As filed with the Securities and Exchange Commission on September 8, 2014
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form F-1
REGISTRATION STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Euronav NV
(Exact name of
Registrant as specified in its Charter)
|
|
|
|
|
|
|
Belgium
|
|
4412
|
|
N/A
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(Primary Standard Industrial
Classification Code Number)
|
|
(I.R.S. Employer
Identification Number)
|
|
|
|
|
|
Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium
Tel:
011-32-3-247-4411
|
|
Seward & Kissel LLP
Attention: Gary J. Wolfe
One Battery Park Plaza
New York, New York 10004
Tel: (212) 574-1200
|
(Address, including zip code, and telephone number,
including area code, of Registrant’s principal executive offices)
|
|
(Name, address and telephone
number of agent for service)
|
Copies to:
|
|
|
|
|
Gary J. Wolfe, Esq.
Robert E. Lustrin, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New
York, New York 10004
Tel: (212) 574-1223 (telephone number)
Fax: (212) 480-8421 (facsimile number)
|
|
Stephen P. Farrell, Esq.
Finnbarr D. Murphy, Esq.
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York,
New York 10178
Tel: (212) 309-6000 (telephone number)
Fax: (212) 309-6001 (facsimile number)
|
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box.
¨
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering.
¨
CALCULATION OF
REGISTRATION FEE
|
|
|
|
|
|
|
|
|
Title of Each Class of
Securities to be Registered
|
|
Proposed
Maximum
Aggregate
Offering Price(1)(2)
|
|
Amount of
Registration Fee(3)
|
|
Ordinary Shares, no par value
|
|
$100,000,000
|
|
$12,880.00
|
|
|
|
|
|
(1)
|
Includes ordinary shares that may be sold pursuant to exercise of the underwriters’ option to purchase
additional shares.
|
|
(2)
|
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
|
|
(3)
|
Calculated in accordance with Rule 457(o) under the Securities Act of 1933.
|
The Registrant hereby amends this
Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may
determine.
The information in this Preliminary Prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 8, 2014
PRELIMINARY PROSPECTUS
Ordinary Shares
Euronav NV
We are offering
of our ordinary shares, and the selling shareholders are selling of our ordinary shares. We will not
receive any proceeds from the sale of ordinary shares by the selling shareholders.
This is our initial public offering in the United
States and currently our ordinary shares are not listed on any United States securities exchange. We intend to apply to list our ordinary shares on the New York Stock Exchange under the symbol “EURN.” Our ordinary shares currently trade on
the NYSE Euronext Brussels, under the symbol “EURN.” On September 3, 2014, the closing price of our ordinary shares trading on the NYSE Euronext Brussels was
€
9.53 per share, which was equivalent to approximately $12.53 per share based on the Bloomberg Composite Rate of
€
0.7609 per $1.00 in effect on that date.
We qualify as an
“emerging growth company” as defined in the Securities Act of 1933, as amended, and, as such, we are eligible for reduced reporting requirements. See “Summary—Implications of Being an Emerging Growth Company.”
Investing in our ordinary shares involves risks. See “
Risk Factors
” beginning on page 25.
We have granted the underwriters an option to purchase up to an additional
of our ordinary shares to cover over-allotments and the selling shareholders have granted the underwriters an option to purchase up to an additional
of our ordinary shares to cover over-allotments.
The Securities
and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
PRICE $ PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Public
Offering Price
|
|
|
Underwriting
Discounts and
Commissions(1)
|
|
|
Proceeds (Before
Expenses) to
Euronav NV
|
|
|
Proceeds to
Selling
Shareholders
|
|
|
Per Share
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Total
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
(1)
|
See “Underwriting” for additional information regarding the total underwriter compensation.
|
The underwriters expect to deliver the ordinary shares to purchasers on or about
, 2014.
|
|
|
|
|
|
|
|
|
Deutsche Bank Securities
|
|
|
|
|
|
|
|
Citigroup
|
|
|
|
|
|
|
|
|
|
J.P. Morgan
|
|
|
|
|
|
|
|
|
|
Morgan Stanley
|
Flandre,
one of our VLCCs
CAP Lara
, one of our Suezmax vessels
FSO Asia
, one of our FSOs
TABLE OF CONTENTS
You should rely only on the information contained in this prospectus or in any free writing prospectus we may
authorize to be delivered to you. We have not, the selling shareholders have not and the underwriters have not, authorized any other person to provide you with additional, different or inconsistent information. If anyone provides you with
additional, different or inconsistent information, you should not rely on it. We may not and the selling shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the
“SEC”) is effective. We are not and the selling shareholders are not and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the
information appearing in this prospectus is accurate as of any date other than the date on the front cover of this prospectus unless otherwise specified herein. Our business, financial condition, results of operations and prospects may have changed
since that date. Information contained on our website does not constitute part of this prospectus.
Until , 2014 (the 25th day after the date of
this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or subscriptions.
PROSPECTUS SUMMARY
This summary highlights information that appears later in this prospectus. This summary may not contain all of the information that may be
important to you. As an investor or prospective investor, you should carefully review the entire prospectus, including the section of this prospectus entitled “Risk Factors” and the more detailed information that appears later in this
prospectus before you consider making an investment in our ordinary shares. The information presented in this prospectus assumes, unless otherwise indicated, that the underwriters’ over-allotment option to purchase additional ordinary shares is
not exercised.
Unless otherwise indicated, references to “Euronav,” the “Company,” “we,”
“our,” “us” or similar terms refer to, Euronav NV, and its subsidiaries. All references in this prospectus to “Chevron,” “Total,” “Valero,” “Rosneft,” and “Maersk Oil” refer to
Chevron Corporation, Total S.A., Valero Energy Corporation, TSC Rosnefteflot” and Maersk Oil Qatar AS, respectively, and certain of each of their subsidiaries that are our customers. References to our “ordinary shares” refer to the
shares offered hereby and references to our “existing ordinary shares” refer to the shares issued and listed on the NYSE Euronext in Belgium prior to the closing of this offering. Unless otherwise indicated, all references to “U.S.
dollars,” “USD,” “dollars,” “US$” and “$” in this prospectus are to the lawful currency of the United States of America and references to “Euro,” “EUR,” and “€” are to
the lawful currency of Belgium. We refer you to a glossary of shipping terms in Appendix A for the definition of certain industry terms used in this prospectus.
Our Business
We are a fully-integrated provider of international maritime shipping and
offshore services engaged primarily in the transportation and storage of crude oil. We were incorporated under the laws of Belgium on June 26, 2003, and we grew out of the combination of certain tanker businesses carried out by three companies
that had a strong presence in the shipping industry: Compagnie Maritime Belge NV, or CMB, formed in 1895, Compagnie Nationale de Navigation SA, or CNN, formed in 1938, and Ceres Hellenic Shipping Enterprises Ltd., or Ceres Hellenic, formed in 1950.
Our predecessor started doing business under the name “Euronav” in 1989.
Our principal shareholders are Peter Livanos,
individually or through entities controlled by the Livanos family, including our corporate director TankLog Holdings Limited, or TankLog, and Saverco NV, or Saverco, an entity controlled by Marc Saverys. Both the Livanos and the Saverys families
have had a continuous presence in the shipping industry since the early nineteenth century. The Livanos family has owned and operated Ceres Hellenic since its formation in 1950, and the Saverys family owned a shipyard which was founded in 1829,
owned and operated various shipowning companies since the 1960s, and acquired CMB in 1991. Peter Livanos may be deemed to beneficially own 16.4% of our outstanding ordinary shares directly and indirectly, through entities controlled by the Livanos
family. Peter Livanos, through his appointment as permanent representative of TankLog on our Board of Directors, serves as the Chairman of our Board. Marc Saverys, the Vice Chairman of our Board of Directors, is also the Chief Executive Officer
of CMB and controls Saverco, a company that is currently CMB’s majority shareholder. Saverco currently owns 12.4% of our outstanding ordinary shares. Upon completion of this offering, Peter Livanos, individually or through entities controlled
by the Livanos family, and Saverco will own approximately % and %, respectively, of our outstanding ordinary shares ( % and % respectively, if the
underwriters exercise their over-allotment option to purchase additional ordinary shares in full).
1
As of September 1, 2014, we owned and operated a modern fleet of 53 vessels (including five
chartered-in vessels) with an aggregate carrying capacity of approximately 13.3 million deadweight tons, or dwt, consisting of 27 very large crude carriers, or VLCCs, one ultra large crude carrier, or ULCC, 23 Suezmax vessels, and two floating,
storage and offloading vessels, or FSOs. In addition, we currently commercially manage two Suezmax vessels owned by third-parties.
In
January 2014, we agreed to acquire 15 modern VLCCs with an average age at the time of acquisition of approximately 4.1 years from Maersk Tankers Singapore Pte Ltd., or Maersk Tankers, which we refer to as the “Maersk Acquisition Vessels,”
for a total purchase price of $980.0 million payable as the vessels are delivered to us charter-free. This acquisition has been fully financed through a combination of new equity and debt issuances and borrowings under our $500.0 Million Senior
Secured Credit Facility. During the period from February 2014 through the date of this prospectus, we took delivery of 14 of the Maersk Acquisition Vessels,
Nautilus
,
Nucleus
,
Navarin
,
Newton
,
Sara
,
Ilma,
Nautic,
Ingrid, Noble, Nectar, Simone, Neptun, Sonia,
and
Iris,
and we expect to take delivery of the remaining vessel in October 2014.
In addition, in July 2014, we agreed to acquire four additional modern VLCCs from Maersk Tankers for an aggregate purchase price of $342.0 million, which we refer to as the “VLCC Acquisition Vessels.” The
purchase price of the VLCC Acquisition Vessels will be financed using the net proceeds of $121.1 million that we received in an underwritten private offering of 10,556,808 of our ordinary shares in Belgium in July 2014 (see “Recent and Other
Developments—Private Offering of Ordinary Shares in Belgium”), available cash on hand, and borrowings under new secured credit facilities, including a new $340.0 million credit facility for which we received a non-binding term sheet, which
we refer to as the “Proposed $340.0 Million Credit Facility.” Three of these vessels are expected to be delivered to us during the third and fourth quarters of 2014 and the last vessel during the second quarter of 2015.
After taking delivery of the four VLCC Acquisition Vessels (three of which we currently charter in) and the remaining Maersk Acquisition Vessel, we
will own and operate 55 double-hulled tankers (including our two FSOs) with an aggregate carrying capacity of approximately 13.9 million dwt. The weighted average age of our fleet as of September 1, 2014, taking into account these vessel
acquisitions, including those to be delivered to us after this date, was approximately 6.8 years, as compared to an industry average age of approximately 9.8 years, according to Drewry Shipping Consultants Ltd., or Drewry.
We currently charter our vessels, non-exclusively, to leading international energy companies, such as Chevron, Maersk Oil, Total and Valero,
although there is no guarantee that these companies will continue their relationships with us. We pursue a chartering strategy that seeks an optimal mix of employment of our vessels depending on the fluctuations of freight rates in the market and
our own judgment as to the direction of those rates in the future. Our vessels are therefore routinely employed on a combination of spot market voyages, fixed-rate contracts and long-term time charters, which typically include a profit sharing
component. We principally employ our VLCCs, and expect to employ the four undelivered VLCC Acquisition Vessels and the remaining undelivered Maersk Acquisition Vessel, through the Tankers International Pool, or the TI Pool, a spot market-oriented
pool in which we were a founding member in 2000. As of September 1, 2014, 19 of our vessels were employed directly in the spot market, 25 of our vessels were employed in the TI Pool, seven of our vessels were employed on long-term charters,
including five with profit sharing components, of which the average remaining duration is 4.0 months, and our two FSOs are employed on long-term service
2
contracts. While we believe that our chartering strategy allows us to capitalize on opportunities in an environment of increasing rates by maximizing our exposure to the spot market, our vessels
operating in the spot market may be subject to market downturns to the extent spot market rates decline. At times when the freight market may become more challenging, we will try to timely shift our exposure to more time charter contracts and
potentially dispose of some of our assets which should provide us with incremental stable cash flows and stronger utilization rates supporting our business during periods of market weakness. We believe that our chartering strategy and our fleet size
management, combined with the leadership of our experienced management team should enable us to capture value during cyclical upswings and to withstand the challenging operating environment such as the one seen in the past several years.
We operate in a capital intensive industry and have historically financed our purchase of tankers and other capital expenditures through a
combination of cash generated from operations, equity capital, borrowings from commercial banks and the occasional issuance of convertible notes. Our ability to generate adequate cash flows on a short- and medium-term basis depends substantially on
the trading performance of our vessels. Historically, market rates for charters of our vessels have been volatile. For example, during the year ended December 31, 2013, our voyage charter and pool revenues decreased by 3% compared to the same
period in 2012, from $175.9 million to $171.2 million, and our time charter revenue decreased by 8%, from $144.9 million to $133.4 million. During the six months ended June 30, 2014, our voyage charter and pool revenues increased by 60% compared to
the same period in 2013, from $81.3 million to $130.1 million, reflecting higher realized spot market charter rates, and our time charter revenue decreased by 2% compared to the same period in 2013, from $72.5 million to $71.1 million because
we had slightly less days on time charter. Periodic adjustments to the supply of and demand for oil tankers cause the industry to be cyclical in nature. We expect continued volatility in market rates for our vessels in the foreseeable future with a
consequent effect on our short- and medium-term revenue and liquidity.
For our fiscal year ended December 31, 2013, we had $304.6
million in revenue and incurred a net loss of $89.7 million, and for the six month period ended June 30, 2014, we had $201.2 million in revenue and incurred a net loss of $21.2 million.
Our Fleet
The following table sets forth summary information regarding our fleet as of
September 1, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Name
|
|
Type
|
|
Deadweight
Tons (DWT)
|
|
|
Year
Built
|
|
|
Shipyard(1)
|
|
Charterer
|
|
Employment
|
|
Charter Expiry
Date(2)
|
|
Owned Vessels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TI Europe
|
|
ULCC
|
|
|
441,561
|
|
|
|
2002
|
|
|
Daewoo
|
|
|
|
Spot
|
|
N/A
|
|
Sara
|
|
VLCC
|
|
|
323,183
|
|
|
|
2011
|
|
|
STX
|
|
|
|
TI Pool
|
|
N/A
|
|
Alsace
|
|
VLCC
|
|
|
320,350
|
|
|
|
2012
|
|
|
Samsung
|
|
|
|
TI Pool
|
|
N/A
|
|
TI Hellas
|
|
VLCC
|
|
|
319,254
|
|
|
|
2005
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Antarctica(3)
|
|
VLCC
|
|
|
315,981
|
|
|
|
2009
|
|
|
Hyundai
|
|
Total
|
|
Time Charter(4)
|
|
May 2015
|
|
Olympia(3)
|
|
VLCC
|
|
|
315,981
|
|
|
|
2008
|
|
|
Hyundai
|
|
Total
|
|
Time Charter(4)
|
|
April 2015
|
|
Ilma
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Simone
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
STX
|
|
|
|
TI Pool
|
|
N/A
|
|
Sonia
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
STX
|
|
|
|
TI Pool
|
|
N/A
|
|
Ingrid
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Iris
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Nucleus
|
|
VLCC
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Name
|
|
Type
|
|
Deadweight
Tons (DWT)
|
|
|
Year
Built
|
|
|
Shipyard(1)
|
|
Charterer
|
|
Employment
|
|
Charter Expiry
Date(2)
|
|
Nautilus
|
|
VLCC
|
|
|
307,284
|
|
|
|
2006
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Navarin
|
|
VLCC
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Nautic
|
|
VLCC
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Newton
|
|
VLCC
|
|
|
307,284
|
|
|
|
2009
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Nectar
|
|
VLCC
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Neptun
|
|
VLCC
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Noble
|
|
VLCC
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Flandre
|
|
VLCC
|
|
|
305,688
|
|
|
|
2004
|
|
|
Daewoo
|
|
|
|
TI Pool
|
|
N/A
|
|
V.K. Eddie(5)
|
|
VLCC
|
|
|
305,261
|
|
|
|
2005
|
|
|
Daewoo
|
|
|
|
TI Pool
|
|
N/A
|
|
TI Topaz
|
|
VLCC
|
|
|
319,430
|
|
|
|
2002
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Famenne
|
|
VLCC
|
|
|
298,412
|
|
|
|
2001
|
|
|
Hitachi
|
|
|
|
TI Pool
|
|
N/A
|
|
Artois
|
|
VLCC
|
|
|
298,330
|
|
|
|
2001
|
|
|
Hitachi
|
|
|
|
TI Pool
|
|
N/A
|
|
Cap Diamant
|
|
Suezmax
|
|
|
160,044
|
|
|
|
2001
|
|
|
Hyundai
|
|
Rosneft
|
|
Time Charter
|
|
October 2014
|
|
Cap Pierre
|
|
Suezmax
|
|
|
159,083
|
|
|
|
2004
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Leon
|
|
Suezmax
|
|
|
159,049
|
|
|
|
2003
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Philippe
|
|
Suezmax
|
|
|
158,920
|
|
|
|
2006
|
|
|
Samsung
|
|
Valero
|
|
Time Charter(4)
|
|
May 2015
|
|
Cap Guillaume
|
|
Suezmax
|
|
|
158,889
|
|
|
|
2006
|
|
|
Samsung
|
|
Valero
|
|
Time Charter(4)
|
|
February 2015
|
|
Cap Charles
|
|
Suezmax
|
|
|
158,881
|
|
|
|
2006
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Victor
|
|
Suezmax
|
|
|
158,853
|
|
|
|
2007
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Lara
|
|
Suezmax
|
|
|
158,826
|
|
|
|
2007
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Theodora
|
|
Suezmax
|
|
|
158,819
|
|
|
|
2008
|
|
|
Samsung
|
|
Valero
|
|
Time Charter(4)
|
|
March 2015
|
|
Cap Felix
|
|
Suezmax
|
|
|
158,765
|
|
|
|
2008
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Fraternity
|
|
Suezmax
|
|
|
157,714
|
|
|
|
2009
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Eugenie(5)
|
|
Suezmax
|
|
|
157,672
|
|
|
|
2010
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Felicity
|
|
Suezmax
|
|
|
157,667
|
|
|
|
2009
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Capt. Michael(5)
|
|
Suezmax
|
|
|
157,648
|
|
|
|
2012
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Devon(5)
|
|
Suezmax
|
|
|
157,642
|
|
|
|
2011
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Maria(5)
|
|
Suezmax
|
|
|
157,523
|
|
|
|
2012
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Finesse
|
|
Suezmax
|
|
|
149,994
|
|
|
|
2003
|
|
|
Universal
|
|
|
|
Spot
|
|
N/A
|
|
Filikon
|
|
Suezmax
|
|
|
149,989
|
|
|
|
2002
|
|
|
Universal
|
|
|
|
Spot
|
|
N/A
|
|
Cap Georges
|
|
Suezmax
|
|
|
146,652
|
|
|
|
1998
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Laurent
|
|
Suezmax
|
|
|
146,645
|
|
|
|
1998
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Romuald
|
|
Suezmax
|
|
|
146,640
|
|
|
|
1998
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Jean
|
|
Suezmax
|
|
|
146,627
|
|
|
|
1998
|
|
|
Samsung
|
|
Petrobras
|
|
Time Charter
|
|
November 2014
|
|
Total DWT—Owned Vessels
|
|
|
|
|
11,014,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maersk Acquisition Vessels To Be Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sandra(6)
|
|
VLCC
|
|
|
323,527
|
|
|
|
2011
|
|
|
STX
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Total DWT—Maersk Acquisition Vessels
|
|
|
|
|
323,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VLCC Acquisition Vessels To Be Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maersk Hojo(8)(9)
|
|
VLCC
|
|
|
302,965
|
|
|
|
2013
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Maersk Hakone(8)(9)
|
|
VLCC
|
|
|
302,624
|
|
|
|
2010
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Maersk Hirado(8)(9)
|
|
VLCC
|
|
|
302,550
|
|
|
|
2011
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Maersk Hakata(10)
|
|
VLCC
|
|
|
302,550
|
|
|
|
2010
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Total DWT—VLCC Acquisition Vessels
|
|
|
|
|
1,210,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chartered-In Expiry Date
|
|
Chartered-In Vessels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KHK Vision
|
|
VLCC
|
|
|
305,749
|
|
|
|
2007
|
|
|
Daewoo
|
|
|
|
TI Pool
|
|
October 2014
(+/- 30
days)
|
|
Cap Isabella(11)
|
|
Suezmax
|
|
|
157,258
|
|
|
|
2013
|
|
|
Samsung
|
|
|
|
Spot
|
|
March 2015
|
|
Total DWT—Chartered-In Vessels
|
|
|
|
|
463,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management Contract Expiry Date
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Name
|
|
Type
|
|
Deadweight
Tons (DWT)
|
|
|
Year
Built
|
|
|
Shipyard(1)
|
|
Charterer
|
|
Employment
|
|
Charter Expiry
Date(2)
|
|
Vessels Under Commercial Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suez Rajan
|
|
Suezmax
|
|
|
158,574
|
|
|
|
2011
|
|
|
Hyundai
|
|
|
|
|
|
October 2014
|
|
Suez Hans
|
|
Suezmax
|
|
|
158,574
|
|
|
|
2011
|
|
|
Hyundai
|
|
|
|
|
|
September 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Contract Expiry Date
|
|
FSO Vessels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FSO Africa(5)
|
|
FSO
|
|
|
442,000
|
|
|
|
2002
|
|
|
Daewoo
|
|
Maersk Oil
|
|
Service Contract
|
|
September 2017
(+2
year option)
|
|
FSO Asia(5)
|
|
FSO
|
|
|
442,000
|
|
|
|
2002
|
|
|
Daewoo
|
|
Maersk Oil
|
|
Service Contract
|
|
July 2017
(+2 year option)
|
|
(1)
|
As used in this prospectus, “Samsung” refers to Samsung Heavy Industries Co., Ltd, “Hyundai” refers to Hyundai Heavy Industries Co., Ltd.,
“Universal” refers to Universal Shipbuilding Corporation, “Hitachi refers to Hitachi Zosen Corporation, “Daewoo” refers to Daewoo Shipbuilding and Marine Engineering S.A., “Ariake” refers to Japan Marine United
Corp., Ariake Shipyard, Japan, “Dalian” refers to Dalian Shipbuilding Industry Co. Ltd., and “STX” refers to STX Offshore and Shipbuilding Co. Ltd.
|
|
(2)
|
Assumes no exercise by the charterer of any option to extend (if applicable).
|
|
(3)
|
In April 2014, a purchase option to buy the
Olympia
and the
Antarctica
was exercised. We expect to deliver the
Olympia
in September 2014 and the
Antarctica
in January 2015. Both vessels will remain employed under their current time charter contract until their respective delivery dates.
|
|
(4)
|
Profit sharing component under time charter contracts.
|
|
(5)
|
Vessels in which we hold a 50% ownership interest.
|
|
(6)
|
Expected to be delivered to us in October 2014.
|
|
(7)
|
Expected to operate in the TI Pool upon its delivery to us.
|
|
(8)
|
Vessel is chartered-in by us until its delivery to us.
|
|
(9)
|
Vessel is expected to be delivered to us during the third or fourth quarter of 2014.
|
|
(10)
|
Vessel is expected to be delivered to us during the second quarter of 2015.
|
|
(11)
|
Vessel is chartered-in on bareboat charter. The bareboat charter will be terminated upon delivery of the vessel to its new owner during the third or fourth quarter of 2014.
|
Employment of Our Fleet
Our tanker fleet is employed worldwide through a combination of primarily spot market voyage fixtures, including through the TI Pool, fixed-rate contracts and time charters. We deploy our two FSOs as floating
storage units under fixed-rate service contracts in the offshore services sector. For the year 2014, our fleet will have approximately 15,462 available days for hire, of which, as of September 1, 2014, 74% are expected to be available to be employed
on the spot market, either directly or through the TI Pool, and 26% are expected to be on time charters, with or without a profit sharing element.
Spot Market
A spot market voyage charter is a contract to carry a specific cargo from a load
port to a discharge port for an agreed freight per ton of cargo or a specified total amount. Under spot market voyage charters, we pay voyage expenses such as port, canal and bunker costs. Spot charter rates have historically been volatile and
fluctuate due to seasonal changes, as well as general supply and demand dynamics in the crude oil marine transportation sector. Although the revenue we generate in the spot market is less predictable, we believe our exposure to this market provides
us with the opportunity to capture better profit margins during periods when vessel demand exceeds supply leading to improvements in tanker charter rates. As of September 1, 2014, we employed 19 of our vessels directly in the spot market.
5
A majority of our Suezmaxes operating in the spot market participate in an internal Revenue
Sharing Agreement, or RSA, together with the four Suezmaxes that we jointly own with JM Maritime as well as Suezmaxes owned by third-parties. Under the RSA, each vessel owner is responsible for its own costs, including voyage-related expenses, but
will share in the net revenues, after the deduction of voyage-related expenses, retroactively on a semi-annual basis. Calculation of allocations and contributions under the RSA are based on a pool points system and are paid after the deduction of
the pool fee to Euronav, as pool manager, from the gross pool income. We believe this arrangement results in an increased market presence and allows us to benefit from additional market information which in turn is beneficial to our performance in
the spot market.
Tankers International Pool
We principally employ and commercially manage our VLCCs through the TI Pool, a leading spot market-oriented VLCC pool in which other shipowners with vessels of similar size and quality participate along with us. We
participated in the formation of the TI Pool in 2000 to allow us and other TI Pool participants, consisting of third-party owners and operators of similarly sized vessels, to gain economies of scale, obtain increased cargo flow of information,
logistical efficiency and greater vessel utilization. As of September 1, 2014, the TI Pool was comprised of 36 vessels, including 25 of our VLCCs. We also expect to employ the remaining undelivered Maersk Acquisition Vessel and the four VLCC
Acquisition Vessels in the TI Pool upon their delivery to us.
By pooling our VLCCs with those of other shipowners, we are able to
derive synergies, including (i) the potential for increased vessel utilization by securing backhaul voyages for our vessels, and (ii) the performance of the Contracts of Affreightment, or COAs. Backhaul voyages involve the transportation
of cargo on part of the return leg of a voyage. COAs, which can involve backhauls, may generate higher effective time charter equivalent, or TCE, revenues than otherwise might be obtainable directly in the spot market. Additionally, by operating a
large number of vessels as an integrated transportation system, the TI Pool offers customers greater flexibility and an additional level of service while achieving scheduling efficiencies. The TI Pool is an owner-focused pool that does not charge
commissions to its members, a practice that differs from that of other commercial pools; rather, the TI Pool aggregates gross charter revenues it receives and deducts voyage expenses and administrative costs before distributing net revenues to the
pool members in accordance with their allocated pool points, which are based on each vessel’s speed, fuel consumption and cargo-carrying capacity. We believe this results in lower TI Pool membership costs, compared to other similarly sized
pools. For example, in 2013, TI Pool membership costs were approximately $650 per vessel per day (with each vessel receiving its proportional share of pool membership expenses), while other similarly sized pools charged up to $1,300 per vessel per
day (based on 1.25% of gross rates plus $300 per day).
Tankers International LLC, or Tankers International, of which we own 40% of the
outstanding interests, is the manager of the pool and is also responsible for the commercial management of the pool participants, including negotiating and entering into vessel employment agreements on behalf of the pool participants. Technical
management of the pooled vessels is performed by each shipowner, who bears the operating costs for its vessels.
6
Time Charters
Time charters provide us with a fixed and stable cash flow for a known period of time. Time charters may help us mitigate, in part, our exposure to the spot market, which tends to be volatile in nature, being
seasonal and generally weaker in the second and third quarters of the year due to refinery shutdowns and related maintenance during the warmer summer months. In the future, we may when the cycle matures or otherwise opportunistically employ more of
our vessels under time charter contracts as the available rates for time charters improve. We may also enter into time charter contracts with profit sharing arrangements, which we believe will enable us to benefit if the spot market increases above
a base charter rate as calculated either by sharing sub charter profits of the charterer or by reference to a market index and in accordance with a formula provided in the applicable charter contract. As of September 1, 2014, we employed seven of
our vessels on fixed-rate time charters, including five with profit sharing components.
FSOs and Offshore Service Contracts
We currently deploy our two FSOs as floating storage units under service contracts with Maersk Oil in the offshore services sector.
As our tanker vessels age, we may seek to extend their useful lives by employing such vessels on long-term offshore projects at rates higher than may otherwise be achieved in the time charter market, or sell such vessels to third-party owners in the
offshore conversion market at a premium.
Management of Our Business
Technical and Commercial Management
Our vessels are technically managed in-house through our
wholly-owned subsidiaries, Euronav Ship Management SAS, Euronav SAS and Euronav Ship Management (Hellas) Ltd. Our in-house technical management services include providing technical expertise necessary for all vessel operations, supervising the
maintenance, upkeep and general efficiency of vessels, arranging and supervising newbuilding construction, drydocking, repairs and alterations, and developing, implementing, certifying and maintaining a safety management system.
Our VLCCs are commercially managed by Tankers International while operating in the TI Pool. All of the participants in the TI Pool collectively pay
a pool management fee equivalent to the costs of running the pool business, after deducting voyage expenses, interest adjustments and administration costs, including legal, banking and other professional fees. The net charge is the pool
administration cost, which is apportioned to each vessel by calendar days. During the year ended December 31, 2013, we paid an aggregate of $1.8 million for the commercial management of our vessels operating in the TI Pool.
Our Suezmax vessels trading in the spot market are commercially managed by Euronav (UK) Agencies Ltd., our London commercial department. Commercial
management services include securing employment for our vessels.
Our time chartered vessels, both VLCCs and Suezmax vessels, are
managed by our operations department based in Antwerp.
7
Positive Industry Fundamentals
We believe that the following demand and supply factors create an attractive environment for us to successfully execute our business plan and to
grow and add value to our business:
Increased global oil consumption is resulting in increased tanker ton mile
demand.
The demand for seaborne transportation of oil has historically been affected by worldwide economic growth, and, in turn, global oil demand. Increases in oil consumption, which in 2013 accounted for approximately
one-third of global energy consumption, as well as a shift in global refinery capacity to the emerging markets, has resulted in growing oil trade distances and increasing tanker ton mile demand. In particular, seaborne crude oil imports have
increased significantly in China and India to meet rising demand, with Chinese and Indian crude oil imports increasing by 212.1 million tons and 117.8 million tons, respectively, during the period from 2000 to 2013, according to Drewry. While
there is no guarantee that past growth rates will continue, we believe this global demand for oil and attendant increase in ton miles over longer trade distances will support continued demand for tanker capacity.
A limited orderbook should restrict the supply of new tankers.
In general, the supply of tankers is influenced by the
current orderbook for newbuilding vessels and the rate of removal of vessels from the worldwide fleet for scrapping or conversion as vessels age. Following a period of rapid expansion from 2007 through 2012, the worldwide tanker fleet grew by only
1.4% in 2013, according to Drewry, of which VLCCs and Suezmaxes grew by 2.0% and 1.4%, respectively, representing the lowest annual increase since 2007. Very few vessel orders were placed in both sectors during 2011, 2012 and 2013, although the pace
of new ordering in the VLCC sector increased in the closing months of 2013 and the first half of 2014.
Favorable secondhand tanker
prices encourage growth
. In general, the demand and supply for tanker capacity influences charterhire rates and vessel values. In late 2013, rates generally started an upward trend in the crude tanker sector, primarily due
to lower levels of fleet growth, coupled with increasing ton mile demand, which has led to an improving balance between vessel supply and demand. According to Drewry, the tanker sector remains one of the most fragmented in shipping with the
worldwide VLCC fleet of 629 vessels being held by 132 different owners and the world Suezmax fleet of 494 vessels being held by 115 different owners. This is not only inefficient in terms of management and administration cost, but may offer
numerous opportunities for further consolidation and may result in enhanced returns for the whole market.
Competitive Strengths
We believe that our future opportunities in our industry are enhanced by the following competitive strengths of our business:
Large fleet of modern, well-maintained tankers
. Following our purchase of the Maersk Acquisition Vessels
and the VLCC Acquisition Vessels, we will be one of the largest independent owners and operators of modern crude oil tankers in the world, with a fleet of 55 tankers, comprised of 29 VLCCs, 23 Suezmax tankers, one ULCC and two FSOs, with a total
capacity of 13.9 million dwt. Pro forma for these acquisitions, our fleet has a weighted average age of 6.8 years, making it one of the younger fleets worldwide as compared to the industry average of 9.8 years, according to Drewry. We
believe that operating a large fleet of modern vessels,
8
enhanced by the size of the TI Pool with 36 vessels under management as of September 1, 2014, provides us with competitive advantages relative to smaller competitors, including greater access to
information and insight into market pricing, which, in turn, enables us to deploy our vessels to maximize our revenue and cash flow. We also believe that operating a fleet of modern well-maintained tankers reduces off-hire time for maintenance and
operating and drydocking costs. The scale and quality of our fleet provides us with both operational synergies and negotiating leverage, giving us the flexibility to capitalize on opportunities throughout the cycles by changing the optimal mix of
employment of our vessels as well as adjusting our fleet size.
A fully-integrated owner, operator and manager with a strong
reputation within the chartering community
. We provide all of our technical operations in-house, including the supervision of newbuilding construction and the maintenance of our vessels through a safety management system,
which allows us to monitor more closely our operations. We believe this enables us to maximize revenues, reduce our costs and offer our customers a more stable quality of performance, reliability and service efficiency than if we contracted for
these services with third-parties. In addition, by leveraging the expertise of our experienced staff, crew and captains, who have an average of 16 years of service with us, we have developed a reputation for safe, reliable and effective shipping and
offshore storage of crude oil in the maritime sector, and we have outperformed industry benchmarks set by Intertanko, the organization of independent tanker owners, and the Oil Companies International Marine Forum (OCIMF) in its Tanker Management
and Self Assessment guide (TMSA) for operating days, lack of lost time incidents and operating expenses. We believe that our reputation for quality, reliability and safety enables us to compete effectively for charters, particularly with
international energy companies that have high standards. In recognition of our reputation in the shipping industry, we have been invited to join, and are an active member of important organizations, including, ITOPF (International Tanker Owners
Pollution Federation), Intertanko, in particular in its Marine and Environmental Protection Committee, and the P&I Club system.
Strong and strategic relationships with well-known international energy companies
. We have and are continuing to
develop non-exclusive chartering relationships with well-known international energy companies, such as Chevron, Maersk Oil, Total and Valero. Many of these companies have repeatedly been served by our predecessor for more than 20 years, although
there is no guarantee that these companies will continue their relationships with us. In past years, for example, Valero has had on time charter from us up to ten of our vessels at one time, primarily in connection with its refinery along the St.
Lawrence River in Quebec, which is located in an environmentally sensitive area with significant operational and navigational challenges. In addition, we have the ability to provide our customers in French jurisdictions with marine transportation of
crude oil, which requires French-flagged vessels, local offices, and the employment of French seafarers, all of which can present barriers to entry to new entrants in the French market. As of September 1, 2014, we had four ships flying French flags
under charter arrangements with Total and Petroineos. We expect to continue to capitalize on and potentially grow our long-term relationships with international energy companies and other customers, and believe that our reputation and proven track
record for safe, reliable and efficient operations position us favorably to capture additional opportunities to meet our customers’ future chartering needs.
Experienced management team
. Our senior executive officers, Paddy Rodgers, our Chief Executive Officer, Hugo De Stoop, our Chief Financial Officer, Captain Alex Staring, our Chief
Operating Officer, and Egied Verbeeck, our General Counsel, each have a high degree of
9
professional education and considerable experience in the shipping industry. With over 75 years of combined shipping experience, our senior executive officers have led our development from 10
vessels with an aggregate carrying capacity of approximately 3.0 million dwt in 2000 to an independent fleet of crude oil tankers with 55 vessels (including two FSOs) with an aggregate carrying capacity of 13.9 million dwt, pro forma for
the addition of the Maersk Acquisition Vessels and the VLCC Acquisition Vessels. Our senior management team has demonstrated its ability to optimize our fleet’s size through the recent cyclical downturn and successfully complete opportunistic
vessel acquisitions on a timely basis and at favorable prices.
Demonstrated access to financing
. We
believe that we have developed relationships with leading international commercial banks and other financial institutions. Throughout our history, and particularly during recent global financial crises, we demonstrated our ability to access
traditional bank financing as well as equity and debt capital markets to finance our business and complete vessel acquisitions. Since 2008, we have raised $3.4 billion, consisting of $2.3 billion in traditional bank financing, $510.0 million in bond
issuances and $625.0 million in equity issuances. Our ability to access financing has allowed us to act swiftly and decisively in completing acquisitions, including our purchase of four Hellespont ULCCs in 2004 through a 50% joint venture with
Overseas Shipholding Group, Inc., or OSG, for $448.0 million, the Metrostar fleet of four VLCCs in 2005 for $477.5 million, the Ceres Hellenic fleet of 16 vessels in 2005 for $1.1 billion, the 15 Maersk Acquisition Vessels in 2014 for $980.0 million
and the four VLCC Acquisition Vessels in 2014 for $342.0 million. While there is no guarantee that we will be able to access similar financing in the future, we believe that our success in financing and implementing our strategy provides us with a
solid base for the future.
Principal shareholders’ and directors’ longstanding relationships in the shipping
industry
. Both the Livanos and the Saverys families have been a continuous presence in the shipping industry since the early nineteenth century as owners of Ceres Hellenic, and of CMB and CNN, respectively. Peter Livanos
serves as the Chairman of our Board of Directors through his appointment as permanent representative of TankLog. The Vice Chairman of our Board of Directors, Marc Saverys, is the Chief Executive Officer of CMB and controls Saverco, a company that is
currently CMB’s majority shareholder. Peter Livanos, individually or through entities controlled by the Livanos family, and Saverco currently own approximately 16.4% and 12.4%, respectively, of our existing outstanding ordinary shares. Upon
completion of this offering, Peter Livanos, individually or through entities controlled by the Livanos family, and Saverco will own approximately % and %, respectively, of our outstanding ordinary
shares ( % and % respectively, if the underwriters exercise their over-allotment option to purchase additional ordinary shares in full).
Our Business Strategies
Our
primary objectives are to manage the size of our fleet according to market circumstances and to maximize shareholder value. The key elements of our strategy are:
Selectively buy and sell vessels in our fleet in order to maintain high quality vessels at attractive prices
. We believe that our recent purchase of the Maersk Acquisition Vessels and
the VLCC Acquisition Vessels represented an attractive investment opportunity to grow our revenue and earnings at a favorable price. With respect to the 15 modern Maersk Acquisition Vessels, we paid $65.3 million on average per VLCC, and with
respect to the four modern VLCC Acquisition Vessels, we paid $85.5 million on average per VLCC, as compared to the current
10
price of newbuilding VLCCs of approximately $99.0 million per VLCC, according to Drewry. In addition, we believe that the Maersk Acquisition Vessels will enable us to capitalize on potential
near-term improvements in tanker market charter rates, instead of having to wait several years to receive newbuilding vessels from shipyards. We also recently sold three VLCCs (Luxembourg, Antarctica and Olympia) for offshore conversion projects at
what we believe are attractive prices compared to the sale prices of other similar vessels. When evaluating future transactions, we will consider and analyze, among other things, our charter rate expectations for the tanker sector, current vessel
prices achieved in the sale and purchase market for vessels, the expected cash flow for vessels relative to the proposed price, vessel specifications, including modern, environmentally safe features, and any related charter employment. While there
is no guarantee that we will be able to acquire and dispose of vessels according to this strategy in the future, we believe that our disciplined acquisition approach, combined with our management’s knowledge of the tanker sector, will provide
us with opportunities to manage the size of our fleet and generate returns and distributions for our shareholders.
Optimize our
exposure to the spot market to maximize earnings
.
We actively manage the employment of our operating fleet between spot market voyages and time charters. Our strategy is to maximize our exposure to the spot market,
which has historically been volatile, but which we believe has delivered the highest returns on average, while securing stable cash flow in anticipation of decreasing markets by chartering some of our vessels on fixed-rate time charters or, in the
case of our two FSOs, in the offshore storage sector on fixed-rate service contracts. As part of our focus on the spot market, we seek to leverage our participation in the TI Pool to benefit from the economies of scale and greater vessel
utilization that the TI Pool can generate. We believe that the revenues that our vessels achieve in the TI Pool will exceed the rate we would otherwise achieve by operating these vessels outside of the TI Pool.
Utilize our high quality assets to continue to capitalize on floating crude oil storage opportunities
. We believe
that we can increase shareholder value by opportunistically employing some of our vessels as crude oil storage units. We may look to deploy some of our vessels in the offshore market on long-term contracts for floating storage projects at rates
higher than may otherwise be achieved in the tanker time charter market. We may also sell our vessels for conversion to third-party owners active in the offshore market at prices exceeding levels that could be realized in the conventional ship sale
and purchase market. We currently operate two FSOs in which we own a 50% interest on long-term service contracts with Maersk Oil. Over the last several years, we have sold five of our ships into the offshore conversion market at a premium above
prices achievable in the broader ship sale and purchase market. We believe that our presence in the offshore market, coupled with the growing trend toward offshore exploration and development projects globally, will lead to additional growth
opportunities in the future.
Maintain a strong balance sheet with access to capital
. We seek to optimize
and constantly monitor our leverage while adapting it to changing market conditions. We plan to finance our business and future vessel acquisitions with a mix of debt and equity from commercial banks and from the capital markets. We believe that
maintaining a strong balance sheet will enable us to access more favorable chartering opportunities as end users have increasingly favored well-capitalized owners, as well as give us a competitive advantage in pursuing vessel acquisitions at
attractive times in the cycle.
Maintain cost efficient in-house vessel operations and corporate
expenses
. Through our in-house vessel operations, we believe that we are better able to monitor our operations,
11
enabling us to maximize revenues and reduce our costs while offering our customers the quality of performances, services and reliability they demand, compared to other vessel owners and operators
who outsource these functions. We have a track record of safe operations and outperform the industry benchmarks set by Intertanko, the organization of independent tanker vessels, and the OCIMF in its TMSA for operating days, lack of lost time
incidents, and operating expenses, all of which ensures that maximum value can be delivered while minimizing human and environmental risks.
Recent and Other Developments
Vessel Acquisitions and Dispositions
During the period from February 2014 through the date of this prospectus, we took delivery of 14 of the Maersk Acquisition Vessels,
Nautilus
,
Nucleus
,
Navarin
,
Newton
,
Sara
,
Ilma, Nautic,
Ingrid, Noble, Nectar, Simone, Neptun, Sonia,
and
Iris
,
and we expect to take delivery of the remaining Maersk Acquisition Vessel in October 2014.
In April 2014, our counterparty exercised a purchase option to buy the
Olympia
and the
Antarctica
from us for an
aggregate purchase price of $178.0 million, less a $20.0 million option fee that we received in January 2011. We expect to deliver the
Olympia
in September 2014 and the
Antarctica
in January 2015. Both vessels will remain employed
under their current time charter contracts until their respective delivery dates. The sales resulted in a combined loss of $7.4 million which was recorded in the second quarter of 2014.
On July 7, 2014, we agreed to acquire an additional four modern VLCCs (three of which we currently charter in), charter-free, from Maersk
Tankers for an aggregate purchase price of $342.0 million. Three of the vessels are expected to be delivered to us during the third and fourth quarter of 2014, with the remaining vessel expected to be delivered to us in the second quarter of 2015.
The purchase price of the VLCC Acquisition Vessels will be financed using the net proceeds of $121.1 million that we received in an underwritten private offering of 10,556,808 of our ordinary shares in Belgium in July 2014 (see below), available
cash on hand, and borrowings under new secured credit facilities, including $205.2 million that we expect to draw down under our Proposed $340.0 Million Credit Facility for which we received a non-binding term sheet on August 13, 2014. Please see
“Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources” for a description of the expected terms of our Proposed $340.0 Million Credit Facility.
On July 31, 2014, the
Cap Isabella
, a vessel that is on bareboat charter to us, was sold by its owner, Belle Shipholdings Ltd., or Belle
Shipholdings to a third-party. The stock of Belle Shipholdings is held for the benefit of immediate family members of Peter Livanos, who serves as the Chairman of our Board of Directors through his appointment as permanent representative of TankLog.
In the beginning of 2013, we sold the
Cap Isabella
to Belle Shipholdings through a sale and lease back agreement, pursuant to which we are entitled to receive a share of the profit resulting from the sale of the vessel by Belle. As a result,
we expect to receive approximately $4.3 million that will be recorded in the third or fourth quarter of 2014. The bareboat charter will be terminated upon delivery of the vessel to its new owner during the third or fourth quarter of 2014. Please see
“Certain Relationships and Related Party Transactions.”
12
Private Offering of Ordinary Shares in Belgium
On July 14, 2014, we received gross proceeds of $125.0 million upon the issuance of 10,556,808 of our ordinary shares in an underwritten
private offering in Belgium mainly to a group of qualified investors at €8.70 per share (or $11.84 per share based on the USD/EUR exchange rate of EUR 1.00 per $1.3610). The proceeds of the offering are expected to be used to
partially finance the purchase price of the four VLCC Acquisition Vessels.
Appointment of New Chairman
At a meeting of our Board of Directors held on July 22, 2014, our Board of Directors resolved to appoint Peter Livanos, in his capacity as permanent
representative of TankLog, as the Chairman of our Board, and Marc Saverys, our former Chairman of the Board, as Vice Chairman, each with immediate effect.
Exchange Offer
Concurrently with the pricing of this offering, we will offer to exchange all
of the outstanding unregistered ordinary shares in Belgium (other than ordinary shares owned by our affiliates) for ordinary shares that have been registered under the Securities Act, which we refer to as the Exchange Offer. The Exchange Offer will
be made only by means of a prospectus contained in our registration statement on Form F-4 that we will file in connection with that Exchange Offer and a related letter of transmittal. This offering is not contingent on the successful completion of
the Exchange Offer. See “Business—Exchange Offer.”
Risk Factors
You should carefully consider the risks described in “Risk Factors” and the other information in this prospectus before deciding whether
to invest in our ordinary shares.
Implications of Being an Emerging Growth Company
While we were incorporated in 2003, we had less than $1.0 billion in revenue during our last fiscal year, which means that we qualify as an
“emerging growth company” as defined in the Jumpstart Our Business Startups Act, or JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise applicable generally to public
companies. These provisions include:
|
|
•
|
|
the ability to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial
Condition and Results of Operations in the registration statement for our initial public offering; and
|
|
|
•
|
|
exemption from the auditor attestation requirement of management’s assessment of the effectiveness of the emerging growth company’s internal controls
over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley.
|
We may
take advantage of these provisions until the end of the fiscal year following the fifth anniversary of our initial public offering or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company
if we have more than $1.0 billion in “total annual gross revenues” during our most recently completed fiscal year, if we become a “large accelerated filer” with market capitalization of more than
13
$700 million, or as of any date on which we have issued more than $1.0 billion in non-convertible debt over the three year period prior to such date. We may choose to take advantage of some,
but not all, of these reduced reporting requirements. For as long as we take advantage of the reduced reporting obligations, the information that we provide shareholders may be different from information provided by other public companies.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended
transition period for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We
currently prepare our consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, which do not have separate provisions for publicly traded and
private companies. However, in the event we convert to U.S. GAAP while we are still an emerging growth company, we may be able to take advantage of the benefits of this extended transition period and, as a result, during such time that we delay the
adoption of any new or revised accounting standards, our consolidated financial statements may not be comparable to other companies that comply with all public company accounting standards.
Corporate Structure
We were
incorporated under the laws of Belgium on June 26, 2003, and we grew out of the combination of certain tanker activities carried out by three companies that had a strong presence in the shipping industry: CMB, formed in 1895, CNN, formed in
1938, and Ceres Hellenic, formed in 1950. Our predecessor started doing business under the name “Euronav” in 1989.
Our
principal shareholders are Peter Livanos, individually or through entities controlled by the Livanos family, including our corporate director TankLog, and Saverco, an entity controlled by Marc Saverys. Both the Livanos and the Saverys families have
been a continuous presence in the shipping industry since the early nineteenth century as owners of Ceres Hellenic, and of CMB and CNN, respectively. TankLog is represented on our Board of Directors by Peter Livanos through his appointment as
permanent representative of TankLog, in which capacity he serves as the Chairman of our Board. The Vice Chairman of our Board of Directors, Marc Saverys, is the Chief Executive Officer of CMB and controls Saverco, a company that is currently
CMB’s majority shareholder. Peter Livanos, individually, and through entities controlled by the Livanos family, and Saverco currently beneficially own approximately 16.4% and 12.4%, respectively, of our existing outstanding ordinary shares.
Upon completion of this offering, Peter Livanos, individually or through entities controlled by the Livanos family, and Saverco will own approximately % and %, respectively, of our
outstanding ordinary shares ( % and % respectively, if the underwriters exercise their over-allotment option to purchase additional ordinary shares in full).
We own our vessels either directly at the parent level, indirectly through our wholly-owned vessel owning subsidiaries, or jointly through our
50%-owned subsidiaries. We conduct our vessel operations through our wholly-owned subsidiaries Euronav Ship Management SAS, Euronav SAS and Euronav Ship Management (Hellas) Ltd., and also through the TI Pool. Our subsidiaries are incorporated under
the laws of Belgium, France, United Kingdom, Liberia, Luxembourg, Cyprus, Hong Kong and the Marshall Islands. Our vessels are flagged in Belgium, the Marshall Islands, France, Panama and Greece.
14
The diagram below depicts our organizational structure, including the ownership of our direct and
indirect management entities and vessel-owning subsidiaries, as of September 1, 2014. The diagram does not reflect ownership of the Company by our principal or other shareholders.
Principal Executive Offices
Our principal executive headquarters are located at De Gerlachekaai 20, 2000 Antwerpen, Belgium. Our telephone number at that address is 011-32-3-247-4411. We also have offices located in the United Kingdom,
France, Greece and Hong Kong. Our website is www.euronav.com. The information contained on our website is not a part of this prospectus.
Other Information
Because
we are incorporated under the laws of Belgium and substantially all of our assets are located outside of the United States, you may encounter difficulty protecting your interests as shareholders, and your ability to protect your rights through the
U.S. federal court system may be limited. Please refer to the sections entitled “Risk Factors” and “Enforcement of Civil Liabilities” for more information.
15
The Offering
|
|
|
|
|
Issuer
|
|
Euronav NV, a company incorporated under the laws of Belgium.
|
|
|
|
|
Ordinary Shares offered to the public by us
|
|
ordinary shares ( ordinary shares, if the underwriters exercise their
over-allotment option to purchase additional shares in full).
|
|
|
|
|
Ordinary Shares offered to the public by the selling shareholders
|
|
ordinary shares ( ordinary shares, if the underwriters exercise their
over-allotment option to purchase additional shares in full).
|
|
|
|
|
Ordinary Shares outstanding immediately after the offering
1
|
|
ordinary shares ( ordinary shares, if the underwriters exercise their
over-allotment option to purchase additional shares in full).
|
|
|
|
|
Use of proceeds
|
|
We estimate that we will receive net proceeds of approximately $ million from this offering
($ million if the underwriters’ option to purchase additional shares is exercised in full), after deducting underwriting discounts and commissions and estimated expenses payable by us. These
estimates are based on an assumed initial public offering price of $ per share (the closing price of our existing ordinary shares on the NYSE Euronext Brussels
on , 2014, based on the Bloomberg Composite Rate of
€
per $1.00 in effect on that date.
We intend to use the net proceeds of this offering for the repayment of certain indebtedness, general corporate purposes and working capital, which may include the accretive acquisition of additional new or
secondhand vessels.
In addition, the selling shareholders will receive
$ million in net proceeds from the sale of ordinary shares offered by this prospectus to the public
($ million if the underwriters’ over-allotment option to purchase additional shares is exercised in full) (in each case, based on the assumed initial public offering price of
$ per share). We will not receive any of the proceeds from the sale of these ordinary shares.
Please read “Use of Proceeds.”
|
|
|
|
|
Dividend policy
|
|
Our Board of Directors may, subject to the approval of our shareholders, as the case may be, from time to time, declare and pay cash dividends in accordance with
our
|
|
1
|
Includes 12,297,071 ordinary shares (consisting of 9,459,286 ordinary shares relating to the contribution of the principal amount and, at our option, up to 2,837,785 ordinary
shares relating to the payment of interest in shares over five years) that we will issue at the closing of this offering if we exercise our option to force a conversion of our outstanding perpetual convertible preferred equity securities and
excludes 1,147,621 ordinary shares issuable upon conversion of our outstanding convertible bonds due 2015.
|
16
|
|
|
|
|
|
|
|
|
|
Articles of Association and applicable Belgian law. Our Board of Directors has not declared or paid a dividend since 2010, but will continue to assess the declaration and payment of dividends
upon consideration of our financial results and earnings, restrictions in our debt agreements, market prospects, current capital expenditures, commitments, investment opportunities and the provisions of Belgian law affecting the payment of dividends
to shareholders and other factors. During the 120 day period commencing on the date immediately following the pricing of the offering, or the “Transition Period,” the ordinary shares offered hereby and the existing ordinary shares issued
in Belgium which are currently trading on the NYSE Euronext Brussels will have different dividend rights. If a dividend is declared during the Transition Period, holders of ordinary shares offered hereby would be entitled to receive dividends based
only upon the earnings from our operations from and after the date of issuance, while holders of existing ordinary shares would be entitled to receive dividends based upon our earnings for all prior periods. Upon the completion of the Transition
Period, (i) the ordinary shares offered hereby will immediately have the same dividend rights as the existing ordinary shares and (ii) the ordinary shares and the existing shares will have the same rights and privileges in all respects. We cannot
assure you that we will pay any dividends. Please see “Dividend Policy” and “Description of Share Capital.”
|
|
|
|
|
U.S. Exchange listing
|
|
We intend to apply to have our ordinary shares listed for trading on the NYSE under the symbol “EURN.”
|
|
|
|
|
Transfer agent
|
|
Computershare Trust Company, N.A.
|
|
|
|
|
Tax Considerations
|
|
See “Tax Considerations” for a full discussion of the tax treatment of the Company and holders of our ordinary shares.
|
|
|
|
|
Risk factors
|
|
Investment in our ordinary shares involves a high degree of risk. You should carefully read and consider all of the information set forth under the heading “Risk Factors” and all
other information set forth in this prospectus before investing in our ordinary shares.
|
17
SUMMARY FINANCIAL AND OPERATING DATA
The following table presents, in each case for the periods and as of the dates indicated, historical summary consolidated financial and other
data. The summary consolidated statement of profit or loss data and summary cash flow data for the years ended December 31, 2013, 2012 and 2011 and the summary consolidated statement of financial position data for the years ended
December 31, 2013 and 2012 have been derived from the audited consolidated financial statements, and the notes thereto, included in this prospectus. The summary consolidated statement of profit or loss data and summary cash flow data for the
six months ended June 30, 2014 and 2013 and the summary consolidated statement of financial position data as of June 30, 2014 have been derived from the unaudited condensed consolidated interim financial statements, and the notes thereto, included
in this prospectus. The financial statements included herein have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and are in U.S. dollars. The
following financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the consolidated financial statements and related notes, and other financial
information appearing elsewhere in this prospectus.
Consolidated Statement of Profit or Loss Data
(US$ in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Revenue
|
|
|
201,157
|
|
|
|
153,818
|
|
|
|
304,622
|
|
|
|
320,836
|
|
|
|
326,315
|
|
|
Gains on disposal of vessels/other tangible assets
|
|
|
6,390
|
|
|
|
0
|
|
|
|
8
|
|
|
|
10,067
|
|
|
|
22,153
|
|
|
Other operating income
|
|
|
3,534
|
|
|
|
2,702
|
|
|
|
11,520
|
|
|
|
10,478
|
|
|
|
5,773
|
|
|
Expenses for shipping activities
|
|
|
(117,851
|
)
|
|
|
(99,228
|
)
|
|
|
(206,528
|
)
|
|
|
(210,558
|
)
|
|
|
(212,459
|
)
|
|
Losses on disposal of vessels
|
|
|
(1
|
)
|
|
|
(215
|
)
|
|
|
(215
|
)
|
|
|
(32,080
|
)
|
|
|
(25,501
|
)
|
|
Impairment on non-current assets held for sale
|
|
|
(7,415
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Depreciation tangible assets
|
|
|
(67,674
|
)
|
|
|
(67,880
|
)
|
|
|
(136,882
|
)
|
|
|
(146,881
|
)
|
|
|
(142,358
|
)
|
|
Depreciation intangible assets
|
|
|
(10
|
)
|
|
|
(63
|
)
|
|
|
(75
|
)
|
|
|
(181
|
)
|
|
|
(213
|
)
|
|
Employee benefits
|
|
|
(9,653
|
)
|
|
|
(6,505
|
)
|
|
|
(13,881
|
)
|
|
|
(15,733
|
)
|
|
|
(15,581
|
)
|
|
Other operating expenses
|
|
|
(7,569
|
)
|
|
|
(5,832
|
)
|
|
|
(13,283
|
)
|
|
|
(15,065
|
)
|
|
|
(13,074
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Result from operating activities
|
|
|
908
|
|
|
|
(23,203
|
)
|
|
|
(54,714
|
)
|
|
|
(79,117
|
)
|
|
|
(54,945
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
623
|
|
|
|
720
|
|
|
|
1,993
|
|
|
|
5,349
|
|
|
|
5,663
|
|
|
Finance expenses
|
|
|
(37,138
|
)
|
|
|
(26,302
|
)
|
|
|
(54,637
|
)
|
|
|
(55,507
|
)
|
|
|
(52,484
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net finance expense
|
|
|
(36,515
|
)
|
|
|
(25,582
|
)
|
|
|
(52,644
|
)
|
|
|
(50,158
|
)
|
|
|
(46,821
|
)
|
|
Share of profit (loss) of equity accounted investees (net of income tax)
|
|
|
14,393
|
|
|
|
9,584
|
|
|
|
17,853
|
|
|
|
9,953
|
|
|
|
5,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before income tax
|
|
|
(21,214
|
)
|
|
|
(39,201
|
)
|
|
|
(89,505
|
)
|
|
|
(119,322
|
)
|
|
|
(95,869
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(38
|
)
|
|
|
(72
|
)
|
|
|
(178
|
)
|
|
|
726
|
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
Non-controlling interest
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
(0.20
|
)
|
|
|
(0.79
|
)
|
|
|
(1.79
|
)
|
|
|
(2.37
|
)
|
|
|
(1.92
|
)
|
|
Diluted earnings per share
|
|
|
(0.20
|
)
|
|
|
(0.79
|
)
|
|
|
(1.79
|
)
|
|
|
(2.37
|
)
|
|
|
(1.92
|
)
|
18
Consolidated Statement of Financial Position Data (at Period End)
(US$ in thousands, except for per share and fleet data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Cash and cash equivalents
|
|
|
274,487
|
|
|
|
|
|
|
|
74,309
|
|
|
|
113,051
|
|
|
|
163,108
|
|
|
Vessels
|
|
|
1,683,472
|
|
|
|
|
|
|
|
1,434,800
|
|
|
|
1,592,837
|
|
|
|
1,616,178
|
|
|
Vessels under construction
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
89,619
|
|
|
Current and non-current bank loans
|
|
|
874,337
|
|
|
|
|
|
|
|
847,763
|
|
|
|
911,474
|
|
|
|
938,992
|
|
|
Equity attributable to Owners of the Company
|
|
|
1,374,321
|
|
|
|
|
|
|
|
800,990
|
|
|
|
866,970
|
|
|
|
980,988
|
|
|
Cash flow data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow/(outflow)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
1,378
|
|
|
|
(31,736
|
)
|
|
|
(8,917
|
)
|
|
|
69,812
|
|
|
|
28,060
|
|
|
Investing activities
|
|
|
(512,476
|
)
|
|
|
46,485
|
|
|
|
28,114
|
|
|
|
(86,986
|
)
|
|
|
39,852
|
|
|
Financing activities
|
|
|
711,578
|
|
|
|
(25,311
|
)
|
|
|
(57,384
|
)
|
|
|
(33,117
|
)
|
|
|
(48,606
|
)
|
|
Fleet Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VLCCs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of vessels(1)
|
|
|
14
|
|
|
|
11
|
|
|
|
11
|
|
|
|
13
|
|
|
|
14
|
|
|
Calendar days(2)
|
|
|
2,540
|
|
|
|
2,027
|
|
|
|
4,085
|
|
|
|
4,940
|
|
|
|
5,264
|
|
|
Vessel operating days(3)
|
|
|
2,477
|
|
|
|
1,996
|
|
|
|
4,036
|
|
|
|
4,891
|
|
|
|
5,119
|
|
|
Available days(4)
|
|
|
2,489
|
|
|
|
1,999
|
|
|
|
4,044
|
|
|
|
4,910
|
|
|
|
5,198
|
|
|
Fleet utilization(5)
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
99.9
|
%
|
|
|
99.6
|
%
|
|
|
98.5
|
%
|
|
Daily TCE charter rates(6)
|
|
$
|
26,868
|
|
|
$
|
24,189
|
|
|
$
|
25,788
|
|
|
$
|
23,510
|
|
|
$
|
24,455
|
|
|
Daily vessel operating expenses(7)
|
|
$
|
8,726
|
|
|
$
|
7,778
|
|
|
$
|
8,178
|
|
|
$
|
7,761
|
|
|
$
|
7,440
|
|
|
Suezmaxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of vessels(1)
|
|
|
19
|
|
|
|
19
|
|
|
|
19
|
|
|
|
18
|
|
|
|
18
|
|
|
Calendar days(2)
|
|
|
3,439
|
|
|
|
3,353
|
|
|
|
6,848
|
|
|
|
6,588
|
|
|
|
6,578
|
|
|
Vessel operating days(3)
|
|
|
3,422
|
|
|
|
3,273
|
|
|
|
6,661
|
|
|
|
6,436
|
|
|
|
6,448
|
|
|
Available days(4)
|
|
|
3,430
|
|
|
|
3,275
|
|
|
|
6,664
|
|
|
|
6,489
|
|
|
|
6,456
|
|
|
Fleet utilization(5)
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
99.2
|
%
|
|
|
99.9
|
%
|
|
Daily TCE charter rates(6)
|
|
$
|
24,305
|
|
|
$
|
19,147
|
|
|
$
|
19,283
|
|
|
$
|
21,052
|
|
|
$
|
24,235
|
|
|
Daily vessel operating expenses(7)
|
|
$
|
8,241
|
|
|
$
|
7,579
|
|
|
$
|
7,753
|
|
|
$
|
7,868
|
|
|
$
|
8,442
|
|
|
Average daily general and administrative expenses per vessel—owned tanker segment only(8)
|
|
$
|
2,880
|
|
|
$
|
2,293
|
|
|
$
|
2,485
|
|
|
$
|
2,672
|
|
|
$
|
2,420
|
|
|
Other data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (unaudited)(9)
|
|
$
|
82,985
|
|
|
$
|
54,324
|
|
|
$
|
100,096
|
|
|
$
|
77,898
|
|
|
$
|
93,523
|
|
|
Adjusted EBITDA (unaudited)(9)
|
|
$
|
101,459
|
|
|
$
|
73,145
|
|
|
$
|
138,853
|
|
|
$
|
120,719
|
|
|
$
|
128,367
|
|
|
Time charter equivalents revenues
|
|
$
|
149,728
|
|
|
$
|
110,955
|
|
|
$
|
232,519
|
|
|
$
|
250,476
|
|
|
$
|
281,476
|
|
|
Basic weighted average shares outstanding
|
|
|
104,324,074
|
|
|
|
50,000,000
|
|
|
|
50,230,438
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Diluted weighted average shares outstanding
|
|
|
104,324,074
|
|
|
|
50,000,000
|
|
|
|
50,230,438
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
(1)
|
Average number of vessels
is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of
our fleet during the period divided by the number of calendar days in that period.
|
|
(2)
|
Calendar days
are the total days the vessels were in our possession for the relevant period, including off-hire days associated with major repairs, drydockings or special
or intermediate surveys.
|
|
(3)
|
Vessel operating days
are the total days our vessels were in our possession for the relevant period net of all off-hire days (scheduled and unscheduled), including
off-hire days, associated with major repairs, drydockings or special or intermediate surveys.
|
|
(4)
|
Available days
are the total days our vessels were in our possession for the relevant period net of scheduled off-hire days associated with major repairs, drydockings or
special or intermediate surveys.
|
|
(5)
|
Fleet utilization
is the percentage of time that our vessels were available for revenue generating voyage days and is determined by dividing Vessel
operating days by available days for the relevant period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and
|
19
|
|
minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or intermediate or vessel
positioning.
|
|
(6)
|
Time Charter Equivalent, or TCE
, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating the TCE rate is
consistent with industry standards and is determined by dividing total voyage revenues less voyage expenses by vessel operating days for the relevant time period. The period over which voyage revenues are recognized commences at the time the vessel
leaves the port at which she discharged her cargo related to her previous voyage (or as the case may be when a vessel is leaving a yard at which she went to drydock or in the case of a newbuilding or a newly acquired vessel as from the moment the
vessel is available to take a cargo. The period ends at the time that discharge of cargo is completed. Net voyage revenues are voyage revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to
a particular voyage, which would otherwise be paid by the charterer under a time charter contract. We may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time charter, during periods of
commercial waiting time or while off-hire during dry-docking or due to other unforeseen circumstances.
|
|
|
The TCE rate is not a measure of financial performance under IFRS (non-IFRS measure), and should not be considered as an alternative to voyage revenues, the most directly
comparable IFRS measure, or any other measure of financial performance presented in accordance with IFRS. However, TCE rate is standard shipping industry performance measure used primarily to compare period-to-period changes in a company’s
performance and assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rates may not be comparable to that reported by other companies. The
following table reflects the calculation of our TCE rates for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
VLCC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net VLCC revenues for all employment types
|
|
$
|
66,560,116
|
|
|
$
|
48,287,795
|
|
|
$
|
104,068,875
|
|
|
$
|
114,987,548
|
|
|
$
|
125,195,000
|
|
|
Total VLCC operating days
|
|
|
2,477
|
|
|
|
1,996
|
|
|
|
4,036
|
|
|
|
4,891
|
|
|
|
5,119
|
|
|
Daily VLCC TCE Rate
|
|
$
|
26,868
|
|
|
$
|
24,189
|
|
|
$
|
25,788
|
|
|
$
|
23,510
|
|
|
$
|
24,455
|
|
|
SUEZMAX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Suezmax revenues for all employment types
|
|
$
|
83,167,458
|
|
|
$
|
62,666,847
|
|
|
$
|
128,449,941
|
|
|
$
|
135,488,742
|
|
|
$
|
156,280,502
|
|
|
Total Suezmax operating days
|
|
|
3,422
|
|
|
|
3,273
|
|
|
|
6,661
|
|
|
|
6,436
|
|
|
|
6,448
|
|
|
Daily Suezmax rate
|
|
$
|
24,305
|
|
|
$
|
19,147
|
|
|
$
|
19,283
|
|
|
$
|
21,052
|
|
|
$
|
24,235
|
|
|
Tanker Fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tanker fleet revenues for all employment type
|
|
$
|
149,727,574
|
|
|
$
|
110,954,643
|
|
|
$
|
232,518,817
|
|
|
$
|
250,476,290
|
|
|
$
|
281,475,502
|
|
|
Total Fleet operating days
|
|
|
5,899
|
|
|
|
5,269
|
|
|
|
10,697
|
|
|
|
11,327
|
|
|
|
11,568
|
|
|
Daily Fleetwide TCE
|
|
$
|
25,381
|
|
|
$
|
21,057
|
|
|
$
|
21,737
|
|
|
$
|
22,114
|
|
|
$
|
24,333
|
|
20
|
|
The following table reflects the calculation of our net revenues for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June
30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Voyage charter revenues
|
|
$
|
130,107
|
|
|
$
|
81,284
|
|
|
$
|
171,225
|
|
|
$
|
175,947
|
|
|
$
|
139,265
|
|
|
Time charter revenues
|
|
$
|
71,050
|
|
|
$
|
72,534
|
|
|
$
|
133,396
|
|
|
$
|
144,889
|
|
|
$
|
187,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal revenue
|
|
$
|
201,157
|
|
|
$
|
153,818
|
|
|
$
|
304,622
|
|
|
$
|
320,836
|
|
|
$
|
326,315
|
|
|
Other income
|
|
$
|
3,534
|
|
|
$
|
2,702
|
|
|
$
|
11,520
|
|
|
$
|
10,478
|
|
|
$
|
5,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
$
|
204,691
|
|
|
$
|
156,520
|
|
|
$
|
316,142
|
|
|
$
|
331,314
|
|
|
$
|
332,088
|
|
|
Net Tanker Fleet Revenues reconciliation
Tanker Fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of total Revenues attributable to ships owned by Euronav*
|
|
$
|
204,314
|
|
|
$
|
148,870
|
|
|
$
|
305,930
|
|
|
$
|
322,576
|
|
|
$
|
328,359
|
|
|
less voyage expenses and commissions
|
|
$
|
(54,586
|
)
|
|
$
|
(37,915
|
)
|
|
$
|
(73,412
|
)
|
|
$
|
(72,100
|
)
|
|
$
|
(46,884
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Total tanker fleet
|
|
$
|
149,728
|
|
|
$
|
110,955
|
|
|
$
|
232,519
|
|
|
$
|
250,476
|
|
|
$
|
281,476
|
|
|
of which Net VLCC Revenues for all employment types
|
|
$
|
66,560
|
|
|
$
|
48,288
|
|
|
$
|
104,069
|
|
|
$
|
114,988
|
|
|
$
|
125,195
|
|
|
of which Net Suezmax Revenues for all employment types
|
|
$
|
83,168
|
|
|
$
|
62,667
|
|
|
$
|
128,450
|
|
|
$
|
135,489
|
|
|
$
|
156,281
|
|
|
|
*
|
Some revenues are excluded because these do not relate directly to vessels.
|
|
(7)
|
Daily vessel operating expenses, or DVOE
, is calculated by dividing direct vessel expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil,
insurance and maintenance and repairs, by calendar days for the relevant time period.
|
|
(8)
|
Average daily general and administrative expense
s
are calculated by dividing general and administrative expenses by calendar days for our owned tanker segment and
relevant time period. Average daily general and administrative expenses are lower when our jointly-owned vessels are included in this calculation.
|
|
(9)
|
EBITDA
(a non-GAAP measure) represents operating earnings before interest expense, income, taxes and depreciation expense attributable to the Company. EBITDA is presented
to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. The Company believes that EBITDA is useful to investors as the shipping industry is
capital intensive which often brings significant cost of financing. EBITDA should not be considered a substitute for profit/(loss) attributable to the Company or cash flow from operating activities prepared in accordance with IFRS as issued by the
IASB or as a measure of profitability or liquidity. The definition of EBITDA used here may not be comparable to that used by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June
30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
$
|
(21,252
|
)
|
|
$
|
(39,273
|
)
|
|
$
|
(89,683
|
)
|
|
$
|
(118,596
|
)
|
|
$
|
(95,987
|
)
|
|
plus
Net finance expenses
|
|
$
|
36,515
|
|
|
$
|
25,582
|
|
|
$
|
52,644
|
|
|
$
|
50,158
|
|
|
$
|
46,821
|
|
|
plus
Depreciation of tangible and intangible assets
|
|
$
|
67,684
|
|
|
$
|
67,943
|
|
|
$
|
136,957
|
|
|
$
|
147,062
|
|
|
$
|
142,571
|
|
|
plus
Income tax expense
|
|
$
|
38
|
|
|
$
|
72
|
|
|
$
|
178
|
|
|
$
|
(726
|
)
|
|
$
|
118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
82,985
|
|
|
$
|
54,324
|
|
|
$
|
100,096
|
|
|
$
|
77,898
|
|
|
$
|
93,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (a non-GAAP measure) represents operating earnings of the group (including the share of EBITDA of equity accounted investees) before interest
expense, income, taxes and depreciation expense attributable to the Company. Adjusted EBITDA provides investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative
periods as the shipping industry is a capital intensive industry which often brings significant cost of financing. The company also believes that adjusted EBITDA is useful to investors and equity analysts as a measure of the company’s operating
performance that can be readily compared to other companies and the company uses adjusted EBITDA in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources. Adjusted EBITDA
|
21
|
|
should not be considered a substitute for profit/(loss) attributable to the Company or cash flow from operating activities prepared in accordance with IFRS as issued by the IASB or any other
measure of operating performance. The definition of adjusted EBITDA used here may not be comparable to that used by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June
30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period using proportionate method for Equity Accounted Investees
|
|
$
|
(21,252
|
)
|
|
$
|
(39,273
|
)
|
|
$
|
(89,683
|
)
|
|
$
|
(118,596
|
)
|
|
$
|
(95,987
|
)
|
|
plus
Net finance expenses
|
|
$
|
36,515
|
|
|
$
|
25,582
|
|
|
$
|
52,644
|
|
|
$
|
50,158
|
|
|
$
|
46,821
|
|
|
plus
Net finance expenses JV
|
|
$
|
4,076
|
|
|
$
|
3,605
|
|
|
$
|
8,352
|
|
|
$
|
12,370
|
|
|
$
|
8,892
|
|
|
plus
Depreciation of tangible and intangible assets
|
|
$
|
67,684
|
|
|
$
|
67,943
|
|
|
$
|
136,957
|
|
|
$
|
147,062
|
|
|
$
|
142,571
|
|
|
plus
Depreciation of tangible and intangible assets JV
|
|
$
|
14,398
|
|
|
$
|
15,216
|
|
|
$
|
30,405
|
|
|
$
|
30,451
|
|
|
$
|
25,952
|
|
|
plus
Income tax expense
|
|
$
|
38
|
|
|
$
|
72
|
|
|
$
|
178
|
|
|
$
|
(726
|
)
|
|
$
|
118
|
|
|
plus
Income tax expense JV
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
101,459
|
|
|
$
|
73,145
|
|
|
$
|
138,853
|
|
|
$
|
120,719
|
|
|
$
|
128,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and uncertainties. Where any forward-looking statement includes a statement
about the assumptions or bases underlying the forward-looking statement, we caution that, while we believe these assumptions or bases to be reasonable and made in good faith, assumed facts or bases almost always vary from the actual results, and the
differences between assumed facts or bases and actual results can be material, depending upon the circumstances. Where, in any forward-looking statement, our management expresses an expectation or belief as to future results, such expectation or
belief is expressed in good faith and is believed to have a reasonable basis. We cannot assure you, however, that the statement of expectation or belief will result or be achieved or accomplished. These statements relate to analyses and other
information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. Forward-looking statements are identified by their
use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,”
“will” and similar terms and phrases, including references to assumptions. Forward-looking statements involve risks and uncertainties that may cause actual future activities and results of operations to be materially different from those
suggested or described in this prospectus. These risks include the risks that are identified in the “Risk Factors” section of this prospectus, and also include, among others, risks associated with the following:
|
|
•
|
|
competition within our industry;
|
|
|
•
|
|
oversupply of vessels comparable to ours or higher specification vessels;
|
|
|
•
|
|
corruption, piracy, militant activities, political instability, terrorism, ethnic unrest and regionalism in countries where we may operate;
|
|
|
•
|
|
delays and cost overruns in construction projects;
|
|
|
•
|
|
our level of indebtedness;
|
|
|
•
|
|
our ability to incur additional indebtedness under and compliance with restrictions and covenants in our debt agreements;
|
|
|
•
|
|
our need for cash to meet our debt service obligations;
|
|
|
•
|
|
our levels of operating and maintenance costs;
|
|
|
•
|
|
availability of skilled workers and the related labor costs;
|
|
|
•
|
|
compliance with governmental, tax, environmental and safety regulation;
|
|
|
•
|
|
any non-compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA, or other applicable regulations relating to bribery;
|
|
|
•
|
|
general economic conditions and conditions in the oil and natural gas industry;
|
|
|
•
|
|
effects of new products and new technology in our industry;
|
|
|
•
|
|
termination of our customer contracts;
|
|
|
•
|
|
our dependence on key personnel;
|
|
|
•
|
|
adequacy of insurance coverage;
|
|
|
•
|
|
our ability to obtain indemnity from customers;
|
|
|
•
|
|
changes in laws, treaties or regulations;
|
|
|
•
|
|
the volatility of the price of our ordinary shares; and
|
23
|
|
•
|
|
our incorporation under the laws of Belgium and the limited rights to relief that may be available compared to other countries, including the United States.
|
Any forward-looking statements contained in this prospectus should not be relied upon as predictions of future
events. No assurance can be given that the expectations expressed in these forward-looking statements will prove to be correct. Actual results could differ materially from expectations expressed in the forward-looking statements if one or more of
the underlying assumptions or expectations proves to be inaccurate or is not realized. You should thoroughly read this prospectus with the understanding that our actual future results may be materially different from and worse than what we expect.
Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. Some important factors that could cause actual results to differ
materially from those in the forward-looking statements are, in certain instances, included with such forward-looking statements and in “Risk Factors” in this prospectus. Additionally, new risk factors and uncertainties emerge from time to
time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking statements. We qualify all of the forward-looking statements by these cautionary statements.
Readers are cautioned not to place undue reliance on the forward-looking statements contained in this prospectus, which represent the best judgment of our management. Such statements, estimates and projections
reflect various assumptions made by us concerning anticipated results, which are subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control and which may or may not prove to be correct. We
undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
24
RISK FACTORS
An investment in our ordinary shares involves a high degree of risk. You should consider carefully the following risk factors, as well as the
other information contained in this prospectus, before making an investment in our ordinary shares. The following risks relate principally to us and our business and the industry in which we operate, the securities market and ownership of our
ordinary shares. Any of the risk factors described below could significantly and negatively affect our business, financial condition or operating results, which may reduce our ability to pay dividends and lower the trading price of our ordinary
shares. You may lose part or all of your investment.
Risks Related to Our Industry
If the tanker industry, which historically has been cyclical, continues to be depressed in the future, our earnings and available cash flow may be adversely
affected.
The tanker industry is both cyclical and volatile in terms of charter rates and profitability. During the five year period
from 2009 through 2013, time charter equivalent (TCE) spot rates for a VLCC trading between the Middle East Gulf and Japan ranged from negative values to a high of $74,600 per day. This volatility continued in 2014, with average monthly rates on the
same route in the first seven months of the year fluctuating between $43,600 to $5,300 per day. A worsening of the current global economic conditions may adversely affect our ability to charter or recharter our vessels or to sell them on the
expiration or termination of their charters, or any renewal or replacement charters that we enter into may not be sufficient to allow us to operate our vessels profitably. Fluctuations in charter rates and vessel values result from changes in the
supply and demand for tanker capacity and changes in the supply and demand for oil and oil products. The factors affecting the supply and demand for tankers are outside of our control, and the nature, timing and degree of changes in industry
conditions are unpredictable.
The factors that influence demand for tanker capacity include:
|
|
•
|
|
supply and demand for energy resources and oil, petroleum products and natural gas;
|
|
|
•
|
|
regional availability of refining capacity and inventories;
|
|
|
•
|
|
global and regional economic and political conditions, including armed conflicts, terrorist activities and strikes;
|
|
|
•
|
|
the distance over which the oil and the oil products are to be moved by sea;
|
|
|
•
|
|
changes in seaborne and other transportation patterns;
|
|
|
•
|
|
environmental and other legal and regulatory developments;
|
|
|
•
|
|
weather and natural disasters;
|
|
|
•
|
|
competition from alternative sources of energy; and
|
|
|
•
|
|
international sanctions, embargoes, import and export restrictions, nationalizations and wars.
|
The factors that influence the supply of tanker capacity include:
|
|
•
|
|
supply and demand for energy resources and oil and petroleum products;
|
|
|
•
|
|
the number of newbuilding deliveries;
|
|
|
•
|
|
the scrapping rate of older vessels;
|
25
|
|
•
|
|
conversion of tankers to other uses;
|
|
|
•
|
|
the number of vessels that are out of service;
|
|
|
•
|
|
environmental concerns and regulations; and
|
|
|
•
|
|
port or canal congestion.
|
Declines in oil and natural gas prices for an extended period of time, or market expectations of potential decreases in these prices, could
negatively affect our future growth in the offshore sector. Sustained periods of low oil and natural gas prices typically result in reduced exploration and extraction because oil and natural gas companies’ capital expenditure budgets are
subject to cash flow from such activities and are therefore sensitive to changes in energy prices. These changes in commodity prices can have a material effect on demand for our services, and periods of low demand can cause excess vessel supply and
intensify the competition in the industry, which often results in vessels, particularly older and less technologically-advanced vessels, being idle for long periods of time. We cannot predict the future level of demand for our services or future
conditions of the oil and natural gas industry. Any decrease in exploration, development or production expenditures by oil and natural gas companies could reduce our revenues and materially harm our business, results of operations and cash available
for distribution.
Any decrease in shipments of crude oil may adversely affect our financial performance.
The demand for our vessels and services in transporting oil derives primarily from demand for Arabian Gulf, West African, North Sea and Caribbean
crude oil, which, in turn, primarily depends on the economies of the world’s industrial countries and competition from alternative energy sources. A wide range of economic, social and other factors can significantly affect the strength of the
world’s industrial economies and their demand for crude oil from the mentioned geographical areas. One such factor is the price of worldwide crude oil. The world’s oil markets have experienced high levels of volatility in the last 25
years. By the end of December 2010, the price of oil was approximately $92 per barrel and continued to rise to approximately $100 by the end of December 2011. In 2012, crude oil reached a high of $118.74 per barrel and a low of $91.19 per barrel and
in 2013, crude oil reached a high of $118.90 per barrel and a low of $97.69 per barrel.
Any decrease in shipments of crude oil
from the above-mentioned geographical areas would have a material adverse effect on our financial performance. Among the factors which could lead to such a decrease are:
|
|
•
|
|
increased crude oil production from other areas, including the exploitation of shale reserves in the United States and the growth in its domestic oil production
and exportation;
|
|
|
•
|
|
increased refining capacity in the Arabian Gulf or West Africa;
|
|
|
•
|
|
increased use of existing and future crude oil pipelines in the Arabian Gulf or West Africa;
|
|
|
•
|
|
a decision by Arabian Gulf or West African oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;
|
|
|
•
|
|
armed conflict in the Arabian Gulf and West Africa and political or other factors; and
|
|
|
•
|
|
trade embargoes or other economic sanctions by the United States and other countries against Russia as a result of increased political tension due to
Russia’s recent annex of Crimea; and
|
26
|
|
•
|
|
the development and the relative costs of nuclear power, natural gas, coal and other alternative sources of energy.
|
In addition, the current economic conditions affecting the United States and world economies may result in reduced consumption of oil products and
a decreased demand for our vessels and lower charter rates, which could have a material adverse effect on our earnings and our ability to pay dividends.
An over-supply of tanker capacity may lead to a reduction in charter rates, vessel values, and profitability.
The market supply of tankers is affected by a number of factors, such as supply and demand for energy resources, including oil and petroleum
products, supply and demand for seaborne transportation of such energy resources, and the current and expected purchase orders for newbuildings. If the capacity of new tankers delivered exceeds the capacity of tankers being scrapped and converted to
non-trading tankers, tanker capacity will increase. If the supply of tanker capacity increases and if the demand for tanker capacity decreases or does not increase correspondingly, charter rates could materially decline. A reduction in charter rates
and the value of our vessels may have a material adverse effect on our results of operations and available cash and our ability to comply with the covenants in our loan agreements.
Our growth in the offshore FSO sector depends on the level of activity in the offshore oil and natural gas industry, which is significantly affected by, among other things, volatile oil and natural gas prices,
and may be materially and adversely affected by a decline in the offshore oil and natural gas industry.
The offshore production,
storage and export industry is cyclical and volatile. Our growth strategy includes on expansion in the offshore FSO sector, which depends on the level of activity in oil and natural gas exploration, development and production in offshore areas
worldwide. The availability of quality FSO prospects, exploration success, relative production costs, the stage of reservoir development and political and regulatory environments affect customers’ FSO programs. Oil and natural gas prices and
market expectations of potential changes in these prices also significantly affect this level of activity and demand for offshore units.
Our results
of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.
We operate our vessels in
markets that have historically exhibited seasonal variations in demand and, as a result, charter rates. Peaks in tanker demand quite often precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks
in oil demand can broadly be classified into two main categories: (1) increased demand prior to Northern Hemisphere winters as heating oil consumption increases and (2) increased demand for gasoline prior to the summer driving season in
the United States. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. This seasonality may result in quarter-to-quarter volatility in our operating results, as many of our vessels trade in the spot market.
Seasonal variations in tanker demand will affect any spot market related rates that we may receive.
Acts of piracy on ocean-going vessels could
adversely affect our business.
Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as
the South China Sea, the Indian Ocean and in the Gulf of Aden. Although the frequency
27
of sea piracy worldwide decreased during 2013 to its lowest level since 2009, sea piracy incidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia and increasingly in
the Gulf of Guinea, with drybulk vessels and tankers particularly vulnerable to such attacks. If these piracy attacks result in regions in which our vessels are deployed being characterized by insurers as “enhanced risk” zones, premiums
payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including costs which may be incurred to the extent we employ onboard security guards, could increase in
such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in
cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, results of operations, cash flows and financial condition and may result in loss of revenues, increased costs and decreased cash flows to our
customers, which could impair their ability to make payments to us under our charters.
The current state of the global financial markets and current
economic conditions may adversely impact our ability to obtain additional financing on acceptable terms and otherwise negatively impact our business.
Global financial markets and economic conditions have been, and continue to be, volatile. In recent years, operating businesses in the global economy have faced tightening credit, weakening demand for goods and
services, deteriorating international liquidity conditions, and declining markets. Since 2008, there has been a general decline in the willingness of banks and other financial institutions to extend credit, particularly in the shipping industry, due
to the historically volatile asset values of vessels. As the shipping industry is highly dependent on the availability of credit to finance and expand operations, it has been negatively affected by this decline.
Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of
obtaining money from the credit markets may increase as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases
ceased, to provide funding to borrowers. Due to these factors, additional financing may not be available if needed and to the extent required, on acceptable terms or at all. If additional financing is not available when needed, or is available only
on unfavorable terms, we may be unable to expand or meet our obligations as they come due or we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take advantage of business opportunities as they
arise.
If economic conditions throughout the world continue to be volatile, it could impede our operations.
Negative trends in the global economy that emerged in 2008 continue to adversely affect global economic conditions. In addition, the world economy
continues to face a number of new challenges, including uncertainty related to the continuing discussions in the United States regarding the U.S. federal debt ceiling, mandatory reductions in U.S. federal spending, continuing turmoil and hostilities
in the Middle East, North Africa, Russia, the Ukraine and Crimea and other geographic areas and countries, continuing economic weakness in the European Union and softening growth in China. There has historically been a strong link between the
development of the world economy and demand for energy, including oil and gas. An extended period of deterioration in the outlook for the world economy could reduce the overall demand for oil and gas and for our services. Such changes could
adversely affect our results of operations and cash flows.
28
The economies of the United States, the European Union and other parts of the world continue to
experience relatively slow growth or remain in recession and exhibit weak economic trends. The credit markets in the United States and Europe have experienced significant contraction, de-leveraging and reduced liquidity, and the U.S. federal
government and state governments and European authorities continue to implement a broad variety of governmental action and/or new regulation of the financial markets. Global financial markets and economic conditions have been, and continue to be,
severely disrupted and volatile. Since 2008, lending by financial institutions worldwide remains at significantly lower levels than in the period preceding 2008.
We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking and securities markets around the world, among other factors. We cannot predict how long the
current market conditions will last. However, these recent and developing economic and governmental factors, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operations and
financial condition and may cause the price of our ordinary shares to decline.
The instability of the Euro or the inability of countries to
refinance their debts could have a material adverse effect on our revenue, profitability and financial position.
As a result of the
credit crisis in Europe, in particular in Greece, Italy, Ireland, Portugal and Spain, the European Commission created the European Financial Stability Facility, or the EFSF, and the European Financial Stability Mechanism, or the EFSM, to provide
funding to Eurozone countries in financial difficulties that seek such support. In March 2011, the European Council agreed on the need for Eurozone countries to establish a permanent stability mechanism, the European Stability Mechanism, or the ESM,
which was established on September 27, 2012 to assume the role of the EFSF and the EFSM in providing external financial assistance to Eurozone countries. Despite these measures, concerns persist regarding the debt burden of certain Eurozone
countries and their ability to meet future financial obligations and the overall stability of the Euro. An extended period of adverse development in the outlook for European countries could reduce the overall demand for oil and gas and for our
services. These potential developments, or market perceptions concerning these and related issues, could affect our financial position, results of operations and cash flow.
Consolidation and governmental regulation of suppliers may increase the cost of obtaining supplies or restrict our ability to obtain needed supplies, which may have a material adverse effect on our results of
operations and financial condition.
We rely on third-parties to provide supplies and services necessary for our operations,
including equipment suppliers, caterers and machinery suppliers. Recent mergers have reduced the number of available suppliers, resulting in fewer alternatives for sourcing key supplies. With respect to certain items, we are generally dependent upon
the original equipment manufacturer for repair and replacement of the item or its spare parts. Such consolidation may result in a shortage of supplies and services thereby increasing the cost of supplies and/or potentially inhibiting the ability of
suppliers to deliver on time. These cost increases or delays could have a material adverse effect on our results of operations and result in downtime, and delays in the repair and maintenance of our vessels and FSOs. Furthermore, many of our
suppliers are U.S. companies or non-U.S. subsidiaries owned or controlled by U.S. companies, which means that in the event a U.S. supplier was debarred or otherwise restricted by the U.S. government from delivering products, our ability to
supply and service our operations could be materially impacted. In addition, through regulation and permitting, certain foreign governments effectively restrict the number of suppliers and technicians available to supply and service our
29
operations in those jurisdictions, which could materially impact our operations and financial condition.
We are subject to complex laws and regulations, including environmental laws and regulations that can adversely affect our business, results of operations, cash flows, financial condition, and our available
cash.
Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national,
state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These requirements include, but
are not limited to, the U.S. Oil Pollution Act of 1990, or OPA, the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, the U.S. Clean Air Act, the U.S. Clean Water Act, the U.S. Marine Transportation
Security Act of 2002, European Union regulations, regulations of the International Maritime Organization, or the IMO, including the International Convention for the Prevention of Pollution from Ships of 1975, the International Convention for the
Prevention of Marine Pollution of 1973, the International Convention for the Safety of Life at Sea of 1974, the International Convention on Load Lines of 1966, and the International Ship and Port Facility Security Code. Compliance with such laws and
regulations, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs in order to comply with other existing and future
regulatory obligations, including, but not limited to, costs relating to air emissions including greenhouse gases, the management of ballast waters, maintenance and inspection, development and implementation of emergency procedures and insurance
coverage or other financial assurance of our ability to address pollution incidents. Oil spills that occur from time to time may also result in additional legislative or regulatory initiatives that may affect our operations or require us to incur
additional expenses to comply with such new laws or regulations.
These costs could have a material adverse effect on our business,
results of operations, cash flows and financial condition and our available cash. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our
operations. Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. Under OPA, for example,
owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-nautical mile exclusive economic zone around the United States (unless the spill results solely from the act or omission of a
third-party, an act of God or an act of war). An oil spill could result in significant liability, including fines, penalties, criminal liability and remediation costs for natural resource damages under international and U.S. federal, state and local
laws, as well as third-party damages, including punitive damages, and could harm our reputation with current or potential charterers of our tankers. We are required to satisfy insurance and financial responsibility requirements for potential oil
(including marine fuel) spills and other pollution incidents. Although we have arranged insurance to cover certain environmental risks, there can be no assurance that such insurance will be sufficient to cover all such risks or that any claims will
not have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.
30
If we fail to comply with international safety regulations, we may be subject to increased liability, which may
adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.
The operation of
our vessels is affected by the requirements set forth in the IMO’s International Management Code for the Safe Operation of Ships and Pollution Prevention, or the ISM Code, promulgated by the IMO under the International Convention for the Safety
of Life at Sea of 1974, or SOLAS. The ISM Code requires the party with operational control of a vessel to develop and maintain an extensive “Safety Management System” that includes, among other things, the adoption of a safety and
environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. If we fail to comply with the ISM Code, we may be subject to increased liability, invalidation of
our existing insurance or a reduction in available insurance coverage for our affected vessels.
Non-compliance with the ISM Code and
other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to decreases in, or invalidation of, available insurance coverage for affected vessels and may result in the denial of access to, or detention in,
some ports. The U.S. Coast Guard and European Union authorities have indicated that vessels not in compliance with the ISM Code by the applicable deadlines will be prohibited from trading in U.S. and European Union ports.
Climate change and greenhouse gas restrictions may adversely impact our operations and markets.
Due to concern over the risk of climate change, a number of countries and the IMO have adopted, or are considering the adoption of, regulatory
frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. In addition,
although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which required adopting countries to implement national programs to
reduce emissions of certain gases, a new treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws, regulations and obligations relating to climate change could increase our costs related
to operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program. Revenue generation and
strategic growth opportunities may also be adversely affected.
Adverse effects upon the oil and gas industry relating to climate
change, including growing public concern about the environmental impact of climate change, may also adversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may
reduce the demand for oil and gas in the future or create greater incentives for use of alternative energy sources. Any long-term material adverse effect on the oil and gas industry could have a significant financial and operational adverse impact
on our business that we cannot predict with certainty at this time.
Declines in charter rates and other market deterioration could cause us to incur
impairment charges.
We evaluate the carrying amounts of our vessels to determine if events have occurred that would require an
impairment of their carrying amounts. The recoverable amount of vessels is reviewed based on events and changes in circumstances that would indicate that the carrying
31
amount of the assets might not be recovered. The review for potential impairment indicators and projection of future cash flows related to the vessels is complex and requires us to make various
estimates including future freight rates, earnings from the vessels and discount rates. All of these items have been historically volatile.
We evaluate the recoverable amount as the higher of fair value less costs to sell and value in use. If the recoverable amount is less than the carrying amount of the vessel, the vessel is deemed impaired. The
carrying values of our vessels may not represent their fair market value at any point in time because the new market prices of secondhand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. For the six months ended
June 30, 2014 and the years ended December 31, 2013 and 2012, we evaluated the recoverable amount of our vessels and we did not recognize an impairment loss. Any impairment charge incurred as a result of further declines in charter rates could
negatively affect our business, financial condition, operating results or the trading price of our ordinary shares.
If our vessels suffer damage due
to the inherent operational risks of the tanker industry, we may experience unexpected drydocking costs and delays or total loss of our vessels, which may adversely affect our business and financial condition.
The operation of an ocean-going vessel carries inherent risks. Our vessels and their cargoes will be at risk of being damaged or lost because of
events such as marine disasters, bad weather, and other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy and other circumstances or events. Changing
economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These hazards may
result in death or injury to persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships, and market disruptions, delay or rerouting, which may also subject us to
litigation. In addition, the operation of tankers has unique operational risks associated with the transportation of oil. An oil spill may cause significant environmental damage and the associated costs could exceed the insurance coverage available
to us. Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in
tankers.
If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs and
maintenance are unpredictable and may be substantial. We may have to pay drydocking costs that our insurance does not cover in full. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of these
repairs, may adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking
facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located to our vessels’ positions. The loss of earnings while these vessels are forced to wait for space or to travel to more distant drydocking
facilities may adversely affect our business and financial condition. Further, the total loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator. If we are unable to adequately maintain or safeguard our
vessels, we may be unable to prevent any such damage, costs, or loss which could negatively impact our business, financial condition, results of operations and available cash.
32
We may be subject to risks inherent in the conversion of vessels into FSO units and the operation of FSO
activities.
Our FSO activities are subject to various risks, including delays, cost overruns, unavailability of supplies, employee
negligence, defects in machinery, collisions, service damage to vessels, damage or loss to freight, piracy or strikes. In case of delays in delivering FSO under service contract to the end-user, contracts can be amended and/or cancelled. Moreover,
the operation of FSO vessels is subject to the inherent possibility of maritime disasters, such as oil spills and other environmental accidents, and to the obligations arising from the ownership and management of vessels in international trade. We
have established current insurance against possible accidents and environmental damage and pollution that complies with applicable law and standard practices in the sector. However, there is no guarantee that such insurance will remain available at
rates which are regarded as reasonable by us or that such insurance will remain sufficient to cover all losses incurred or the cost of each compensation claim made against us, or that our insurance policies will cover the loss of income resulting
from a vessel becoming non-operational. Should compensation claims be made against us, our vessels may be impounded or subject to other judicial procedures, which would adversely affect our results of operations and financial condition.
If labor interruptions are not resolved in a timely manner, they could have a material adverse effect on our business, results of operations, cash flows,
financial condition and ability to pay dividends.
We employ masters, officers and crews to man our vessels. If not resolved in a
timely and cost-effective manner, industrial action or other labor unrest could prevent or hinder our operations from being carried out as we expect and could have a material adverse effect on our business, results of operations, cash flows,
financial condition and ability to pay dividends.
Our labor costs and the operating restrictions that apply to us could increase as a result of
collective bargaining negotiations and changes in labor laws and regulations, and disputes resulting in work stoppages, strikes, or disruptions could adversely affect our business.
The majority of our employees (land-based and offshore) are represented by collective bargaining agreements in Belgium, Greece, France and the
Philippines. For a limited number of vessels, the employment of onboard staff is based on internationally negotiated collective bargaining agreements. In addition, many of these represented individuals are working under agreements that are subject
to salary negotiation. These negotiations could result in higher personnel costs, other increased costs or increased operating restrictions that could adversely affect our financial performance. In addition, as part of our legal obligations, we are
required to contribute certain amounts to retirement funds and pension plans (with insurance companies or integrated in a national social security scheme) and are bound to legal restrictions in our ability to dismiss employees. Any disagreements
concerning ordinary or extraordinary collective bargaining may damage our reputation and the relationship with our employees and lead to labor disputes, including work stoppages, strikes and/or work disruptions, which could hinder our operations
from being carried out normally, and if not resolved in a timely cost-effective manner, could have a material effect on our business.
We operate our
vessels worldwide and as a result, our vessels are exposed to international risks which may reduce revenue or increase expenses.
The
international shipping industry is an inherently risky business involving global operations. Our vessels and their cargoes will be at risk of being damaged or lost because of
33
events such as marine disasters, bad weather, and acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism,
piracy and other circumstances or events. In addition, changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways,
piracy, terrorism, labor strikes and boycotts. These sorts of events could interfere with shipping routes and result in market disruptions which may reduce our revenue or increase our expenses.
International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination and
trans-shipment points. Inspection procedures can result in the seizure of the cargo and/or our vessels, delays in the loading, offloading or delivery and the levying of customs duties, fines or other penalties against us. It is possible that changes
to inspection procedures could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment
of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.
World events could affect our results of operations and financial condition.
We conduct most of our operations outside of the United States and Belgium, and our business, results of operations, cash flows, financial condition and available cash may be adversely affected by the effects of
political instability, terrorist or other attacks, war or international hostilities. Continuing conflicts and recent developments in North Korea, the Middle East, including Egypt, and North Africa, including Libya, and the presence of the
United States and Belgium and other armed forces in Afghanistan may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further world economic instability and uncertainty in global financial
markets. As a result of the above, insurers have increased premiums and reduced or restricted coverage for losses caused by terrorist acts generally. Future terrorist attacks could result in increased volatility of the financial markets and
negatively impact the U.S. and global economy. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all.
In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and
piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact on our business, financial condition, results of operations
and available cash.
If our vessels call on ports located in countries that are subject to sanctions and embargos imposed by the U.S. or other
governments that could adversely affect our reputation and the market for our ordinary shares.
Although we believe that no vessels
owned or operated by us have called on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and other authorities or countries identified by the U.S. government or other authorities as state sponsors of
terrorism, such as Cuba, Iran, Sudan and Syria, in the future, our vessels may call on ports in these countries from time to time on charterers’ instructions. Sanctions and embargo laws and regulations vary in their application, as they do not
all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be
34
amended or strengthened over time. In 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act, or “CISADA,” which expanded the scope of the Iran
Sanctions Act. Among other things, CISADA expands the application of the prohibitions on companies such as ours and introduces limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the
investment, supply or export of refined petroleum or petroleum products.
In 2012, President Obama signed Executive Order 13608 which
prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. Any persons
found to be in violation of Executive Order 13608 will be deemed a foreign sanctions evader and will be banned from all contacts with the United States, including conducting business in US dollars. Also in 2012, President Obama signed into law the
Iran Threat Reduction and Syria Human Rights Act of 2012, or the Iran Threat Reduction Act, which created new sanctions and strengthened existing sanctions. Among other things, the Iran Threat Reduction Act intensifies existing sanctions regarding
the provision of goods, services, infrastructure or technology to Iran’s petroleum or petrochemical sector. The Iran Threat Reduction Act also includes a provision requiring the President of the United States to impose five or more sanctions
from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to
another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person
knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of that
person’s vessels from U.S. ports for up to two years.
On November 24, 2013, the P5+1 (the United States, United Kingdom,
Germany, France, Russia and China) entered into an interim agreement with Iran entitled the “Joint Plan of Action,” or JPOA. Under the JPOA it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its
nuclear program is used only for peaceful purposes, the United States and European Union would voluntarily suspend certain sanctions for a period of six months. On January 20, 2014, the United States and European Union indicated that they would
begin implementing the temporary relief measures provided for under the JPOA. These measures include, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industries from
January 20, 2014 until July 20, 2014. The United States has since extended the JPOA until November 24, 2014.
In addition,
charterers and other parties that we have previously entered into contracts with regarding our vessels may be affiliated with persons or entities that are now or may soon be the subject of sanctions imposed by the Obama administration and/or the
European Union or other international bodies in response to recent events relating to Russia, Crimea and the Ukraine. If we determine that such sanctions require us to terminate existing contracts or if we are found to be in violation of such
sanctions, we may suffer reputational harm and our results of operations may be adversely affected.
Although we believe that we have
been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be
unclear and may be subject to changing interpretations. Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital
35
markets and conduct our business and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors
may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to
invest in, or to divest from, our ordinary shares may adversely affect the price at which our ordinary shares trades. Additionally, some investors may decide to divest their interest, or not to invest, in our company simply because we do business
with companies that do business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn
negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to
U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third-parties that are unrelated to those countries or entities
controlled by their governments. Investor perception of the value of our ordinary shares may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
We expect that our vessels will call in ports where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge
of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims which could
have an adverse effect on our business, results of operations, cash flows and financial condition.
Maritime claimants could arrest our vessels,
which would have a negative effect on our cash flows.
Crew members, suppliers of goods and services to a vessel, shippers of cargo
and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting or attaching a vessel through foreclosure proceedings.
The arrest or attachment of one or more of our vessels could interrupt our business or require us to pay large sums of money to have the arrest lifted, which would have a negative effect on our cash flows.
In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the
vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in our
fleet for claims relating to another of our ships.
Governments could requisition our vessels during a period of war or emergency, which may
negatively impact our business, financial condition, results of operations and available cash.
A government could requisition one or
more of our vessels for title or hire. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes
control of a vessel and effectively becomes the charterer at dictated charter
36
rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels may negatively impact our business, financial condition, results of
operations and available cash.
Technological innovation could reduce our charterhire income and the value of our vessels.
The charterhire rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency,
operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and
straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new tankers are built that are more efficient or more flexible or have longer
physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charterhire payments we receive for our vessels and the resale value of our vessels could significantly decrease. As a
result, our results of operations and financial condition could be adversely affected.
Risks Related to Our Company
We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings.
As of September 1, 2014, we employed 44 of our vessels in either the spot market or in a spot market-oriented tanker pool, such as the TI Pool, of
which we were a founding member, exposing us to fluctuations in spot market charter rates. In addition, we expect to employ the undelivered VLCC Acquisition Vessel and the remaining undelivered Maersk Acquisition Vessels in the TI Pool upon their
delivery to us. We will also enter into spot charters in the future. The spot charter market may fluctuate significantly based upon tanker and oil supply and demand. For example, over the past five years, VLCC spot market rates expressed as a time
charter equivalent have ranged from negative values to a high of $74,600 per day, and in July 2014 were $26,500 per day. The successful operation of our vessels in the competitive spot charter market depends on, among other things, obtaining
profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is very volatile, and, in the past, there have been periods when spot charter rates
have declined below the operating cost of vessels. If future spot charter rates decline, then we may be unable to operate our vessels trading in the spot market profitably, meet our obligations, including payments on indebtedness, or pay dividends
in the future. Furthermore, as charter rates for spot charters are fixed for a single voyage which may last up to several weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits
from such increases.
We may not be able to renew or obtain new and favorable charters for our vessels whose charters are expiring or are terminated,
which could adversely affect our revenues and profitability.
Our ability to renew expiring contracts or obtain new charters will
depend on the prevailing market conditions at the time. If we are not able to obtain new contracts in direct continuation with existing charters, or if new contracts are entered into at charter rates substantially below the existing charter rates or
on terms otherwise less favorable compared to existing contracts terms, our revenues and profitability could be adversely affected. As of September 1, 2014, we employed seven vessels on time charters, two of which expire in 2014 and five of which
expire in 2015.
37
The markets in which we compete experience fluctuations in the demand. Upon the expiration or
termination of their current charters, we may not be able to obtain charters for our vessels currently employed and there may be a gap in employment of the vessels between current charters and subsequent charters. In particular, if oil and natural
gas prices are low, or if it is expected that such prices will decrease in the future, at a time when we are seeking to arrange charters for our vessels, we may not be able to obtain charters at attractive rates or at all.
If the charters which we receive for the reemployment of our current vessels are less favorable, we will recognize less revenue from their
operations. Our ability to meet our cash flow obligations will depend on our ability to consistently secure charters for our vessels at sufficiently high charter rates. We cannot predict the future level of demand for our services or future
conditions in the oil and gas industry. If oil and gas companies do not continue to increase exploration, development and production expenditures, we may have difficulty securing charters or we may be forced to enter into charters at unattractive
rates, which would adversely affect our results of operations and financial condition.
We are subject to certain risks with respect to our
counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.
We have entered into, and may enter in the future, various contracts, including credit facilities, charter agreements and other agreements
associated with the operation of our vessels. Such agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our
control and may include, among other things, general economic conditions, the condition of the maritime and offshore industries, the overall financial condition of the counterparty, charter rates received for specific types of vessels and various
expenses. For example, the combination of a reduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-based credit facilities and the lack of availability of debt or equity financing may result in a
significant reduction in the ability of our charterers to make charter payments to us. In addition, in depressed market conditions, our charterers and customers may no longer need a vessel that is currently under charter or contract or may be able
to obtain a comparable vessel at lower rates. As a result, charterers and customers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts. Should a counterparty fail to honor its
obligations under agreements with us, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The failure of our charterers to meet their obligations under our charter agreements, on which we depend for our revenues, could cause us to suffer losses or
otherwise adversely affect our business.
The ability and willingness of each of our counterparties to perform their obligations
under a time charter, spot voyage or other agreement with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the tanker shipping industry and the
overall financial condition of the counterparties. Charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities such as oil. In addition, in depressed market conditions, there have been reports of
charterers renegotiating their charters or defaulting on their obligations under charters. Our customers may fail to pay charterhire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with
us, it
38
may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or on time charters may be at lower rates given currently decreased
tanker charter rate levels. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have a material adverse effect on our business, financial condition,
results of operations and cash flows, as well as our ability to pay dividends, if any, in the future, and compliance with covenants in our credit facilities.
If we do not identify suitable tankers for acquisition or successfully integrate any acquired tankers, we may not be able to grow or to effectively manage our growth.
One of our strategies is to continue to grow by expanding our operations and adding to our fleet at attractive points in the cycle, including
through strategic alliances or joint ventures. Our future growth will depend upon a number of factors, some of which may not be within our control. These factors include our ability to:
|
|
•
|
|
identify suitable tankers and/or shipping companies for acquisitions at attractive prices, which may not be possible if asset prices rise too quickly;
|
|
|
•
|
|
manage relationships with customers and suppliers;
|
|
|
•
|
|
identify businesses engaged in managing, operating or owning tankers for acquisitions or joint ventures;
|
|
|
•
|
|
integrate any acquired tankers or businesses successfully with our then-existing operations;
|
|
|
•
|
|
attract, hire, train, integrate and retain qualified, highly trained personnel and crew to manage and operate our growing business and fleet;
|
|
|
•
|
|
identify additional new markets;
|
|
|
•
|
|
enhance our customer base;
|
|
|
•
|
|
improve our operating, financial and accounting systems and controls; and
|
|
|
•
|
|
obtain required financing for our existing and new operations.
|
Our failure to effectively identify, purchase, develop and integrate any tankers or businesses, such as the Maersk Acquisition Vessels and the VLCC Acquisition Vessels, could adversely affect our business,
financial condition and results of operations. We may incur unanticipated expenses as an operating company. Our current operating and financial systems may not be adequate as we implement our plan to expand the size of our fleet. Finally,
acquisitions, such as the Maersk Acquisition Vessels and the VLCC Acquisition Vessels, may require additional equity issuances or debt issuances, both of which could reduce our cash flow. If we are unable to execute the points noted above, our
financial condition may be adversely affected.
Growing any business by acquisition presents numerous risks such as undisclosed
liabilities and obligations, difficulty in obtaining additional qualified personnel and managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. The expansion of our fleet may
impose significant additional responsibilities on our management and staff, and the management and staff of our commercial and technical managers, and may necessitate that we, and they, increase the number of personnel. We cannot give any assurance
that we will be successful in executing our growth
39
plans or that we will not incur significant expenses and losses in connection with our future growth.
An increase in operating costs would decrease earnings and available cash.
Under time charters
the charterer is responsible for voyage expenses and the owner is responsible for the vessel operating costs. Under our spot charters, we are responsible for vessel operating expenses. When our owned vessels are operated in the spot market, we are
also responsible for voyage expenses and vessel costs. Our vessel operating expenses include the costs of crew, provisions, deck and engine stores, insurance and maintenance and repairs, which expenses depend on a variety of factors, many of which
are beyond our control. Voyage expenses include bunkers (fuel), port and canal charges. If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and can be substantial.
Increases in any of these expenses would decrease earnings and dividends per share.
Changes in fuel, or bunkers, prices may adversely affect our
profits.
Fuel, or bunkers, is typically the largest expense in our shipping operations for our vessels which operate on voyage
charter and changes in the price of fuel may therefore adversely affect our profitability. The price and supply of fuel are unpredictable and fluctuate based on events outside our control, including geopolitical developments, supply and demand for
oil and gas, actions by the Organization of the Petroleum Exporting Countries, or OPEC, and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further, fuel
may become much more expensive in the future, which may reduce our profitability. We currently do not hedge our exposure to the fluctuating price of bunkers.
If we are unable to operate our vessels profitably, we may be unsuccessful in competing in the highly competitive international tanker market, which would negatively affect our financial condition and our
ability to expand our business.
The operation of tanker vessels and transportation of crude and petroleum products is extremely
competitive and reduced demand for transportation of oil and oil products could lead to increased competition. Competition arises primarily from other tanker owners, including major oil companies as well as independent tanker companies, some of whom
have substantially greater resources than we do. Competition for the transportation of oil and oil products can be intense and depends on price, location, size, age, condition and the acceptability of the tanker and its operators to the charterers.
We will have to compete with other tanker owners, including major oil companies as well as independent tanker companies.
Our market
share may decrease in the future. If we expand our business or provide new services in new geographic regions, we may not be able to compete profitably. New markets may require different skills, knowledge or strategies than we use in our current
markets, and the competitors in those new markets may have greater financial strength and capital resources than we do.
A substantial portion of our
revenue is derived from a limited number of customers and the loss of any of these customers could result in a significant loss of revenues and cash flow.
We currently derive a substantial portion of our revenue from a limited number of customers. For the six months ended June 30, 2014, Valero accounted for 15%, Chevron
40
accounted for 7%, and Total accounted for 7% of our total revenues in our tankers segment. For the year ended December 31, 2013, Valero accounted for 14% and Total accounted for 11% of our total
revenues in our tankers segment. In addition, our only FSO customer as of June 30, 2014 was Maersk Oil. All of our charter agreements have fixed terms, but may be terminated early due to certain events, such as a charterer’s failure to make
charter payments to us because of financial inability, disagreements with us or otherwise. The ability of each of our counterparties to perform its obligations under a charter with us will depend on a number of factors that are beyond our control
and may include, among other things, general economic conditions, the condition of the tanker industry and the overall financial condition of the counterparty. Should a counterparty fail to honor its obligations under an agreement with us, we may be
unable to realize revenue under that charter and could sustain losses, which could have a material adverse effect on our business, financial condition, results of operations and ability to pay dividends, if any.
In addition, a charterer may exercise its right to terminate the charter if, among other things:
|
|
•
|
|
the vessel suffers a total loss or is damaged beyond repair;
|
|
|
•
|
|
we default on our obligations under the charter, including prolonged periods of vessel off-hire;
|
|
|
•
|
|
war or hostilities significantly disrupt the free trade of the vessel;
|
|
|
•
|
|
the vessel is requisitioned by any governmental authority; or
|
|
|
•
|
|
a prolonged force majeure event occurs, such as war or political unrest, which prevents the chartering of the vessel.
|
In addition, the charter payments we receive may be reduced if the vessel does not perform according to certain contractual specifications. For
example, charterhire may be reduced if the average vessel speed falls below the speed we have guaranteed or if the amount of fuel consumed to power the vessel exceeds the guaranteed amount. Additionally, compensation under our FSO service contracts
is based on daily performance and/or availability of each FSO in accordance with the requirements specified in the applicable FSO service contracts. The charter payments we receive under our FSO service contracts may be reduced if the vessel is
idle, but available for operation, or if a force majeure event occurs, or we may not be entitled to receive charter payments if the FSO is taken out of service for maintenance for an extended period, or the charter may be terminated if these events
continue for an extended period.
If any of our charters are terminated, we may be unable to re-deploy the related vessel on terms as
favorable to us as our current charters, or at all. If we are unable to re-deploy a vessel for which the charter has been terminated, we will not receive any revenues from that vessel and we may be required to pay ongoing expenses necessary to
maintain the vessel in proper operating condition. Any of these factors may decrease our revenue and cash flows. Further, the loss of any of our charterers, charters or vessels, or a decline in charterhire under any of our charters, could have a
material adverse effect on our business, results of operations, financial condition and ability to pay dividends, if any, to our shareholders.
Our
FSO service contracts may not permit us to fully recoup our cost increases in the event of a rise in expenses.
Our FSO service
contracts have dayrates that are fixed over the contract term. In order to mitigate the effects of inflation on revenues from these term contracts, our FSO service
41
contracts include yearly escalation provisions. These provisions are designed to recompense us for certain cost increases, including wages, insurance and maintenance costs. However, actual cost
increases may result from events or conditions that do not cause correlative changes to the applicable escalation provisions. In addition, the adjustments are normally performed on an annual basis. For these reasons, the timing and amount received
as a result of the adjustments may differ from the timing and amount of expenditures associated with actual cost increases, which could adversely affect our results of operations and financial condition and ability to pay dividends, if any, to our
shareholders.
Currently, we operate our FSOs only offshore Qatar, which has fields whose production lives deplete over time and as a result, overall
activity may decline faster than anticipated.
We currently operate our FSOs only offshore Qatar, which has fields whose production
lives deplete over time, and as a result, the overall activity in such fields may decline faster than anticipated. There are increased costs associated with retiring old oil and gas installations, which may threaten to slow the development of the
region’s remaining resources.
The purchase and operation of secondhand vessels, including the Maersk Acquisition Vessels and the VLCC
Acquisition Vessels, expose us to increased operating costs which could adversely affect our earnings and, as our fleet ages, the risks associated with older vessels could adversely affect our ability to obtain profitable charters.
Our current business strategy includes additional growth through the acquisition of new and secondhand vessels, including the Maersk Acquisition
Vessels and the VLCC Acquisition Vessels. While we typically inspect secondhand vessels prior to purchase, this does not provide us with the same knowledge about their condition that we would have had if these vessels had been built for and operated
exclusively by us. Generally, we do not receive the benefit of warranties from the builders for the secondhand vessels that we acquire.
In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less
fuel-efficient than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, since older vessels may be less desirable to charterers.
Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations or the
addition of new equipment to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the
remainder of their useful lives.
We will be required to make additional capital expenditures to expand the number of vessels in our fleet and to
maintain all our vessels, which will be dependent on additional financing.
Our business strategy is based in part upon the expansion
of our fleet through the purchase of additional vessels at attractive points in the cycle. If we are unable to fulfill our obligations under any memorandum of agreement or newbuilding construction contract for future vessel acquisitions, the sellers
of such vessels may be permitted to terminate such contracts and we may forfeit all or a portion of the down payments we already made under such contracts and we may be sued for any outstanding balance.
In addition, we will incur significant maintenance costs for our existing and any newly-acquired vessels. A newbuilding vessel must be drydocked
within five years of its delivery from
42
a shipyard, with survey cycles of no more than 60 months for the first three surveys, and 30 months thereafter, not including any unexpected repairs. We estimate the cost to drydock a vessel to
be between $750,000 and $1,500,000, depending on the size and condition of the vessel and the location of drydocking and the special surveys to be performed.
If we do not set aside funds and are unable to borrow or raise funds for vessel replacement, at the end of a vessel’s useful life our revenue will decline, which would adversely affect our business, results
of operations, financial condition, and available cash.
If we do not set aside funds and are unable to borrow or raise funds for
vessel replacement, we will be unable to replace the vessels in our fleet upon the expiration of their remaining useful lives. Our cash flows and income are dependent on the revenues earned by the chartering of our vessels. If we are unable to
replace the vessels in our fleet upon the expiration of their useful lives, our business, results of operations, financial condition and available cash per share would be adversely affected. Any funds set aside for vessel replacement will reduce
available cash.
Our ability to obtain additional financing may be dependent on the performance and creditworthiness of our then existing charters.
The actual or perceived credit quality of our charterers and any defaults by them, may materially affect our ability to obtain the
additional capital resources that we will require to purchase additional vessels or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing at all or at a higher than anticipated cost may
materially affect our results of operation and our ability to implement our business strategy.
We depend on our executive officers and other key
employees, and the loss of their services could, in the short term, have a material adverse effect on our business, results and financial condition.
We depend on the efforts, knowledge, skill, reputations and business contacts of our executive officers and other key employees. Accordingly, our success will depend on the continued service of these individuals.
We may experience departures of senior executive officers and other key employees, and we cannot predict the impact that any of their departures would have on our ability to achieve our financial objectives. The loss of the services of any of them
could, in the short term, have a material adverse effect on our business, results of operations and financial condition.
Failure to obtain or retain
highly skilled personnel could adversely affect our operations.
We require highly skilled personnel to operate our business, and
will be required to hire additional highly trained personnel to operate the Maersk Acquisition Vessels and the VLCC Acquisition Vessels. Competition for skilled and other labor required for our operations has increased in recent years as the number
of ocean-going vessels in the worldwide fleet has increased. If this expansion continues and is coupled with improved demand for seaborne shipping services in general, shortages of qualified personnel could further create and intensify upward
pressure on wages and make it more difficult for us to staff and service vessels. Such developments could adversely affect our financial results and cash flow. Furthermore, as a result of any increased competition for people and risk for higher
turnover, we may experience a reduction in the experience level of our personnel, which could lead to higher downtime and more operating incidents.
43
United States tax authorities could treat us as a “passive foreign investment company,” which could have
adverse United States federal income tax consequences to United States shareholders.
A foreign corporation will be treated as a
“passive foreign investment company,” or PFIC, for United States federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of “passive income” or (2) at
least 50% of the average value of the corporation’s assets produce or are held for the production of those types of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, and gains from
the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived
from the performance of services does not constitute “passive income.” United States shareholders of a PFIC are subject to a disadvantageous United States federal income tax regime with respect to the income derived by the PFIC, the
distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.
Based on our current and proposed method of operation, we do not believe that we will be a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to
derive from our time chartering activities as services income, rather than rental income. Accordingly, our income from our time and voyage chartering activities should not constitute “passive income,” and the assets that we own and operate
in connection with the production of that income should not constitute assets that produce or are held for the production of “passive income.”
There is substantial legal authority supporting this position, consisting of case law and United States Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time
charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority that characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly,
no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for
any future taxable year if the nature and extent of our operations change.
If the IRS were to find that we are or have been a PFIC for
any taxable year, our United States shareholders would face adverse United States federal income tax consequences and incur certain information reporting obligations. Under the PFIC rules, unless those shareholders make an election available
under the United States Internal Revenue Code of 1986, as amended, or the Code (which election could itself have adverse consequences for such shareholders), such shareholders would be subject to United States federal income tax at the then
prevailing rates on ordinary income plus interest, in respect of excess distributions and upon any gain from the disposition of their ordinary shares, as if the excess distribution or gain had been recognized ratably over the shareholder’s
holding period of the ordinary shares. See “Taxation—Passive Foreign Investment Company Status and Significant Tax Consequences” for a more comprehensive discussion of the United States federal income tax consequences to United States
shareholders if we are treated as a PFIC.
We may have to pay tax on United States source shipping income, or taxes in other jurisdictions, which
would reduce our earnings.
Under the Code, 50% of the gross shipping income of a corporation that owns or charters vessels, as we
and our subsidiaries do, that is attributable to transportation that begins or ends,
44
but that does not both begin and end, in the United States may be subject to a 4% United States federal income tax without allowance for deductions, unless that corporation qualifies for
exemption from tax under Section 883 of the Code and the regulations promulgated thereunder by the United States Department of the Treasury or an applicable U.S. income tax treaty.
We and our subsidiaries intend to take the position that we qualify for either this statutory tax exemption or an exemption under an income tax
treaty for United States federal income tax return reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to United States federal
income tax on our United States source shipping income. For example, we may no longer qualify for exemption under Section 883 of the Code for a particular taxable year if shareholders with a five percent or greater interest in our ordinary
shares, or “5% Shareholders,” owned, in the aggregate, 50% or more of our outstanding ordinary shares for more than half the days during the taxable year, and there does not exist sufficient 5% Shareholders that are qualified shareholders
for purposes of Section 883 of the Code to preclude non-qualified 5% Shareholders from owning 50% or more of our ordinary shares for more than half the number of days during such taxable year or we are unable to satisfy certain substantiation
requirements with regard to our 5% Shareholders. Due to the factual nature of the issues involved, there can be no assurances on the tax-exempt status of us or any of our subsidiaries.
If we or our subsidiaries were not entitled to exemption under Section 883 of the Code for any taxable year, we or our subsidiaries could be
subject for such year to an effective 2% United States federal income tax on the shipping income we or they derive during such year which is attributable to the transport of cargoes to or from the United States. The imposition of this taxation
would have a negative effect on our business and would decrease our earnings available for distribution to our shareholders.
We may
also be subject to tax in other jurisdictions, which could reduce our earnings.
Our shareholders residing in countries other than Belgium may be
subject to double withholding taxation with respect to dividends or other distributions made by us.
Any dividends or other
distributions we make to shareholders will, in principle, be subject to withholding tax in Belgium at a rate of 25%, except for shareholders which qualify for an exemption of withholding tax such as, amongst others, qualifying pension funds or a
company qualifying as a parent company in the sense of the Council Directive (90/435/EEC) of 23 July 1990 (the “Parent-Subsidiary Directive”) or that qualify for a lower withholding tax rate or an exemption by virtue of a tax
treaty. Various conditions may apply and shareholders residing in countries other than Belgium are advised to consult their advisers regarding the tax consequences of dividends or other distributions made by us. Our shareholders residing in
countries other than Belgium may not be able to credit the amount of such withholding tax to any tax due on such dividends or other distributions in any other country than Belgium. As a result, such shareholders may be subject to double taxation in
respect of such dividends or other distributions.
Belgium and the United States have concluded a double tax treaty concerning the
avoidance of double taxation (the “U.S.—Belgium Treaty”). The U.S.—Belgium Treaty reduces the applicability of Belgian withholding tax to 15%, 5% or 0% for U.S. taxpayers, provided that the U.S. taxpayer meets the limitation of
benefits conditions imposed by the U.S.—Belgium Treaty. The Belgian withholding tax is generally reduced to 15% under the U.S.—Belgium Treaty. The 5% withholding tax applies in case where the U.S. shareholder is a company which
45
holds at least 10% of the shares in the Company. A 0% Belgian withholding tax applies when the shareholder is a company which has held at least 10% of the shares in the Company for at least 12
months, or is, subject to certain conditions, a U.S. pension fund. The U.S. shareholders are encouraged to consult their own tax advisers to determine whether they can invoke the benefits and meet the limitation of benefits conditions as imposed by
the U.S.—Belgium Treaty.
Changes to the tonnage tax or the corporate tax regimes applicable to us, or to the interpretation thereof, may impact
our future operating results.
The Belgian Ministry of Finance approved our application on October 23, 2013 for beneficial tax
treatment of certain of our vessel operations income. Under this Belgian tax regime, our taxable basis is determined on a lump-sum basis (which is, on the basis of the tonnage of the vessels it operates), rather than on the basis of our
accounting results, as adjusted, for Belgian corporate income tax purposes. This tonnage tax regime was initially granted for 10 years, and was renewed for an additional 10-year period in 2013. In addition, with respect to certain of our
vessels operating under the Greek flag, we benefit from a similar tonnage tax regime in Greece. Certain of our subsidiaries that were formed in connection with our acquisition of the Maersk Acquisition Vessels are subject to the ordinary
Belgian corporate income tax regime, however, which benefit from a tax investment allowance due to the acquisition. However, we have decided to apply for the Belgian Tonnage Tax regime for those subsidiaries. We cannot assure you that we will be
able to continue to take advantage of these tax benefits in the future or that the Belgian Ministry of Finance will approve our applications. Changes to the tax regimes applicable to us, or the interpretation thereof, may impact our future
operating results.
Insurance may be difficult to obtain, or if obtained, may not be adequate to cover our losses that may result from our operations
due to the inherent operational risks of the tanker industry.
We carry insurance to protect us against most of the accident-related
risks involved in the conduct of our business, including marine hull and machinery insurance, protection and indemnity insurance, which include pollution risks, crew insurance and war risk insurance. However, we may not be adequately insured to
cover losses from our operational risks, which could have a material adverse effect on us. Additionally, our insurers may refuse to pay particular claims and our insurance may be voidable by the insurers if we take, or fail to take, certain action,
such as failing to maintain certification of our vessels with applicable maritime regulatory organizations. Any significant uninsured or under-insured loss or liability could have a material adverse effect on our business, results of operations,
cash flows and financial condition and our available cash. In addition, we may not be able to obtain adequate insurance coverage at reasonable rates in the future during adverse insurance market conditions.
In addition, changes in the insurance markets attributable to terrorist attacks may also make certain types of insurance more difficult for us to
obtain due to increased premiums or reduced or restricted coverage for losses caused by terrorist acts generally.
Because we obtain
some of our insurance through protection and indemnity associations, which result in significant expenses to us, we may be required to make additional premium payments.
We may be subject to increased premium payments, or calls, in amounts based on our claim records, the claim records of our managers, as well as the claim records of other members of the protection and indemnity
associations through which we receive insurance coverage for tort liability, including pollution-related liability. In addition, our protection and indemnity associations may not have enough resources to cover claims made against them. Our
46
payment of these calls could result in significant expense to us, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and available
cash.
Servicing our current or future indebtedness limits funds available for other purposes and if we cannot service our debt, we may lose our
vessels.
We had $1,255.4 million and $1,119.8 million in indebtedness as of June 30, 2014 and December 31, 2013, respectively,
and expect to incur additional indebtedness as we take delivery of the Maersk Acquisition Vessels and the VLCC Acquisition Vessels and further expand our fleet. Borrowing under our credit facilities requires us to dedicate a part of our cash flow
from operations to paying interest on our indebtedness. These payments limit funds available for working capital, capital expenditures and other purposes, including further equity or debt financing in the future. Amounts borrowed under our credit
facilities bear interest at variable rates. Increases in prevailing rates could increase the amounts that we would have to pay to our lenders, even though the outstanding principal amount remains the same and our net income and cash flows would
decrease. We expect our earnings and cash flow to vary from year to year due to the cyclical nature of the tanker industry. If we do not generate or reserve enough cash flow from operations to satisfy our debt obligations, we may have to undertake
alternative financing plans, such as:
|
|
•
|
|
seeking to raise additional capital;
|
|
|
•
|
|
refinancing or restructuring our debt;
|
|
|
•
|
|
reducing or delaying capital investments.
|
However, these alternative financing plans, if necessary, may not be sufficient to allow us to meet our debt obligations. If we are unable to meet our debt obligations or if some other default occurs under our
credit facilities, our lenders could elect to declare that debt, together with accrued interest and fees, to be immediately due and payable and proceed against the collateral vessels securing that debt even though the majority of the proceeds used
to purchase the collateral vessels did not come from our credit facilities.
Adverse market conditions could cause us to breach covenants in our
credit facilities and adversely affect our operating results.
The market values of tankers have generally been depressed. The market
prices for tankers declined significantly from historically high levels reached in early 2008 and remain at relatively low levels. You should expect the market value of our vessels to fluctuate depending on general economic and market conditions
affecting the shipping industry and prevailing charterhire rates, competition from other tanker companies and other modes of transportation, types, sizes and ages of vessels, applicable governmental regulations and the cost of newbuildings. We
believe that the current aggregate market value of our vessels will be in excess of loan to value amounts required under our credit facilities. Our credit facilities generally require that the fair market value of the vessels pledged as collateral
never be less than between 100% and 125%, depending on the applicable credit facility, of the aggregate principal amount outstanding under the loan. We were in compliance with these requirements as of June 30, 2014 and December 31, 2013.
A decrease in vessel values or a failure to meet this ratio could cause us to breach certain covenants in our existing credit
facilities and future financing agreements that we may enter into from time to time. If we breach such covenants and are unable to remedy the relevant
47
breach or obtain a waiver, our lenders could accelerate our debt and foreclose on our owned vessels. Additionally, if we sell one or more of our vessels at a time when vessel prices have fallen,
the sale price may be less than the vessel’s carrying value on our consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, ultimately leading to a reduction in earnings.
We may be unable to comply with the restrictions and financial covenants in the agreements governing our indebtedness or any future financial obligations,
including the loan agreements that our 50%-owned joint ventures have entered into, that impose operating and financial restrictions on us.
Our agreements governing our indebtedness, including the loan agreements that our
50%-owned
joint ventures have entered into, impose certain operating and financial
restrictions on us, mainly to ensure that the market value of the mortgaged vessel under the applicable credit facility does not fall below a certain percentage of the outstanding amount of the loan, which we refer to as the asset coverage ratio. In
addition, certain of our credit facilities will require us to satisfy certain other financial covenants, which require us to, among other things, maintain:
|
|
•
|
|
an amount of current assets that, on a consolidated basis, exceeds our current liabilities;
|
|
|
•
|
|
an aggregate amount of cash, cash equivalents and available aggregate undrawn amounts of any committed loan of at least $50.0 million or 3% to 5% of our total
indebtedness, depending on the applicable loan, whichever is greater;
|
|
|
•
|
|
an aggregate cash balance of at least $30.0 million; and
|
|
|
•
|
|
a ratio of consolidated capital and reserves to total assets of at least 30%.
|
In general, the operating restrictions that are contained in our credit facilities may prohibit or otherwise limit our ability to, among other
things:
|
|
•
|
|
effect changes in management of our vessels;
|
|
|
•
|
|
transfer or sell or otherwise dispose of all or a substantial portion of our assets;
|
|
|
•
|
|
declare and pay dividends if such dividend is in excess of 50% of our net income or if there is or will be, as a result of the dividend, an event of default or
breach of a loan covenant; and
|
|
|
•
|
|
incur additional indebtedness.
|
A violation of any of our financial covenants or operating restrictions contained in our credit facilities, including the loan agreements of our
50%-owned joint ventures, may constitute an event of default under our credit facilities, which, unless cured within the grace period set forth under the applicable credit facility, if applicable, or waived or modified by our lenders, provides our
lenders with the right to, among other things, require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell
vessels in our fleet, reclassify our indebtedness as current liabilities and accelerate our indebtedness and foreclose their liens on our vessels and the other assets securing the credit facilities, which would impair our ability to continue to
conduct our business.
Furthermore, certain of our credit facilities contain a cross-default provision that may be triggered by a
default under one of our other credit facilities, or those of our 50%-owned joint ventures. A cross-default provision means that a default on one loan would result in a default on certain other loans. Because of the presence of cross-default
provisions in certain of our credit
48
facilities, the refusal of any one lender under our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if our other lenders under
our credit facilities have waived covenant defaults under the respective credit facilities. If our secured indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for us to refinance our debt
or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders foreclose their liens, which would adversely affect our ability to conduct our business.
Moreover, in connection with any waivers of or amendments to our credit facilities that we may obtain, our lenders may impose additional operating
and financial restrictions on us or modify the terms of our existing credit facilities. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including
through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest
rates they charge us on our outstanding indebtedness.
As of June 30, 2014 and December 31, 2013, we were in compliance with the
financial covenants contained in our debt agreements.
For more information, please read “Management’s Discussion and Analysis
of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Borrowing Activities.”
The contribution of our
joint ventures to our profits and losses may fluctuate, which could have a material adverse effect on our business, financial condition, results of operation and cash flows.
We currently own an interest in seven of our vessels through 50%-owned joint ventures, together with other third-party vessel owners and operators
in our industry. Our ownership in these joint ventures is accounted for using the equity method, which means that our allocation of profits and losses of the applicable joint venture is included in our consolidated financial statements. The
contribution of our joint ventures to our profits and losses may fluctuate, including the dividends that we may receive from such entities, which could have a material adverse effect on our business, financial condition, results of operations and
cash flows.
OSG, a company with which we share equal ownership in a joint venture, and certain of its affiliates filed petitions for
Chapter 11 protection in November 2012. On August 5, 2014, OSG announced that it had emerged from Chapter 11 as a newly reorganized company. OSG’s Chapter 11 filing has had no material impact on the continued operations of the FSO joint
venture, including the ability of the joint venture to continue to perform its obligations, as well as its ability to continue to service its outstanding debt obligations and maintain continued compliance with the covenants under such debt
agreements, and it is expected that the FSO joint venture will continue to operate normally as OSG emerges from bankruptcy.
In
addition, we have provided, and may continue to provide in the future, unsecured loans to our joint ventures which we treat as additional investments in the joint ventures. Accordingly, in the event our joint ventures do not repay these loans as
they become due and payable, the value of our investment in such entities may decline. Furthermore, we have provided, and may continue to provide in the future, guarantees to certain banks with respect to commercial bank indebtedness of our joint
ventures. Failure on behalf of any of our joint ventures to service its debt requirements and comply with any provisions contained in its commercial loan agreements, including paying scheduled installments and complying with certain covenants,
49
may lead to an event of default under its loan agreement. As a result, if our joint ventures are unable to obtain a waiver or do not have enough cash on hand to repay the outstanding borrowings,
their lenders may foreclose their liens on the vessels securing the loans or seek repayment of the loan from us, or both, which would have a material adverse effect on our financial condition, results of operations, and cash flows. As of
December 31, 2013, $412.4 million was outstanding under these joint venture loan agreements, of which we have guaranteed $206.2 million. As of June 30, 2014, $355.8 million was outstanding under these joint venture loan agreements, of
which we have guaranteed $177.9 million.
We are exposed to volatility in the London Interbank Offered Rate (“LIBOR”), and we
have and we intend to selectively enter into derivative contracts, which can result in higher than market interest rates and charges against our income
.
The amounts outstanding under our senior secured credit facilities have been, and amounts under additional credit facilities that we may enter in the future will generally be, advanced at a floating rate based on
LIBOR, which has been stable, but was volatile in prior years, which can affect the amount of interest payable on our debt, and which, in turn, could have an adverse effect on our earnings and cash flow. In addition, in recent years, LIBOR has been
at relatively low levels, and may rise in the future as the current low interest rate environment comes to an end. Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging
arrangements to hedge our exposure to the interest rates applicable to our credit facilities and any other financing arrangements we may enter into in the future. Moreover, even if we have entered into interest rate swaps or other derivative
instruments for purposes of managing our interest rate exposure, our hedging strategies may not be effective and we may incur substantial losses.
We have entered into and may selectively in the future enter into derivative contracts to hedge our overall exposure to interest rate risk exposure. Entering into swaps and derivatives transactions is inherently
risky and presents various possibilities for incurring significant expenses. The derivatives strategies that we employ in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs and
recognize losses on such arrangements in our financial statements. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a description of our interest rate swap arrangements.
Fluctuations in exchange rates and non-convertibility of currencies could result in losses to us.
As a result of our international operations, we are exposed to fluctuations in foreign exchange rates due to parts of our operating costs being
expressed in currencies other than U.S. dollars, primarily in Euro. Accordingly, we may experience currency exchange losses if we have not fully hedged our exposure to a foreign currency, which could lead to fluctuations in our results of
operations.
Obligations associated with being a public company require significant company resources and management attention, and we will incur
increased costs as a result of being a public company.
Following completion of this offering, we will be subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the other rules and regulations of the SEC, including Sarbanes-Oxley, and requirements of the NYSE. These requirements and rules may place a strain on our
systems and resources. For example, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition and Sarbanes-Oxley requires that we maintain effective
50
disclosure controls and procedures and internal controls over financial reporting. These reporting and other obligations will place significant demands on our management, administrative,
operational and accounting resources and will cause us to incur significant legal, accounting and other expenses that we have not incurred prior to this offering. The expenses incurred by public companies, generally, for reporting and corporate
governance purposes have been increasing and the costs we will incur for such purposes may strain our resources. We expect these rules and regulations to increase our legal and financial compliance costs, divert management’s attention to ensure
compliance and to make some activities more time-consuming and costly. We may need to upgrade our systems or create new systems, implement additional financial and management controls, reporting systems and procedures, create or outsource an
internal audit function, and hire additional accounting and finance staff. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with the financial reporting requirements and other rules that apply
to reporting companies could be impaired. In addition, our limited management resources may exacerbate the difficulties in complying with these reporting and other requirements while focusing on executing our business strategy. Our incremental
general and administrative expenses as a publicly traded corporation will include costs associated with reports to shareholders, tax returns, investor relations, registrar and transfer agent’s fees, incremental director and officer liability
insurance costs and director compensation. We cannot accurately predict the amount of the additional costs we may incur, the timing of such costs or the degree of impact that our management’s attention to these matters will have on our
business. Any failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, prospects, liquidity, results of operations and financial condition. Furthermore, if we are unable to satisfy
our obligations as a public company, we could be subject to delisting of our ordinary shares, fines, sanctions and other regulatory action.
We will be required to comply with certain provisions of Section 404 of Sarbanes-Oxley on or before December 31, 2016, although as an “emerging growth company” we will be exempt from certain of
its requirements for so long as we remain as such. For example, Section 404 of Sarbanes-Oxley requires that we and our independent auditors report annually on the effectiveness of our internal control over financial reporting, however, as an
“emerging growth company” we may take advantage of an exemption from the auditor attestation requirement. Once we are no longer an “emerging growth company” or, if prior to such date, we opt to no longer take advantage of the
applicable exemption, we will be required to include an opinion from our independent auditors on the effectiveness of our internal control over financial reporting. Management, however, is not exempt from this requirement and will be required to,
among other things, maintain and periodically evaluate our internal control over financial reporting and disclosure controls and procedures. In particular, we will need to perform system and process evaluation and testing of our internal control
over financial reporting to allow us to report on the effectiveness of our internal control over financial reporting, as required. We intend to take advantage of these reporting exemptions until we are no longer an “emerging growth
company,” at which time, we expect to incur significant additional expenses and devote substantial additional management effort toward ensuring compliance with these requirements, including Section 404 of the Sarbanes-Oxley Act.
We depend on directors who are associated with affiliated companies, which may create conflicts of interest.
Our principal shareholders include Peter Livanos, individually or through entities controlled by the Livanos family, including our corporate
director, TankLog, and Saverco. Peter Livanos serves as the Chairman of our Board acting in his capacity as permanent representative of TankLog. Saverco is affiliated with Marc Saverys, the Vice Chairman of our Board. John Michael
51
Radziwill, one of our directors, is the son of John Radziwill who owns JM Maritime Investments Inc., or JM Maritime, a company that has a 50% interest in four of our joint ventures as
further outlined in the section “Certain Relationships and Related Party Transactions.” John Michael Radziwill is not a shareholder or director of, nor is he employed by JM Maritime. Because these directors owe fiduciary duties to both us
and other related parties, conflicts of interest may result in matters involving or affecting us and our customers. In addition, they may have conflicts of interest when faced with decisions that could have different implications for other related
parties than they do for us. Any such conflicts of interest could adversely affect our business, financial condition and results of operations and the trading price of our ordinary shares. For further discussion of transactions with, or involving,
our directors that may give rise to potential conflicts of interest, please see “Certain Relationships and Related Party Transactions.”
Risks Relating to an Investment in Our Ordinary Shares
An active and liquid market for our ordinary shares
may not develop or be sustained.
Prior to this offering, our ordinary shares have traded only on the NYSE Euronext Brussels and
there has been no established trading market for our ordinary shares in the United States. We intend to apply to list our ordinary shares on the New York Stock Exchange upon notice of issuance. Active, liquid trading markets generally result in
lower bid ask spreads and more efficient execution of buy and sell orders for market participants. If an active trading market for the ordinary shares does not develop, the price of the ordinary shares may be more volatile and it may be more
difficult and time-consuming to complete a transaction in the ordinary shares, which could have an adverse effect on the realized price of the ordinary shares. We cannot predict the price at which our ordinary shares will trade.
We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make
our ordinary shares less attractive to investors.
We are an “emerging growth company,” as defined in the Jumpstart our
Business Startups Act of 2012, or the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the
auditor attestation requirements of Section 404 of Sarbanes-Oxley for up to five years. Investors may find our ordinary shares and the price of our ordinary shares less attractive because we rely, or may rely, on these exemptions. If some
investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and the price of our ordinary shares may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We currently prepare our
consolidated financial statements in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, which do not have separate provisions for publicly traded and private companies.
However, in the event we convert to U.S. GAAP while we are still an emerging growth company, we may be able to take advantage of the benefits of this extended transition period and, as a result, during such time that we delay the adoption of any new
or revised accounting standards, our consolidated financial statements may not be comparable to other companies that comply with all public company accounting standards.
52
We could remain an “emerging growth company” until the last day of the fiscal year following
the fifth anniversary of the completion of this offering, although a variety of circumstances could cause us to lose that status earlier. For as long as we take advantage of the reduced reporting obligations, the information that we provide
shareholders may be different from information provided by other public companies.
Our share price may be highly volatile and future sales of our
ordinary shares could cause the market price of our ordinary shares to decline.
The market price of our ordinary shares has
historically fluctuated over a wide range and may continue to fluctuate significantly in response to many factors, such as actual or anticipated fluctuations in our operating results, changes in financial estimates by securities analysts, economic
and regulatory trends, general market conditions, rumors and other factors, many of which are beyond our control. Since 2008, the stock market has experienced extreme price and volume fluctuations. If the volatility in the market continues or
worsens, it could have an adverse affect on the market price of our ordinary shares and impact a potential sale price if holders of our ordinary shares decide to sell their shares.
We cannot assure you that our Board of Directors will declare dividends.
Our Board of
Directors may from time to time, declare and pay cash dividends in accordance with our Articles of Association and applicable Belgian law. The declaration and payment of dividends, if any, will always be subject to the approval of either our Board
of Directors (in the case of “interim dividends”) or of the shareholders (in the case of “regular dividends” or “intermediary dividends”). Our Board of Directors has not declared or paid a dividend since 2010, but will
continue to assess the declaration and payment of dividends upon consideration of our financial results and earnings, restrictions in our debt agreements, market prospects, current capital expenditures, commitments, investment opportunities, the
ability of our subsidiaries to distribute funds to us and the provisions of Belgian law affecting the payment of dividends to shareholders and other factors. During the 120 day period commencing on the date immediately following the pricing of the
offering, or the “Transition Period,” the ordinary shares offered hereby and the existing ordinary shares issued in Belgium which are currently trading on the NYSE Euronext Brussels will have different dividend rights. If a dividend is
declared during the Transition Period, holders of ordinary shares offered hereby would be entitled to receive dividends based only upon the earnings from our operations from and after the date of issuance of such ordinary shares, while holders of
existing ordinary shares would be entitled to receive dividends based upon our earnings from and after the date of issuance of the ordinary shares and for all prior periods. Upon the completion of the Transition Period, (i) the ordinary shares
offered hereby will immediately have the same dividend rights as the existing ordinary shares and (ii) the ordinary shares and the existing ordinary shares shall have the same rights and privileges in all respects. This temporary dividend
difference was authorized by our board of directors.
We cannot assure you that we will pay any dividends. The tanker industry is
volatile and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any period.
We may incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the amount of cash that we have available for distribution as dividends, including as a result of the
risks described herein. If additional financing is not available to us on acceptable terms, our Board of Directors may determine to finance or refinance acquisitions with cash from operations, which would reduce the amount of any cash available for
the payment of dividends.
53
In general, under the terms of our debt agreements, we are not permitted to pay dividends if there is
or will be as a result of the dividend a default or a breach of a loan covenant or in an amount more than 50% of our net income. Please see the section of this prospectus entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital Resources” for more information relating to restrictions on our ability to pay dividends under the terms of the agreements governing our indebtedness.
Belgian law generally prohibits the payment of dividends unless net assets on the closing date of the last financial year do not fall beneath the
amount of the registered capital and, before the dividend is paid out, 5% of the net profit is allocated to the legal reserve until this legal reserve amounts to 10% of the share capital. No distributions may occur if, as a result of such
distribution, our net assets would fall below the sum of (i) the amount of our registered capital, (ii) the amount of such aforementioned legal reserves, and (iii) other reserves which may be required by our articles of association or
by law, such as the reserves not available for distribution in the event we hold treasury shares. We may not have sufficient surplus in the future to pay dividends and our subsidiaries may not have sufficient funds or surplus to make distributions
to us. We can give no assurance that dividends will be paid at all.
Investors in this offering will suffer immediate and substantial dilution.
The initial public offering price per ordinary share will be substantially higher than our pro forma net tangible book value per
share immediately after this offering. As a result, you will pay a price per ordinary share that substantially exceeds the per share book value of our tangible assets after subtracting our liabilities. In addition, you will pay more for your
ordinary shares than the amounts paid by our existing shareholders. Assuming an offering price of $ per ordinary share (based on the closing price of our existing ordinary shares on the NYSE Euronext
Brussels on , 2014 based upon an exchange rate of per $1.00 in effect on that date), you will incur
immediate and substantial dilution in an amount of $ per ordinary share. See “Dilution.”
Future issuances and sales of our ordinary shares could cause the market price of our ordinary shares to decline.
As of September 1, 2014, our issued (and fully paid up) share capital was $142,440,546.45 which is represented by 131,050,666 ordinary shares, and
our Board of Directors is authorized to increase share capital in one or several times by a total maximum of $73,000,000 for a period of five years. Issuances and sales of a substantial number of ordinary shares in the public market, including the
ordinary shares that we expect to issue at the closing of this offering if we exercise our option to force a conversion of our outstanding convertible preferred equity securities and ordinary shares issuable upon conversion of our outstanding
Convertible Notes due 2015, or the perception that these issuances or sales could occur, may depress the market price for our ordinary shares. These sales could also impair our ability to raise additional capital through the sale of our equity
securities in the future. In addition, following the completion of the Exchange Offer, up to an additional of our ordinary shares may be available for
trading in the U.S. markets. We intend to issue additional ordinary shares in the future. Our shareholders may incur dilution from any future equity offering.
We are incorporated in Belgium, which provides for different and in some cases more limited shareholder rights than the laws of jurisdictions in the United States.
We are a Belgian company and our corporate affairs are governed by Belgian corporate law. Principles of law relating to such matters as the validity
of corporate procedures, the fiduciary duties of management, the dividend payment dates and the rights of shareholders may differ
54
from those that would apply if we were incorporated in a jurisdiction within the United States. For example, there are no statutory dissenters’ rights under Belgian law with respect to share
exchanges, mergers and other similar transactions, and the rights of shareholders of a Belgian company to sue derivatively, on the company’s behalf, are more limited than in the United States.
Civil liabilities based upon the securities and other laws of the United States may not be enforceable in original actions instituted in Belgium or in actions
instituted in Belgium to enforce judgments of U.S. courts.
Civil liabilities based upon the securities and other laws of the United
States may not be enforceable in original actions instituted in Belgium or in actions instituted in Belgium to enforce judgments of U.S. courts. Actions for the enforcement of judgments of U.S. courts might be successful only if the Belgian court
confirms the substantive correctness of the judgment of the U.S. court and is satisfied that:
|
|
•
|
|
the effect of the enforcement judgment is not manifestly incompatible with Belgian public policy;
|
|
|
•
|
|
the judgment did not violate the rights of the defendant;
|
|
|
•
|
|
the judgment was not rendered in a matter where the parties transferred rights subject to transfer restrictions with the sole purpose of avoiding the application
of the law applicable according to Belgian international private law;
|
|
|
•
|
|
the judgment is not subject to further recourse under U.S. law;
|
|
|
•
|
|
the judgment is not incompatible with a judgment rendered in Belgium or with a subsequent judgment rendered abroad that might be enforced in Belgium;
|
|
|
•
|
|
a claim was not filed outside Belgium after the same claim was filed in Belgium, while the claim filed in Belgium is still pending;
|
|
|
•
|
|
the Belgian courts did not have exclusive jurisdiction to rule on the matter;
|
|
|
•
|
|
the U.S. court did not accept its jurisdiction solely on the basis of either the nationality of the plaintiff or the location of the disputed goods; and
|
|
|
•
|
|
the judgment submitted to the Belgian court is authentic.
|
55
USE OF PROCEEDS
We estimate that we will receive net proceeds of approximately $ million from this offering
($ million if the underwriters’ option to purchase additional shares is exercised in full), after deducting underwriting discounts and commissions and estimated expenses payable by us, assuming an
initial public offering price of $ per share. These estimates are based on an assumed initial public offering price of $ per share (the closing price of
our existing ordinary shares on the NYSE Euronext Brussels on , 2014, based on the Bloomberg Composite Rate of
€
per $1.00 in effect on that date).
We intend to use the net proceeds of this offering for the repayment of certain indebtedness, general corporate purposes and working capital, which
may include the accretive acquisition of additional new or secondhand vessels.
A $1.00 increase or decrease in the assumed initial
public offering price of $ per ordinary share would cause the net proceeds from this offering, after deducting the estimated underwriting discount and commissions and offering expenses payable by us, to
increase or decrease, respectively, by approximately $ million. In addition, we may also increase or decrease the number of ordinary shares we are offering. Each increase of 1.0 million ordinary
shares offered by us, together with a concomitant $1.00 increase in the assumed public offering price to $ per ordinary share, would increase net proceeds to us from this offering by approximately
$ million. Similarly, each decrease of 1.0 million ordinary shares offered by us, together with a concomitant $1.00 decrease in the assumed initial offering price to
$ per ordinary share, would decrease the net proceeds to us from this offering by approximately $ million.
In addition, the selling shareholders will receive $ million in net proceeds from the sale
of ordinary shares offered by this prospectus to the public ($ if the underwriters’ option to
purchase additional ordinary shares is exercised in full) (based on the assumed initial public offering price of $ per share). We will not receive any of the proceeds from the sale of these ordinary
shares.
56
CAPITALIZATION
The following table sets forth our cash and cash equivalents, restricted cash and capitalization:
|
|
•
|
|
on an actual historical basis, as of June 30, 2014;
|
|
|
•
|
|
on an adjusted basis, to give effect to:
|
|
|
•
|
|
the acquisition of six of the Maersk Acquisition Vessels (the deliveries of the
Nautilus
,
Nucleus,
Nautic, Newton, Sara, Ingrid
and
Ilma
are included in the actual figures), for an aggregate amount of $407.0 million, of which a remaining payment of $366.3 million is due;
|
|
|
•
|
|
an advance payment of $34.2 million to acquire the four VLCC Acquisition Vessels.
|
|
|
•
|
|
a $324.0 million drawdown on our $500.0 million Senior Secured Credit Facility to finance the acquisition of six of the Maersk Acquisition Vessels;
|
|
|
•
|
|
the increase in our working capital requirement of $15.0 million due to our acquisition of the six Maersk Acquisition Vessels;
|
|
|
•
|
|
a private placement of 10,556,808 shares for net cash proceeds of $121.1 million on July 9, 2014, to partially finance the four VLCC Acquisition Vessels we
contracted to acquire.
|
|
|
•
|
|
the sale of the VLCC
Olympia
to its new owner on September 8, 2014, for an aggregate selling price of $89.0 million, less a $10.0 million prepayment that
we received in 2012. After a debt repayment of $43.3 million on our $300.0 Million Senior Secured Credit Facility, the net cash proceeds to us were $35.7 million.
|
|
|
•
|
|
on an as further adjusted basis, to give effect to:
|
|
|
•
|
|
the issuance of ordinary shares in this offering at an assumed
public offering price of $ per share, which was the closing price on the NYSE Euronext Brussels on ,
2014 (based on the Bloomberg Composite Rate of
€
per $1.00 in effect on that date); and
|
|
|
•
|
|
the issuance of up to 12,297,071 ordinary shares (consisting of 9,459,286 ordinary shares relating to the contribution of the principal amount and, at our
option, up to 2,837,785 ordinary shares relating to the payment of interest in shares over five years) that we will issue at the closing of this offering if we exercise our option to force a conversion of our outstanding perpetual convertible equity
preferred securities.
|
57
There have been no significant changes to our capitalization since June 30, 2014, as so adjusted. The
information set forth in the table assumes no exercise of the underwriters’ over-allotment option. You should read this capitalization table together with the section of this prospectus entitled “Selected Consolidated Financial and Other
Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes appearing elsewhere in this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2014
|
|
|
|
Actual
|
|
|
As
Adjusted
|
|
|
As Further
Adjusted
|
|
|
|
(US$ in thousands)
|
|
Cash
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents(1)
|
|
$
|
274,487
|
|
|
$
|
339,703
|
|
|
|
|
Restricted cash
|
|
|
—
|
|
|
|
—
|
|
|
|
|
Total Cash
|
|
|
274,487
|
|
|
|
339,703
|
|
|
|
|
Debt
|
|
|
|
|
|
|
|
|
|
|
|
Secured Debt(2)
|
|
|
874,337
|
|
|
|
1,154,993
|
|
|
|
|
Unsecured Debt(3)
|
|
|
381,023
|
|
|
|
371,023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
1,255,360
|
|
|
|
1,526,016
|
|
|
|
|
Capitalization
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity(4)
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares, no par value, 120,493,858 outstanding at June 30, 2014—Actual; Ordinary
shares, no par value, 131,050,666—As Adjusted; Ordinary shares, no par value, —As Further Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
Share capital(5)
|
|
|
130,966
|
|
|
|
142,440
|
|
|
|
|
Share premium account(5)
|
|
|
828,244
|
|
|
|
941,770
|
|
|
|
|
Preferred equity
|
|
|
75,000
|
|
|
|
75,000
|
|
|
|
|
Translation reserves
|
|
|
892
|
|
|
|
892
|
|
|
|
|
Hedging reserve
|
|
|
—
|
|
|
|
—
|
|
|
|
|
Treasury shares
|
|
|
(46,062
|
)
|
|
|
(46,062
|
)
|
|
|
|
Retained
earnings
(6)
|
|
|
385,281
|
|
|
|
381,341
|
|
|
|
|
Non-controlling interest
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
1,374,321
|
|
|
|
1,495,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
|
2,629,681
|
|
|
|
3,021,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Increase in cash and cash equivalents of $65.2 million as a result of (i) $366.3 million remaining payment due to our acquisition of six of the Maersk Acquisition Vessels, (ii)
$324.0 million due to our drawdown under our $500.0 Million Senior Secured Credit Facility (including transaction costs), (iii) $15.0 million increase in working capital, (iv) $121.0 million in net proceeds received due to the private placement of
10,556,808 ordinary shares to finance the acquisition of the four VLCC Acquisition Vessels, (v) net proceeds of $35.7 million as a result of the sale of the VLCC
Olympia
and the repayment of the outstanding debt and (vi) the $34.2 million
advance payment to acquire the four VLCC Acquisition Vessels.
|
|
(2)
|
Adjusted for (i) $324.0 million due to our drawdown on our $500.0 Million Senior Secured Credit Facility and (ii) $43.3 million repayment on our $300.0 Million Senior Secured
Credit Facility after the sale of the VLCC Olympia.
|
|
(3)
|
Adjusted for the prepayment of $10.0 million that we received in 2012 for the sale of the VLCC Olympia.
|
|
(4)
|
Excluding 1,147,621 ordinary shares issuable upon conversion of our outstanding Convertible Notes due 2015.
|
|
(5)
|
Increase due to the equity increase of $125.0 million to finance the acquisition of the VLCC Acquisition Vessels.
|
|
(6)
|
Decrease due to transaction costs of $3.9 million related to the equity increase of $125.0 million to finance the acquisition of the VLCC Acquisition Vessels.
|
58
PER SHARE MARKET PRICE INFORMATION
Our ordinary shares have traded on the NYSE Euronext Brussels since December 1, 2004, under the symbol “EURN.” The closing price of
our ordinary shares on the NYSE Euronext Brussels was
€
9.53 per share on September 3, 2014, which was equivalent to approximately
$12.53 per share based on the Bloomberg Composite Rate of
€
0.7508 to $1.00 in effect on that date.
We intend to apply to have our ordinary shares listed for trading on the New York Stock Exchange under the symbol “EURN.”
The following tables set forth the high and low prices and the average daily trading volume for our ordinary shares as reported on the NYSE
Euronext Brussels for the periods listed below. Share prices are presented in U.S. dollars per ordinary share based on the Bloomberg Composite Rate on each day of measurement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYSE Euronext Brussels
|
|
|
|
|
High
(U.S. dollars)
|
|
|
Low
(U.S. dollars)
|
|
|
Average Daily
Trading Volume
|
|
|
Fiscal year ended December 31, 2009
|
|
|
23.13
|
|
|
|
9.26
|
|
|
|
128,929
|
|
|
Fiscal year ended December 31, 2010
|
|
|
25.09
|
|
|
|
15.06
|
|
|
|
75,263
|
|
|
Fiscal year ended December 31, 2011
|
|
|
18.04
|
|
|
|
3.85
|
|
|
|
57,867
|
|
|
Fiscal year ended December 31, 2012
|
|
|
9.73
|
|
|
|
4.77
|
|
|
|
52,836
|
|
|
Fiscal year ended December 31, 2013
|
|
|
12.06
|
|
|
|
3.95
|
|
|
|
65,651
|
|
|
|
|
|
|
|
NYSE Euronext Brussels
|
|
|
|
|
High
(U.S. dollars)
|
|
|
Low
(U.S. dollars)
|
|
|
Average Daily
Trading Volume
|
|
|
First quarter 2012
|
|
|
9.52
|
|
|
|
4.77
|
|
|
|
115,438
|
|
|
Second quarter 2012
|
|
|
9.73
|
|
|
|
6.34
|
|
|
|
41,099
|
|
|
Third quarter 2012
|
|
|
6.86
|
|
|
|
5.73
|
|
|
|
20,844
|
|
|
Fourth quarter 2012
|
|
|
7.26
|
|
|
|
5.30
|
|
|
|
33,116
|
|
|
First quarter 2013
|
|
|
6.87
|
|
|
|
4.33
|
|
|
|
62,570
|
|
|
Second quarter 2013
|
|
|
5.68
|
|
|
|
3.95
|
|
|
|
46,232
|
|
|
Third quarter 2013
|
|
|
6.55
|
|
|
|
4.62
|
|
|
|
47,250
|
|
|
Fourth quarter 2013
|
|
|
12.06
|
|
|
|
6.20
|
|
|
|
107,233
|
|
|
First quarter 2014
|
|
|
14.80
|
|
|
|
11.08
|
|
|
|
289,381
|
|
|
Second quarter 2014
|
|
|
12.79
|
|
|
|
10.70
|
|
|
|
73,378
|
|
|
Third quarter 2014 (through and including September 3, 2014)
|
|
|
13.06
|
|
|
|
18.87
|
|
|
|
87,956
|
|
|
|
|
|
|
|
NYSE Euronext Brussels
|
|
|
|
|
High
(U.S. dollars)
|
|
|
Low
(U.S. dollars)
|
|
|
Average Daily
Trading Volume
|
|
|
February 2014
|
|
|
14.50
|
|
|
|
12.09
|
|
|
|
172,202
|
|
|
March 2014
|
|
|
14.22
|
|
|
|
11.08
|
|
|
|
121,173
|
|
|
April 2014
|
|
|
12.28
|
|
|
|
10.70
|
|
|
|
113,139
|
|
|
May 2014
|
|
|
12.67
|
|
|
|
11.79
|
|
|
|
64,492
|
|
|
June 2014
|
|
|
12.79
|
|
|
|
11.96
|
|
|
|
44,396
|
|
|
July 2014
|
|
|
12.85
|
|
|
|
12.06
|
|
|
|
90,207
|
|
|
August 2014
|
|
|
12.55
|
|
|
|
10.87
|
|
|
|
89,319
|
|
|
September 2014 (through and including September 3, 2014)
|
|
|
12.61
|
|
|
|
11.82
|
|
|
|
61,162
|
|
59
EXCHANGE RATE INFORMATION
The following table sets forth, for the periods set forth below, the high, low, average and period end Bloomberg Composite Rate (New York)
expressed as EUR per $1.00. The Bloomberg Composite Rate is a “best market” calculation in which, at any point in time, the bid rate is equal to the highest bid rate of all contributing bank indications and the ask rate is set to the
lowest ask rate offered by these banks. The Bloomberg Composite Rate is a mid-value rate between the applied highest bid rate and the lowest ask rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EUR per $1.00
|
|
|
Year
|
|
High
|
|
|
Low
|
|
|
Average(1)
|
|
|
Period end
|
|
|
2009
|
|
|
0.8026
|
|
|
|
0.6603
|
|
|
|
0.7188
|
|
|
|
0.6978
|
|
|
2010
|
|
|
0.8420
|
|
|
|
0.6859
|
|
|
|
0.7583
|
|
|
|
0.7471
|
|
|
2011
|
|
|
0.7777
|
|
|
|
0.6695
|
|
|
|
0.7162
|
|
|
|
0.7714
|
|
|
2012
|
|
|
0.8303
|
|
|
|
0.7415
|
|
|
|
0.7753
|
|
|
|
0.7580
|
|
|
2013
|
|
|
0.7842
|
|
|
|
0.7204
|
|
|
|
0.7523
|
|
|
|
0.7277
|
|
|
|
|
|
|
|
|
Month
|
|
High
|
|
|
Low
|
|
|
Average(2)
|
|
|
Period end
|
|
|
February 2014
|
|
|
0.7419
|
|
|
|
0.7234
|
|
|
|
0.7316
|
|
|
|
0.7246
|
|
|
March 2014
|
|
|
0.7296
|
|
|
|
0.7160
|
|
|
|
0.7233
|
|
|
|
0.7263
|
|
|
April 2014
|
|
|
0.7312
|
|
|
|
0.7192
|
|
|
|
0.7241
|
|
|
|
0.7211
|
|
|
May 2014
|
|
|
0.7360
|
|
|
|
0.7148
|
|
|
|
0.7282
|
|
|
|
0.7335
|
|
|
June 2014
|
|
|
0.7403
|
|
|
|
0.7301
|
|
|
|
0.7353
|
|
|
|
0.7305
|
|
|
July 2014
|
|
|
0.7481
|
|
|
|
0.7301
|
|
|
|
0.7389
|
|
|
|
0.7471
|
|
|
August 2014
|
|
|
0.7615
|
|
|
|
0.7438
|
|
|
|
0.7511
|
|
|
|
0.7615
|
|
|
September 2014 (through and including September 3, 2014)
|
|
|
0.7627
|
|
|
|
0.7599
|
|
|
|
0.7615
|
|
|
|
0.7609
|
|
|
(1)
|
The average of the Bloomberg Composite Rates on the last business day of each month during the relevant period.
|
|
(2)
|
The average of the Bloomberg Composite Rates on each business day during the relevant period.
|
The Bloomberg Composite Rate on September 3, 2014 was €0.7609 per $1.00.
The above rates may differ from the actual rates used in the preparation of our consolidated financial statements and other financial information
appearing in this prospectus. Our inclusion of these exchange rates is not meant to suggest that the Euro amounts actually represent such dollar amounts or that such amounts could be or could have been converted into dollars at any particular rate,
if at all. For a discussion of the impact of the exchange rate fluctuations on our financial condition and results of operations, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
60
DIVIDEND POLICY
Our Board of Directors may from time to time, declare and pay cash dividends in accordance with our Articles of Association and applicable Belgian
law. The declaration and payment of dividends, if any, will always be subject to the approval of either our Board of Directors (in the case of “interim dividends”) or of the shareholders (in the case of “regular dividends” or
“intermediary dividends”). Our Board of Directors has not declared or paid a dividend since 2010, but will continue to assess the declaration and payment of dividends upon consideration of our financial results and earnings, restrictions
in our debt agreements, market prospects, current capital expenditures, commitments, investment opportunities, and the provisions of Belgian law affecting the payment of dividends to shareholders and other factors. We cannot assure you that we will
pay any dividends in the future or of the amount of such dividends.
In general, we may only distribute dividends after approval at a
meeting of the shareholders. Dividends are paid at the time and place indicated by our Board of Directors. During the 120 day period commencing on the date immediately following the pricing of the offering, or the “Transition Period,” the
ordinary shares offered hereby and the existing ordinary shares issued in Belgium which are currently trading on the NYSE Euronext Brussels will have different dividend rights. If a dividend is declared during the Transition Period, holders of
ordinary shares offered hereby would be entitled to receive dividends based only upon the earnings from our operations from and after the date of issuance of such ordinary shares, while holders of existing ordinary shares would be entitled to
receive dividends based upon our earnings from and after the date of issuance of the ordinary shares and for all prior periods. Upon the completion of the Transition Period, (i) the ordinary shares offered hereby shall immediately have the same
dividend rights as the existing ordinary shares and (ii) the ordinary shares offered hereby and the existing ordinary shares shall have the same rights and privileges in all respects. Please see “Description of Share Capital—Ordinary
Shares”
Pursuant to the Belgian Companies Code, the shareholders’ meeting can, in principle, decide on the profit
appropriation by a simple majority of votes cast at the general shareholders’ meeting, and this on the basis of the most recently audited annual accounts that were drawn up in accordance with the generally accepted accounting principles in
Belgium and on the basis of a (non-binding) proposal from our Board of Directors. Our Articles of Association also authorize the Board of Directors to pay interim dividends on the profit of the current financial year in accordance with the
provisions of the Belgian Companies Code. Belgian law generally prohibits the payment of dividends unless net assets on the closing date of the last financial year do not fall beneath the amount of the registered capital and, before the dividend is
paid out, 5% of the net profit is allocated to the legal reserve until this legal reserve amounts to 10% of the share capital. No distributions may occur if, as a result of such distribution, our net assets would fall below the sum of (i) the
amount of our registered capital, (ii) the amount of such aforementioned legal reserves, and (iii) other reserves which may be required by our articles of association or by laws, such as the reserves not available for distribution in the
event we hold treasury shares.
During the period from December 2004, when our shares began trading on the Euronext Brussels, to
December 31, 2013, we distributed total dividends to our shareholders in the amount of US $656.9 million out of cumulative net results of US$865.3 million during the same period. We pay these dividends when, in the view of our Board of Directors, we
generate excess cashflow from operations above what is required to meet our near term debt service and capital expenditure obligations, which occurs during periods of strong market related charter rates.
61
We may not have sufficient surplus in the future to pay dividends and our subsidiaries may not have
sufficient funds or surplus to make distributions to us. In addition, certain covenants in our loan facilities prohibit us from paying dividends if there is or will be, as a result of the dividend, a default or breach of a loan covenant or the
dividend is of an amount greater than 50% of our annual or semi-annual net income, depending on the period to which the dividend relates, without obtaining the consent of our lenders prior to the payment of such dividend. For a discussion of the
material tax consequences regarding the receipt of dividends we may declare, please see “Taxation.”
We can give no assurance
that dividends will be paid in the future or the amount of such dividends. Our Board of Directors will seek to distribute to our shareholders cash it deems as surplus through the payment of dividends, as it has done in the past and as demonstrated
in the table below. We have historically paid dividends on our ordinary shares in Euros. Our history of dividends paid to our shareholders is as follows:
|
|
|
|
|
|
|
Year
|
|
Dividend
Amount per
Ordinary Share
(EUR)
|
|
|
2004
|
|
|
EUR 3.20
|
|
|
2005
|
|
|
EUR 1.60
|
|
|
2006
|
|
|
EUR 1.68
|
|
|
2007
|
|
|
EUR 0.80
|
|
|
2008
|
|
|
EUR 2.60
|
|
|
2009
|
|
|
EUR 0.10
|
|
|
2010
|
|
|
EUR 0.10
|
|
62
DILUTION
As of June 30, 2014, we had net adjusted tangible book value of $ million, or
$ per share. After giving effect to the sale of ordinary shares by us in this offering at an initial offering price of
$ per share (the closing price of our existing ordinary shares on the NYSE Euronext Brussels on , 2014,
based on the Bloomberg Composite Rate of
€
per $1.00 in effect on that date), the issuance
of up to 12,297,071 ordinary shares (consisting of 9,459,286 ordinary shares relating to the contribution of the principal amount and, at our option, up to 2,837,785 ordinary shares relating to the payment of interest in shares over five years) if
we exercise our option to convert our remaining 30 outstanding perpetual convertible preferred equity securities and deducting the estimated underwriting discounts and commissions and estimated offering expenses, and assuming that the
underwriters’ option to purchase additional shares is not exercised, the pro forma net adjusted tangible book value as of June 30, 2014 would have been $ million, or
$ per share. This represents an immediate accretion in net tangible book value of $ per share to existing shareholders and an immediate dilution of net
adjusted tangible book value of $ per share to new investors. The following table illustrates the pro forma per share accretion and dilution as of June 30, 2014:
|
|
|
|
|
|
|
Assumed initial public offering price per share
|
|
$
|
|
|
|
Net adjusted tangible book value per share as of June 30, 2014
|
|
$
|
|
|
|
Increase in net adjusted tangible book value per share attributable to new investors in this offering
|
|
$
|
|
|
|
Pro forma net adjusted tangible book value per share after giving effect to this offering
|
|
$
|
|
|
|
Dilution per share to new investors
|
|
$
|
|
|
Net tangible book value per ordinary share is determined by dividing our tangible net worth, which consists of
tangible assets less liabilities, by the number of ordinary shares outstanding. Dilution or accretion is the amount by which the offering price paid by the purchasers of our ordinary shares in this offering will differ from the net tangible book
value per ordinary share after the offering.
The following table summarizes, on a pro forma basis as of June 30, 2014, the differences
between the number of ordinary shares issued as a result of this offering (not including shares sold by the selling shareholders), the total amount paid and the average price per share paid by the existing holders of ordinary shares and by you in
this offering based on the assumed initial public offering price of $ per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Shares
Outstanding
|
|
Total Consideration
|
|
Average
Price Per
Share
|
|
|
|
Number
|
|
Percentage
|
|
Amount
|
|
Percentage
|
|
|
|
|
(Expressed in millions of U.S. dollars, except percentages and per share data)
|
|
Existing investors
|
|
|
|
|
|
|
|
|
|
|
|
New investors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
A $1.00 increase or decrease in the assumed initial public offering price of $
per ordinary share would cause the adjusted net tangible book value to increase or decrease, respectively, by approximately $ million, or $
per ordinary share, assuming no exercise of the underwriters’ option to purchase additional ordinary shares.
63
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
The following table presents, in each case for the periods and as of the dates indicated, historical selected consolidated financial and other
data. The selected consolidated statement of profit or loss data and selected cash flow data for the years ended December 31, 2013, 2012 and 2011 and the selected consolidated statement of financial position data for the years ended
December 31, 2013 and 2012 have been derived from the audited consolidated financial statements, and the notes thereto, included in this prospectus. The selected consolidated statement of profit or loss data and summary cash flow data for the
six months ended June 30, 2014 and 2013 and the summary consolidated statement of financial position data
as of June 30, 2014 have been derived from the unaudited condensed consolidated interim financial statements, and the notes
thereto, included in this prospectus. The financial statements included herein have been prepared in accordance with IFRS as issued by the IASB, and are in U.S. dollars. The following financial data should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the consolidated financial statements and related notes, and other financial information appearing elsewhere in this prospectus.
Consolidated Statement of Profit or Loss Data
(US$ in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Revenue
|
|
|
201,157
|
|
|
|
153,818
|
|
|
|
304,622
|
|
|
|
320,836
|
|
|
|
326,315
|
|
|
Gains on disposal of vessels/other tangible assets
|
|
|
6,390
|
|
|
|
0
|
|
|
|
8
|
|
|
|
10,067
|
|
|
|
22,153
|
|
|
Other operating income
|
|
|
3,534
|
|
|
|
2,702
|
|
|
|
11,520
|
|
|
|
10,478
|
|
|
|
5,773
|
|
|
Expenses for shipping activities
|
|
|
(117,851
|
)
|
|
|
(99,228
|
)
|
|
|
(206,528
|
)
|
|
|
(210,558
|
)
|
|
|
(212,459
|
)
|
|
Losses on disposal of vessels
|
|
|
(1
|
)
|
|
|
(215
|
)
|
|
|
(215
|
)
|
|
|
(32,080
|
)
|
|
|
(25,501
|
)
|
|
Impairment on non-current assets held for sale
|
|
|
(7,415
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Depreciation tangible assets
|
|
|
(67,674
|
)
|
|
|
(67,880
|
)
|
|
|
(136,882
|
)
|
|
|
(146,881
|
)
|
|
|
(142,358
|
)
|
|
Depreciation intangible assets
|
|
|
(10
|
)
|
|
|
(63
|
)
|
|
|
(75
|
)
|
|
|
(181
|
)
|
|
|
(213
|
)
|
|
Employee benefits
|
|
|
(9,653
|
)
|
|
|
(6,505
|
)
|
|
|
(13,881
|
)
|
|
|
(15,733
|
)
|
|
|
(15,581
|
)
|
|
Other operating expenses
|
|
|
(7,569
|
)
|
|
|
(5,832
|
)
|
|
|
(13,283
|
)
|
|
|
(15,065
|
)
|
|
|
(13,074
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Result from operating activities
|
|
|
908
|
|
|
|
(23,203
|
)
|
|
|
(54,714
|
)
|
|
|
(79,117
|
)
|
|
|
(54,945
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
623
|
|
|
|
720
|
|
|
|
1,993
|
|
|
|
5,349
|
|
|
|
5,663
|
|
|
Finance expenses
|
|
|
(37,138
|
)
|
|
|
(26,302
|
)
|
|
|
(54,637
|
)
|
|
|
(55,507
|
)
|
|
|
(52,484
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net finance expense
|
|
|
(36,515
|
)
|
|
|
(25,582
|
)
|
|
|
(52,644
|
)
|
|
|
(50,158
|
)
|
|
|
(46,821
|
)
|
|
Share of profit (loss) of equity accounted investees (net of income tax)
|
|
|
14,393
|
|
|
|
9,584
|
|
|
|
17,853
|
|
|
|
9,953
|
|
|
|
5,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before income tax
|
|
|
(21,214
|
)
|
|
|
(39,201
|
)
|
|
|
(89,505
|
)
|
|
|
(119,322
|
)
|
|
|
(95,869
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(38
|
)
|
|
|
(72
|
)
|
|
|
(178
|
)
|
|
|
726
|
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
Non-controlling interest
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
(0.20
|
)
|
|
|
(0.79
|
)
|
|
|
(1.79
|
)
|
|
|
(2.37
|
)
|
|
|
(1.92
|
)
|
|
Diluted earnings per share
|
|
|
(0.20
|
)
|
|
|
(0.79
|
)
|
|
|
(1.79
|
)
|
|
|
(2.37
|
)
|
|
|
(1.92
|
)
|
64
Consolidated Statement of Financial Position Data (at Period End)
(US$ in thousands, except for per share and fleet data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Cash and cash equivalents
|
|
|
274,487
|
|
|
|
|
|
|
|
74,309
|
|
|
|
113,051
|
|
|
|
163,108
|
|
|
Vessels
|
|
|
1,683,472
|
|
|
|
|
|
|
|
1,434,800
|
|
|
|
1,592,837
|
|
|
|
1,616,178
|
|
|
Vessels under construction
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
89,619
|
|
|
Current and non-current bank loans
|
|
|
874,337
|
|
|
|
|
|
|
|
847,763
|
|
|
|
911,474
|
|
|
|
938,992
|
|
|
Equity attributable to Owners of the Company
|
|
|
1,374,321
|
|
|
|
|
|
|
|
800,990
|
|
|
|
866,970
|
|
|
|
980,988
|
|
|
Cash flow data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow/(outflow)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
1,378
|
|
|
|
(31,736
|
)
|
|
|
(8,917
|
)
|
|
|
69,812
|
|
|
|
28,060
|
|
|
Investing activities
|
|
|
(512,476
|
)
|
|
|
46,485
|
|
|
|
28,114
|
|
|
|
(86,986
|
)
|
|
|
39,852
|
|
|
Financing activities
|
|
|
711,578
|
|
|
|
(25,311
|
)
|
|
|
(57,384
|
)
|
|
|
(33,117
|
)
|
|
|
(48,606
|
)
|
|
Fleet Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VLCCs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of vessels(1)
|
|
|
14
|
|
|
|
11
|
|
|
|
11
|
|
|
|
13
|
|
|
|
14
|
|
|
Calendar days(2)
|
|
|
2,540
|
|
|
|
2,027
|
|
|
|
4,085
|
|
|
|
4,940
|
|
|
|
5,264
|
|
|
Vessel operating days(3)
|
|
|
2,477
|
|
|
|
1,996
|
|
|
|
4,036
|
|
|
|
4,891
|
|
|
|
5,119
|
|
|
Available days(4)
|
|
|
2,489
|
|
|
|
1,999
|
|
|
|
4,044
|
|
|
|
4,910
|
|
|
|
5,198
|
|
|
Fleet utilization(5)
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
99.9
|
%
|
|
|
99.6
|
%
|
|
|
98.5
|
%
|
|
Daily TCE charter rates(6)
|
|
$
|
26,868
|
|
|
$
|
24,189
|
|
|
$
|
25,788
|
|
|
$
|
23,510
|
|
|
$
|
24,455
|
|
|
Daily vessel operating expenses(7)
|
|
$
|
8,726
|
|
|
$
|
7,778
|
|
|
$
|
8,178
|
|
|
$
|
7,761
|
|
|
$
|
7,440
|
|
|
Suezmaxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of vessels(1)
|
|
|
19
|
|
|
|
19
|
|
|
|
19
|
|
|
|
18
|
|
|
|
18
|
|
|
Calendar days(2)
|
|
|
3,439
|
|
|
|
3,353
|
|
|
|
6,848
|
|
|
|
6,588
|
|
|
|
6,578
|
|
|
Vessel operating days(3)
|
|
|
3,422
|
|
|
|
3,273
|
|
|
|
6,661
|
|
|
|
6,436
|
|
|
|
6,448
|
|
|
Available days(4)
|
|
|
3,430
|
|
|
|
3,275
|
|
|
|
6,664
|
|
|
|
6,489
|
|
|
|
6,456
|
|
|
Fleet utilization(5)
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
99.2
|
%
|
|
|
99.9
|
%
|
|
Daily TCE charter rates(6)
|
|
$
|
24,305
|
|
|
$
|
19,147
|
|
|
$
|
19,283
|
|
|
$
|
21,052
|
|
|
$
|
24,235
|
|
|
Daily vessel operating expenses(7)
|
|
$
|
8,241
|
|
|
$
|
7,579
|
|
|
$
|
7,753
|
|
|
$
|
7,868
|
|
|
$
|
8,442
|
|
|
Average daily general and administrative expenses per vessel—owned tanker segment only(8)
|
|
$
|
2,880
|
|
|
$
|
2,293
|
|
|
$
|
2,485
|
|
|
$
|
2,672
|
|
|
$
|
2,420
|
|
|
Other data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (unaudited)(9)
|
|
$
|
82,985
|
|
|
$
|
54,324
|
|
|
$
|
100,096
|
|
|
$
|
77,898
|
|
|
$
|
93,523
|
|
|
Adjusted EBITDA (unaudited)(9)
|
|
$
|
101,459
|
|
|
$
|
73,145
|
|
|
$
|
138,853
|
|
|
$
|
120,719
|
|
|
$
|
128,367
|
|
|
Time charter equivalents revenues
|
|
$
|
149,728
|
|
|
$
|
110,955
|
|
|
$
|
232,519
|
|
|
$
|
250,476
|
|
|
$
|
281,476
|
|
|
Basic weighted average shares outstanding
|
|
|
104,324,074
|
|
|
|
50,000,000
|
|
|
|
50,230,438
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Diluted weighted average shares outstanding
|
|
|
104,324,074
|
|
|
|
50,000,000
|
|
|
|
50,230,438
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
(1)
|
Average number of vessels
is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of
our fleet during the period divided by the number of calendar days in that period.
|
|
(2)
|
Calendar days
are the total days the vessels were in our possession for the relevant period, including off-hire days associated with major repairs, drydockings or special
or intermediate surveys.
|
|
(3)
|
Vessel operating days
are the total days our vessels were in our possession for the relevant period net of all off-hire days (scheduled and unscheduled), including
off-hire days, associated with major repairs, drydockings or special or intermediate surveys.
|
|
(4)
|
Available days
are the total days our vessels were in our possession for the relevant period net of scheduled off-hire days associated with major repairs, drydockings or
special or intermediate surveys.
|
|
(5)
|
Fleet utilization
is the percentage of time that our vessels were available for revenue generating voyage days and is determined by dividing vessel operating days by
available days for the relevant period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons
other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or intermediate or vessel positioning.
|
65
|
(6)
|
Time Charter Equivalent, or TCE
, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating the TCE rate is
consistent with industry standards and is determined by dividing total voyage revenues less voyage expenses by vessel operating days for the relevant time period. The period over which voyage revenues are recognized commences at the time the vessel
leaves the port at which she discharged her cargo related to her previous voyage (or as the case may be when a vessel is leaving a yard at which she went to drydock or in the case of a newbuilding or a newly acquired vessel as from the moment the
vessel is available to take a cargo. The period ends at the time that discharge of cargo is completed. Net voyage revenues are voyage revenues minus voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to
a particular voyage, which would otherwise be paid by the charterer under a time charter contract. We may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time charter, during periods of
commercial waiting time or while off-hire during dry-docking or due to other unforeseen circumstances.
|
|
|
The TCE rate is not a measure of financial performance under IFRS (non-IFRS measure), and should not be considered as an alternative to voyage revenues, the most directly
comparable IFRS measure, or any other measure of financial performance presented in accordance with IFRS. However, TCE rate is standard shipping industry performance measure used primarily to compare period-to-period changes in a company’s
performance and assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rates may not be comparable to that reported by other companies. The
following table reflects the calculation of our TCE rates for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
VLCC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net VLCC revenues for all employment types
|
|
$
|
66,560,116
|
|
|
$
|
48,287,795
|
|
|
$
|
104,068,875
|
|
|
$
|
114,987,548
|
|
|
$
|
125,195,000
|
|
|
Total VLCC operating days
|
|
|
2,477
|
|
|
|
1,996
|
|
|
|
4,036
|
|
|
|
4,891
|
|
|
|
5,119
|
|
|
Daily VLCC TCE Rate
|
|
$
|
26,868
|
|
|
$
|
24,189
|
|
|
$
|
25,788
|
|
|
$
|
23,510
|
|
|
$
|
24,455
|
|
|
SUEZMAX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Suezmax revenues for all employment types
|
|
$
|
83,167,458
|
|
|
$
|
62,666,847
|
|
|
$
|
128,449,941
|
|
|
$
|
135,488,742
|
|
|
$
|
156,280,502
|
|
|
Total Suezmax operating days
|
|
|
3,422
|
|
|
|
3,273
|
|
|
|
6,661
|
|
|
|
6,436
|
|
|
|
6,448
|
|
|
Daily Suezmax rate
|
|
$
|
24,305
|
|
|
$
|
19,147
|
|
|
$
|
19,283
|
|
|
$
|
21,052
|
|
|
$
|
24,235
|
|
|
Tanker Fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Tanker fleet revenues for all employment type
|
|
$
|
149,727,574
|
|
|
$
|
110,954,643
|
|
|
$
|
232,518,817
|
|
|
$
|
250,476,290
|
|
|
$
|
281,475,502
|
|
|
Total Fleet operating days
|
|
|
5,899
|
|
|
|
5,269
|
|
|
|
10,697
|
|
|
|
11,327
|
|
|
|
11,568
|
|
|
Daily Fleetwide TCE
|
|
$
|
25,381
|
|
|
$
|
21,057
|
|
|
$
|
21,737
|
|
|
$
|
22,114
|
|
|
$
|
24,333
|
|
66
|
|
The following table reflects the calculation of our net revenues for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June
30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Voyage charter revenues
|
|
$
|
130,107
|
|
|
$
|
81,284
|
|
|
$
|
171,225
|
|
|
$
|
175,947
|
|
|
$
|
139,265
|
|
|
Time charter revenues
|
|
$
|
71,050
|
|
|
$
|
72,534
|
|
|
|
133,396
|
|
|
|
144,889
|
|
|
|
187,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal revenue
|
|
$
|
201,157
|
|
|
$
|
153,818
|
|
|
$
|
304,622
|
|
|
$
|
320,836
|
|
|
$
|
326,315
|
|
|
Other income
|
|
$
|
3,534
|
|
|
$
|
2,702
|
|
|
$
|
11,520
|
|
|
$
|
10,478
|
|
|
$
|
5,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
$
|
204,691
|
|
|
$
|
156,520
|
|
|
$
|
316,142
|
|
|
$
|
331,314
|
|
|
$
|
332,088
|
|
|
Net Tanker Fleet Revenues reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tanker Fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of total Revenues attributable to ships owned by Euronav*
|
|
$
|
204,314
|
|
|
$
|
148,870
|
|
|
$
|
305,930
|
|
|
$
|
322,576
|
|
|
$
|
328,359
|
|
|
less voyage expenses and commissions
|
|
$
|
(54,586
|
)
|
|
$
|
(37,915
|
)
|
|
$
|
(73,412
|
)
|
|
$
|
(72,100
|
)
|
|
$
|
(46,884
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Total tanker fleet
|
|
$
|
149,728
|
|
|
$
|
110,955
|
|
|
$
|
232,519
|
|
|
$
|
250,476
|
|
|
$
|
281,476
|
|
|
of which Net VLCC Revenues for all employment types
|
|
$
|
66,560
|
|
|
$
|
48,288
|
|
|
$
|
104,069
|
|
|
$
|
114,988
|
|
|
$
|
125,195
|
|
|
of which Net Suezmax Revenues for all employment types
|
|
$
|
83,168
|
|
|
$
|
62,667
|
|
|
$
|
128,450
|
|
|
$
|
135,489
|
|
|
$
|
156,281
|
|
|
|
*
|
Some revenues are excluded because these do not relate directly to vessels.
|
|
(7)
|
Daily vessel operating expenses, or DVOE
, is calculated by dividing direct vessel expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil,
insurance and maintenance and repairs, by calendar days for the relevant time period.
|
|
(8)
|
Average daily general and administrative expense
s
are calculated by dividing general and administrative expenses by calendar days for our owned tanker segment and
relevant time period. Average daily general and administrative expenses are lower when our jointly-owned vessels are included in this calculation.
|
|
(9)
|
EBITDA
(a non-GAAP measure) represents operating earnings before interest expense, income, taxes and depreciation expense attributable to the Company. EBITDA is presented
to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. The Company believes that EBITDA is useful to investors as the shipping industry is
capital intensive which often brings significant cost of financing. EBITDA should not be considered a substitute for profit/(loss) attributable to the Company or cash flow from operating activities prepared in accordance with IFRS as issued by the
IASB or as a measure of profitability or liquidity. The definition of EBITDA used here may not be comparable to that used by other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June
30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
$
|
(21,252
|
)
|
|
$
|
(39,273
|
)
|
|
$
|
(89,683
|
)
|
|
$
|
(118,596
|
)
|
|
$
|
(95,987
|
)
|
|
plus
Net finance expenses
|
|
$
|
36,515
|
|
|
$
|
25,582
|
|
|
$
|
52,644
|
|
|
$
|
50,158
|
|
|
$
|
46,821
|
|
|
plus
Depreciation of tangible and intangible assets
|
|
$
|
67,684
|
|
|
$
|
67,943
|
|
|
$
|
136,957
|
|
|
$
|
147,062
|
|
|
$
|
142,571
|
|
|
plus
Income tax expense
|
|
$
|
38
|
|
|
$
|
72
|
|
|
$
|
178
|
|
|
$
|
(726
|
)
|
|
$
|
118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
82,985
|
|
|
$
|
54,324
|
|
|
$
|
100,096
|
|
|
$
|
77,898
|
|
|
$
|
93,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (a non-GAAP measure) represents operating earnings of the group (including the share of EBITDA of equity accounted investees) before interest
expense, income taxes and depreciation expense attributable to the Company. Adjusted EBITDA provides investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative
periods as the shipping industry is a capital intensive industry which often brings significant cost of financing. The company also believes that adjusted EBITDA is useful to investors and equity analysts as a measure of the company’s operating
performance that can be readily compared to other companies and the company uses adjusted EBITDA in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources. Adjusted EBITDA should not be considered a
substitute for profit/(loss) attributable to the Company or cash flow from operating
|
67
|
|
activities prepared in accordance with IFRS as issued by the IASB or any other measure of operating performance. The definition of adjusted EBITDA used here may not be comparable to that used by
other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June
30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period using proportionate method for Equity Accounted Investees
|
|
$
|
(21,252
|
)
|
|
$
|
(39,273
|
)
|
|
$
|
(89,683
|
)
|
|
$
|
(118,596
|
)
|
|
$
|
(95,987
|
)
|
|
plus
Net finance expenses
|
|
$
|
36,515
|
|
|
$
|
25,582
|
|
|
$
|
52,644
|
|
|
$
|
50,158
|
|
|
$
|
46,821
|
|
|
plus
Net finance expenses JV
|
|
$
|
4,076
|
|
|
$
|
3,605
|
|
|
$
|
8,352
|
|
|
$
|
12,370
|
|
|
$
|
8,892
|
|
|
plus
Depreciation of tangible and intangible assets
|
|
$
|
67,684
|
|
|
$
|
67,943
|
|
|
$
|
136,957
|
|
|
$
|
147,062
|
|
|
$
|
142,571
|
|
|
plus
Depreciation of tangible and intangible assets JV
|
|
$
|
14,398
|
|
|
$
|
15,216
|
|
|
$
|
30,405
|
|
|
$
|
30,451
|
|
|
$
|
25,952
|
|
|
plus
Income tax expense
|
|
$
|
38
|
|
|
$
|
72
|
|
|
$
|
178
|
|
|
$
|
(726
|
)
|
|
$
|
118
|
|
|
plus
Income tax expense JV
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
101,459
|
|
|
$
|
73,145
|
|
|
$
|
138,853
|
|
|
$
|
120,719
|
|
|
$
|
128,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following presentation of management’s discussion and analysis of results of operations
and financial condition should be read in conjunction with our historical audited and unaudited consolidated financial statements and accompanying notes, and other financial information appearing elsewhere in this prospectus. You should also
carefully read the following discussion in conjunction with “Risk Factors,” “Forward-Looking Statements,” “Selected Historical Financial and Other Data,” “The International Oil Tanker Shipping Industry,” and
“Overview of the Offshore Oil and Gas Industry.”
Overview
We are a fully-integrated provider of international maritime shipping and offshore services engaged primarily in the transportation and storage of
crude oil. We were incorporated under the laws of Belgium on June 26, 2003, and we grew out of the combination of certain tanker businesses carried out by three companies that had a strong presence in the shipping industry: CMB, formed in 1895,
CNN, formed in 1938, and Ceres Hellenic, formed in 1950. Our predecessor started doing business under the name “Euronav” in 1989.
As of September 1, 2014, we owned and operated a modern fleet of 53 vessels (including five chartered-in vessels) with an aggregate carrying capacity of approximately 13.3 million dwt, consisting of 27 VLCCs, one
ULCC, 23 Suezmax vessels, and two FSOs. In addition, we currently commercially manage two Suezmax vessels owned by third-parties.
In
January 2014, we agreed to acquire 15 modern VLCCs with an average age at the time of acquisition of approximately 4.1 years from Maersk Tankers, which we refer to as the “Maersk Acquisition Vessels,” for a total purchase price of
$980.0 million payable as the vessels are delivered to us charter-free. This acquisition has been fully financed through a combination of new equity and debt issuances and borrowings under our $500.0 Million Senior Secured Credit Facility (described
below). During the period from February 2014 through the date of this prospectus, we took delivery of 14 of the Maersk Acquisition Vessels,
Nautilus
,
Nucleus
,
Navarin
,
Newton
,
Sara
,
Ilma, Nautic,
Ingrid,
Noble, Nectar, Simone, Neptun, Sonia,
and
Iris,
and we expect to take delivery of the remaining vessel in October 2014.
In
addition, in July 2014, we agreed to acquire four additional modern VLCCs from Maersk Tankers for an aggregate purchase price of $342.0 million, which we refer to as the “VLCC Acquisition Vessels.” The purchase price of the VLCC
Acquisition Vessels will be financed using the net proceeds of $121.1 million that we received in an underwritten private offering of 10,556,808 of our ordinary shares in Belgium in July 2014 (see “Recent and Other Developments—Private
Offering of Ordinary Shares in Belgium”), available cash on hand, and borrowings under new secured credit facilities, including a new $340.0 million credit facility for which we received a non-binding term sheet, which we refer to as the
“Proposed $340.0 Million Credit Facility.” Three of these vessels are expected to be delivered to us during the third and fourth quarters of 2014 and the last vessel during the second quarter of 2015.
After taking delivery of the four VLCC Acquisition Vessels (three of which we currently charter in) and the remaining Maersk Acquisition Vessel, we
will own and operate 55 double-hulled tankers (including our two FSOs) with an aggregate carrying capacity of approximately 13.9 million dwt. The weighted average age of our fleet as of September 1, 2014, taking into account these vessel
acquisitions, including those to be delivered to us after this date, was approximately 6.8 years, as compared to an industry average age of approximately 9.8 years, according to Drewry.
69
We currently charter our vessels, non-exclusively, to leading international energy companies, such as
Chevron, Maersk Oil, Total and Valero, although there is no guarantee that these companies will continue their relationships with us. We pursue a chartering strategy that seeks an optimal mix of employment of our vessels depending on the
fluctuations of freight rates in the market and our own judgment as to the direction of those rates in the future. Our vessels are therefore routinely employed on a combination of spot market voyages, fixed-rate contracts and long-term time
charters, which typically include a profit sharing component. We principally employ our VLCCs, and expect to employ the four undelivered VLCC Acquisition Vessels and the remaining undelivered Maersk Acquisition Vessel, through the TI Pool, a spot
market-oriented pool in which we were a founding member in 2000. As of September 1, 2014, 19 of our vessels were employed directly in the spot market, 25 of our vessels were employed in the TI Pool, seven of our vessels were employed on
long-term charters, including five with profit sharing components, of which the average remaining duration is 4.0 months, and our two FSOs are employed on long-term service contracts. While we believe that our chartering strategy allows us to
capitalize on opportunities in an environment of increasing rates by maximizing our exposure to the spot market, our vessels operating in the spot market may be subject to market downturns to the extent spot market rates decline. At times when the
freight market may become more challenging, we will try to timely shift our exposure to more time charter contracts and potentially dispose of some of our assets which should provide us with incremental stable cash flows and stronger utilization
rates supporting our business during periods of market weakness. We believe that our chartering strategy and our fleet size management, combined with the leadership of our experienced management team should enable us to capture value during cyclical
upswings and to withstand the challenging operating environment such as the one seen in the past several years.
We operate in a capital
intensive industry and have historically financed our purchase of tankers and other capital expenditures through a combination of cash generated from operations, equity capital, borrowings from commercial banks and the occasional issuance of
convertible notes. Our ability to generate adequate cash flows on a short- and medium-term basis depends substantially on the trading performance of our vessels. Historically, market rates for charters of our vessels have been volatile. For example,
during the year ended December 31, 2013, our voyage charter and pool revenues decreased by 3% compared to the same period in 2012, from $175.9 million to $171.2 million, and our time charter revenue decreased by 8%, from $144.9 million to
$133.4 million. During the six months ended June 30, 2014, our voyage charter and pool revenues increased by 60% compared to the same period in 2013, from $81.3 million to $130.1 million, reflecting higher realized spot market charter rates, and our
time charter revenue decreased by 2% compared to the same period in 2013, from $72.5 million to $71.1 million because we had slightly less days on time charter. Periodic adjustments to the supply of and demand for oil tankers cause the industry
to be cyclical in nature. We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short- and medium-term revenue and liquidity.
For our fiscal year ended December 31, 2013, we had $304.6 million in revenue and incurred a net loss of $89.7 million, and for the six month
period ended June 30, 2014, we had $201.2 million in revenue and incurred a net loss of $21.2 million.
Our Operations and
the Oil Tanker Market
Our revenues are highly sensitive to supply and demand patterns for vessels of the size and design
configurations which we own and operate and the trades in which our vessels operate. Rates for the transportation of crude oil from which we earn a substantial part of our revenues are determined by market forces such as the supply and demand for
oil, the distance that
70
cargoes must be transported, and the number of vessels expected to be available at the time such cargoes need to be transported. The demand for oil shipments is significantly affected by the
state of the global economy, global GDP growth and level of OPEC exports. The number of vessels is affected by newbuilding deliveries and by the removal of existing vessels from service, principally because of storage, scrappings or conversions. Our
revenues are also affected by the mix of charters between spot market voyages and medium- to long-term time charters. Because shipping revenues and voyage expenses are significantly affected by the mix between voyage charters and time charters, we
manage our vessels to maximize TCE revenues, which represents operating revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter, under which we are responsible for voyage related expenses, to revenue generated
from a time charter, under which we are not responsible for voyage related expenses. Our management makes economic decisions based on anticipated TCE rates and evaluates financial performance based on TCE rates achieved on our vessels.
In general, the supply of tankers is influenced by the current orderbook for newbuilding vessels and the rate of removal of vessels from the
worldwide fleet for scrapping or conversion as vessels age. In recent years, the supply of tanker capacity has increased more rapidly than demand for tanker capacity, resulting in the oversupply of tankers. Following a period of rapid expansion from
2007 through 2012, the worldwide tanker fleet grew by only 1.6% in 2013, of which VLCCs and Suezmax vessels grew by 2.0% and 1.4%, respectively, representing the lowest annual increase since 2007. A total number of 31 Suezmax vessels and 30 VLCCs
were added to the worldwide tanker fleet in 2013, compared to 9 Suezmax vessels and 21 VLCCs added to the worldwide tanker fleet in 2012. This imbalance could materially affect charter rates.
Early in the first half of 2014, charter rates for large crude carriers increased in both the Suezmax and the VLCC markets compared to the same
period in 2013 due to greater cargo movements. Charter rates have, however, been extremely volatile and we expect this trend will continue during the course of this year. Initially, charter rates in January 2014 were slightly down compared to the
previous month but the market then picked up again towards the second half of the month. February 2014 and March 2014 followed the same volatile trend in charter rates due to a combination of factors, such as weather and uncertain tonnage lists. We
believe, however, that there has been a significant improvement compared to same period in 2013 when the rates were stable but low due to excess tanker capacity. The second quarter of 2014 was dominated with one of the longest and deepest turnaround
seasons for refineries we have seen which reduced demand for crude oil. However, the underlying picture of a more balanced market had not changed and once refineries were back up towards the end of the second quarter, positive pressure started to
build on freight rates. We and more particularly TI (VLCC Pool) were observing this and pressing the market for higher rates to reflect the tight balance. Initially the freight market showed plenty of resistance as smaller ship owners who could not
benefit from the flow of information only major players have access to, were persuaded by charterers that there were more competing ships than was really the case. This was eventually overcome and rates moved up significantly on both the VLCC and
Suezmax segments. Indeed, in July 2014, we have seen Suezmax rates at their highest level since January 2014. We believe that crude oil tanker rates should remain strong in the coming months due to positive seasonal demand factors and improving
underlying supply/demand fundamentals.
71
The following table presents our average TCE rates (in US dollars) and vessel operating days, which
are the total days our vessels were in our possession for the relevant period net of scheduled off-hire days associated with major repairs, drydockings or special or intermediate surveys for the periods indicated*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
REVENUE
|
|
|
REVENUE
|
|
|
REVENUE
|
|
|
REVENUE
|
|
|
REVENUE
|
|
|
|
|
Fixed
|
|
|
Spot
|
|
|
Pool
|
|
|
Fixed
|
|
|
Spot
|
|
|
Pool
|
|
|
Fixed
|
|
|
Spot
|
|
|
Pool
|
|
|
Fixed
|
|
|
Spot
|
|
|
Pool
|
|
|
Fixed
|
|
|
Spot
|
|
|
Pool
|
|
|
TANKER SEGMENT VLCC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average rate
|
|
|
41,355
|
|
|
|
12,168
|
|
|
|
26,994
|
|
|
|
41,873
|
|
|
|
(2,884
|
)
|
|
|
18,522
|
|
|
|
42,813
|
|
|
|
21,583
|
|
|
|
20,437
|
|
|
|
41,797
|
|
|
|
|
|
|
|
18,607
|
|
|
|
49,114
|
|
|
|
|
|
|
|
18,742
|
|
|
Vessel Operating days
|
|
|
346
|
|
|
|
356
|
|
|
|
1,775
|
|
|
|
542
|
|
|
|
62.77
|
|
|
|
1,391
|
|
|
|
946
|
|
|
|
380
|
|
|
|
2,710
|
|
|
|
1,034
|
|
|
|
|
|
|
|
3,857
|
|
|
|
963
|
|
|
|
|
|
|
|
4,156
|
|
|
SUEZMAX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average rate
|
|
|
25,538
|
|
|
|
22,722
|
|
|
|
—
|
|
|
|
20,838
|
|
|
|
16,609
|
|
|
|
—
|
|
|
|
21,305
|
|
|
|
16,575
|
|
|
|
|
|
|
|
23,320
|
|
|
|
16,745
|
|
|
|
|
|
|
|
27,795
|
|
|
|
11,941
|
|
|
|
|
|
|
Vessel Operating days
|
|
|
1,923
|
|
|
|
1,498
|
|
|
|
—
|
|
|
|
1,964
|
|
|
|
1,308
|
|
|
|
—
|
|
|
|
3,814
|
|
|
|
2,847
|
|
|
|
|
|
|
|
4,216
|
|
|
|
2,220
|
|
|
|
|
|
|
|
5,000
|
|
|
|
1,448
|
|
|
|
|
|
|
*
|
The above table does not include the joint venture vessels, recognized in the income statement at Equity Method, at their respective share of economic interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
Year Ended December 31,
|
|
|
|
|
2014
|
|
2013
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
REVENUE
|
|
REVENUE
|
|
REVENUE
|
|
|
REVENUE
|
|
|
REVENUE
|
|
|
|
|
Fixed
|
|
|
Spot
|
|
Pool
|
|
Fixed
|
|
|
Spot
|
|
Pool
|
|
Fixed
|
|
|
Spot
|
|
Pool
|
|
|
Fixed
|
|
|
Spot
|
|
|
Pool
|
|
|
Fixed
|
|
|
Spot
|
|
|
Pool
|
|
|
FSO SEGMENT (Equity Method)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FSO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average rate
|
|
|
175,121
|
|
|
|
|
|
|
|
174,098
|
|
|
|
|
|
|
|
175,394
|
|
|
|
|
|
—
|
|
|
|
147,308
|
|
|
|
—
|
|
|
|
—
|
|
|
|
137,027
|
|
|
|
—
|
|
|
|
—
|
|
|
Revenue days
|
|
|
181
|
|
|
|
|
|
|
|
181
|
|
|
|
|
|
|
|
365
|
|
|
|
|
|
—
|
|
|
|
366
|
|
|
|
—
|
|
|
|
—
|
|
|
|
365
|
|
|
|
—
|
|
|
|
—
|
|
72
Fleet Development
The following table summarizes the development of our fleet as of the dates presented below:*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June
30,
2014
|
|
|
Six Months
Ended June
30,
2013
|
|
|
Year Ended
December 31,
2013
|
|
|
Year Ended
December 31,
2012
|
|
|
Year Ended
December 31,
2011
|
|
|
VLCCs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At start of period
|
|
|
12.2
|
|
|
|
12.2
|
|
|
|
12.2
|
|
|
|
13.9
|
|
|
|
17.1
|
|
|
Acquisitions
|
|
|
8.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
0.0
|
|
|
Dispositions
|
|
|
-1.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
-1.0
|
|
|
|
-1.0
|
|
|
Chartered in
|
|
|
1.8
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
-1.7
|
|
|
|
-2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At end of period
|
|
|
20.5
|
|
|
|
12.2
|
|
|
|
12.2
|
|
|
|
12.2
|
|
|
|
13.9
|
|
|
Newbuildings on order
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
|
Suezmax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At start of period
|
|
|
21.0
|
|
|
|
20.0
|
|
|
|
20.0
|
|
|
|
19.0
|
|
|
|
18.5
|
|
|
Acquisitions
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
0.5
|
|
|
Dispositions
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
Chartered in
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At end of period
|
|
|
21.0
|
|
|
|
21.0
|
|
|
|
21.0
|
|
|
|
20.0
|
|
|
|
19.0
|
|
|
Newbuildings on order
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
2.0
|
|
|
FSO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At start of period
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
Acquisitions
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
Dispositions
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
Chartered in
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At end of period
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
|
1.0
|
|
|
Newbuildings on order
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
Total fleet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At start of period
|
|
|
34.2
|
|
|
|
33.2
|
|
|
|
33.2
|
|
|
|
33.9
|
|
|
|
36.6
|
|
|
Acquisitions
|
|
|
8.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
2.0
|
|
|
|
0.5
|
|
|
Dispositions
|
|
|
-1.5
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
-1.0
|
|
|
|
-1.0
|
|
|
Chartered in
|
|
|
1.8
|
|
|
|
1.0
|
|
|
|
0.0
|
|
|
|
-1.7
|
|
|
|
-2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At end of period
|
|
|
42.5
|
|
|
|
34.2
|
|
|
|
34.2
|
|
|
|
33.2
|
|
|
|
33.8
|
|
|
Newbuildings on order
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
1.0
|
|
|
|
3.0
|
|
|
*
|
This table includes vessels we own through joint venture entities, which we recognize in our income statement using the equity method, at our respective share of economic
interest. This table does not include vessels acquired, but not yet delivered, from Maersk Tankers.
|
Vessel
Acquisitions and Charter-in Agreements
On January 5, 2011, we took delivery of the Suezmax
Devon
, which we own through
one of our 50%-owned joint ventures with JM Maritime. Upon its delivery to us, we employed the
Devon
directly in the spot market.
In January 2012, we took delivery of the newbuilding Suezmax vessels
Maria
and
Capt. Michael
, which we own through one of our
50%-owned joint ventures, which we employed directly in the spot market upon their delivery to us.
In February 2012, we took delivery
of the newbuilding VLCC
Alsace
, which commenced trading in the TI Pool upon its delivery to us.
73
On March 16, 2012, we acquired for no consideration a 50% participation in the co-chartered-in
vessel
KHK Vision
from OSG.
On February 5, 2014, we agreed to charter-in the VLCC
Maersk Hojo
from Maersk Tankers
A/S for a period of 12 months, with the option to extend the charter for an additional 12 months. The time charter commenced on March 24, 2014 upon delivery of the vessel to us.
On February 5, 2014, we agreed to charter-in the VLCC
Maersk Hirado
from Maersk Tankers A/S for a period of 12 months, with the option
to extend the charter for an additional 12 months.
During the period from February 2014 through the date of this prospectus, we took
delivery of 14 of the Maersk Acquisition Vessels from Maersk Tankers,
Nautilus
,
Nucleus
,
Navarin
,
Newton
,
Sara
,
Ilma, Nautic,
Ingrid, Noble, Nectar, Simone, Neptun, Sonia,
and
Iris
.
On July 7, 2014, we agreed to acquire an additional four modern VLCCs, charter-free, from Maersk Tankers for an aggregate purchase
price of $342.0 million. Three of the vessels are expected to be delivered to us during the third and fourth quarter of 2014, with the remaining vessel expected to be delivered to us in the second quarter of 2015.
Vessel Sales and Redeliveries
On March 3, 2011, we delivered the VLCC
Pacific Lagoon
, which was sold to an unrelated third-party for an aggregate of $52.0 million in
2010.
On March 12, 2011 and August 22, 2011, we redelivered the chartered-in the VLCC
Hawtah
and VLCC
Watban
to
their respective owners.
In May 2011, we took redelivery of the VLCC
Irene SL
, which was employed in the TI Pool, in which we
held a 25% economic interest in the chartered-in contract.
In September 2012, we redelivered the VLCC
Ardenne Venture
, which we
own through one of our 50%-owned joint ventures, upon the expiration of its time charter-in period.
In October 2012, we sold the VLCC
Algarve
for $35.8 million, resulting in a capital gain of $7.3 million.
In November 2012, we terminated early the time
chartered-in contract for VLCC
TI Guardian
, which was scheduled to expire in October 2013. The
TI Guardian
was the oldest vessel in our fleet at that time and was booked as a finance lease.
In March 2013, we sold the newbuilding Suezmax
Cap Isabella
to Belle Shipholdings Ltd., a related party, pursuant to a sale and leaseback
agreement for $54.0 million, which was used to pay the final shipyard installment due at delivery of $55.2 million. The stock of Belle Shipholdings Ltd. is held for the benefit of immediate family members of Peter Livanos, the representative of our
corporate director TankLog Holdings Limited.
In November 2013, we sold the VLCC
Ardenne Venture
, which we owned through one of
our 50% owned joint ventures, for $41.7 million, resulting in a capital gain of $2.2 million. The vessel was delivered to the new owner on January 2, 2014.
On January 7, 2014, we sold the VLCC
Luxembourg
, for $28.0 million to an unrelated third-party, resulting in a capital gain of $6.4 million, which was recognized upon delivery of the vessel on
May 28, 2014.
74
In April 2014, our counterparty exercised a purchase option to buy the
Olympi
a and the
Antarctica
from us for an aggregate purchase price of $178.0 million, of which $20.0 million had been received as an option fee deductible from the purchase price in January 2011. We expect to deliver the
Olympia
in September 2014 and
the
Antarctica
in January 2015. Both vessels will remain employed under their current time charter contract until their respective delivery dates. The sale resulted in a combined loss of $7.4 million which was recorded in the second quarter
of 2014.
Factors Affecting Our Results of Operations
The principal factors which have affected our results of operations and are expected to affect our future results of operations and financial position include:
|
|
•
|
|
The spot rate and time charter market for VLCC and Suezmax tankers;
|
|
|
•
|
|
The number of vessels in our fleet;
|
|
|
•
|
|
Utilization rates on our vessels, including actual revenue days versus non-revenue ballast days;
|
|
|
•
|
|
Our ability to maintain and grow our customer relationships;
|
|
|
•
|
|
Economic regulatory, political and government conditions that affect the tanker shipping industry;
|
|
|
•
|
|
The earnings on our vessels;
|
|
|
•
|
|
Gains and losses from the sale of assets and amortization of deferred gains;
|
|
|
•
|
|
Vessel operating expenses, including in some cases, the fluctuating price of fuel expenses when our vessels operate in the spot or voyage market;
|
|
|
•
|
|
Impairment losses on vessels;
|
|
|
•
|
|
Administrative expenses;
|
|
|
•
|
|
Acts of piracy or terrorism;
|
|
|
•
|
|
Drydocking and special survey days, both expected and unexpected;
|
|
|
•
|
|
Our overall debt level and the interest expense and principal amortization; and
|
|
|
•
|
|
Equity gains (losses) of unconsolidated subsidiaries and associated companies.
|
Lack of Historical Operating Data for Vessels Before Their Acquisition
Consistent with
shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records, there is no historical financial and/or operational due diligence process when we acquire vessels.
Accordingly, we do not obtain the historical operating data for the vessels from the sellers because that information is not material to our decision to make acquisitions, nor do we believe it would be helpful to potential investors in assessing our
business or profitability. Most vessels are sold under a standardized agreement, which, among other things, provides the buyer with the right to inspect the vessel and the vessel’s classification society records. The standard agreement does not
give the buyer the right to inspect, or receive copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller typically removes from the vessel all records, including past financial records and
accounts related to the vessel. In addition, the
75
technical management agreement between the seller’s technical manager and the seller is automatically terminated and the vessel’s trading certificates are revoked by its flag state
following a change in ownership.
Consistent with shipping industry practice, we treat the acquisition of a vessel (whether acquired
with or without charter) as the acquisition of an asset rather than a business. Although vessels are generally acquired free of charter, we have agreed to acquire (and may in the future acquire) some vessels with time charters. Where a vessel has
been under a voyage charter, the vessel is delivered to the buyer free of charter. It is rare in the shipping industry for the last charterer of the vessel in the hands of the seller to continue as the first charterer of the vessel in the hands of
the buyer. In most cases, when a vessel is under time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer’s consent and the buyer’s entering into a separate direct agreement with the
charterer to assume the charter. The purchase of a vessel itself does not transfer the charter, because it is a separate service agreement between the vessel owner and the charterer. In the case of the Maersk Acquisition Vessels, we acquired those
vessels charter-free under industry standard agreements. When we acquire a vessel and assume a related time charter, we must take the following steps before the vessel will be ready to commence operations:
|
|
•
|
|
obtain the charterer’s consent to us as the new owner;
|
|
|
•
|
|
obtain the charterer’s consent to a new technical manager;
|
|
|
•
|
|
in some cases, obtain the charterer’s consent to a new flag for the vessel;
|
|
|
•
|
|
arrange for a new crew for the vessel;
|
|
|
•
|
|
replace most if not all hired equipment on board, such as computers and communication equipment;
|
|
|
•
|
|
negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;
|
|
|
•
|
|
register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;
|
|
|
•
|
|
implement a new planned maintenance program for the vessel; and
|
|
|
•
|
|
ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.
|
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with IFRS, which requires us to make estimates in the application of accounting policies based on the best assumptions, judgments and opinions of
management.
The following is a discussion of our accounting policies that involve a higher degree of judgment and the methods of their
application. For a description of all of our material accounting policies, please see Note 1—Summary of Significant Accounting Policies to our consolidated financial statements included herein.
Revenue Recognition
We
generate a large part of our revenue from voyage charters, including vessels in pools that predominantly perform voyage charters. Within the shipping industry, there are two
76
methods used to account for voyage charter revenue: (1) ratably over the estimated length of each voyage and (2) completed voyage. The recognition of voyage revenues ratably over the
estimated length of each voyage is the most prevalent method of accounting for voyage revenues in the shipping industry and the method we use. Under each method, voyages may be calculated on either a load-to-load or discharge-to-discharge basis. In
applying its revenue recognition method, management believes that the discharge-to-discharge basis of calculating voyages more accurately estimates voyage results than the load-to-load basis. Since, at the time of discharge, management generally
knows the next load port and expected discharge port, the discharge- to-discharge calculation of voyage revenues can be estimated with a greater degree of accuracy. We do not begin recognizing voyage revenue until a charter has been agreed to by
both us and the customer, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage, because it is only at this time the charter rate is determinable for the specified load and discharge ports and
collectability is reasonably assured.
Revenues from time charters are accounted for as operating leases and are thus recognized ratably
over the rental periods of such charters, as service is performed. The board will, however, analyze each contract before deciding on its accounting treatment between operating lease and finance lease. We do not recognize time charter revenues during
periods that vessels are off-hire.
For our vessels operating in the TI Pool, revenues and voyage expenses are pooled and allocated to
the pool’s participants on a time charter equivalent basis in accordance with an agreed-upon formula. The formulas in the pool agreements for allocating gross shipping revenues net of voyage expenses are based on points allocated to
participants’ vessels based on cargo carrying capacity and other technical characteristics, such as speed and fuel consumption. The selection of charterers, negotiation of rates and collection of related receivables and the payment of voyage
expenses are the responsibility of the pool. The pool may enter into contracts that earn either voyage charter revenue or time charter revenue. The pool follows the same revenue recognition principles, as applied by us, in determining shipping
revenues and voyage expenses, including recognizing revenue only after a charter has been agreed to by both the pool and the customer, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage.
Vessel Useful Lives and Residual Values
The useful economic life of a vessel is variable. Elements considered in the determination of the useful lives of the assets are the uncertainty over the future market and future technological changes. The carrying
value of each of our vessels represents its initial cost at the time it was delivered or purchased less depreciation calculated using an estimated useful life of 20 years, except for FSO service vessels for which estimated useful lives of 25 years
are used. Newbuildings are depreciated from delivery of the construction yard. Purchased vessels and FSOs converted later into an FSO are depreciated over their respective remaining useful lives as from the delivery of the construction yard to its
first owner.
As of June 30, 2014, all of our owned vessels are double hull. If the estimated economic lives assigned to our vessels
prove to be too long because of new regulations, the continuation of weak markets, the broad imposition of age restrictions by our customers or other future events, this could result in higher depreciation expenses and impairment losses in future
periods related to a reduction in the useful lives of any affected vessels.
We estimate that our vessels will not have any residual
value at the end of their useful lives. Even though the scrap value of a vessel could be worth something, it is difficult to estimate
77
taking into consideration the cyclicality of the nature of future demand for scrap steel and is likely to remain volatile and unpredictable. The costs of scrapping and disposing of a vessel with
due respect for the environment and the safety of the workers in such specialized yards is equally challenging to forecast as regulations and good industry practice leading to self-regulation can dramatically change over time. For example, certain
organizations have suggested that the industry adopt The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, or the Convention. While this Convention has not been accepted yet by the flag states of the flags
we use, we believe that this Convention or a similar convention may be adopted in the future. In the event that more stringent requirements are imposed upon tanker owners, including those seeking to sell their vessels to a party that intends to
recycle the vessels after they have been purchased, or a Recycling Purchaser, such requirements could negatively impact the sales prices obtainable from the Recycling Purchasers or require companies, including us, to incur additional costs in order
to sell their vessels to recycling purchasers or to other foreign buyers intending to use such vessels for further trading. Therefore, we take the view that by the time our assets reach the end of their useful lives, their scrap values are likely to
be the same as their disposal costs.
Vessel Impairment
The carrying values of our vessels may not represent their fair market values at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of
constructing new vessels. The carrying amounts of our vessels are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated. We define our cash
generating unit as a single vessel, unless such vessel is operated in a pool, in which case such vessel, together with the other vessels in the pool, are collectively treated as a cash generating unit. An impairment loss is recognized whenever the
carrying amount of an asset or cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement.
Calculation of recoverable amount
The recoverable amount of an asset or cash generating unit
is the greater of its fair value less its cost to sell and value in use. In assessing value in use, the estimated future cash flows, which are based on current market conditions, historical trends as well as future expectations, are discounted to
their present value using a pre-tax discount rate that reflects the time value of money and the risks specific to the asset or cash generating unit.
The carrying values of our vessels may not represent their fair market values or the amount that could be obtained by selling the vessels at any point in time since the market prices of second-hand vessels tend to
fluctuate with changes in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical.
In developing estimates of future cash flows, we must make assumptions about future performance, with significant assumptions being related to charter rates, ship operating expenses, utilization, drydocking
requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. Specifically, in estimating future charter rates, management takes into
consideration estimated daily time charter equivalent rates for each vessel type over the estimated remaining lives. The estimated daily time charter equivalent rates are based on the trailing 10-year historical average rates, based on quarterly
average rates published by a third-party maritime research service. Recognizing that the transportation of crude oil and petroleum products is cyclical and subject to significant volatility based on factors beyond our control,
78
management believes the use of estimates based on the 10-year historical average rates calculated as of the reporting date to be reasonable as historically it is the most appropriate reflection
of a typical shipping cycle. When using 5-year historical charter rates in this impairment analysis, the impairment analysis indicates an impairment in a total amount of $147.6 million for the tanker fleet, and when using 1-year historical charter
rates in this impairment analysis, the impairment analysis indicates an impairment in a total amount of $433.2 million for the tanker fleet.
Estimated outflows for operating expenses and drydocking requirements are based on historical and budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved
and estimates of a residual value are consistent with our depreciation policy.
The more significant factors that could impact
management’s assumptions regarding time charter equivalent rates include (i) loss or reduction in business from significant customers, (ii) unanticipated changes in demand for transportation of crude oil and petroleum products,
(iii) changes in production of or demand for oil and petroleum products, generally or in particular regions, (iv) greater than anticipated levels of tanker newbuilding orders or lower than anticipated levels of tanker scrappings, and
(v) changes in rules and regulations applicable to the tanker industry, including legislation adopted by international organizations such as IMO and the EU or by individual countries. Although management believes that the assumptions used to
evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially, in the future. There can be no assurance as to how long charter rates and
vessel values will remain at their current low levels or whether they will improve by a significant degree. If charter rates were to remain at depressed levels, future assessments of vessel impairment would be adversely affected.
Our Fleet—Vessel Carrying Values
During the past few years, the market values of vessels have experienced particular volatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value,
of certain of our vessels may have declined below the carrying amounts of those vessels. After undergoing the impairment analysis discussed above, we have concluded that for the six months ended June 30, 2014 and the years ended December 31, 2013
and 2012, no impairment was required.
The following table presents information with respect to the carrying amount of the
Company’s vessels by type and indicates whether their estimated market values are below their carrying values as of June 30, 2014 and December 31, 2013. The carrying value of each of the Company’s vessels does not necessarily
represent its fair market value or the amount that could be obtained if the vessel were sold. The Company’s estimates of market values for its vessels assume that the vessels are all in good and seaworthy condition without need for repair and,
if inspected, would be certified as being in class without notations of any kind. The Company’s estimates are based on the estimated market values for vessels received from independent ship brokers and are inherently uncertain. In addition,
because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would not record a loss for any of the vessels
for which the fair market value is below its carrying value unless and until the Company either determines to sell the vessel for a loss or determines that the vessel is impaired as discussed above in “Critical Accounting Policies—Vessel
Impairment.” The Company believes that the future discounted cash flows expected to be earned over the estimated
79
remaining useful lives for those vessels that have experienced declines in market values below their carrying values would exceed such vessels’ carrying values. For the vessel that we have
designated as held for sale at June 30, 2014 and December 31, 2013, we used the agreed upon selling price of these vessels if an agreement has been reached to sell these vessels and our estimate of basic market value if an agreement has not
been reached as of the date of this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Type
|
|
Number
of Vessels
June 30,
2014
|
|
|
Number
of Vessels
December 31,
2013
|
|
|
Carrying Value at
June 30, 2014
|
|
|
Carrying Value at
December 31,
2013
|
|
|
VLCC (includes ULCC)(1)
|
|
|
16
|
|
|
|
9
|
|
|
$
|
919,984
|
|
|
$
|
631,893
|
|
|
Suezmax(2)
|
|
|
18
|
|
|
|
18
|
|
|
$
|
763,488
|
|
|
$
|
802,906
|
|
|
Vessels held for sale
|
|
|
2
|
|
|
|
1
|
|
|
$
|
178,000
|
|
|
$
|
21,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
36
|
|
|
|
28
|
|
|
$
|
1,861,472
|
|
|
$
|
1,456,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
As of December 31, 2013, 5 of our VLCC owned vessels had carrying values which exceeded their aggregate market values. These vessels had an aggregate carrying value of
$480.9 million, which exceeded their aggregate market value by approximately $152.3 million. As of June 30, 2014, three of our VLCC owned vessels had carrying values which exceeded their aggregate market values. These vessels had an aggregate
carrying value of $281.9 million, which exceeded their aggregate market value by approximately $96.7 million.
|
|
(2)
|
As of December 31, 2013, 18 of our Suezmax owned vessels had carrying values which exceeded their aggregate market values. These vessels had an aggregate carrying value of
$802.9 million, which exceeded their aggregate market value by approximately $190.4 million. As of June 30, 2014, 18 of our Suezmax owned vessels had carrying values which exceeded their aggregate market values. These vessels had an aggregate
carrying value of $763.5 million, which exceeded their aggregate market value by approximately $146.1 million.
|
The table
above only takes into account the fleet that is 100% owned by the Company and therefore does not take into account the vessels that are owned in joint ventures or the FSOs as they are accounted for using the equity method.
Vessels held for sale
Vessels whose carrying values are expected to be recovered primarily through sale rather than through continuing use are classified as held for
sale. This is the case when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such vessels and its sale is highly probable, i.e., when it is significantly more likely
than merely probable.
Immediately before classification as held for sale, the vessels are remeasured in accordance with our accounting
policies. Thereafter the vessels are measured at the lower of their carrying amount and fair value less cost to sell.
Impairment losses
on initial classification as held for sale and subsequent gains and losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.
Vessels classified as held for sale are no longer depreciated
.
As of June 30, 2014, we had two VLCCs (
Olympia
and
Antarctica
) as non-current assets held for sale. As of December 31, 2013, we
had one VLCC (
Luxembourg
) as a non-current asset held for sale.
Drydocking-Component approach
Within the shipping industry, there are two methods that are used to account for drydockings: (1) capitalize drydocking costs as incurred
(deferral method) and amortize such
80
costs over the period to the next scheduled drydocking (typically over 5 years), and (2) expense drydocking costs as incurred. Where an item of property, plant and equipment comprises major
components having different useful lives, they are accounted for as separate items of property, plant and equipment. Costs associated with routine repairs and maintenance are expensed as incurred including routine maintenance performed whilst the
vessel is in drydock. After each drydock, all the components installed (as replacements or as additional components) during the drydock are classified in two categories (according to their estimated lifetime and their respective cost). When the
useful life is higher than 1 year, the component is amortized if their cost is higher than the established threshold. The components will then be amortized over their estimated lifetime (3-5 years). The thresholds are reviewed by the board on an
annual basis.
Results of Operations
Six Months Ended June 30, 2014 Compared to the Six Months Ended June 30, 2013
Total
shipping revenues and voyage expenses and commissions.
The following table sets forth our total shipping revenues and voyage
expenses and commissions for the six months ended June 30, 2014 and June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
Voyage charter and pool revenues
|
|
|
130,107
|
|
|
|
81,284
|
|
|
|
48,823
|
|
|
|
60
|
%
|
|
Time charter revenues
|
|
|
71,050
|
|
|
|
72,534
|
|
|
|
(1,484
|
)
|
|
|
(2
|
)%
|
|
Other income
|
|
|
3,534
|
|
|
|
2,702
|
|
|
|
832
|
|
|
|
31
|
%
|
|
Total operating revenues
|
|
|
204,691
|
|
|
|
156,520
|
|
|
|
48,171
|
|
|
|
31
|
%
|
|
Voyage expenses and commissions
|
|
|
(54,586
|
)
|
|
|
(37,915
|
)
|
|
|
(16,671
|
)
|
|
|
44
|
%
|
Voyage Charter and Pool Revenues
. Voyage charter and pool revenues increased by 60%,
or $48.8 million, to $130.1 million for the six months ended June 30, 2014, compared to $81.3 million for the same period in 2013. This increase was primarily due to an increase in the average TCE rates for VLCCs and Suezmax vessels (from
$18,522 and $16,609 in 2013, respectively, to $26,994 and $22,722 in 2014, respectively, as well as an increase in the total number of vessel operating days).
Time Charter Revenues.
Time charter revenues decreased by 2%, or $1.5 million, to $71.0 million for the six months ended June 30, 2014, compared to $72.5 million for the same
period in 2013. This decrease was primarily due to the change in employment type of certain of our vessels, which, after completing their time charter-out contracts, were employed in the spot market.
Other Income
. Other income increased by 31%, or $0.8 million, to $3.5 million for the six months ended June 30,
2014, compared to $2.7 million for the same period in 2013. This increase was primarily attributable to additional revenues received because some of our vessels in the spot market were being traded in certain geographical areas.
Voyage Expen
ses and Commissions
. Voyage expenses and commissions increased by 44%, or $16.7 million, to $54.6
million for the six months ended June 30, 2014, compared to $37.9 million for the same period in 2013. This increase was primarily due to the fluctuation of bunker prices, as quoted on the international markets, as well as additional port expenses
due to changes in our fleet trading pattern and an increase in the number of vessels operating in the spot market or through the TI Pool.
81
Net gain (loss) on lease terminations and net gain (loss) on the sale of assets.
The following table sets forth our gain (loss) on lease terminations and gain (loss) on the sale of assets for the six months ended June 30, 2014
and June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
Net gain (loss) on lease terminations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0
|
%
|
|
Net gain (loss) on sale of assets (including impairment on non-current assets held for sale)
|
|
|
(1,026
|
)
|
|
|
(216
|
)
|
|
|
(810
|
)
|
|
|
375
|
%
|
We did not terminate any leases during the six months ended June 30, 2014 or June 30, 2013. Net (loss)
increased by 375%, or $0.8 million, to $1.0 million for the six months ended June 30, 2014, compared to $0.2 million for the same period in 2013. The net loss on the sale of assets of $1.0 million represents the difference between a capital gain of
$6.4 million recorded on the sale of the VLCC
Luxembourg
in May 2014 and the combined loss of $7.4 million recorded as an impairment on non-current assets held for sale on the
Olympia
and
Antarctica
in the second quarter of
2014. The net loss of $0.2 million in 2013 was related to the sale of the
Cap Isabella
.
Vessel Operating Expenses.
The following table sets forth our vessel operating expenses for the six months ended June 30, 2014 and June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
Total VLCC operating expenses
|
|
|
23,312
|
|
|
|
18,769
|
|
|
|
4,543
|
|
|
|
24
|
%
|
|
Total Suezmax operating expenses
|
|
|
31,978
|
|
|
|
33,794
|
|
|
|
(1,816
|
)
|
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total vessel operating expenses
|
|
|
55,290
|
|
|
|
52,563
|
|
|
|
2,727
|
|
|
|
5
|
%
|
Vessel operating expenses increased by 5%, or $2.7 million, to $55.3 million for the six months ended June 30,
2014, compared to $52.6 million for the same period in 2013. This increase was primarily due to an increase in the number of vessels operated by us following our taking delivery of the Maersk Acquisition Vessels.
Time charter-in expenses and bareboat charter-hire expenses.
The following table sets forth our chartered-in vessel expenses and bareboat chart-hire expenses for the six months ended June 30, 2014 and June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
Time charter-in expenses
|
|
|
9,175
|
|
|
|
11,493
|
|
|
|
(2,318
|
)
|
|
|
(20
|
)%
|
|
Bareboat charter-hire expenses
|
|
|
1,946
|
|
|
|
1,024
|
|
|
|
922
|
|
|
|
90
|
%
|
Time charter-in expenses decreased by 20%, or $2.3 million, to $9.2 million for the six months ended June 30, 2014,
compared to $11.5 million for the same period in 2013. This decrease was primarily attributable to the net decrease in the number of vessels on time charter to us.
Bareboat charter-hire expenses increased by 90%, or $0.9 million, to $1.9 million for the six months ended June 30, 2014, compared to $1.0 million for the same period in 2013. This
82
increase was primarily attributable to the bareboat contract for the Suezmax
Cap Isabella
, which started on March 15, 2013, and which therefore accounted for about half of the period
in 2013.
General and administrative expenses.
The following table sets forth our general and administrative expenses for the six months ended June 30, 2014 and June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
General and administrative expenses
|
|
|
17,223
|
|
|
|
12,338
|
|
|
|
4,885
|
|
|
|
40
|
%
|
General and administrative expenses increased by 40%, or $4.9 million, to $17.2 million for the six months ended
June 30, 2014, compared to $12.3 million for the same period in 2013. This increase was primarily due to an increase in staff costs, including (i) $2.2 million relating to equity-settled share based payments and (ii) $1.0 million relating to
increased wages and salaries, due to additional staff hired. In addition, tonnage taxes recorded increased by $0.75 million. Finally, administrative expenses relating to Tankers International pool increased by $0.4 million due to the increased
number of our VLCCs operating in the pool.
Depreciation and amortization expenses.
The following table sets forth our depreciation and amortization expenses for the six months ended June 20, 2014 and June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
Depreciation and amortization expenses
|
|
|
67,684
|
|
|
|
67,943
|
|
|
|
(259
|
)
|
|
|
0
|
%
|
Depreciation and amortization expenses remained primarily unchanged from $67.9 million for the six months ended
June 30, 2013 to $67.7 million for the same period in 2014, which was primarily due to (i) the sale of the VLCC
Luxembourg
, which was booked as an asset held for sale at December 31, 2013 and contributed to a decrease of $2.1 million for the
period, (ii) the sale of VLCCs
Olympia
and
Antarctica
, which were booked as assets held for sale, resulting in a decrease of $2.6 million for the period, which were partially offset by (iii) the acquisition of the Maersk Acquisition
Vessels resulting in an aggregate increase of $4.5 million.
Finance Expenses.
The following table sets forth our finance expenses for the six months ended June 30, 2014 and June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
Interest expense on financial liabilities measured at amortized cost
|
|
|
27,221
|
|
|
|
22,529
|
|
|
|
4,692
|
|
|
|
21
|
%
|
|
Fair value adjustment on interest rate swaps
|
|
|
0
|
|
|
|
(103
|
)
|
|
|
103
|
|
|
|
(100
|
)%
|
|
Other financial charges
|
|
|
9,388
|
|
|
|
2,753
|
|
|
|
6,635
|
|
|
|
241
|
%
|
|
Foreign exchange losses
|
|
|
529
|
|
|
|
1,124
|
|
|
|
(595
|
)
|
|
|
(53
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
37,138
|
|
|
|
26,303
|
|
|
|
10,835
|
|
|
|
41
|
%
|
83
Finance expenses increased by 41%, or $10.8 million, to $37.1 million for the six months ended June
30, 2014, compared to $26.3 million for the same period in 2013. This increase was primarily related to an increase in interest expense on financial liabilities as a result of 1,097 of the remaining convertible Notes issued in 2013 and maturing in
2018 were converted in the first half of 2014 in a total of 18,495,656 new ordinary shares resulting in an increase in interest expenses of $6.4 million, primarily due to the early interest payment on the 2018 convertible bonds. This increase was
partially offset by a decrease in interest rate swaps expenses related to the $300 million facility which matured beginning of April 2014 resulting in a decrease of expenses of $1.5 million for the period. In addition other financial charges have
increased by 241% or $6.6 million as a result of the amortization of transaction costs relating to the Mezzanine financing. Also, foreign exchange losses decreased by 53%, or $0.6 million primarily due to favourable exchange rates between the EUR
and the USD.
Share of results of equity accounted investees, net of income tax.
The following table sets forth our share of results of equity accounted investees (net of income tax) for the six months ended June 30, 2014 and
June 30, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Six Months Ended
June 30, 2014
|
|
|
Six Months Ended
June 30, 2013
|
|
|
$ Change
|
|
|
% Change
|
|
|
Share of results of equity accounted investees
|
|
|
14,393
|
|
|
|
9,584
|
|
|
|
4,809
|
|
|
|
50
|
%
|
Our share of results of equity accounted investees, which consist of two joint ventures, of which one owning one
VLCC and one has delivered its VLCC at the beginning of 2014 to her new buyers following a sale agreement dated in 2013, four joint ventures owning one Suezmax each and two joint ventures owning one FSO each, increased by 50%, or $4.8 million, to
$14.4 million for the six months ended June 30, 2014, compared to $9.6 million for the same period in 2013. This increase was primarily attributable to the increase in spot rates received from the TI Pool for one of our jointly-owned VLCCs,
which increased by 80% to $31,455 per day from $17,521 on average for the same period in 2013, in addition to a combined increase in net results for our four jointly-owned Suezmaxes, mainly due to lower operational expenses and lower financial
expenses, respectively, due to lower amounts outstanding on their according shipping loans and increased spot rates by 17% to $16,904 per day from $15,215 on average for the same period in 2013.
Fiscal Year Ended December 31, 2013 Compared to the Fiscal Year Ended December 31, 2012
Total shipping revenues and voyage expenses and commissions.
The following table sets forth our total shipping revenues and voyage expenses and commissions for the years ended December 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
Voyage charter and pool revenues
|
|
|
171,226
|
|
|
|
175,947
|
|
|
|
(4,721
|
)
|
|
|
(3
|
)%
|
|
Time charter revenues
|
|
|
133,396
|
|
|
|
144,889
|
|
|
|
(11,493
|
)
|
|
|
(8
|
)%
|
|
Other income
|
|
|
11,520
|
|
|
|
10,478
|
|
|
|
1,042
|
|
|
|
10
|
%
|
|
Total shipping revenues
|
|
|
316,142
|
|
|
|
331,314
|
|
|
|
(15,172
|
)
|
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses and commissions
|
|
|
(73,412
|
)
|
|
|
(72,100
|
)
|
|
|
(1,312
|
)
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage Charter and Pool Revenues
. Voyage charter revenues decreased by 3%, or
$4.7 million, to $171.2 million for the year ended December 31, 2013, compared to
84
$175.9 million for the same period in 2012. This decrease was primarily due to a decrease in the average daily TCE rates achieved for our owned VLCCs and Suezmax tankers from $20,437 and
$16,575, respectively, in 2012 to $18,607 and $16,745, respectively, in 2013, as a result of changes in the employment of certain of our vessels between fixed-rate time charters and the spot market or the TI Pool. During 2013, three of our vessels
that previously operated in the spot market or through the TI Pool commenced employment under time charters, which was partially offset by our employment of four vessels in the spot market, three of which previously operated under time charters, and
one of which previously operated in the TI Pool.
Time Charter Revenues
. Time charter revenues decreased
by 8%, or $11.5 million, to $133.4 million for the year ended December 31, 2013, compared to $144.9 million for the same period in 2012. This decrease was primarily due to changes in the employment of certain of our vessels between the spot
market or the TI Pool and fixed-rate time charters. During 2013, five of our vessels which previously operated under time charters commenced employment in the spot market or in the TI Pool, which was partially offset by our employment of two
additional vessels under time charters and our commercial management of five Suezmax vessels.
Other
Income
. Other income increased by 10%, or $1.0 million, to $11.5 million for the year ended December 31, 2013, compared to $10.5 million for the same period in 2012. This increase was primarily due to insurance
rebates received based on changes in our vessels’ trading patterns.
Voyage Expenses and
Commissions
. Voyage expenses and commissions increased by 2%, or $1.3 million, to $73.4 million for the year ended December 31, 2013, compared to $72.1 million for the same period in 2012. This increase was
primarily due to fluctuations in bunker prices quoted on international markets and an increase in port expenses due to changes in our vessels’ trading patterns.
Net gain (loss) on lease terminations and net gain (loss) on the sale of assets.
The following
table sets forth our gain (loss) on lease terminations, and gain (loss) on the sale of assets for the years ended December 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
Net gain (loss) on lease terminations
|
|
|
0
|
|
|
|
2,831
|
|
|
|
(2,831
|
)
|
|
|
(100
|
)%
|
|
Net gain (loss) on sale of assets
|
|
|
(207
|
)
|
|
|
(24,844
|
)
|
|
|
24,637
|
|
|
|
(99
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain (loss) on lease terminations.
Net gain on lease terminations decreased by
100%, or $2.8 million, to $0 for the year ended December 31, 2013, compared to $2.8 million for the same period in 2012. This difference was due to our termination of the time charter-in contract for the
TI Guardian
in November 2012,
resulting in a capital gain of $2.8 million for the year ended December 31, 2012. We did not terminate any leases during the year ended December 31, 2013.
Net gain
(loss) on sale of assets.
Net (loss) decreased by 99%, or $24.6 million, to $0.2 million for the year ended December 31, 2013, compared to $(24.8)
million for the same period in 2012. This decrease was primarily attributable to the sale of the
Cap Isabella
, resulting in a capital loss of $32.1 million
in 2012 and due to the sale of the
Algarve
, resulting in a capital gain
of $7.2 million in 2012.
85
Vessel Operating Expenses.
The following table sets forth our vessel operating expenses for the years ended December 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
Total VLCC operating expenses
|
|
|
38,883
|
|
|
|
43,534
|
|
|
|
(4,651
|
)
|
|
|
(11
|
)%
|
|
Total Suezmax operating expenses
|
|
|
73,201
|
|
|
|
66,004
|
|
|
|
7,197
|
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total vessel operating expenses
|
|
|
112,084
|
|
|
|
109,538
|
|
|
|
2,546
|
|
|
|
2
|
%
|
Vessel operating expenses increased by $2.5 million, or 2%, to $112.1 million for the year ended December 31,
2013, compared to $109.5 million for the same period in 2012. This increase was primarily attributable to an increase in Suezmax operating costs as a result of certain repairs performed during drydock of six of our Suezmax vessels in 2013, compared
to four in 2012, an increase in crewing costs due to the delivery of the
Cap Isabella
on bareboat charter, and an increase in special expenses for vessel modifications for the installation of energy savings devices onboard four Suezmax
vessels.
Time charter-in expenses and bareboat charter-hire expenses.
The following table sets forth our chartered-in vessel expenses and bareboat chart-hire expenses for the years ended December 31, 2013 and
2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
Time charter-in expenses
|
|
|
18,029
|
|
|
|
28,920
|
|
|
|
(10,891
|
)
|
|
|
(38
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bareboat charter-hire expenses
|
|
|
3,002
|
|
|
|
0
|
|
|
|
3,002
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time charter-in expenses decreased by 38%, or $10.9 million, to $18.0 million for the year ended December 31,
2013, compared to $28.9 million during the same period in 2012. This decrease was primarily due to a decrease in the number of time chartered-in vessels during 2013 to 2, compared to 7 vessels in 2012, and our termination of a time charter contract
for a VLCC
Ardenne Venture
in September 2012.
Bareboat charter-hire expenses increased to $3.0 million for the year ended
December 31, 2013, compared to $0 million for the same period in 2012. The increase was primarily attributable to bareboat charter-hire expenses related to our sale and leaseback of the Suezmax,
Cap Isabella
, in March 2013 for a fixed
period and the absence of any vessels chartered-in on bareboat charter in 2012.
General and administrative expenses.
The following table sets forth our general and administrative expenses for the years ended December 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
General and administrative expenses
|
|
|
27,166
|
|
|
|
30,797
|
|
|
|
(3,631
|
)
|
|
|
(12
|
)%
|
General and administrative expenses which include also, amongst others, director fees, office rental, consulting
fees, audit fees and tonnage tax decreased by 12%, or $3.6 million, to $27.1 million for the year ended December 31, 2013, compared to $30.8 million for the same period in 2012. This decrease was primarily due to a decrease in staff costs
(employee benefits) of $1.9 million, and a decrease in legal and professional fees and services of $1.8 million during
86
2013. In 2012, $0.7 million was recorded under trade debts written off, which relates to unrecoverable timecharter out revenues.
Depreciation and amortization expenses.
The following table sets forth our depreciation and amortization expenses for the years ended December 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
Depreciation and amortization expenses
|
|
|
136,957
|
|
|
|
147,062
|
|
|
|
(10,105
|
)
|
|
|
(7
|
)%
|
Depreciation and amortization expenses decreased by 7%, or $10.1 million, to $136.9 million for the year ended
December 31, 2013, compared to $147.0 million for the same period in 2012. This decrease was primarily attributable to our sale of the VLCC
Algarve
in October 2012, resulting in a decrease of $3.2 million and the termination of our
finance lease of the
TI Guardian
in November 2012, resulting in a decrease of $8.0 million, which were partially offset by the delivery of our newbuilding VLCC
Alsace
in February 2012, resulting in an increase of $1.3 million.
Finance Expenses.
The following table sets forth our finance expenses for the years ended December 31, 2013 and 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
Interest expense on financial liabilities measured at amortized cost
|
|
|
49,240
|
|
|
|
47,930
|
|
|
|
1,310
|
|
|
|
3
|
%
|
|
Fair value adjustment on interest rate swaps
|
|
|
(154
|
)
|
|
|
(273
|
)
|
|
|
119
|
|
|
|
(44
|
)%
|
|
Other financial charges
|
|
|
2,809
|
|
|
|
3,551
|
|
|
|
(742
|
)
|
|
|
(21
|
)%
|
|
Foreign exchange losses
|
|
|
2,742
|
|
|
|
4,299
|
|
|
|
(1,557
|
)
|
|
|
(36
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
54,637
|
|
|
|
55,507
|
|
|
|
(870
|
)
|
|
|
(2
|
)%
|
Finance expenses decreased by 2%, or $0.9 million, to $54.6 million for the year ended December 31, 2013,
compared to $55.5 million for the same period in 2012. This small decrease was primarily attributable to a marginal decrease of interest expense on financial liabilities measured at amortized cost of $0.7 million as a result of a variance in LIBOR
during the year, the fair value adjustment on interest rate swaps related to the tranche drawdown on the
FSO Africa
, and the foreign exchange loss due to a difference in the exchange rate between the USD and the EUR, in which currencies we
incur certain expenses.
Share of results of equity accounted investees, net of income tax.
The following table sets forth our share of results of equity accounted investees (net of income tax) for the years ended December 31, 2013 and
2012:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2013
|
|
|
2012
|
|
|
$ Change
|
|
|
% Change
|
|
|
Share of results of equity accounted investees
|
|
|
17,853
|
|
|
|
9,953
|
|
|
|
7,900
|
|
|
|
79
|
%
|
Our share of results of equity accounted investees, which consist of two joint ventures owning one VLCC each, four
joint ventures owning one Suezmax each and two joint ventures owning one FSO each, increased by 79%, or $7.9 million, to $17.9 million for the year ended December 31, 2013, compared to $10.0 million for the same period in 2012. This increase
was
87
primarily due to our participation in the 50%-owned joint venture, TI Africa Limited, the owner of the
FSO Africa
, which entered into a new agreement in October 2012 with Maersk upon the
expiration of its existing charter, at an escalated charter rate, for the provision of FSO services on the Al Shaheen field offshore Qatar, which has an initial term of five years. This increase was partially offset by our employment of the VLCC
Ardenne Venture
, which we own through one of our 50%-owned joint ventures (Great Hope Enterprises Ltd.), in the TI Pool upon the expiration of its time charter-in September 2012, which resulted in a decrease in revenues earned on the vessel
during 2013. This increase was also partially offset by a decrease in available days for hire of the VLCC
VK Eddie
, which we own through one of our 50%-owned joint ventures (Kingswood Co. Ltd), due to repairs during dry-docking and a special
survey during 2013. In addition, our share in our 50%-owned joint ventures owning four of our Suezmaxes has been affected by lower spot market rates on Suezmax vessels.
Fiscal Year Ended December 31, 2012 Compared to the Fiscal Year Ended December 31, 2011
Total shipping revenues and voyage expenses and commissions.
The following table sets forth
our total shipping revenues and voyage expenses and commissions for the years ended December 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Change
|
|
|
Voyage charter and pool revenues
|
|
|
175,947
|
|
|
|
139,265
|
|
|
|
36,682
|
|
|
|
26
|
%
|
|
Time charter revenues
|
|
|
144,889
|
|
|
|
187,050
|
|
|
|
(42,161
|
)
|
|
|
(23
|
)%
|
|
Other income
|
|
|
10,478
|
|
|
|
5,773
|
|
|
|
4,705
|
|
|
|
81
|
%
|
|
Total shipping revenues
|
|
|
331,314
|
|
|
|
332,088
|
|
|
|
(774
|
)
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage expenses and commissions
|
|
|
(72,100
|
)
|
|
|
(46,884
|
)
|
|
|
(25,216
|
)
|
|
|
54
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voyage Charter and Pool Revenues.
Voyage charter revenues increased by 26%, or
$36.7 million, to $175.9 million for the year ended December 31, 2012, compared to $139.2 million for the same period in 2011. This increase was primarily due to an increase in TCE rates achieved for our owned VLCCs and Suezmax tankers
from $18,100 and $12,000, respectively, in 2011 to $19,800 and $16,500, respectively, in 2012, as a result of changes in the employment of certain of our vessels between fixed-rate time charters and the spot market or the TI Pool, our acquisition of
one additional VLCC, which we employed in the TI Pool upon its delivery to us, and an increase of one chartered-in vessel, in which Euronav had a participation of 40%, by the TI Pool. These increases were partially offset by our redelivery of
vessels we had chartered-in and the sale of one vessel, the
VLCC Algarve
.
Time Charter
Revenues.
Time charter revenues decreased by 23%, or $42.1 million, to $144.9 million for the year ended December 31, 2012, compared to $187.0 million during the same period in 2011. This decrease was mainly due to
changes in the employment of certain of our vessels between the spot market or the TI Pool and fixed-rate time charters. During 2012, five of our vessels that previously operated under time charters commenced employment in the spot market, which was
partially offset by our employment of two other vessels starting new contracts under time charters.
Other
Income.
Other income increased by 81%, or $4.7 million, to $10.5 million for the year ended December 31, 2012, compared to $5.8 million during the same period in 2011. This increase was primarily due to the receipt of
funds from our insurance relating to a hull claim and the receipt of tender participation compensation for an offshore storage contract for which, ultimately, we were not selected. In addition, this increase is attributable to insurance rebates
received based on changes in our vessels’ trading patterns, and premiums we received for our vessels trading in the spot market in certain geographical zones.
88
Voyage Expenses and Commissions
. Voyage expenses and commissions
increased by 54%, or $25.2 million, to $72.1 million, during the year ended December 31, 2012, compared to $46.9 million for the same period in 2011. This increase was primarily due to an increase of approximately two Suezmax vessels operated
in our spot fleet.
Net gain (loss) on lease terminations and net gain (loss) on the sale of assets.
The following table sets forth our gain (loss) on lease terminations, and gain (loss) on the sale of assets for the years ended December 31,
2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Changes
|
|
|
Net gain (loss) on lease terminations
|
|
|
2,831
|
|
|
|
0
|
|
|
|
2,831
|
|
|
|
100
|
%
|
|
Net gain (loss) on sale of assets
|
|
|
(24,844
|
)
|
|
|
(3,347
|
)
|
|
|
(21,497
|
)
|
|
|
642
|
%
|
Net gain (loss) on lease terminations.
Net gain on lease terminations increased to
$2.8 million for the year ended December 31, 2012, compared to $0 million for the same period in 2011. This difference was primarily due to our termination of the time charter-in contract for the
TI Guardian
in November 2012,
resulting in a capital gain of $2.8 million for the year ended December 31, 2012. We did not terminate any leases during the year ended December 31, 2011.
Net gain (loss) on sale of assets.
Net (loss) increased by 642%, or $21.5 million, to $(24.8) million for the year ended December 31, 2012, compared to $(3.3) million
for the same period in 2011. This increase was primarily
attributable to the sale of the
Pacific Lagoon
in 2011, resulting in a capital gain of $22.1 million and due to the cancellation of the newbuilding contract for Hull number
S1905, resulting in a capital loss of $25.5 million in 2011.
Vessel Operating Expenses.
The following table sets forth our vessel operating expenses for the years ended December 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Change
|
|
|
Total VLCC operating costs
|
|
|
43,534
|
|
|
|
50,138
|
|
|
|
(6,604
|
)
|
|
|
(13
|
)%
|
|
Total Suezmax operating costs
|
|
|
66,004
|
|
|
|
72,940
|
|
|
|
(6,936
|
)
|
|
|
(10
|
)%
|
|
Total vessel operating expenses
|
|
|
109,538
|
|
|
|
123,078
|
|
|
|
(13,540
|
)
|
|
|
(11
|
)%
|
Vessel operating expenses decreased by $13.5 million, or 11%, to $109.5 million for the year ended
December 31, 2012, compared to $123.1 million for the same period in 2011. This decrease was primarily attributable to a decrease in VLCC operating costs as a result of the restructuring of our vessels’ management structure, savings in
crew costs of $6.8 million due to a more efficient allocation of our crew, and a decrease in technical expenses of $4.7 million due to four vessel undergoing repairs during drydock, as compared to six vessels in 2011.
Time charter-in expenses and bareboat charter-hire expenses.
The following table sets forth our chartered-in vessel expenses and bareboat chart-hire expenses for the years ended December 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Change
|
|
|
Time charter-in expenses
|
|
|
28,920
|
|
|
|
42,497
|
|
|
|
(13,577
|
)
|
|
|
(32
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bareboat charter-hire expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89
Time charter-in expenses decreased by 32%, or $13.6 million, to $28.9 million for the year ended
December 31, 2012, compared to $42.5 million for the same period in 2011. This decrease was primarily due to our redelivery of five co-chartered-in vessels by the TI pool in which Euronav had an economic participation and our termination of a
time charter contract for a VLCC in November 2012. As of December 31, 2012, we time chartered-in two vessels. In addition, two other vessels that we commercially manage were being recognized as time chartered-in vessels in our income statement
(even though we had back-to-back contracts to time charter them out to a third-party). This compares to seven vessels time-chartered in for 2011.
During the years ended December 31, 2012 and 2011, we had no bareboat charter-in agreements.
General and administrative expenses.
The following table sets forth our general and administrative expenses for the years ended December 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Change
|
|
|
General and administrative expenses
|
|
|
30,797
|
|
|
|
28,655
|
|
|
|
2,142
|
|
|
|
7
|
%
|
General and administrative expenses increased by 7%, or $2.1 million, to $30.8 million for the year ended
December 31, 2012, compared to $28.7 million for the same period in 2011. This increase was primarily due to an increase in miscellaneous operating charges of $0.8 million and an increase in legal and professional fees and services of $0.5
million during 2012. In 2012, $0.7 million was recorded under trade debts written off, which relates to unrecoverable time charter-out revenues.
Depreciation and amortization expenses.
The following table sets forth our depreciation and
amortization expenses for the years ended December 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Change
|
|
|
Depreciation and amortization expenses
|
|
|
147,062
|
|
|
|
142,571
|
|
|
|
4,491
|
|
|
|
3
|
%
|
Depreciation and amortization expenses increased by 3%, or $4.5 million, to $147.0 million for the year ended
December 31, 2012, compared to $142.5 million for the same period in 2011. This increase was primarily attributable to the delivery of our newbuilding VLCC
Alsace
in February 2012, resulting in an increase of $6.7 million. This increase
was partially offset by our sale of the VLCC
Algarve
in October 2012, resulting in a decrease of $0.9 million and the termination of our finance lease of the
TI Guardian
in November 2012, resulting in a decrease of $1.4 million.
90
Finance Expenses.
The following table sets forth our finance expenses for the years ended December 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Change
|
|
|
Interest expense on financial liabilities measured at amortized cost
|
|
|
47,930
|
|
|
|
57,097
|
|
|
|
(9,167
|
)
|
|
|
(16
|
)%
|
|
Fair value adjustment on interest rate swaps
|
|
|
(273
|
)
|
|
|
(17,840
|
)
|
|
|
17,567
|
|
|
|
(98
|
)%
|
|
Other financial charges
|
|
|
3,551
|
|
|
|
6,812
|
|
|
|
(3,261
|
)
|
|
|
(48
|
)%
|
|
Foreign exchange losses
|
|
|
4,299
|
|
|
|
6,415
|
|
|
|
(2,116
|
)
|
|
|
(33
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance expenses
|
|
|
55,507
|
|
|
|
52,484
|
|
|
|
3,023
|
|
|
|
6
|
%
|
Finance expense increased by 6%, or $3.0 million, to $55.5 million for the year ended December 31, 2012,
compared to $52.5 million for the same period in 2011. This increase was primarily attributable to the maturity of one of our interest rate swaps at the end of 2011.
Share of results of equity accounted investees, net of income tax.
The following table sets
forth our share of results of equity accounted investees (net of income tax) for the years ended December 31, 2012 and 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
2012
|
|
|
2011
|
|
|
$ Change
|
|
|
% Change
|
|
|
Share of results of equity accounted investees
|
|
|
9,953
|
|
|
|
5,897
|
|
|
|
4,056
|
|
|
|
69
|
%
|
Our share of results of equity accounted investees which consist of two joint ventures owning 1 VLCC each, four
joint ventures owning one Suezmax each and 2 joint ventures owning one FSO each, increased by 69%, or $4.0 million, to $10.0 million for the year ended December 31, 2012, compared to $5.8 million for the same period in 2011. This increase was
primarily due to our participation in the 50%-owned joint venture, TI Africa Limited, the owner of the
FSO Africa
, which entered into a new agreement in October 2012 with Maersk upon the expiration of its existing charter, at an escalated
charter rate, for the provision of FSO services on the Al Shaheen field offshore Qatar, which has an initial term of five years and to an increase of vessels in operation under joint venture structures, as two out of four Suezmax vessels owned
through joint ventures were delivered in 2012 and one in 2011.
Customers
We charter our vessels to leading international energy companies, such as Chevron, Maersk Oil, Total and Valero. For the year ended
December 31, 2013, Valero and Total represented 14% and 11%, respectively, of our total revenues in our tankers segment, compared to 20% and 14%, respectively, for the same period in 2012. In addition, our only FSO customer for the years ended
December 31, 2013 and 2012 was Maersk Oil. None of our other customers accounted for more than 10% of our total revenues.
Liquidity and Capital
Resources
We operate in a capital intensive industry and have historically financed our purchase of tankers and other capital
expenditures through a combination of cash generated from operations, equity capital, borrowings from commercial banks and the occasional issuance of convertible notes. Our ability to generate adequate cash flows on a short- and medium-term basis
depends substantially on the trading performance of our vessels. Historically, market rates
91
for charters of our vessels have been volatile. Periodic adjustments to the supply of and demand for oil tankers cause the industry to be cyclical in nature. We expect continued volatility in
market rates for our vessels in the foreseeable future with a consequent effect on our short- and medium-term liquidity.
Our funding
and treasury activities are conducted within corporate policies to maximize investment returns while maintaining appropriate liquidity for our requirements. Cash and cash equivalents are held primarily in U.S. dollars with some balances held in
British Pounds, Euros, and other currencies we may hold for limited amounts.
As of June 30, 2014 and December 31, 2013, we had
$274.5 million and $74.3 million in cash and cash equivalents, respectively.
Our short-term liquidity requirements relate to payment of
operating costs (including certain repairs performed in drydock), lease payments for our chartered in fleet, funding working capital requirements, maintaining cash reserves against fluctuations in operating cash flows as well as maintaining some
cash balances on accounts pledges under borrowings from commercial banks. In addition, since December 31, 2013, we agreed to acquire the 15 Maersk Acquisition Vessels for $980.0 million, which is payable as the vessels are delivered to us.
Sources of short-term liquidity include cash balances, restricted cash balances, short-term investments and receipts from our
customers. Revenues from time charters and bareboat charters are generally received monthly in advance. Revenues from FSO service contracts are received monthly in arrears while revenues from voyage charters are received upon completion of the
voyage.
Our medium- and long-term liquidity requirements include funding the equity portion of investments in new or replacement
vessels, repayment of the convertible notes and funding all the payments we are required to make under our loan agreements with commercial banks. Sources of funding for our medium- and long-term liquidity requirements include new loans, refinancing
of existing arrangements, issuance of new notes or refinancing of existing ones via public and private debt offerings, equity issues, vessel sales and sale and leaseback arrangements.
Net cash provided by operating activities during the six months ended June 30, 2014 was $1.4 million compared to net cash used by operations of
$38.2 million during the six months ended June 30, 2013. Our partial reliance on the spot market contributes to fluctuations in cash flows from operating activities as a result of its exposure to highly cyclical tanker rates. Any increase or
decrease in the average TCE rates earned by our vessels in periods subsequent to June 30, 2014, will have a positive or negative comparative impact, respectively, on the amount of cash provided by operating activities.
Net cash used by operating activities during the year ending December 31, 2013 was $8.9 million compared to net cash provided by operations of
$69.8 million for the same period in 2012 and $28 million for the same period in 2011. Our partial reliance on the spot market contributes to fluctuations in cash flows from operating activities as a result of its exposure to highly cyclical tanker
rates. Any increase or decrease in the average TCE rates earned by our vessels in periods subsequent to December 31, 2013, compared with the actual TCE rates achieved during 2013, will have a positive or negative comparative impact,
respectively, on the amount of cash provided by operating activities.
As of June 30, 2014 and December 31, 2013, our total
indebtedness was $1,255.4 million and $1,119.8 million, respectively.
92
We expect to finance our funding requirements with cash on hand, operating cash flow and bank debt or
other types of debt financing. In the event that our cash flow from operations does not enable us to satisfy our short-term or medium- to long-term liquidity requirements, we will also have to consider alternatives, such as raising equity, or new
convertible notes, which could dilute shareholders, or selling assets (including investments), which could negatively impact our financial results, depending on market conditions at the time, establish new loans or refinancing of existing
arrangements.
Perpetual Convertible Preferred Equity Issues
On January 13, 2014, we issued 60 perpetual convertible preferred equity securities for net proceeds of $150.0 million, which are convertible into ordinary shares of us, at the holders’ option. The
perpetual convertible preferred equity securities bear interest at 6% during the first 5 years, which is payable annually in arrears in cash or in shares at our option. On February 6, 2014, we issued 9,459,286 ordinary shares upon the
conversion of 30 perpetual convertible preferred equity securities, representing a face value of $75.0 million. The remaining 30 outstanding perpetual convertible preferred equity securities may be converted to ordinary shares at any time. We have
the option to force the conversion of our perpetual convertible preferred equity securities if our share price reaches a certain level over a certain period of time and our ordinary shares have been admitted to listing on the New York Stock Exchange
or the Nasdaq Stock Exchange. In accordance with the terms of the perpetual convertible preferred equity securities, we expect to exercise this option and issue up to 9,459,286 ordinary shares relating to the contribution of the principal amount
and, at our option, up to 2,837,785 ordinary shares relating to the payment of interest in shares over five years, totaling 12,297,071 shares, at the closing of this offering upon the conversion of the remaining 30 outstanding perpetual convertible
preferred equity securities.
Equity Issuances
During the period from November 12, 2013 through April 22, 2014, we issued an aggregate of 20,969,473 existing ordinary shares at the holders’ option, upon conversion of $124,900,000 in aggregate
principal amount of 1,249 Convertible Notes due 2018. On February 20, 2014, we issued an optional redemption notice announcing that on April 9, 2014, we will exercise our right to redeem all such Convertible Notes due 2018 outstanding as
of April 2, 2014.
On January 10, 2014, we received gross proceeds of $50.0 million upon the issuance of 5,473,571 of our
ordinary shares in an equity offering at
€
6.70 per share (based on the USD/EUR exchange rate applied by the European Central Bank of
EUR 1.00 per $1.3634 in effect on January 6, 2014). The proceeds of the offering were used to partially finance the purchase price of the Maersk Acquisition Vessels.
On February 24, 2014, we received gross proceeds of $300.0 million upon the issuance of 32,841,528 of our ordinary shares in an equity offering at
€
6.70 per share (based on the USD/EUR exchange rate applied by the European Central Bank of EUR 1.00 per $1.3634 in effect on
January 6, 2014). The proceeds of the offering were used to partially finance the purchase price of the Maersk Acquisition Vessels.
On July 14, 2014, we received gross proceeds of $125.0 million upon the issuance of 10,556,808 of our ordinary shares in an underwritten private
offering in Belgium mainly to a group of qualified investors at €8.70 per share (or $11.84 per share based on the USD/EUR exchange rate of EUR 1.00 per $1.3610). The proceeds of the offering are expected to be used to partially
finance the purchase price of the four VLCC Acquisition Vessels.
93
Our Borrowing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts Outstanding as of
|
|
|
(U.S.$ in thousands)
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
December 31,
2012
|
|
|
Euronav NV Credit Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$750.0 Million Secured Loan Facility
|
|
$
|
494,876
|
|
|
$
|
568,579
|
|
|
$
|
621,400
|
|
|
$300.0 Million Secured Loan Facility
|
|
$
|
201,433
|
|
|
$
|
211,433
|
|
|
$
|
231,433
|
|
|
$65.0 Million Secured Loan Facility
|
|
$
|
56,400
|
|
|
$
|
58,550
|
|
|
$
|
62,850
|
|
|
$500.0 Million Senior Secured Credit Facility
|
|
$
|
136,225
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Credit Line Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit lines
|
|
$
|
—
|
|
|
$
|
13,588
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$150.0 Million Convertible Notes due 2015
|
|
$
|
25,000
|
|
|
$
|
25,000
|
|
|
$
|
150,000
|
|
|
$125.0 Million Convertible Notes due 2018
|
|
$
|
—
|
|
|
$
|
109,800
|
|
|
$
|
—
|
|
|
$235.5 Million Notes due 2021
|
|
$
|
235,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest bearing debt
|
|
$
|
1,149,434
|
|
|
$
|
986,950
|
|
|
$
|
1,065,683
|
|
|
Joint Venture Credit Facilities (at 50% economic interest)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$43.0 Million Secured Loan Facility (Great Hope)
|
|
$
|
—
|
|
|
$
|
9,975
|
|
|
$
|
13,125
|
|
|
$52.0 Million Secured Loan Facility (Seven Seas)
|
|
$
|
6,500
|
|
|
$
|
7,583
|
|
|
$
|
9,750
|
|
|
$135.0 Million Secured Loan Facility (Fontveille and Monghetti)
|
|
$
|
47,110
|
|
|
$
|
49,610
|
|
|
$
|
53,110
|
|
|
$76.0 Million Secured Loan Facility (Fiorano)
|
|
$
|
19,219
|
|
|
$
|
20,281
|
|
|
$
|
22,406
|
|
|
$67.5 Million Secured Loan Facility (Larvotto)
|
|
$
|
19,534
|
|
|
$
|
20,526
|
|
|
$
|
22,511
|
|
|
$500.0 Million Secured Loan Facility (TI Asia and TI Africa)
|
|
$
|
85,556
|
|
|
$
|
98,250
|
|
|
$
|
123,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest bearing debt—joint ventures
|
|
$
|
177,919
|
|
|
$
|
206,225
|
|
|
$
|
244,065
|
|
Euronav NV Credit Facilities
$750.0 Million Secured Loan Facility
On June 22, 2011, we entered into a $750.0 million
secured loan facility with a syndicate of banks and Nordea Bank Norge SA as Agent and Security Trustee. This facility is comprised of a $500.0 million term loan facility and a $250.0 million revolving credit facility, and has a term of six years. We
used the proceeds of this facility to refinance all remaining indebtedness under our $1,600 million loan agreement and for general corporate and working capital purposes. This facility is secured by 22 of our wholly-owned vessels. The term loan is
repayable in 11 installments of consecutive 6-month intervals, with the final repayment due at maturity in 2017. Each revolving advance is repayable in full on the last day of its applicable interest period. This facility, as amended, bears
interest at LIBOR plus a margin of 3.0%
per annum
plus applicable mandatory costs. Following the sale of the
Algarve
in October 2012, we prepaid $18.6 million of the term loan, and the revolving loan facility was reduced by
$10.2 million. In February 2014, the amount outstanding under this facility of $218.5 million was fully repaid. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were $494.9 million and $568.6 million,
respectively.
$300.0 Million Secured Loan Facility
On April 3, 2009, we entered into a $300.0 million secured loan facility with a syndicate of banks and Nordea Bank Norge SA as Agent and Security Trustee. This facility had an initial term
94
of five years, which was amended to extend maturity by an additional four years until 2018. We used the proceeds of this facility to finance the acquisition of six vessels,
Fraternity,
Felicity, Cap Felix, Cap Theodora, Antarctica and Olympia
, which were pledged as collateral under the loan, and for general corporate and working capital purposes. This facility, as amended, is repayable in consecutive quarterly installments and
bears interest at LIBOR plus a margin of 3.40%
per annum
, plus applicable mandatory costs. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were $201.4 million and $211.4 million, respectively.
$65.0 Million Secured Loan Facility
On December 23, 2011, we entered into a $65.0 million secured term loan facility with DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) to finance the acquisition of
Alsace
, which is mortgaged
under the loan. This facility is repayable over a term of seven years in ten installments at successive six month intervals, each in the amount of $2.15 million together with a balloon installment of $43.5 million payable with (and forming part of)
the tenth and final repayment installment on February 23, 2017, assuming the full amount is drawn. The interest rate is LIBOR plus a margin of 2.95% per annum plus applicable mandatory costs. As of June 30, 2014 and December 31, 2013,
the outstanding balances of this facility were $56.4 million and $58.6 million, respectively.
$500.0 Million Senior Secured Credit
Facility
On March 25, 2014, we entered into a $500.0 million senior secured credit facility with DNB Bank ASA, Nordea Bank
Norge ASA, and Skandinaviska Enskilda Banken AB. This facility bears interest at LIBOR plus a margin of 2.75% per annum and is repayable over a term of six years with maturity in 2020 and is secured by the 15 Maersk Acquisition Vessels. The
proceeds of the facility will be drawn and used to partially finance the purchase price of the Maersk Acquisition Vessels. As of June 30, 2014, the outstanding balance on this facility was $136.2 million.
Proposed $340.0 Million Credit Facility
On August 13, 2014, we received a non-binding commitment letter from ING Bank N.V., acting as bookrunning mandated lead arranger, for a new syndicated $340.0 million senior secured credit facility, of which $205.2
million would be available to fund a portion of the purchase price of the VLCC Acquisition Vessels and other purposes and $134.8 million would be available to refinance existing indebtedness relating to our existing Suezmax vessels. A portion of the
proceeds of this facility are expected to finance a portion of the purchase price of the four VLCC Acquisition Vessels. The four VLCC Acquisition Vessels and four of our Suezmax vessels will serve as collateral under the loan. This facility is
expected to have a seven year term with customary financial and restrictive covenants, and interest at LIBOR plus a margin. The closing of this facility is subject to usual and customary conditions precedent, including the negotiation and execution
of final documentation.
Joint Venture Credit Facilities (at 50% economic interest)
$43.0 Million Loan Facility (Great Hope)
On July 12, 2010, one of our 50%-owned joint ventures, Great Hope Limited, entered into a $43.0 million loan facility with Crédit Agricole Asia Shipfinance Limited to partially finance the acquisition
of the
Ardenne Venture
, which we subsequently sold in November 2013 and delivered in January 2014. This loan has a term of eight years and is payable in 31 quarterly installments without a balloon payment, and bears interest at LIBOR plus a
margin of 2.7% per
95
annum. As of December 31, 2013, the outstanding balance on this facility was $20.0 million, of which we have a 50% economic interest of $10.0 million. On January 2, 2014, we repaid the
loan in full upon the sale of the vessel securing the loan.
$52.0 Million Loan Facility (Seven Seas)
On May 6, 2005, one of our 50%-owned joint ventures, Seven Seas Shipping Limited, entered into a $52.0 million loan facility with Chiao Tung
Bank to partially finance the construction of the
V.K.Eddie
. This loan has a term of 12 years with a maturity of May 2017 and no balloon and bears interest at LIBOR plus a margin of 0.80% per annum. As of June 30, 2014 and
December 31, 2013, the outstanding balances on this facility were $13.0 million and $15.2 million, respectively, of which we had a 50% economic interest of $6.5 million and $7.6 million, respectively.
$135.0 Million Secured Term Loan Facility (Fontvielle and Moneghetti)
On April 23, 2008, two of our 50%-owned joint ventures, Fontvielle Shipholding Limited and Moneghetti Shipholding Limited, entered into a
$135.0 million secured term loan facility with BNP Paribas (Suisse) SA and Alpha Bank A.E. to finance our acquisition of
Eugenie
and
Devon
. This facility, as amended, is comprised of two tranches; the Fontvielle Tranche of up to
$55.5 million and the Moneghetti Tranche in the amount of $67.5 million. This facility is repayable in quarterly installments over a term of 10 years with a balloon of $43.2 million. This loan bears interest at LIBOR plus a margin of
2.75% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were $94.2 million and $99.2 million, respectively, of which we had a 50% economic interest of $47.1 million and $49.6 million,
respectively.
$76.0 Million Loan Facility (Fiorano)
On October 23, 2008, one of our 50%-owned joint ventures, Fiorano Shipholding Limited, entered into a $76.0 million loan facility with Scotia Bank to partially finance the acquisition of the
Capt.
Michael
. This loan has a term of eight years with a balloon of $14.0 million due at maturity. This loan bears interest at LIBOR plus a margin of 1.225% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on
this facility were $38.4 million and $40.6 million, respectively, of which we had a 50% economic interest of $19.2 million and $20.3 million, respectively.
$67.5 Million Loan Facility (Larvotto)
On August 29, 2008, one of our 50%-owned joint
ventures, Larvotto Shipholding Limited, entered into a $67.5 million loan facility, as supplemented by a supplemental letter dated November 28, 2011, with Fortis Bank S.A./N.V. to partially finance the acquisition of the
Maria
. This loan
has a term of eight years with a balloon payment of $16.2 million due at maturity. This loan bears interest at LIBOR plus a margin of 1.5% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were
$39.1 million and $41.1 million, respectively, of which we had a 50% economic interest of $19.5 million and $20.5 million, respectively.
$500.0 Million FSO Facility (TI Asia and TI Africa)
On October 3, 2008, two of our
50%-owned joint ventures, TI Asia Ltd. and TI Africa Ltd., entered into a $500.0 million senior secured credit facility with a group of commercial lenders
96
with ING Bank N.V. as Agent and Security Trustee. We used the proceeds of this facility to finance the acquisition of two ULCC vessels,
TI Asia
and
TI Africa
, and to convert these
vessels to FSOs, which serve as collateral under this facility. This facility consists of two tranches; the
FSO Asia
tranche matures in 2017 and bears interest at LIBOR plus a margin of 1.15% per annum, and the
FSO Africa
tranche,
following the restructuring of this tranche, matures in 2015 and bears interest at LIBOR plus a margin of 2.75% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were $171.1 million and
$196.5 million, respectively, of which we had a 50% economic interest of $85.6 million and $98.3 million, respectively.
Bond Issuances
Convertible Notes due 2015 and 2018
On September 24, 2009, we issued $150 million of fixed-rate senior unsecured convertible notes due 2015, which we refer to as the “Convertible Notes due 2015.” These notes were issued at 100% of
their principal amount and bear interest at a rate of 6.50% per annum, payable semi-annually in arrears, and are convertible between November 4, 2009 and January 24, 2015 into our ordinary shares at the conversion price applicable at
such conversion date and in accordance with the conditions set out in a related trust deed. The initial conversion price was EUR 16.28375 (or $23.16852 at EUR/US$ exchange rate of 1.4228) per share and was set at a premium of 25% to the volume
weighted average price of our ordinary shares on Euronext Brussels on September 3, 2009. Unless previously redeemed, converted or purchased and cancelled, the Convertible Notes due 2015 will be redeemed in cash on January 31, 2015 at 100%
of their principal amount. The Notes were added to the official list of the Luxembourg Stock Exchange and are traded on the Luxembourg Stock Exchange’s Euro MTF Market. During the first quarter of 2012, we repurchased 68 Convertible Notes due
2015, which we subsequently exchanged for Convertible Notes due 2018 (as defined below). The face value of each note is $100,000 and we paid an average of $78,441. Further, in the second quarter of 2013, we repurchased an additional 5 Convertible
Notes due 2015 for an average price of $92,000. In February 2014, we repurchased an additional $1.3 million of the Convertible Notes due 2015, taking the total number of notes currently held by us to 18.
On February 20, 2013, we completed our offer to exchange all of the Convertible Notes due 2015 for $150.0 million in aggregate principal
amount of 6.50% convertible notes due 2018, which we refer to as the “Convertible Notes due 2018.” The Convertible Notes due 2018 have an extended maturity profile and an initial conversion price of EUR 6.65. The Convertible Notes due 2018
also have a feature to compensate the noteholders for the forgiven interest in the event they are converted to ordinary shares during the first four years. The exchange offer resulted in $125.0 million of notes (face value) being exchanged for new
notes, including the 68 notes acquired by us in 2012, which we subsequently resold in the third quarter in 2013.
During the period from
November 12, 2013 through April 22, 2014, we issued an aggregate of 20,969,473 existing ordinary shares upon conversion of $124,900,000 in aggregate principal amount of 1,249 Convertible Notes due 2018 at the holders’ option. On
February 20, 2014, we exercised our right to redeem all of the remaining Convertible Notes due in 2018 and on April 9, 2014, redeemed the last convertible note due 2018 outstanding as of April 2, 2014 for an aggregate of $101,227.78.
At that time, $4.9 million, or less than 10%, in principal amount of the Convertible Notes due 2018 originally issued remained outstanding. Each outstanding note was redeemed on April 9, 2014 at $101,227.78, which is the principal amount of a
note ($100,000) plus accrued but unpaid interest from January 31, 2014 to (but excluding) April 9, 2014. As a result, after April 9, 2014, no Convertible Bonds due in 2018 were outstanding.
97
$235.5 Million Unsecured Bond
On February 4, 2014, we issued $235.5 million in aggregate principal amount of 7-year redeemable unsecured bonds. The bonds were issued at 85%
of their principal amount and bear interest at a rate of 5.95% per annum for the first year, payable semi-annually in arrears, which will increase to 8.50% per annum for the second and third years and will further increase to
10.20% per annum from year four until maturity in 2021. We may redeem the bonds at any time at par. The proceeds of the bonds are expected to be used to partially finance the purchase price of the Maersk Acquisition Vessels. We may utilize a
portion of the net proceeds of this offering to redeem the bonds.
Security
Our secured indebtedness is generally secured by:
|
|
•
|
|
a first priority mortgage in all collateral vessels;
|
|
|
•
|
|
a parent guarantee; and
|
|
|
•
|
|
a general pledge of earnings generated by the vessels under mortgage for the specific facility.
|
Loan Covenants
Our debt
agreements discussed above generally contain, or are expected to contain, financial covenants, which require us to maintain, among other things:
|
|
•
|
|
an amount of current assets that, on a consolidated basis, exceeds our current liabilities. Current assets may include undrawn amount of any committed revolving
credit facilities and credit lines having a maturity of more than one year;
|
|
|
•
|
|
an aggregate amount of cash, cash equivalents and available aggregate undrawn amounts of any committed loan of at least $50.0 million or between 3% to 5% of our
total indebtedness (excluding guarantees), depending on the applicable loan facility, whichever is greater;
|
|
|
•
|
|
a ratio of consolidated capital and reserves to total assets of at least 30%; and
|
|
|
•
|
|
an asset coverage ratio of assets secured under our bank facilities between 100% and 125%.
|
Our credit facilities discussed above also contain, or are expected to contain, restrictions and undertakings which may limit our and our
subsidiaries’ ability to, among other things:
|
|
•
|
|
effect changes in management of our vessels;
|
|
|
•
|
|
transfer or sell or otherwise dispose of all or a substantial portion of our assets;
|
|
|
•
|
|
declare and pay dividends, (with respect to each of our joint ventures, except for Seven Seas Shipping Limited no dividend may be distributed before its loan
agreement, as applicable, is repaid in full); and
|
|
|
•
|
|
incur additional indebtedness.
|
A violation of any of our financial covenants or operating restrictions contained in our credit facilities may constitute an event of default under
our credit facilities, which, unless cured within the grace period set forth under the applicable credit facility, if applicable, or waived or modified
98
by our lenders, provides our lenders with the right to, among other things, require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down
our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, reclassify our indebtedness as current liabilities and accelerate our indebtedness and foreclose their liens on our vessels and the other
assets securing the credit facilities, which would impair our ability to continue to conduct our business.
Furthermore, certain of our
credit facilities contain a cross-default provision that may be triggered by a default under one of our other credit facilities. A cross-default provision means that a default on one loan would result in a default on certain other loans. Because of
the presence of cross-default provisions in certain of our credit facilities, the refusal of any one lender under our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if our other
lenders under our credit facilities have waived covenant defaults under the respective credit facilities. If our secured indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for us to
refinance our debt or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders foreclose their liens, which would adversely affect our ability to conduct our business.
Moreover, in connection with any waivers of or amendments to our credit facilities that we may obtain, our lenders may impose additional operating
and financial restrictions on us or modify the terms of our existing credit facilities. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including
through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest
rates they charge us on our outstanding indebtedness.
In addition, we have provided, and may continue to provide in the future,
unsecured loans to our joint ventures which we treat as additional investments in the joint ventures. Accordingly, in the event our joint ventures do not repay these loans as they become due and payable, the value of our investment in such entities
may decline. Furthermore, we have provided, and may continue to provide in the future, guarantees to certain banks with respect to commercial bank indebtedness of our joint ventures. Failure on behalf of any of our joint ventures to service its debt
requirements and comply with any provisions contained in its commercial loan agreements, including paying scheduled installments and complying with certain covenants, may lead to an event of default under its loan agreement. As a result, if our
joint ventures are unable to obtain a waiver or do not have enough cash on hand to repay the outstanding borrowings, their lenders may foreclose their liens on the vessels securing the loans or seek repayment of the loan from us, or both, which
would have a material adverse effect on our financial condition, results of operations, and cash flows. As of June 30, 2014 and December 31, 2013, $355.8 million and $412.4 million, respectively, was outstanding under these joint venture
loan agreements, of which we have guaranteed $177.9 million and $206.2 million, respectively.
As of June 30, 2014 and December 31,
2013, we were in compliance with all of the covenants contained in our debt agreements.
Guarantees
We have provided guarantees to financial institutions that have provided credit facilities to six of our joint ventures, in the aggregate amount of
$177.9 million and $206.2 million as of June 30, 2014 and December 31, 2013, respectively. The total of the related outstanding bank
99
loans as of June 30, 2014 and December 31, 2013 was $355.8 million and $412.4 million, respectively.
In addition, on July 24, 2009, two of our 50%-owned joint ventures, TI Asia Ltd. and TI Africa Ltd., which own the
FSO Asia
and
FSO Africa
, two FSO vessels, respectively, entered into a $50.0
million guarantee facility agreement with Nordea Bank Finland plc in order to issue two guarantees of up to $25.0 million each in favor of Maersk Oil Qatar AS in connection with its use of the
FSO Asia
and
FSO Africa
after such vessels
have been converted to FSO. In August 2010, the amount available under this guarantee facility was reduced to $31.5 million. This guarantee terminates upon the earlier of (i) eight years after the Guarantee Issue Date for the second Guarantee
and (ii) March 31, 2008. As of June 30, 2014 and December 31, 2013, the guarantee has not been called upon.
Contractual Obligations
As of June 30, 2014, we had the following contractual obligations and commitments which are based on contractual payment dates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Total
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
Thereafter
|
|
|
Long-term bank loan facilities
|
|
|
888,936
|
|
|
|
60,156
|
|
|
|
120,312
|
|
|
|
120,312
|
|
|
|
366,269
|
|
|
|
144,511
|
|
|
|
77,376
|
|
|
Long-term debt obligations
|
|
|
260,500
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
235,500
|
|
|
Bank Credit Line facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Seller’s Credit facility
|
|
|
30,000
|
|
|
|
—
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operational leases (vessels)
|
|
|
16,242
|
|
|
|
12,142
|
|
|
|
4,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operational leases (non-vessel)
|
|
|
4,310
|
|
|
|
553
|
|
|
|
861
|
|
|
|
861
|
|
|
|
861
|
|
|
|
531
|
|
|
|
643
|
|
|
Capital Expenditure commitments
|
|
|
778,500
|
|
|
|
706,500
|
|
|
|
72,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual obligations due by period
|
|
|
1,978,488
|
|
|
|
779,351
|
|
|
|
252,273
|
|
|
|
121,173
|
|
|
|
367,130
|
|
|
|
145,042
|
|
|
|
313,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not included in
the table above are options that have been granted to us but not yet exercised under our time charter-in agreements to extend their respective durations.
100
The following table presents our contractual obligations as of June 30, 2014,
pro forma
for
significant changes in our contractual obligations that have occurred since June 30, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
Total
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
Thereafter
|
|
|
Long-term bank loan facilities(1)(2)
|
|
|
1,169,589
|
|
|
|
74,604
|
|
|
|
147,002
|
|
|
|
147,002
|
|
|
|
392,960
|
|
|
|
146,625
|
|
|
|
261,396
|
|
|
Long-term debt obligations
|
|
|
260,500
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
235,500
|
|
|
Bank Credit Line facilities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Seller’s Credit facility
|
|
|
30,000
|
|
|
|
—
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operational leases (vessels)
|
|
|
16,242
|
|
|
|
12,142
|
|
|
|
4,100
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Operational leases (non-vessel)
|
|
|
4,310
|
|
|
|
553
|
|
|
|
861
|
|
|
|
861
|
|
|
|
861
|
|
|
|
531
|
|
|
|
643
|
|
|
Capital Expenditure commitments(3)
|
|
|
378,000
|
|
|
|
306,000
|
|
|
|
72,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total contractual obligations due by period
|
|
|
1,858,641
|
|
|
|
393,299
|
|
|
|
278,963
|
|
|
|
147,863
|
|
|
|
393,821
|
|
|
|
147,156
|
|
|
|
497,539
|
|
|
(1)
|
We drew down an additional $324.0 million under our $500.0 Million Senior Secured Credit Facility, resulting in an increase in the semi-annual repayment schedule by $15.6 million
beginning in December 2014 and an increase in the balloon payment by $152.9 million which is due at maturity in 2020.
|
|
(2)
|
Repayment of $43.3 million due to the sale of the VLCC
Olympia
, which reduced the quarterly prepayment schedule by $1.1 million and the balloon by $27.9 million.
|
|
(3)
|
The capital expenditure commitments is reduced with (i) $366.3 million after delivery of the last six Maersk Acquisition Vessels, and (ii) $34.2 million after the payment to
acquire the four VLCC Acquisition Vessels.
|
As of June 30, 2014, the following equity accounted investees (of which we
have a 50% ownership interest) have the following contractual obligations and commitments which are based on contractual payment dates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
|
|
Total
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
Thereafter
|
|
|
Joint Venture
|
|
Long-term bank
loan facilities
|
|
|
177,919
|
|
|
|
17,997
|
|
|
|
30,875
|
|
|
|
24,706
|
|
|
|
46,864
|
|
|
|
8,110
|
|
|
|
49,367
|
|
|
Seven Seas Shipping Ltd.
|
|
$52.0 Million
secured bank loan
facility
|
|
|
6,500
|
|
|
|
1,083
|
|
|
|
2,167
|
|
|
|
2,167
|
|
|
|
1,083
|
|
|
|
—
|
|
|
|
—
|
|
|
Fontvieille Shipholding Ltd.
|
|
$55.5 Million secured bank loan facility
|
|
|
20,235
|
|
|
|
1,000
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
11,235
|
|
|
Moneghetti Shipholding Ltd.
|
|
$67.5 Million secured bank loan facility
|
|
|
26,875
|
|
|
|
1,000
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
17,875
|
|
|
Larvotto Shipholding Ltd.
|
|
$48.0 Million secured bank loan facility
|
|
|
19,534
|
|
|
|
993
|
|
|
|
1,985
|
|
|
|
1,985
|
|
|
|
1,985
|
|
|
|
1,985
|
|
|
|
10,601
|
|
|
Fiorano Shipholding Ltd.
|
|
$48.0 Million secured bank loan facility
|
|
|
19,219
|
|
|
|
1,063
|
|
|
|
2,125
|
|
|
|
2,125
|
|
|
|
2,125
|
|
|
|
2,125
|
|
|
|
9,656
|
|
|
TI Africa Ltd
|
|
$113.7 Million secured bank loan facility
|
|
|
13,125
|
|
|
|
6,250
|
|
|
|
6,875
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US$ in thousands)
|
|
|
|
Total
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
Thereafter
|
|
|
TI Asia Ltd
|
|
$250.0 Million secured bank loan facility
|
|
|
72,431
|
|
|
|
6,608
|
|
|
|
13,723
|
|
|
|
14,429
|
|
|
|
37,671
|
|
|
|
—
|
|
|
|
—
|
|
|
Joint Venture
|
|
Seller’s
Credit
facilities(**)
|
|
|
10,000
|
|
|
|
—
|
|
|
|
10,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Larvotto Shipholding Ltd
|
|
Shipyard deferred payment
|
|
|
5,000
|
|
|
|
—
|
|
|
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Fiorano Shipholding Ltd.
|
|
Shipyard deferred payment
|
|
|
5,000
|
|
|
|
—
|
|
|
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total contractual obligations due by period
|
|
|
|
|
187,919
|
|
|
|
17,997
|
|
|
|
40,875
|
|
|
|
24,706
|
|
|
|
46,864
|
|
|
|
8,110
|
|
|
|
49,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
On November 14, 2013, we announced the sale of the VLCC
Ardenne Venture
. The vessel was delivered to her new owners on January 2, 2014 and consequently, the
outstanding bank loan facility was repaid in full following the delivery.
|
|
**
|
On January 9, 2012 and January 31, 2012, we took delivery of two Suezmax vessels from the shipyard, the
Maria
and the
Capt. Michael
, respectively, for
which we received a seller’s credit from Samsung Heavy Industries Co., Ltd., fully repayable by the beginning of 2015.
|
Off-Balance Sheet Arrangements
We are
committed to make rental payments under operating leases for vessels and for office premises. The future minimum rental payments under our non-cancellable operating leases are disclosed above under “Contractual Obligations.”
102
THE INTERNATIONAL OIL TANKER SHIPPING INDUSTRY
All the information and data presented in this section, including the analysis of the international oil tanker shipping industry has been
provided by Drewry. Drewry has advised us that the statistical and graphical information contained herein is drawn from its database and other sources. In connection therewith, Drewry has advised that: (a) certain information in Drewry’s
database is derived from estimates or subjective judgments; (b) the information in the databases of other maritime data collection agencies may differ from the information in Drewry’s database; (c) while Drewry has taken reasonable
care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures. The Company believes and acts as though the industry and market
data presented in this section is reliable.
Overview
The maritime shipping industry is fundamental to international trade, as it is the only practicable and cost effective means of transporting large volumes of many essential commodities and finished goods around the
world. In turn, the oil tanker shipping industry represents a vital link in the global energy supply chain, in which VLCC and Suezmax tankers play an important role, given their availability to carry large quantities of crude oil.
The oil tanker shipping industry is primarily divided between crude tankers that carry either crude oil or residual fuel oil and product tankers
that carry refined petroleum products. The following review specifically focuses on the crude sector.
Revenue in the oil tanker
shipping market is driven by daily freight rates. Freight rates have increased recently due to a number of factors, including: (i) increased global demand for oil driven by emerging markets, (ii) longer voyage distances as a result of
changing oil trading patterns, and (iii) only moderate growth in vessel supply as a result of a declining tanker orderbook and increased scrapping activity. Freight is paid for the movement of cargo between a load port and a discharge port. The
cost of moving the ship from a discharge port to the next load port is not directly compensated by the charterers in the freight payment but is an expense of the owners if not on time charter.
In broad terms, demand for oil traded by sea is principally affected by world and regional economic growth and, to a lesser extent, other factors
such as changes in regional oil prices. As such, there is a close relationship between changes in the level of economic activity and changes in the volume of oil moved by sea (see the chart below). With continued strong GDP growth in Asia,
especially in China, seaborne oil trade to Asian emerging markets has been growing significantly. Chinese oil consumption has grown from 5.6 million barrels per day to 10.1 million barrels per day between 2003 and 2013. During this same
period, oil consumption in OECD countries declined from 48.6 to 46.0million barrels per day. There is no certainty that past rates of growth and decline will continue in the future. In 2013, total seaborne trade in crude oil was equivalent to 2.1
billion tons. Given that most forecasts now point to rising global economic growth in 2014 and 2015, there is an expectation that movements of oil by sea will also grow.
103
World GDP and Crude Oil Seaborne Trade 2000 to 2014
(Percent change year on year)
|
(1)
|
GDP—provisional assessment
|
Source: Drewry
Changes in regional oil consumption, as well as a shift in global refinery capacity from the developed to the developing world, is
resulting in growing seaborne oil trade distances. For example a VLCC’s voyage from West Africa to the US Gulf takes 35 days, while a trip from West Africa to China takes 61 days. This increase in oil trade distances, coupled with increases in
world oil demand driven by Chinese oil consumption growth, has had a positive impact on tanker demand with ton miles growing from 7.8 to 9.3 billion ton miles in the period 2003 to 2013.
Supply in the tanker sector, as measured by its deadweight (dwt) cargo carrying capacity, is primarily influenced by the rate of deliveries of
newbuildings from the shipyards in line with their orderbook, as well as the rate of removals from the fleet via vessel scrapping or conversion to offshore units. After a period of rapid expansion, supply growth in the tanker sector is moderating
with the overall tanker fleet growing by just 1.6% in 2013. New tanker orders in the period 2010 to 2013 were limited due to lack of available bank financing and a challenged rate environment, which has contributed to the total crude tanker
orderbook declining to 13.8% of the existing global tanker fleet capacity as of July 2014, compared with nearly 50% of the existing fleet at its recent peak in 2008. Although new ordering has picked up in the VLCC sector in recent months, supply
growth in the tanker sector as a whole is likely to remain low in 2014 and 2015 as the orderbook as a percentage of the fleet remains low in historical terms.
In the closing months of 2013, VLCC and Suezmax time charter equivalent (TCE) rates recovered strongly after a prolonged period of weakness that affected all sectors of the tanker market. Despite volatility in the
opening months of 2014 more positive market sentiment has had a beneficial impact on secondhand vessel values. In July 2014, five-year-old VLCC and Suezmax tankers were valued at $73 and $48 million, respectively, equivalent to increases of 32% and
20%, respectively, from July 2013 levels.
104
World Oil Demand and Production
In 2013, oil accounted for approximately one third of global energy consumption. World oil consumption has increased steadily over the past 15 years, with the exception of 2008 and 2009, as a result of increasing
global economic activity and industrial production. In recent years, growth in oil demand has been largely driven by developing countries in Asia and growing Chinese consumption. In 2013, world oil demand increased to 91.0 million barrels per
day (bpd), which represents a 1.4% increase from 2012 and is 6.9% higher than the recent low recorded in 2009.
World Oil Consumption:
2003 to 2013
(Million Barrels Per Day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
CAGR
03-13%
|
|
|
North America
|
|
|
24.5
|
|
|
|
25.3
|
|
|
|
25.5
|
|
|
|
25.4
|
|
|
|
25.5
|
|
|
|
24.2
|
|
|
|
23.7
|
|
|
|
24.1
|
|
|
|
24.0
|
|
|
|
23.6
|
|
|
|
24.0
|
|
|
|
-0.2
|
%
|
|
Europe—OECD
|
|
|
15.4
|
|
|
|
15.6
|
|
|
|
15.5
|
|
|
|
15.5
|
|
|
|
15.3
|
|
|
|
15.4
|
|
|
|
14.7
|
|
|
|
14.7
|
|
|
|
14.3
|
|
|
|
13.8
|
|
|
|
13.6
|
|
|
|
-1.2
|
%
|
|
Pacific
|
|
|
8.7
|
|
|
|
8.5
|
|
|
|
8.6
|
|
|
|
8.5
|
|
|
|
8.4
|
|
|
|
8.0
|
|
|
|
8.0
|
|
|
|
8.1
|
|
|
|
8.1
|
|
|
|
8.6
|
|
|
|
8.4
|
|
|
|
-0.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total OECD
|
|
|
48.6
|
|
|
|
49.4
|
|
|
|
49.6
|
|
|
|
49.4
|
|
|
|
49.2
|
|
|
|
47.6
|
|
|
|
46.4
|
|
|
|
46.9
|
|
|
|
46.4
|
|
|
|
46.0
|
|
|
|
46.0
|
|
|
|
-0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Soviet Union
|
|
|
3.6
|
|
|
|
3.7
|
|
|
|
3.8
|
|
|
|
3.9
|
|
|
|
4.2
|
|
|
|
4.2
|
|
|
|
4.0
|
|
|
|
4.2
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
2.5
|
%
|
|
Europe—Non OECD
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.8
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
0.0
|
%
|
|
China
|
|
|
5.6
|
|
|
|
6.4
|
|
|
|
6.6
|
|
|
|
7.0
|
|
|
|
7.6
|
|
|
|
7.9
|
|
|
|
7.9
|
|
|
|
8.9
|
|
|
|
9.2
|
|
|
|
9.8
|
|
|
|
10.1
|
|
|
|
6.1
|
%
|
|
Asia (exc China)
|
|
|
8.1
|
|
|
|
8.6
|
|
|
|
8.8
|
|
|
|
8.9
|
|
|
|
9.5
|
|
|
|
9.7
|
|
|
|
10.3
|
|
|
|
10.9
|
|
|
|
11.1
|
|
|
|
11.4
|
|
|
|
11.7
|
|
|
|
3.7
|
%
|
|
Latin America
|
|
|
4.7
|
|
|
|
4.9
|
|
|
|
5.0
|
|
|
|
5.2
|
|
|
|
5.7
|
|
|
|
5.9
|
|
|
|
5.7
|
|
|
|
6.0
|
|
|
|
6.3
|
|
|
|
6.4
|
|
|
|
6.6
|
|
|
|
3.5
|
%
|
|
Middle East
|
|
|
5.4
|
|
|
|
5.8
|
|
|
|
6.1
|
|
|
|
6.5
|
|
|
|
6.5
|
|
|
|
7.1
|
|
|
|
7.1
|
|
|
|
7.3
|
|
|
|
7.4
|
|
|
|
7.7
|
|
|
|
8.0
|
|
|
|
4.0
|
%
|
|
Africa
|
|
|
2.7
|
|
|
|
2.8
|
|
|
|
2.9
|
|
|
|
3.0
|
|
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
3.4
|
|
|
|
3.7
|
|
|
|
3.7
|
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-OECD
|
|
|
30.8
|
|
|
|
32.9
|
|
|
|
33.9
|
|
|
|
35.2
|
|
|
|
37.4
|
|
|
|
38.7
|
|
|
|
39.1
|
|
|
|
41.5
|
|
|
|
42.5
|
|
|
|
44.2
|
|
|
|
45.4
|
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
World Total
|
|
|
79.4
|
|
|
|
82.3
|
|
|
|
83.5
|
|
|
|
84.6
|
|
|
|
86.6
|
|
|
|
86.3
|
|
|
|
85.5
|
|
|
|
88.4
|
|
|
|
88.9
|
|
|
|
90.2
|
|
|
|
91.4
|
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Drewry
Seasonal trends also affect world oil consumption and, consequently, oil tanker demand. While trends in consumption vary with the specific season each year, peaks in tanker demand often precede seasonal consumption
peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can be classified broadly into two main categories: increased demand prior to Northern Hemisphere winters as heating oil consumption increases and increased
demand for gasoline prior to the summer driving season in the United States.
105
Global trends in oil production have naturally followed the growth in oil consumption, allowing for
the fact that changes in the level of oil inventories also play a part in determining production levels and tie in with the seasonal peaks in demand. World crude oil production in the period 2003 to 2013 is shown in the table below.
World Oil Production: 2003 to 2013
(Million Barrels Per Day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
CAGR
03-13 %
|
|
|
N. America
|
|
|
14.6
|
|
|
|
14.6
|
|
|
|
14.1
|
|
|
|
14.2
|
|
|
|
14.3
|
|
|
|
13.9
|
|
|
|
13.6
|
|
|
|
14.1
|
|
|
|
14.6
|
|
|
|
15.8
|
|
|
|
17.1
|
|
|
|
1.59
|
%
|
|
FSU(1)
|
|
|
10.3
|
|
|
|
11.2
|
|
|
|
11.6
|
|
|
|
12.1
|
|
|
|
12.8
|
|
|
|
12.8
|
|
|
|
13.3
|
|
|
|
13.5
|
|
|
|
13.6
|
|
|
|
13.7
|
|
|
|
13.9
|
|
|
|
3.04
|
%
|
|
OPEC
|
|
|
30.7
|
|
|
|
33.0
|
|
|
|
34.2
|
|
|
|
34.4
|
|
|
|
35.5
|
|
|
|
37.0
|
|
|
|
34.0
|
|
|
|
34.6
|
|
|
|
35.6
|
|
|
|
37.6
|
|
|
|
36.8
|
|
|
|
1.83
|
%
|
|
Asia
|
|
|
6.0
|
|
|
|
6.3
|
|
|
|
6.3
|
|
|
|
6.4
|
|
|
|
6.4
|
|
|
|
6.4
|
|
|
|
7.5
|
|
|
|
7.8
|
|
|
|
7.8
|
|
|
|
7.8
|
|
|
|
7.7
|
|
|
|
2.53
|
%
|
|
Other
|
|
|
18.1
|
|
|
|
18.0
|
|
|
|
18.3
|
|
|
|
18.1
|
|
|
|
16.6
|
|
|
|
16.4
|
|
|
|
17.0
|
|
|
|
17.3
|
|
|
|
16.8
|
|
|
|
16.0
|
|
|
|
16.0
|
|
|
|
-1.23
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
79.7
|
|
|
|
83.1
|
|
|
|
84.5
|
|
|
|
85.2
|
|
|
|
85.6
|
|
|
|
86.5
|
|
|
|
85.4
|
|
|
|
87.3
|
|
|
|
88.4
|
|
|
|
90.9
|
|
|
|
91.5
|
|
|
|
1.39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Drewry
At the beginning of 2013, proven global oil reserves totaled 1,653 billion barrels, an amount approximately 50 times greater than 2013 production
rates. These reserves tend to be located in regions far from the major consuming countries, and this distance contributes to demand for crude tanker shipping. One important reversal of this trend in recent years, however, has been the development of
tight or shale oil reserves in the United States, which has had a negative impact on the volume of US crude oil imports. Nevertheless, much of the oil from West Africa and the Caribbean that was historically imported by the US is now shipped to
China, which has a positive impact on rates due to increased ton miles given the long distances oil needs to travel.
Production and
exports from the Middle East (largely from OPEC suppliers) and West Africa have historically had a significant impact on the demand for tanker capacity, and, consequently, on tanker charter hire rates due to the long distances between these supply
sources and demand centers. Oil exports from short-haul regions, such as the North Sea, are significantly closer to ports used by the primary consumers of such exports, which results in shorter average voyages.
The volume of crude oil moved by sea each year reflects the underlying changes in world oil consumption and production. Driven by increased world
oil demand and production, especially in developing countries, seaborne trade in crude oil in 2013 is provisionally estimated at 2.1 billion tons, or 69% of all seaborne oil trade (crude oil and refined petroleum products).
106
The chart below illustrates changes in global seaborne movements of crude oil between 1980 and 2013.
Seaborne Crude Oil Trade Development: 1980 to 2013
(Million Tons)
Source: Drewry
World seaborne oil trade is the result of geographical imbalances between areas of oil consumption and production. Historically, certain developed economies have acted as the primary drivers of these seaborne oil
trade patterns. The regional growth rates in oil consumption shown in the chart below indicate that the developing world is driving recent trends in oil demand and trade. In Asia, the Middle East, Africa and Latin America, oil consumption during the
period from 2003 to 2013 grew at annual rates in excess of 3%, and, in the case of China, the annual growth rate was close to 6%. Strong demand for oil in these regions is driving both increased volume of seaborne oil trades and increased voyage
distances, as more oil is being transported on long haul routes.
Regional Oil Consumption Growth Rates: 2003 to 2013
(CAGR—Percent)
Source: Drewry
107
Furthermore, consumption on a per capita basis remains low in many parts of the developing world, but
as many of these regions have insufficient domestic supplies, rising demand for oil will have to be satisfied by increased imports.
Oil Consumption Per Capita: 2013
(Tons per Capita)
Source: Drewry
In the case of China and India, seaborne crude oil imports have risen significantly in the last decade to meet an increasing demand for energy (see chart below). During the period from 2000 to 2013, Chinese crude
oil imports increased from 70.1 to 282.2 million tons and Indian imports increased from 69.5 to 187.3 million tons. Conversely, Japanese imports declined from 213.7 to 178.4 million tons over the same period. US imports have also
declined as a result of growing domestic oil supplies. As a result of the changes in regional oil consumption and due to increasing demand for longer voyage lengths such as Middle East to Asia typically 49 days and West Africa to Asia typically 61
days, seaborne oil trade distance has been growing. This is especially beneficial to VLCC and Suezmax tankers operators because these vessels provide larger economies of scale for long voyages.
108
Asian Countries—Crude Oil Imports
(Million Tons)
Source: Drewry
The shift in global refinery capacity from the developed to the developing world is also having a positive impact on the seaborne oil trade given increasing distances from production sources to refineries. The
distribution of refinery throughput by region in the period 2003 to 2013 is shown in the following table.
Oil Refinery Throughput by
Region: 2003 to 2013
(Million Barrels Per Day)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
CAGR%
03-13
|
|
|
North America
|
|
|
18,619
|
|
|
|
18,868
|
|
|
|
18,518
|
|
|
|
18,484
|
|
|
|
18,460
|
|
|
|
17,879
|
|
|
|
17,502
|
|
|
|
17,740
|
|
|
|
17,707
|
|
|
|
17,993
|
|
|
|
18,301
|
|
|
|
-0.2
|
%
|
|
S. & Cent. America
|
|
|
5,009
|
|
|
|
5,401
|
|
|
|
5,378
|
|
|
|
5,334
|
|
|
|
5,456
|
|
|
|
5,363
|
|
|
|
4,889
|
|
|
|
4,834
|
|
|
|
5,053
|
|
|
|
4,657
|
|
|
|
4,786
|
|
|
|
-0.5
|
%
|
|
Europe & Eurasia
|
|
|
19,920
|
|
|
|
20,371
|
|
|
|
20,736
|
|
|
|
20,783
|
|
|
|
20,716
|
|
|
|
20,635
|
|
|
|
19,509
|
|
|
|
19,595
|
|
|
|
19,491
|
|
|
|
19,538
|
|
|
|
19,142
|
|
|
|
-0.4
|
%
|
|
Middle East
|
|
|
5,602
|
|
|
|
5,796
|
|
|
|
6,008
|
|
|
|
6,300
|
|
|
|
6,397
|
|
|
|
6,396
|
|
|
|
6,297
|
|
|
|
6,396
|
|
|
|
6,517
|
|
|
|
6,388
|
|
|
|
6,353
|
|
|
|
1.3
|
%
|
|
Africa
|
|
|
2,301
|
|
|
|
2,304
|
|
|
|
2,491
|
|
|
|
2,372
|
|
|
|
2,372
|
|
|
|
2,456
|
|
|
|
2,293
|
|
|
|
2,449
|
|
|
|
2,169
|
|
|
|
2,206
|
|
|
|
2,177
|
|
|
|
-0.6
|
%
|
|
Australasia
|
|
|
823
|
|
|
|
820
|
|
|
|
757
|
|
|
|
749
|
|
|
|
767
|
|
|
|
756
|
|
|
|
762
|
|
|
|
756
|
|
|
|
789
|
|
|
|
779
|
|
|
|
735
|
|
|
|
-1.1
|
%
|
|
China
|
|
|
4,823
|
|
|
|
5,382
|
|
|
|
5,916
|
|
|
|
6,155
|
|
|
|
6,563
|
|
|
|
6,953
|
|
|
|
7,488
|
|
|
|
8,571
|
|
|
|
9,059
|
|
|
|
9,199
|
|
|
|
9,648
|
|
|
|
7.2
|
%
|
|
India
|
|
|
2,380
|
|
|
|
2,559
|
|
|
|
2,561
|
|
|
|
2,860
|
|
|
|
3,107
|
|
|
|
3,213
|
|
|
|
3,641
|
|
|
|
3,899
|
|
|
|
4,085
|
|
|
|
4,302
|
|
|
|
4,462
|
|
|
|
6.5
|
%
|
|
Japan
|
|
|
4,118
|
|
|
|
4,038
|
|
|
|
4,136
|
|
|
|
4,026
|
|
|
|
3,995
|
|
|
|
3,946
|
|
|
|
3,627
|
|
|
|
3,619
|
|
|
|
3,410
|
|
|
|
3,400
|
|
|
|
3,453
|
|
|
|
-1.7
|
%
|
|
Other Asia Pacific
|
|
|
6,886
|
|
|
|
7,355
|
|
|
|
7,474
|
|
|
|
7,469
|
|
|
|
7,493
|
|
|
|
7,351
|
|
|
|
7,229
|
|
|
|
7,434
|
|
|
|
7,390
|
|
|
|
7,436
|
|
|
|
7,227
|
|
|
|
0.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Toral World
|
|
|
70,482
|
|
|
|
72,893
|
|
|
|
73,976
|
|
|
|
74,533
|
|
|
|
75,325
|
|
|
|
74,949
|
|
|
|
73,234
|
|
|
|
75,293
|
|
|
|
75,668
|
|
|
|
75,899
|
|
|
|
76,284
|
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: Drewry
Changes in refinery throughput are largely driven by changes in the location of capacity. Capacity increases are taking place mostly in the developing world, especially in Asia. In response to growing domestic
demand, Chinese refinery throughput has grown at a faster rate than that of any other global region in the last decade, with refinery throughput in the Middle East and other emerging economies following. By contrast, refinery throughput in
North America has declined in the last decade. This has had a positive impact on crude tanker shipping, as regions where
109
refining capacity is growing will need to import more oil. The shift in refinery capacity is likely to continue as refinery development plans are heavily focused on areas such as Asia and the
Middle East and few are planned for North America and Europe.
Oil Refinery Throughput by Region: Growth Rates 2003 to 2013
(CAGR—Percent)
Source: Drewry
As a result of changes in trade patterns, as well as shifts in refinery locations, average voyage distances in the crude sector have increased. In the period from 2003 to 2013 ton mile demand in the crude tanker
sector grew from 7.8 to 9.3 billion ton miles. The table below shows changes in tanker demand expressed in ton miles, which is measured as the product of the volume of oil carried (measured in metric tons) multiplied by the distance over which it is
carried (measured in miles).
Crude Oil Tanker Demand: 2003 to 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
2004
|
|
|
2005
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
CAGR %
03-13
|
|
|
Seaborne Crude Trade—Mill Tons
|
|
|
1,937
|
|
|
|
2,043
|
|
|
|
2,076
|
|
|
|
2,086
|
|
|
|
2,102
|
|
|
|
2,111
|
|
|
|
2,025
|
|
|
|
2,066
|
|
|
|
2,032
|
|
|
|
2,075
|
|
|
|
2,090
|
|
|
|
0.76
|
%
|
|
Ton Mile Demand—Bill T M
|
|
|
7,752
|
|
|
|
8,294
|
|
|
|
8,447
|
|
|
|
8,626
|
|
|
|
8,707
|
|
|
|
8,853
|
|
|
|
8,512
|
|
|
|
8,908
|
|
|
|
8,803
|
|
|
|
9,159
|
|
|
|
9,314
|
|
|
|
1.85
|
%
|
|
Average Voyage Length—Miles
|
|
|
4,002
|
|
|
|
4,060
|
|
|
|
4,069
|
|
|
|
4,135
|
|
|
|
4,142
|
|
|
|
4,194
|
|
|
|
4,203
|
|
|
|
4,312
|
|
|
|
4,332
|
|
|
|
4,414
|
|
|
|
4,456
|
|
|
|
1.08
|
%
|
Source: Drewry
110
Crude Tanker Fleet Overview
The world crude tanker fleet is generally divided into five major types of vessel classifications, based on carrying capacity. The main tanker vessel types are:
|
|
•
|
|
VLCCs
, with an oil cargo carrying capacity in excess of 200,000 dwt (typically 300,000 to 320,000 dwt or approximately two million barrels). VLCCs
generally trade on long-haul routes from the Middle East and West Africa to Asia, Europe and the U.S. Gulf or the Caribbean. Tankers in excess of 320,000 dwt are known as Ultra Large Crude Carriers (ULCCs), although for the purposes of this report
they are included within the VLCC category.
|
|
|
•
|
|
Suezmax
tankers, with an oil cargo carrying capacity of approximately 120,000 to 200,000 dwt (typically 150,000 to 160,000 dwt or approximately one
million barrels). Suezmax tankers are engaged in a range of crude oil trades across a number of major loading zones. Within the Suezmax sector, there are a number of product and shuttle tankers (shuttle tankers are specialized ships built to
transport crude oil and condensates from offshore oil field installations to onshore terminals and refineries and are often referred to as “floating pipelines”), which do not participate in the crude oil trades.
|
|
|
•
|
|
Aframax
tankers, with an oil cargo carrying capacity of approximately 80,000 to 120,000 dwt (or approximately 500,000 barrels). Aframax tankers are
employed in shorter regional trades, mainly in North West Europe, the Caribbean, the Mediterranean and Asia.
|
|
|
•
|
|
Panamax
tankers, with an oil carrying capacity of 55,000 to 80,000 dwt (carrying 350,000 to 500,000 barrels). Panamax tankers operate in more specialized
trading spheres as they are designed to take advantage of port restrictions on larger vessels in North and South America and, therefore, generally trade in these markets.
|
|
|
•
|
|
Handy
tankers, comprising both Handysize tankers and Handymax tankers, with an oil cargo carrying capacity of less than 55,000 dwt but more than 10,000
dwt. Handy tankers trade on a variety of regional trade routes carrying refined petroleum products and, to a limited extent, crude oil on trade routes not suitable for larger vessels.
|
As of July 31, 2014 the crude tanker fleet consisted of 1,888 ships with a combined capacity of 346.9 million dwt.
Crude Oil Tanker Fleet(1)—July31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Type
|
|
Deadweight Tons
(Dwt)
|
|
|
Number of
Vessels
|
|
|
% of Fleet
|
|
|
Capacity
(Million Dwt)
|
|
|
% of Fleet
|
|
|
VLCC
|
|
|
200,000 +
|
|
|
|
626
|
|
|
|
33.2
|
|
|
|
192.3
|
|
|
|
55.4
|
|
|
Suezmax
|
|
|
120-199,999
|
|
|
|
482
|
|
|
|
25.5
|
|
|
|
74.6
|
|
|
|
21.5
|
|
|
Aframax
|
|
|
80-119,999
|
|
|
|
685
|
|
|
|
36.3
|
|
|
|
73.5
|
|
|
|
21.2
|
|
|
Panamax
|
|
|
55-79,999
|
|
|
|
95
|
|
|
|
5.0
|
|
|
|
6.5
|
|
|
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
1,888
|
|
|
|
100.0
|
|
|
|
346.9
|
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes a small number of ships below 55,000 dwt which theoretically can carry crude oil
|
Source: Drewry
111
The table below shows principal routes for crude oil tankers and where these vessels are deployed.
Crude Oil Tankers—Typical Deployment by Size Category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Area
|
|
Trade Route
|
|
Haul
|
|
Vessel Type
|
|
|
|
|
|
|
|
|
VLCC
|
|
|
Suezmax
|
|
|
Aframax
|
|
|
Inter-Regional
|
|
MEG(1)—Asia
|
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
|
MEG—N. America
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
MEG—Europe—Suez(2)
|
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
|
W.Africa(3)—N. America
|
|
|
|
|
X
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
W. Africa—Asia
|
|
Long
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
|
|
|
US Gulf—Asia
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
MEG—Europe—Cape(4)
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
W. Africa—Europe
|
|
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
NS(5)—N. America
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
MEG—Pacific Rim
|
|
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
|
Intra-Regional
|
|
North Sea
|
|
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
Caribbean
|
|
Medium
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
Mediterranean
|
|
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
|
|
|
Asia—Pacific
|
|
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
|
(2)
|
Suezmax via Suez Canal fully laden
|
|
(4)
|
VLCC transit via Cape of Good Hope
|
Source: Drewry
VLCCs are built to carry cargo parcels of two million barrels, and Suezmax tankers are built to carry cargo parcels of one million barrels, which
are the most commonly traded parcel sizes in the crude oil trading markets. Their carrying capacities make VLCCs and Suezmax tankers the most appropriate asset class globally for long and medium haul trades. While traditional VLCC and Suezmax
trading routes have typically originated in the Middle East and the Atlantic Basin,
112
increased Asian demand for crude oil has opened up new trading routes for both classes of vessel. The map below shows the main VLCC and Suezmax tanker seaborne trade routes.
Principal VLCC and Suezmax Seaborne Crude Oil Trades
Source: Drewry
VLCC/Suezmax Fleet Development
Growth in
crude tanker supply has slowed as a result of lower levels of new ordering and an increase in vessel demolitions and conversions. Between the end of 2012 and the end of 2013 the world crude tanker fleet grew by only 1.4%. In the VLCC and Suezmax
sectors, the fleets grew by 2.0% and 1.4%, respectively. This represents the lowest annual increase in supply since 2007.
VLCC & Suezmax Fleet Development: 2003 to 2014
(Year on Year percentage Growth: Million Dwt)
Source: Drewry
113
In 2013, deliveries of new crude tankers to the fleet were at their lowest level since 2009, which was
a major factor in the correction of an over-supply within the sector. In 2013, the VLCC and Suezmax deliveries amounted to 9.5 and 4.6 million dwt, respectively, as compared with 15.4 and 7.4 million dwt, respectively, in 2012.
VLCC/Suezmax Tanker Deliveries
)
2003 to 2014(1)
(‘000 Dwt)
Source: Drewry
114
The chart below indicates the volume of new orders placed in the VLCC and Suezmax sectors in the
period from 2003 to 2013. Very few new vessel orders were placed in both sectors during 2011, 2012 and 2013, although the pace of new ordering in the VLCC sector increased in the closing months of 2013 and the opening months of 2014.
VLCC/Suezmax New Orders 2003 to 2014(1)
(‘000 Dwt)
Source: Drewry
In the last few years, delays in new ship deliveries, often referred to as “slippage,” have become a consistent annual feature of the
market. Slippage is the result of a combination of several factors, including cancellations of orders, problems in obtaining vessel financing, owners seeking to defer delivery during weak markets, shipyards quoting over-optimistic delivery times,
and, in some cases, shipyards experiencing financial difficulty. Over 50% of the Suezmax tankers currently on order are being built in Chinese shipyards. A number of Chinese yards, including a yard at which 23 of the 48 Suezmax tankers currently on
order will be constructed, are experiencing financial problems which have led to both cancellations and delays in deliveries.
New order
cancellations have been a feature of most shipping markets during the market downturn. For obvious reasons, shipyards are reluctant to openly report such events, making the tracking of the true size of the orderbook at any given point in time
difficult. The difference between actual and scheduled deliveries reflects the fact that orderbooks are often overstated.
Slippage has
affected both the VLCC and Suezmax sectors. The table below indicates the relationship between scheduled and actual deliveries for both asset classes in the period 2010 to 2013. Since slippage has occurred in recent years, it is not unreasonable to
expect that some of the VLCC and Suezmax tankers scheduled for delivery in 2014 and 2015 will not be delivered on time.
115
VLCC/Suezmax Tankers: Scheduled versus Actual Deliveries
(Million Dwt)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
2013
|
|
|
VLCC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled Deliveries
|
|
|
20.9
|
|
|
|
23
|
|
|
|
28.9
|
|
|
|
22.4
|
|
|
|
18.7
|
|
|
Actual Deliveries
|
|
|
16.4
|
|
|
|
16.9
|
|
|
|
19.1
|
|
|
|
15.4
|
|
|
|
9.5
|
|
|
Slippage Rate %
|
|
|
22
|
|
|
|
25
|
|
|
|
34
|
|
|
|
31
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
Suezmax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled Deliveries
|
|
|
10.9
|
|
|
|
9
|
|
|
|
10.5
|
|
|
|
11.2
|
|
|
|
10.4
|
|
|
Actual Deliveries
|
|
|
7.3
|
|
|
|
6.1
|
|
|
|
6.6
|
|
|
|
7.4
|
|
|
|
4.6
|
|
|
Slippage Rate %
|
|
|
33
|
|
|
|
31
|
|
|
|
37
|
|
|
|
34
|
|
|
|
56
|
|
Source: Drewry
Lower levels of new ordering combined with cancellations have resulted in a declining vessel orderbook. At its peak in 2008, the VLCC and Suezmax tanker orderbooks were each equivalent to 50% of the existing
fleets, respectively, which led to high levels of new deliveries in both sectors between 2009 and 2012. However, with low levels of new ordering in 2012 and 2013, as of March 31, 2014, the total crude VLCC and Suezmax orderbooks have declined
to 13.7% and 7.9% of the existing VLCC and Suezmax fleet, respectively.
VLCC & Suezmax Orderbooks: Percent Existing Fleet
(%)
Source: Drewry
As of July 31, 2014, the total crude tanker orderbook representing vessels delivering from 2014 to 2016 amounted to 275 vessels, or 48.0 million dwt, equivalent to 13.8 % of the existing crude tanker
fleet. The orderbook for Suezmax tankers currently stands at 38 vessels representing 5.9million dwt (excluding shuttle tankers), and for VLCCs the orderbook stands at 84 vessels representing 26.3 million dwt.
116
Crude Oil Tanker(1) Orderbook July31st, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Size Dwt
|
|
Existing Fleet
|
|
|
Scheduled Deliveries
|
|
|
|
|
|
|
|
|
Total Orderbook
|
|
|
% Existing Fleet
|
|
|
|
|
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
|
|
|
|
|
|
No.
|
|
|
Dwt
|
|
|
No.
|
|
|
Dwt
|
|
|
No.
|
|
|
Dwt
|
|
|
No.
|
|
|
Dwt
|
|
|
No.
|
|
|
Dwt
|
|
|
No.
|
|
|
Dwt
|
|
|
No
|
|
|
Dwt
|
|
|
VLCC
|
|
200,000 +
|
|
|
626
|
|
|
|
192.3
|
|
|
|
16
|
|
|
|
5.1
|
|
|
|
15
|
|
|
|
4.7
|
|
|
|
45
|
|
|
|
14.0
|
|
|
|
8
|
|
|
|
2.5
|
|
|
|
84
|
|
|
|
26.3
|
|
|
|
13.4
|
%
|
|
|
13.7
|
%
|
|
Suezmax
|
|
120-199,999
|
|
|
482
|
|
|
|
74.6
|
|
|
|
13
|
|
|
|
2.0
|
|
|
|
10
|
|
|
|
1.5
|
|
|
|
14
|
|
|
|
2.2
|
|
|
|
1
|
|
|
|
0.2
|
|
|
|
38
|
|
|
|
5.9
|
|
|
|
7.9
|
%
|
|
|
7.9
|
%
|
|
Aframax
|
|
80-119,999
|
|
|
685
|
|
|
|
73.5
|
|
|
|
26
|
|
|
|
2.9
|
|
|
|
50
|
|
|
|
5.6
|
|
|
|
37
|
|
|
|
4.2
|
|
|
|
5
|
|
|
|
0.6
|
|
|
|
118
|
|
|
|
13.3
|
|
|
|
17.2
|
%
|
|
|
18.1
|
%
|
|
Panamax
|
|
55-79,999
|
|
|
95
|
|
|
|
6.5
|
|
|
|
10
|
|
|
|
0.7
|
|
|
|
4
|
|
|
|
0.3
|
|
|
|
21
|
|
|
|
1.5
|
|
|
|
0
|
|
|
|
0.0
|
|
|
|
35
|
|
|
|
2.5
|
|
|
|
36.8
|
%
|
|
|
38.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
1,888
|
|
|
|
346.9
|
|
|
|
65
|
|
|
|
10.7
|
|
|
|
79
|
|
|
|
12.1
|
|
|
|
117
|
|
|
|
21.9
|
|
|
|
14.0
|
|
|
|
3.3
|
|
|
|
275
|
|
|
|
48.0
|
|
|
|
14.6
|
%
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes product tankers and in the case of Suezmax shuttle tankers
|
Source: Drewry
Tanker supply is also affected by vessel scrapping or demolition. As an oil
tanker ages, vessel owners often conclude that it is more economical to scrap a vessel that has exhausted its useful life than to upgrade the vessel to maintain its “in-class” status. Often, particularly when tankers reach approximately 25
years of age, the costs of conducting the class survey and performing required repairs become economically inefficient. In recent years, most oil tankers that have been scrapped were between 25 and 30 years of age.
In addition to vessel age, scrapping activity is influenced by freight markets. During periods of high freight rates, scrapping activity will
decline and the opposite will occur when freight rates are low. The chart below indicates that vessel scrapping was much higher from 2009 to 2013 than in the preceding five years.
Oil Tanker Scrapping: 2003 to 2014(1)
(‘000 Dwt)
|
(1)
|
All tankers including crude and product tankers through to July 2014
|
Source: Drewry
Within the context of the
wider market, increased vessel scrapping is a positive development, as it helps to counterbalance new ship deliveries and to moderate fleet growth.
117
The Crude Oil Tanker Freight Market
Types of Charter
Oil tankers are employed in the market through a number of different
chartering options, described below.
|
|
•
|
|
A
bareboat charter
involves the use of a vessel usually over longer periods of up to several years. All voyage related costs, including vessel fuel, or
bunkers, and port dues as well as all vessel operating expenses, such as day-to-day operations, maintenance, crewing and insurance, transfer to the charterer’s account. The owner of the vessel receives monthly charter hire payments on a per day
basis and is responsible only for the payment of capital costs related to the vessel.
|
|
|
•
|
|
A
time charter
involves the use of the vessel, either for a number of months or years or for a trip between specific delivery and redelivery positions,
known as a trip charter. The charterer pays all voyage related costs. The owner of the vessel receives monthly charter hire payments on a per day basis and is responsible for the payment of all vessel operating expenses and capital costs of the
vessel.
|
|
|
•
|
|
A
single
or
spot voyage charter
involves the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to
various cargo handling terms. Most of these charters are of a single or spot voyage nature. The cost of repositioning the ship to load the next cargo falls outside the charter and is at the cost and discretion of the owner. The owner of the vessel
receives one payment derived by multiplying the tons of cargo loaded on board by the agreed upon freight rate expressed on a per cargo ton basis. The owner is responsible for the payment of all expenses including voyage, operating and capital costs
of the vessel.
|
|
|
•
|
|
A
contract of affreightment
, or
COA
, relates to the carriage of multiple cargoes over the same route and enables the COA holder to nominate
different ships to perform individual voyages. This arrangement constitutes a number of voyage charters to carry a specified amount of cargo during the term of the COA, which usually spans a number of years. All of the ship’s operating, voyage
and capital costs are borne by the shipowner. The freight rate is normally agreed on a per cargo ton basis.
|
Tanker Freight Rates
Worldscale is the tanker industry’s standard reference for calculating freight rates. Worldscale is used because it provides
the flexibility required for the oil trade. Oil is a fairly homogenous commodity as it does not vary significantly in quality and it is relatively easy to transport by a variety of methods. These attributes, combined with the volatility of the world
oil markets, means that an oil cargo may be bought and sold many times while at sea and therefore, the cargo owner requires great flexibility in its choice of discharge options. If tanker fixtures were priced in the same way as dry cargo fixtures,
this would involve the shipowner calculating separate individual freights for a wide variety of discharge points. Worldscale provides a set of nominal rates designed to provide roughly the same daily income irrespective of discharge point.
Time charter equivalent (TCE) is the measurement that describes the earnings potential of any spot market voyage based on the quoted
Worldscale rate. As described above, the Worldscale rate is set and can then be converted into dollars per cargo ton. A voyage calculation is then performed which removes all expenses (port costs, bunkers and commission) from the gross revenue,
resulting in a net revenue which is then divided by the total voyage days, which includes the days from discharge of the prior cargo until discharge of the cargo for which the freight is paid (at sea and in port), to give a daily TCE rate.
118
The supply and demand for tanker capacity influences tanker charter hire rates and vessel values. In
general, time charter rates are less volatile than spot rates as they reflect the fact that the vessel is fixed for a longer period of time. In the spot market, rates will reflect the immediate underlying conditions in vessel supply and demand and
are thus more prone to volatility. Small changes in tanker utilization have historically led to relatively large fluctuations in tanker charter rates for VLCCs, with more moderate price volatility in the Suezmax, Aframax and Panamax markets and less
volatility in the Handy market, as compared to the tanker market as a whole.
The chart below illustrates monthly changes in TCE rates
for VLCC and Suezmax tankers during the period from January 2003 to July 2014.
VLCC/Suezmax Tanker Time Charter Equivalent (TCE)
Rates: 2003 to 2014(1)
(US$/Day)
Source: Drewry
From 2005 to 2007, time charter rates for all tankers sizes rose steeply, reflecting the fact that buoyant demand for oil and increased seaborne
movements of oil generated additional demand for tanker capacity. This increased demand for capacity led to a tighter balance between vessel demand and supply and consequently led to rising freight rates. As the world economy weakened in the second
half of 2008, however, demand for oil fell, negatively impacting tanker demand and freight rates. Rates declined in 2009, only to recover in the early part of 2010, before falling once again in the summer months and then remaining weak for the
remainder of 2011 and into 2012. At times during 2013, TCE rates for VLCCs and Suezmax tankers were close to or in negative net returns, although in practice, the use of slow steaming to reduce bunker consumption and triangulation voyage patterns,
as indicated in the map below, may have turned these rates into positive earnings.
119
Indicative VLCC Triangulation Voyage Pattern
Source: Drewry
Excessive vessel supply and negative market sentiment were the main forces driving the direction of the market during this period.
VLCC/Suezmax 1 Year Time Charter Rates: 2003 to 2014(1)
(US$/Day Period Averages)
Source: Drewry
Generally, rates have started to edge up in the crude tanker sector, primarily due to lower levels of fleet growth which has led to an improving
balance between vessel supply and demand and a more positive sentiment surrounding the sector as a whole.
120
Newbuilding Prices
Global shipbuilding is concentrated in China, South Korea and Japan. This concentration is the result of economies of scale, construction techniques and the prohibitive costs of building in other parts of the
world. Collectively, these three countries account for over 80% of global shipbuilding production.
Vessels are constructed at shipyards
of varying size and technical sophistication. Drybulk carriers are generally considered to be the least technically sophisticated vessels to construct, with oil tankers, container vessels and LNG carriers having a much higher degree of technical
sophistication.
The actual construction of a vessel can take place in 9 to 12 months and can be partitioned into five stages: contract
signing, steel cutting, keel laying, launching and delivery. Each of these stages is usually associated with an installment payment to the shipyard. The amount of time between signing a newbuilding contract and the date of delivery is usually
greater than 12 months, and in times of high shipbuilding demand, can extend to two to three years.
Newbuilding prices as a whole
rose steadily between 2004 and mid 2008 due to high levels of new ordering, a shortage in newbuilding capacity during a period of high charter rates, and increased shipbuilders’ costs as a result of increasing steel prices and the weakening
U.S. Dollar. Prices, however, weakened in 2009, as a result of a downturn in new ordering, and remained weak until the second half of 2013, when they started to rise again. The following chart illustrates the trend in oil tanker newbuilding prices
during the period from 2003 to 2014.
VLCC/Suezmax Tanker Newbuilding Prices: 2003 to 2014(1)
(US$ Million)
Source: Drewry
Newbuilding prices peaked in 2008 and in March 2014 values were 39% lower than the peak for VLCCs and 37% lower than the peak for Suezmaxes.
121
Secondhand Prices
Secondhand values reflect prevailing and expected charter rates, albeit with a lag. During extended periods of high charter rates, vessel values tend to appreciate and vice versa. Vessel values, however, are also
influenced by other factors including the age of the vessel. Prices for young vessels, those approximately five years old or under, are also influenced by newbuilding prices. Prices for old vessels, those that are in excess of 25 years old and near
the end of their useful economic lives, are influenced by the value of scrap steel.
In addition, values for younger vessels tend to
fluctuate less on a percentage basis than values for older vessels. This is attributed to the finite useful economic life of older vessels which makes the price of younger vessels, with a commensurably longer remaining economic lives, less
susceptible to the level of prevailing and expected charter rates in the foreseeable future.
Vessel values are determined on a daily
basis in the sale and purchase (S&P) market, where vessels are sold and bought through specialized sale and purchase brokers who regularly report these transactions to participants in the seaborne transportation industry. The S&P market for
oil tankers is transparent and quite liquid with a large number of vessels changing hands on a regular basis.
The chart below
illustrates the movements of prices (in US$ million) for secondhand (5 year old) oil tankers between 2000 and 2014. Secondhand values peaked in 2008 and despite a recent uplift, in July 2014 the values for VLCC and Suezmax tankers were still
approximately 50% below this peak.
VLCC/Suezmax Tanker Secondhand Prices—5 Year Old Vessels: 2000 to 2014(1)
(US$ Million)
Source: Drewry
122
With vessel earnings at high levels and with a scarcity of available newbuilding berths, demand for
oil tankers available for early delivery and secondhand values for all tankers rose steadily from 2004 until the middle of 2008. In some instances, the market witnessed secondhand prices for five-year-old oil tankers reaching levels higher than
those for comparably sized newbuildings. This increase was temporary and in 2010 and 2011, with the downturn in freight rates, secondhand values for tankers weakened. However, in the closing months of 2013, improvement in tanker freight rates has
had a positive impact on vessel values.
123
OVERVIEW OF THE OFFSHORE OIL AND GAS INDUSTRY
All the information and data in this prospectus about the offshore oil industry has been provided by Energy Maritime Associates (EMA), an
independent strategic planning and consulting firm focused on the marine and offshore sectors. EMA has advised that the statistical and graphical information contained herein is drawn from its database and other sources. In connection therewith, EMA
has advised that: (a) certain information in EMA’s database is derived from estimates or subjective judgments; (b) the information in the databases of other maritime data collection agencies may differ from the information in
EMA’s database; (c) while EMA has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures. The
Company believes and acts as though the industry and market data presented in this section is reliable.
Brief History of the Offshore Industry
Over the past 20 years global oil demand has grown at an average annual rate of 1.4%. With the exception of two years during the
global financial crisis in 2008 and 2009, oil demand has increased year after year during this period. Annual growth since 2010, following recovery from the financial crisis, has averaged 1.6%. The International Energy Agency (IEA) forecasts world
oil demand will grow by 11% to 101 million barrels per day by 2035.
Increasingly, oil is being produced offshore. According to the
IEA, despite the rapid pace of growth in onshore oil production in North America, offshore oil production is expected to account for 30% of the growth in global oil production capacity of 9.3 million barrels per day between 2011 and 2017.
The offshore oil and gas industry can generally be defined as the extraction and production of oil and gas offshore. From a more
nuanced perspective, it is a highly technical industry with significant risks, but whose rewards are high. Unlike onshore developments, where drilling and processing equipment can be constructed onsite, often with access to existing infrastructure,
offshore developments have additional engineering and logistical requirements in designing, transporting, installing and operating facilities in remote offshore environments. Because of this, each production unit is unique and designed for the
specific field’s geological and environmental characteristics including hydrocarbon specifications, reservoir requirements (water/gas/chemical injection), well/subsea configuration, water depth, and weather conditions (above and below the
water).
The water depth of offshore developments has increased dramatically since its start from piers extended from shore in just a
few meters of water. In 1947, Kerr-McGee drilled the first well beyond the sight of land. This well was in only 5.5 meters of water, but was 17 kilometers off the Louisiana coast. Offshore developments have continued to move further from land and
into increasingly deeper waters using fixed platforms that extended from the seabed to the surface.
Floating Production and Storage (or
FPS) and Floating, Production, Storage and Offloading unit (or FPSO) units emerged in the 1970s. Since that time, FPS units have been installed in increasing water depths, with the deepest units on order now designed for 2,900 meters of water. Water
depths are currently defined as shallow (shallower than 1,000 meters), deepwater (between 1,000 meters and 1,500 meters), and ultra-deepwater (deeper than 1,500 meters). Units installed before 2000 were almost all in shallow water. In the decade
that followed, 40% of units were installed in deepwater. For units installed since 2010, over 50% are in deepwater, including
124
30% in ultra-deepwater. Other types of FPS units include Single Point Mooring and Reservoir, or Spar, Tension-Leg Platform, or TLP, and semi-submersibles, or Semis, which are well suited to
deepwater. For liquefying gas and then converting it back to gas, Floating Liquefied Natural Gas and Floating Storage Regas Unit (or FSRU) can be used. Mobile Offshore Production Units (or MOPU), and Floating Storage Offloading units (or FSO) are
popular for shallow water developments.
The geographical range of the FPS industry has also changed over the years. For the first few
decades of industry activity, projects were concentrated in the Gulf of Mexico and the North Sea. However, with discoveries of new hydrocarbon basins, the location of offshore developments expanded to include most parts of the world, with Brazil,
West Africa, and Southeast Asia now leading the way.
Source: EMA, January 2014
Along with increasing water depth, the size and complexity of these offshore developments has also grown, which in turn has increased the size and complexity of the FPS units. Project development cycles have
increased in time, complexity, and cost. In particular, the time between initial discovery and starting production is now five to seven years and increasing.
This lengthening of project time is due to a combination of factors, including the complexity of the field itself, as well as increased front end engineering and design, expanded internal company review processes,
and compliance with local regulations. This additional planning and scrutiny is largely a response to past projects which did not meet the planned budget, schedule and/or operational expectations.
Contract Awards and Orderbook
Production
from floating production systems has been increasing over the past 17 years, but not in a consistent manner. Approval of these projects depends largely on the oil price
125
expectation at the time and the related production potential associated with the specific project. As a result, the orders for FPS units generally follow the price of oil. After the price of
Brent crude dropped to $34 per barrel in 2008, only ten FPS units were awarded in 2009. As the price of Brent crude recovered to over $120 per barrel in 2012, 30 or more FPS units were awarded each year from 2010 to 2012.
Source: EMA, January 2014
126
Currently Installed Units
As of January 2014, there are 257 FPS systems in service worldwide comprised of FPSOs (61%) of the current total, Production Semis (16%), TLPs (9%), Production Spars (7%), FSRU (4%), and Production Barges
(3%). This does not include twenty-two production units and two Floating Storage and offloading units that are available for re-use. Another 90 floating storage/offloading units (without production capability) are in service.
Source: EMA, January 2014
Global Distribution of Installed Units by Type:
Source: EMA, January 2014
127
Source: EMA, January 2014
Markets
The top five regions for floating
production systems are Southeast Asia (20%), Africa (18%), Brazil (17%), Gulf of Mexico (“GOM”) (14%), and Northern Europe (“NE”) (13%). The type of system varies widely from region to region—FSOs are the dominant type in
Southeast Asia (“SEA”) due to the relatively shallow water depths and lack of infrastructure. In this type of environments, a fixed production platform and FSO is often the most economic development option.
The current order backlog consists of 64 production floaters, ten FSOs and four Mobile Offshore Production Units, or MOPUs. Within the backlog, 41
units are utilizing purpose-built hulls and 23 units are based on converted hulls. Of the production floaters being built, 35 are owned by field operators, 29 by leasing contractors.
Since 1996, the production floater order backlog has ranged from a low of 17 units in 1999 to a peak of 71 units in the first half of 2013. Within
this period, there have been three cycles: a downturn in 1998 and 1999 followed by an upturn from 2000 to 2002 of 17 to 39 units, relative stability in 2003 and 2004, an upturn from 2005 to 2007 from 35 to 67 units followed by a downturn from 2008
to 2009 down to 32 units, and an upturn between 2010 and 2013 to 71 units.
128
Orders of FSOs and MOPUs are dominated by Southeast Asia with six FSOs, Southwest Asia
(“SWA”) with three MOPUs, and Northern Europe with three FSOs.
Source: EMA, January 2014
Most Attractive Growth Regions
Between 2018
and 2024, Brazil and West Africa are expected to continue to be the most attractive areas for offshore projects and present ample investment opportunities according to respondents of EMA’s 2014 industry sentiment survey. As of January 2014,
Brazil and West Africa account for 39% (91 out of 231) potential floating production projects in the planning stage. Some other industry participants believe that Mexico presents the third largest growth opportunity globally despite that according
to EMA only six potential projects are currently listed in Mexico. New shallow and deep water projects requiring FPSOs and FSOs are expected to increase dramatically following the recent changes in Mexican law to allow increased foreign
129
investment. East Africa may also be a growth region, following large gas discoveries in Mozambique and Tanzania.
Source: EMA, January 2014
The FSO Market
FSOs provide field storage
and offloading in a variety of situations. FSOs are primarily used in conjunction with fixed platforms, MOPUs and production floaters (Semis, TLPs, Spars) to provide offshore field storage of oil and condensate. They are also used as offshore
storage/export facilities for onshore production fields and as storage/blending/transhipment terminals for crude oil or refined products. Most FSOs store oil, although there are a few FSOs that store liquefied natural gas (LNG) or liquefied
petroleum gas (LPG).
FSOs range from simple tankers with few modifications to purpose built and extensively modified tankers with
significant additional equipment at a total cost ranging between $250 and $300 million. Oil storage capacity on FSOs varies from 60,000 barrels to 3 million barrels. The
FSO Asia
and the
FSO Africa
, which are co-owned by Euronav,
are among the largest and most complex FSOs in operation. Water depth ranges from 15 meters to 380 meters with the exception of the FSO Marlim Sul in Brazil at 1,180 meters. There is no inherent limitation on water depth for FSOs.
Most FSOs currently in operation are older single-hull tankers modified for storage/offloading use. Approximately 25% of the FSOs now operating are
15 years or older. Around 42% of the FSOs in service are Aframax or Suezmax-size (600,000 to 1 million barrels). Around another 30% are VLCC or ULCC size units (up to 3 million barrels). The remaining 28% of FSOs is comprised of smaller
units.
Around 45% of FSOs in service are positioned in Southeast Asia. Approximately 20% are in West Africa. The others are spread over
the Middle East, India, Northern Europe, Mediterranean, Brazil, and elsewhere.
Large storage capacity and ability to be moored in
almost any water depth makes FSOs ideal for areas without pipeline infrastructure and where the production platform has no storage
130
capabilities (fixed platforms, MOPU, Spar, TLP, Semi-submersible platform). FSOs have no or limited process topsides, which make them relatively simple to convert from old tankers, as compared to
an FPSO. FSOs can be relocated to other fields and some have also later been converted to FPSOs.
The Key Components of an FSO
Unlike other FPS systems, the hull is the primary component of an FSO. Topsides are normally simple and feature primarily accommodation, helicopter
landing facilities, crude metering equipment, and sometimes power generation. However some FSOs, including the
FSO Asia
and the
FSO Africa
, which are co-owned by Euronav, have more sophisticated topsides (which are described below).
Mooring systems are the same as for an FPSO: spread-mooring or turret-moored (internal and external). In addition, some simple storage units are moored by their own anchor or alongside a jetty. In benign environments, an FSO can be moored to a
Catenary Anchor Leg Mooring buoy (soft mooring), where the buoy is fixed to the seabed and attached to the FSO by mooring ropes.
Some
FSOs, such as the
FSO Asia
and the
FSO Africa
, include a small part of the production process, particularly water separation/treatment and chemical injection. For example, after initial processing on the platform, the
FSO Asia
and the
FSO Africa
may provide additional processing of the platform fluids and separate the water from the crude oil. The oil and water are usually heated, accelerating the separation of the two organic compounds. Once separated, oil is
transferred to separate storage cargo tanks and then offloaded to export vessels. Water is treated, purified and returned to the underwater source reservoir or directly to the sea.
Trends in FSO Orders
Approximately 23 orders for FSOs have been placed over the past five
years, with an average of 4.6 annually. While the majority of FSOs were converted from oil tankers, approximately 20% of these units were purpose-built as FSOs. This is in line with the currently installed fleet profile.
Forecast Summary
EMA is tracking 28
potential projects in the planning stage that may require an FSO. The number of FSO projects has increased over the past five years. In 2008, there were 22 FSO projects. In 2011 there were 24 projects. FSO projects can typically be developed more
quickly than other FPS developments and therefore there are a number of projects to be awarded in the next five years that are not yet visible.
Between 2014 and 2018, orders for 30 to 45 FSOs are expected with a total capital cost between $3.7 and $5.5 billion, with the base case being 35 units. Around 75 percent will be based on converted tanker hulls.
The remainder will be purpose-built units. This is above the historical average of 4.5 per year since 2003.
The prospects for the
FSO sector are optimistic due to the number of visible offshore energy development projects in the planning stage as well as activity in the drilling market. 131 jack-up drilling rigs are currently on order, with deliveries between January 2014
and 2016, according to Icarus Consultants. This could cause a decrease in drilling cost for fields in less than 100 meters of water, where the most popular development option is an FSO, in conjunction with a fixed platform or MOPU. The cost of MOPUs
should also decrease, as the over 300 rigs that are more than 25-years old will be marginalized by these new deliveries. If this trend materializes, a sharp rise in the number of FSO orders is anticipated starting in 2015 and 2016.
131
The vast majority of FSO orders will continue to go to Southeast Asian countries including Thailand,
Vietnam, and Malaysia, but there has been increased activity in the North Sea and Mediterranean as well. Mexico is also a large potential market for FSO solutions, which would be ideal for many shallow water developments.
Over the next five years, converted oil tankers will remain the dominant choice for FSOs. Newbuilt units will be used for some development projects
in the North Sea as well as for condensate FSOs on gas fields. Between 2014 and 2018, 23 to 35 conversions and seven to ten newbuilding orders are expected. In the past, the majority of vessels chosen for conversion were between 20 and 25 years old.
However, all of the converted units currently on order utilize 15 to 20 year old vessels as oil companies increasingly scrutinize the quality and hull fatigue of the units earmarked as conversion candidates. Some recent FPSO conversion projects have
selected newbuilt or units as young as five years old.
Increasingly, FSO conversion work is being carried out in Chinese yards, but
some of the more complex FSO projects will continue to be performed in Singapore and Malaysia. Newbuilt units will be constructed by the Chinese and Korean yards, with higher specification FSOs going to Korea and the rest to China.
Competition
Competition in the FSO market
includes tanker owners, specialized FSO/FPSO contractors, and engineering/construction companies in the floating production sector. Tanker owners tend to compete for projects which require less modification and investment. Companies such as Teekay
Offshore Partners L.P., Knutsen NYK Offshore Tankers AS, and Omni Offshore Terminals Pte Ltd target more complex FSO projects with higher specifications and client requirements. FPSO contractors such as MODEC Inc., SBM Offshore N.V., SBM, and BW
Offshore Limited had competed in the FSO market in the past, but are now primarily focused on large FPSO projects.
Most clients conduct
a detailed pre-qualification screening before accepting proposals. Pre-qualification requirements include: FSO conversion and operation experience, health, safety, environment systems and procedures, access to tanker for conversion and financial
resources.
Contract Structure
As part of the overall offshore field development, most FSOs are leased on long-term (5 to 15 years), fixed-rate service contracts (normally
structured as either a time charter or a bareboat contract). The FSO is essential to the field production as oil is exported via the FSO. Typically, the FSO contract has a fixed period as well as additional extension periods (at the charterer’s
option) depending on the projected life of the development project. The FSO is designed to remain offshore for the duration of the contact, as opposed to conventional tankers, which have scheduled drydocking repairs every two to three years.
Depending on tax treatment and local regulations, some oil companies elect to purchase the FSO rather than lease it, particularly when the unit is expected to remain on site for over 20 years. However, there have been FSO lease contracts for 20 or
even 25 years.
132
BUSINESS
History and Development of the Company
We were incorporated under the laws of Belgium on
June 26, 2003, and we grew out of the combination of certain tanker businesses carried out by three companies that had a strong presence in the shipping industry, CMB, formed in 1895, CNN, formed in 1938, and Ceres Hellenic, formed in 1950. Our
predecessor started doing business under the name “Euronav” in 1989.
Our principal shareholders are Peter Livanos,
individually or through entities controlled by the Livanos family, including our corporate director TankLog, and Saverco NV, or Saverco, an entity controlled by Marc Saverys. Both the Livanos and the Saverys families have had a continuous presence
in the shipping industry since the early nineteenth century. The Livanos family has owned and operated Ceres Hellenic since its formation in 1950, and the Saverys family owned a shipyard which was founded in 1829, owned and operated various
shipowning companies since the 1960s, and acquired CMB in 1991. Peter Livanos may be deemed to beneficially own 16.4% of our outstanding ordinary shares directly and indirectly, through entities controlled by the Livanos family. Peter Livanos,
through his appointment as permanent representative of TankLog on our Board of Directors, serves as the Chairman of our Board. Marc Saverys, the Vice Chairman of our Board of Directors, is also the Chief Executive Officer of CMB and controls
Saverco, a company that is currently CMB’s majority shareholder. Saverco currently owns 12.4% of our outstanding ordinary shares. Upon completion of this offering, Peter Livanos, individually or through entities controlled by the Livanos
family, and Saverco will own approximately % and %, respectively, of our outstanding ordinary shares ( % and % respectively, if the underwriters exercise
their over-allotment option to purchase additional ordinary shares in full).
As of September 1, 2014, we owned and operated a
modern fleet of 53 vessels (including five chartered-in vessels) with an aggregate carrying capacity of approximately 13.3 million dwt, consisting of 27 VLCCs, one ULCC, 23 Suezmax vessels, and two FSOs. In addition, we currently commercially manage
two Suezmax vessels owned by third-parties.
In January 2014, we agreed to acquire 15 modern VLCCs with an average age at the time of
acquisition of approximately 4.1 years from Maersk Tankers, which we refer to as the “Maersk Acquisition Vessels,” for a total purchase price of $980.0 million payable as the vessels are delivered to us charter-free. This acquisition has
been fully financed through a combination of new equity and debt issuances and borrowings under our $500.0 Million Senior Secured Credit Facility. During the period from February 2014 through the date of this prospectus, we took delivery of 14 of
the Maersk Acquisition Vessels,
Nautilus
,
Nucleus
,
Navarin
,
Newton
,
Sara
,
Ilma, Nautic,
Ingrid, Noble, Nectar, Simone, Neptun, Sonia,
and
Iris
,
and we expect to take delivery of the
remaining vessel in October 2014.
In addition, in July 2014, we agreed to acquire four additional modern VLCCs from Maersk Tankers for
an aggregate purchase price of $342.0 million, which we refer to as the “VLCC Acquisition Vessels.” The purchase price of the VLCC Acquisition Vessels will be financed using the net proceeds of $121.1 million that we received in an
underwritten private offering of 10,556,808 of our ordinary shares in Belgium in July 2014 (see “Recent and Other Developments—Private Offering of Ordinary Shares in Belgium”), available cash on hand, and borrowings under new secured
credit facilities, including a new $340.0 million credit facility for which we received a non-binding term sheet, which we refer to as the “Proposed $340.0 Million Credit Facility.” Three of these vessels are expected to be delivered to us
during the third and fourth quarters of 2014 and the last vessel during the second quarter of 2015.
133
After taking delivery of the four VLCC Acquisition Vessels (three of which we currently charter in)
and the remaining Maersk Acquisition Vessel, we will own and operate 55 double-hulled tankers (including our two FSOs) with an aggregate carrying capacity of approximately 13.9 million dwt. The weighted average age of our fleet as of
September 1, 2014, taking into account these vessel acquisitions, including those to be delivered to us after this date, was approximately 6.8 years, as compared to an industry average age of approximately 9.8 years, according to Drewry.
We own our vessels either directly at the parent level, indirectly through our wholly-owned vessel owning subsidiaries, or jointly
through our 50%-owned subsidiaries. We conduct our vessel operations through our wholly-owned subsidiaries Euronav Ship Management SAS, Euronav SAS and Euronav Ship Management (Hellas) Ltd., and also through the TI Pool. Our subsidiaries are
incorporated under the laws of Belgium, France, United Kingdom, Liberia, Luxembourg, Cyprus, Hong Kong and the Marshall Islands. Our vessels are flagged in Belgium, the Marshall Islands, France, Panama and Greece.
Business Overview
We are a fully-integrated
provider of international maritime shipping and offshore services engaged primarily in the transportation and storage of crude oil. We currently charter our vessels, non-exclusively, to leading international energy companies, such as Chevron, Maersk
Oil, Total and Valero, although there is no guarantee that these companies will continue their relationships with us. We pursue a chartering strategy that seeks an optimal mix of employment of our vessels depending on the fluctuations of freight
rates in the market and our own judgment as to the direction of those rates in the future. Our vessels are therefore routinely employed on a combination of spot market voyages, fixed-rate contracts and long-term time charters, which typically
include a profit sharing component. We principally employ our VLCCs, and expect to employ the four undelivered VLCC Acquisition Vessels and the remaining undelivered Maersk Acquisition Vessel, through the TI Pool, a spot market-oriented pool in
which we were a founding member in 2000. As of September 1, 2014, 19 of our vessels were employed directly in the spot market, 25 of our vessels were employed in the TI Pool, seven of our vessels were employed on long-term charters, including
five with profit sharing components, of which the average remaining duration is 4.0 months, and our two FSOs are employed on long-term service contracts. While we believe that our chartering strategy allows us to capitalize on opportunities in an
environment of increasing rates by maximizing our exposure to the spot market, our vessels operating in the spot market may be subject to market downturns to the extent spot market rates decline. At times when the freight market may become more
challenging, we will try to timely shift our exposure to more time charter contracts and potentially dispose of some of our assets which should provide us with incremental stable cash flows and stronger utilization rates supporting our business
during periods of market weakness. We believe that our chartering strategy and our fleet size management, combined with the leadership of our experienced management team should enable us to capture value during cyclical upswings and to withstand the
challenging operating environment such as the one seen in the past several years.
We operate in a capital intensive industry and have
historically financed our purchase of tankers and other capital expenditures through a combination of cash generated from operations, equity capital, borrowings from commercial banks and the occasional issuance of convertible notes. Our ability to
generate adequate cash flows on a short- and medium-term basis depends substantially on the trading performance of our vessels. Historically, market rates for charters of our vessels have been volatile. For example, during the year ended
December 31, 2013, our voyage charter and pool revenues decreased by 3% compared to the same period in
134
2012, from $175.9 million to $171.2 million, and our time charter revenue decreased by 8%, from $144.9 million to $133.4 million. During the six months ended June 30, 2014, our voyage charter and
pool revenues increased by 60% compared to the same period in 2013, from $81.3 million to $130.1 million, reflecting higher realized spot market charter rates, and our time charter revenue decreased by 2% compared to the same period in 2013, from
$72.5 million to $71.1 million because we had slightly less days on time charter. Periodic adjustments to the supply of and demand for oil tankers cause the industry to be cyclical in nature. We expect continued volatility in market rates for our
vessels in the foreseeable future with a consequent effect on our short- and medium-term revenue and liquidity.
For our fiscal year
ended December 31, 2013, we had $304.6 million in revenue and incurred a net loss of $89.7 million, and for the six month period ended June 30, 2014, we had $201.2 million in revenue and incurred a net loss of $21.2 million.
Our Fleet
The following
table sets forth summary information regarding our fleet as of September 1, 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Name
|
|
Type
|
|
Deadweight
Tons (DWT)
|
|
|
Year
Built
|
|
|
Shipyard(1)
|
|
Charterer
|
|
Employment
|
|
Charter Expiry
Date(2)
|
|
Owned Vessels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TI Europe
|
|
ULCC
|
|
|
441,561
|
|
|
|
2002
|
|
|
Daewoo
|
|
|
|
Spot
|
|
N/A
|
|
Sara
|
|
VLCC
|
|
|
323,183
|
|
|
|
2011
|
|
|
STX
|
|
|
|
TI Pool
|
|
N/A
|
|
Alsace
|
|
VLCC
|
|
|
320,350
|
|
|
|
2012
|
|
|
Samsung
|
|
|
|
TI Pool
|
|
N/A
|
|
TI Hellas
|
|
VLCC
|
|
|
319,254
|
|
|
|
2005
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Antarctica(3)
|
|
VLCC
|
|
|
315,981
|
|
|
|
2009
|
|
|
Hyundai
|
|
Total
|
|
Time Charter(4)
|
|
May 2015
|
|
Olympia(3)
|
|
VLCC
|
|
|
315,981
|
|
|
|
2008
|
|
|
Hyundai
|
|
Total
|
|
Time Charter(4)
|
|
April 2015
|
|
Ilma
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Simone
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
STX
|
|
|
|
TI Pool
|
|
N/A
|
|
Sonia
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
STX
|
|
|
|
TI Pool
|
|
N/A
|
|
Ingrid
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Iris
|
|
VLCC
|
|
|
314,000
|
|
|
|
2012
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Nucleus
|
|
VLCC
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Nautilus
|
|
VLCC
|
|
|
307,284
|
|
|
|
2006
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Navarin
|
|
VLCC
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Nautic
|
|
VLCC
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Newton
|
|
VLCC
|
|
|
307,284
|
|
|
|
2009
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Nectar
|
|
VLCC
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Neptun
|
|
VLCC
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Noble
|
|
VLCC
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
|
|
TI Pool
|
|
N/A
|
|
Flandre
|
|
VLCC
|
|
|
305,688
|
|
|
|
2004
|
|
|
Daewoo
|
|
|
|
TI Pool
|
|
N/A
|
|
V.K. Eddie(5)
|
|
VLCC
|
|
|
305,261
|
|
|
|
2005
|
|
|
Daewoo
|
|
|
|
TI Pool
|
|
N/A
|
|
TI Topaz
|
|
VLCC
|
|
|
319,430
|
|
|
|
2002
|
|
|
Hyundai
|
|
|
|
TI Pool
|
|
N/A
|
|
Famenne
|
|
VLCC
|
|
|
298,412
|
|
|
|
2001
|
|
|
Hitachi
|
|
|
|
TI Pool
|
|
N/A
|
|
Artois
|
|
VLCC
|
|
|
298,330
|
|
|
|
2001
|
|
|
Hitachi
|
|
|
|
TI Pool
|
|
N/A
|
|
Cap Diamant
|
|
Suezmax
|
|
|
160,044
|
|
|
|
2001
|
|
|
Hyundai
|
|
Rosneft
|
|
Time Charter
|
|
October 2014
|
|
Cap Pierre
|
|
Suezmax
|
|
|
159,083
|
|
|
|
2004
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Leon
|
|
Suezmax
|
|
|
159,049
|
|
|
|
2003
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Philippe
|
|
Suezmax
|
|
|
158,920
|
|
|
|
2006
|
|
|
Samsung
|
|
Valero
|
|
Time Charter(4)
|
|
May 2015
|
|
Cap Guillaume
|
|
Suezmax
|
|
|
158,889
|
|
|
|
2006
|
|
|
Samsung
|
|
Valero
|
|
Time Charter(4)
|
|
February 2015
|
|
Cap Charles
|
|
Suezmax
|
|
|
158,881
|
|
|
|
2006
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Victor
|
|
Suezmax
|
|
|
158,853
|
|
|
|
2007
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Lara
|
|
Suezmax
|
|
|
158,826
|
|
|
|
2007
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Theodora
|
|
Suezmax
|
|
|
158,819
|
|
|
|
2008
|
|
|
Samsung
|
|
Valero
|
|
Time Charter(4)
|
|
March 2015
|
|
Cap Felix
|
|
Suezmax
|
|
|
158,765
|
|
|
|
2008
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Fraternity
|
|
Suezmax
|
|
|
157,714
|
|
|
|
2009
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Name
|
|
Type
|
|
Deadweight
Tons (DWT)
|
|
|
Year
Built
|
|
|
Shipyard(1)
|
|
Charterer
|
|
Employment
|
|
Charter Expiry
Date(2)
|
|
Eugenie(5)
|
|
Suezmax
|
|
|
157,672
|
|
|
|
2010
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Felicity
|
|
Suezmax
|
|
|
157,667
|
|
|
|
2009
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Capt. Michael(5)
|
|
Suezmax
|
|
|
157,648
|
|
|
|
2012
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Devon(5)
|
|
Suezmax
|
|
|
157,642
|
|
|
|
2011
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Maria(5)
|
|
Suezmax
|
|
|
157,523
|
|
|
|
2012
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Finesse
|
|
Suezmax
|
|
|
149,994
|
|
|
|
2003
|
|
|
Universal
|
|
|
|
Spot
|
|
N/A
|
|
Filikon
|
|
Suezmax
|
|
|
149,989
|
|
|
|
2002
|
|
|
Universal
|
|
|
|
Spot
|
|
N/A
|
|
Cap Georges
|
|
Suezmax
|
|
|
146,652
|
|
|
|
1998
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Laurent
|
|
Suezmax
|
|
|
146,645
|
|
|
|
1998
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Romuald
|
|
Suezmax
|
|
|
146,640
|
|
|
|
1998
|
|
|
Samsung
|
|
|
|
Spot
|
|
N/A
|
|
Cap Jean
|
|
Suezmax
|
|
|
146,627
|
|
|
|
1998
|
|
|
Samsung
|
|
Petrobras
|
|
Time Charter
|
|
November 2014
|
|
Total DWT—Owned Vessels
|
|
|
|
|
11,014,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maersk Acquisition Vessels To Be Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sandra(6)
|
|
VLCC
|
|
|
323,527
|
|
|
|
2011
|
|
|
STX
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Total DWT—Maersk Acquisition Vessels
|
|
|
|
|
323,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VLCC Acquisition Vessels To Be Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maersk Hojo(8)(9)
|
|
VLCC
|
|
|
302,965
|
|
|
|
2013
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Maersk Hakone(8)(9)
|
|
VLCC
|
|
|
302,624
|
|
|
|
2010
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Maersk Hirado(8)(9)
|
|
VLCC
|
|
|
302,550
|
|
|
|
2011
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Maersk Hakata(10)
|
|
VLCC
|
|
|
302,550
|
|
|
|
2010
|
|
|
Ariake
|
|
|
|
TI Pool(7)
|
|
N/A
|
|
Total DWT—VLCC Acquisition Vessels
|
|
|
|
|
1,210,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chartered-In
Expiry Date
|
|
Chartered-In Vessels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KHK Vision
|
|
VLCC
|
|
|
305,749
|
|
|
|
2007
|
|
|
Daewoo
|
|
|
|
TI Pool
|
|
October 2014
(+/- 30
days)
|
|
Cap Isabella(11)
|
|
Suezmax
|
|
|
157,258
|
|
|
|
2013
|
|
|
Samsung
|
|
|
|
Spot
|
|
March 2015
|
|
Total DWT—Chartered-In Vessels
|
|
|
|
|
463,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management
Contract Expiry
Date
|
|
Vessels Under Commercial Management
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suez Rajan
|
|
Suezmax
|
|
|
158,574
|
|
|
|
2011
|
|
|
Hyundai
|
|
|
|
|
|
October 2014
|
|
Suez Hans
|
|
Suezmax
|
|
|
158,574
|
|
|
|
2011
|
|
|
Hyundai
|
|
|
|
|
|
September 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Contract
Expiry Date
|
|
FSO Vessels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FSO Africa(5)
|
|
FSO
|
|
|
442,000
|
|
|
|
2002
|
|
|
Daewoo
|
|
Maersk Oil
|
|
Service Contract
|
|
September 2017
(+2year
option)
|
|
FSO Asia(5)
|
|
FSO
|
|
|
442,000
|
|
|
|
2002
|
|
|
Daewoo
|
|
Maersk Oil
|
|
Service Contract
|
|
July 2017
(+2year
option)
|
|
(1)
|
As used in this prospectus, “Samsung” refers to Samsung Heavy Industries Co., Ltd, “Hyundai” refers to Hyundai Heavy Industries Co., Ltd.,
“Universal” refers to Universal Shipbuilding Corporation, “Hitachi refers to Hitachi Zosen Corporation, “Daewoo” refers to Daewoo Shipbuilding and Marine Engineering S.A., “Ariake” refers to Japan Marine United
Corp., Ariake Shipyard, Japan, “Dalian” refers to Dalian Shipbuilding Industry Co. Ltd., and “STX” refers to STX Offshore and Shipbuilding Co. Ltd.
|
|
(2)
|
Assumes no exercise by the charterer of any option to extend (if applicable).
|
|
(3)
|
In April 2014, a purchase option to buy the
Olympia
and the
Antarctica
was exercised. We expect to deliver the
Olympia
in September 2014 and the
Antarctica
in January 2015. Both vessels will remain employed under their current time charter contract until their respective delivery dates.
|
|
(4)
|
Profit sharing component under time charter contracts.
|
|
(5)
|
Vessels in which we hold a 50% ownership interest.
|
|
(6)
|
Expected to be delivered to us in October 2014.
|
|
(7)
|
Expected to operate in the TI Pool upon its delivery to us.
|
136
|
(8)
|
Vessel is chartered-in by us until its delivery to us.
|
|
(9)
|
Vessel is expected to be delivered to us during the third or fourth quarter of 2014.
|
|
(10)
|
Vessel is expected to be delivered to us during the second quarter of 2015.
|
|
(11)
|
Vessel is chartered-in on bareboat charter. The bareboat charter will be terminated upon delivery of the vessel to its new owner during the third or fourth quarter of 2014.
|
Employment of Our Fleet
Our tanker fleet is employed worldwide through a combination of primarily spot market voyage fixtures, including through the TI Pool, fixed-rate contracts and time charters. We deploy our two FSOs as floating
storage units under fixed-rate service contracts in the offshore services sector. For the year 2014, our fleet will have approximately 15,462 available days for hire, of which, as of September 1, 2014, 74% are expected to be available to be employed
on the spot market, either directly or through the TI Pool, and 26% are expected to be on time charters, with or without a profit sharing element.
Spot Market
A spot market voyage charter is a contract to carry a specific cargo from a load
port to a discharge port for an agreed freight per ton of cargo or a specified total amount. Under spot market voyage charters, we pay voyage expenses such as port, canal and bunker costs. Spot charter rates have historically been volatile and
fluctuate due to seasonal changes, as well as general supply and demand dynamics in the crude oil marine transportation sector. Although the revenue we generate in the spot market is less predictable, we believe our exposure to this market provides
us with the opportunity to capture better profit margins during periods when vessel demand exceeds supply leading to improvements in tanker charter rates. As of September 1, 2014, we employed 19 of our vessels directly in the spot market.
A majority of our Suezmaxes operating in the spot market participate in an internal Revenue Sharing Agreement, or RSA, together with
the four Suezmaxes that we jointly own with JM Maritime as well as Suezmaxes owned by third-parties. Under the RSA, each vessel owner is responsible for its own costs, including voyage-related expenses, but will share in the net revenues, after
the deduction of voyage-related expenses, retroactively on a semi-annual basis. Calculation of allocations and contributions under the RSA are based on a pool points system and are paid after the deduction of the pool fee to Euronav, as pool
manager, from the gross pool income. We believe this arrangement results in an increased market presence and allows us to benefit from additional market information which in turn is beneficial to our performance in the spot market.
Tankers International Pool
We principally employ and commercially manage our VLCCs through the TI Pool, a leading spot market-oriented VLCC pool in which other shipowners with
vessels of similar size and quality participate along with us. We participated in the formation of the TI Pool in 2000 to allow us and other TI Pool participants, consisting of third-party owners and operators of similarly sized vessels, to gain
economies of scale, obtain increased cargo flow of information, logistical efficiency and greater vessel utilization. As of September 1, 2014, the TI Pool was comprised of 36 vessels, including 25 of our VLCCs. We also expect to employ the remaining
undelivered Maersk Acquisition Vessel and the four VLCC Acquisition Vessel in the TI Pool upon their delivery to us.
137
By pooling our VLCCs with those of other shipowners, we are able to derive synergies, including
(i) the potential for increased vessel utilization by securing backhaul voyages for our vessels, and (ii) the performance of the Contracts of Affreightment, or COAs. Backhaul voyages involve the transportation of cargo on part of the
return leg of a voyage. COAs, which can involve backhauls, may generate higher effective time charter equivalent, or TCE, revenues than otherwise might be obtainable directly in the spot market. Additionally, by operating a large number of vessels
as an integrated transportation system, the TI Pool offers customers greater flexibility and an additional level of service while achieving scheduling efficiencies. The TI Pool is an owner-focused pool that does not charge commissions to its
members, a practice that differs from that of other commercial pools; rather, the TI Pool aggregates gross charter revenues it receives and deducts voyage expenses and administrative costs before distributing net revenues to the pool members in
accordance with their allocated pool points, which are based on each vessel’s speed, fuel consumption and cargo-carrying capacity. We believe this results in lower TI Pool membership costs, compared to other similarly sized pools. For example,
in 2013, TI Pool membership costs were approximately $650 per vessel per day (with each vessel receiving its proportional share of pool membership expenses), while other similarly sized pools charged up to $1,300 per vessel per day (based on 1.25%
of gross rates plus $300 per day).
Tankers International LLC, or Tankers International, of which we own 40% of the outstanding
interests, is the manager of the pool and is also responsible for the commercial management of the pool participants, including negotiating and entering into vessel employment agreements on behalf of the pool participants. Technical management of
the pooled vessels is performed by each shipowner, who bears the operating costs for its vessels.
Time Charters
Time charters provide us with a fixed and stable cash flow for a known period of time. Time charters may help us mitigate, in part, our exposure to
the spot market, which tends to be volatile in nature, being seasonal and generally weaker in the second and third quarters of the year due to refinery shutdowns and related maintenance during the warmer summer months. In the future, we may when the
cycle matures or otherwise opportunistically employ more of our vessels under time charter contracts as available rates for time charters improve. We may also enter into time charter contracts with profit sharing arrangements, which we believe will
enable us to benefit if the spot market increases above a base charter rate as calculated either by sharing sub charter profits of the charterer or by reference to a market index and in accordance with a formula provided in the applicable charter
contract. As of September 1, 2014, we employed seven of our vessels on fixed-rate time charters, including five with profit sharing components.
FSOs and Offshore Service Contracts
We currently deploy our two FSOs as floating storage units
under service contracts with Maersk Oil in the offshore services sector. As our tanker vessels age, we may seek to extend their useful lives by employing such vessels on long-term offshore projects at rates higher than may otherwise be achieved in
the time charter market, or sell such vessels to third-party owners in the offshore conversion market at a premium.
Exchange Offer
Concurrently with the pricing of this offering, we will offer to exchange all of the outstanding unregistered ordinary shares in Belgium (other than
ordinary shares owned by our
138
affiliates) for ordinary shares that have been registered under the Securities Act, which we refer to as the Exchange Offer. The Exchange Offer will be made only by means of a prospectus
contained in our registration statement on Form F-4 that we will file in connection with that Exchange Offer and a related letter of transmittal. This offering is not contingent on the successful completion of the Exchange Offer.
Competitive Strengths
We believe that our
future opportunities in our industry are enhanced by the following competitive strengths of our business:
Large fleet of modern,
well-maintained tankers.
Following our purchase of the Maersk Acquisition Vessels and the VLCC Acquisition Vessels, we will be one of the largest independent owners and operators of modern crude oil tankers in the
world, with a fleet of 55 tankers, comprised of 29 VLCCs, 23 Suezmax tankers, one ULCC and two FSOs, with a total capacity of 13.9 million dwt. Pro forma for these acquisitions, our fleet has a weighted average age of 6.8 years, making it
one of the younger fleets worldwide as compared to the industry average of 9.8 years, according to Drewry. We believe that operating a large fleet of modern vessels, enhanced by the size of the TI Pool with 36 vessels under management as of
September 1, 2014, provides us with competitive advantages relative to smaller competitors, including greater access to information and insight into market pricing, which, in turn, enables us to deploy our vessels to maximize our revenue and cash
flow. We also believe that operating a fleet of modern
well-maintained
tankers reduces off-hire time for maintenance and operating and drydocking costs. The scale and quality of our fleet provides us with both
operational synergies and negotiating leverage, giving us the flexibility to capitalize on opportunities throughout the cycles by changing the optimal mix of employment of our vessels as well as adjusting our fleet size.
A fully-integrated owner, operator and manager with a strong reputation within the chartering community.
We provide
all of our technical operations in-house, including the supervision of newbuilding construction and the maintenance of our vessels through a safety management system, which allows us to monitor more closely our operations. We believe this enables us
to maximize revenues, reduce our costs and offer our customers a more stable quality of performance, reliability and service efficiency than if we contracted for these services with third-parties. In addition, by leveraging the expertise of our
experienced staff, crew and captains, who have an average of 16 years of service with us, we have developed a reputation for safe, reliable and effective shipping and offshore storage of crude oil in the maritime sector, and we have outperformed
industry benchmarks set by Intertanko, the organization of independent tanker owners, and the Oil Companies International Marine Forum (OCIMF) in its Tanker Management and Self Assessment guide (TMSA) for operating days, lack of lost time incidents
and operating expenses. We believe that our reputation for quality, reliability and safety enables us to compete effectively for charters, particularly with international energy companies that have high standards. In recognition of our reputation in
the shipping industry, we have been invited to join, and are an active member of important organizations, including, ITOPF (International Tanker Owners Pollution Federation), Intertanko, in particular in its Marine and Environmental Protection
Committee, and the P&I Club system.
Strong and strategic relationships with well-known international energy
companies.
We have and are continuing to develop non-exclusive chartering relationships with well-known international energy companies, such as Chevron, Maersk Oil, Total and Valero. Many of these companies have repeatedly
been served by our predecessor for more than 20 years, although there is no guarantee that these companies will continue their relationships with us. In past years, for example, Valero has had on time charter from us up to ten of our vessels at one
time,
139
primarily in connection with its refinery along the St. Lawrence River in Quebec, which is located in an environmentally sensitive area with significant operational and navigational challenges.
In addition, we have the ability to provide our customers in French jurisdictions with marine transportation of crude oil, which requires French-flagged vessels, local offices, and the employment of French seafarers, all of which can present
barriers to entry to new entrants in the French market. As of September 1, 2014, we had four ships flying French flags under charter arrangements with Total and Petroineos. We expect to continue to capitalize on and potentially grow our long-term
relationships with international energy companies and other customers, and believe that our reputation and proven track record for safe, reliable and efficient operations position us favorably to capture additional opportunities to meet our
customers’ future chartering needs.
Experienced management team.
Our senior executive officers,
Paddy Rodgers, our Chief Executive Officer, Hugo De Stoop, our Chief Financial Officer, Captain Alex Staring, our Chief Operating Officer, and Egied Verbeeck, our General Counsel, each have a high degree of professional education and considerable
experience in the shipping industry. With over 75 years of combined shipping experience, our senior executive officers have led our development from 10 vessels with an aggregate carrying capacity of approximately 3.0 million dwt in 2000 to
an independent fleet of crude oil tankers with 55 vessels (including two FSOs) with an aggregate carrying capacity of 13.9 million dwt, pro forma for the addition of the Maersk Acquisition Vessels and the VLCC Acquisition Vessels. Our senior
management team has demonstrated its ability to optimize our fleet’s size through the recent cyclical downturn and successfully complete opportunistic vessel acquisitions on a timely basis and at favorable prices.
Demonstrated access to financing.
We believe that we have developed relationships with leading international
commercial banks and other financial institutions. Throughout our history, and particularly during recent global financial crises, we demonstrated our ability to access traditional bank financing as well as equity and debt capital markets to finance
our business and complete vessel acquisitions. Since 2008, we have raised $3.4 billion, consisting of $2.3 billion in traditional bank financing, $510.0 million in bond issuances and $625.0 million in equity issuances. Our ability to access
financing has allowed us to act swiftly and decisively in completing acquisitions, including our purchase of four Hellespont ULCCs in 2004 through a 50% joint venture with Overseas Shipholding Group, Inc., or OSG, for $448.0 million, the Metrostar
fleet of four VLCCs in 2005 for $477.5 million, the Ceres Hellenic fleet of 16 vessels in 2005 for $1.1 billion, the 15 Maersk Acquisition Vessels in 2014 for $980.0 million and the four VLCC Acquisition Vessels in 2014 for $342.0 million. While
there is no guarantee that we will be able to access similar financing in the future, we believe that our success in financing and implementing our strategy provides us with a solid base for the future.
Principal shareholders’ and directors’ longstanding relationships in the shipping industry.
Both the
Livanos and the Saverys families have been a continuous presence in the shipping industry since the early nineteenth century as owners of Ceres Hellenic, and of CMB and CNN, respectively. Peter Livanos serves as the Chairman of our Board of
Directors through his appointment as permanent representative of TankLog. The Vice Chairman of our Board of Directors, Marc Saverys, is the Chief Executive Officer of CMB and controls Saverco, a company that is currently CMB’s majority
shareholder. Peter Livanos, individually or through entities controlled by the Livanos family, and Saverco currently own approximately 16.4% and 12.4%, respectively, of our existing outstanding ordinary shares. Upon completion of this offering,
Peter Livanos, individually or through entities controlled by the Livanos family, and Saverco will own approximately % and %, respectively, of our outstanding ordinary shares ( %
and % respectively, if the underwriters exercise their over-allotment option to purchase additional ordinary shares in full).
140
Our Business Strategies
Our primary objectives are to manage the size of our fleet according to market circumstances and to maximize shareholder value. The key elements of our strategy are:
Selectively buy and sell vessels in our fleet in order to maintain high quality vessels at attractive prices.
We
believe that our recent purchase of the Maersk Acquisition Vessels and the VLCC Acquisition Vessels represented an attractive investment opportunity to grow our revenue and earnings at a favorable price. With respect to the 15 modern Maersk
Acquisition Vessels, we paid $65.3 million on average per VLCC, and with respect to the four modern VLCC Acquisition Vessels, we paid $85.5 million on average per VLCC, as compared to the current price of newbuilding VLCCs of approximately $99.0
million per VLCC, according to Drewry. In addition, we believe that the Maersk Acquisition Vessels will enable us to capitalize on potential near-term improvements in tanker market charter rates, instead of having to wait several years to receive
newbuilding vessels from shipyards. We also recently sold three VLCCs (Luxembourg, Antarctica and Olympia) for offshore conversion projects at what we believe are attractive prices compared to the sale prices of other similar vessels. When
evaluating future transactions, we will consider and analyze, among other things, our charter rate expectations for the tanker sector, current vessel prices achieved in the sale and purchase market for vessels, the expected cash flow for vessels
relative to the proposed price, vessel specifications, including modern, environmentally safe features, and any related charter employment. While there is no guarantee that we will be able to acquire and dispose of vessels according to this strategy
in the future, we believe that our disciplined acquisition approach, combined with our management’s knowledge of the tanker sector, will provide us with opportunities to manage the size of our fleet and generate returns and distributions for
our shareholders.
Optimize our exposure to the spot market to maximize earnings
.
We actively
manage the employment of our operating fleet between spot market voyages and time charters. Our strategy is to maximize our exposure to the spot market, which has historically been volatile, but which we believe has delivered the highest returns on
average, while securing stable cash flow in anticipation of decreasing markets by chartering some of our vessels on fixed-rate time charters or, in the case of our two FSOs, in the offshore storage sector on fixed-rate service contracts. As part of
our focus on the spot market, we seek to leverage our participation in the TI Pool to benefit from the economies of scale and greater vessel utilization that the TI Pool can generate. We believe that the revenues that our vessels achieve in the
TI Pool will exceed the rate we would otherwise achieve by operating these vessels outside of the TI Pool.
Utilize our high quality
assets to continue to capitalize on floating crude oil storage opportunities.
We believe that we can increase shareholder value by opportunistically employing some of our vessels as crude oil storage units. We may look to
deploy some of our vessels in the offshore market on long-term contracts for floating storage projects at rates higher than may otherwise be achieved in the tanker time charter market. We may also sell our vessels for conversion to third-party
owners active in the offshore market at prices exceeding levels that could be realized in the conventional ship sale and purchase market. We currently operate two FSOs in which we own a 50% interest on long-term service contracts with Maersk Oil.
Over the last several years, we have sold five of our ships into the offshore conversion market at a premium above prices achievable in the broader ship sale and purchase market. We believe that our presence in the offshore market, coupled with the
growing trend toward offshore exploration and development projects globally, will lead to additional growth opportunities in the future.
Maintain a strong balance sheet with access to capital.
We seek to optimize and constantly monitor our leverage while
adapting it to changing market conditions. We plan to finance our
141
business and future vessel acquisitions with a mix of debt and equity from commercial banks and from the capital markets. We believe that maintaining a strong balance sheet will enable us to
access more favorable chartering opportunities as end users have increasingly favored well-capitalized owners, as well as give us a competitive advantage in pursuing vessel acquisitions at attractive times in the cycle.
Maintain cost efficient in-house vessel operations and corporate expenses.
Through our in-house vessel operations, we
believe that we are better able to monitor our operations, enabling us to maximize revenues and reduce our costs while offering our customers the quality of performances, services and reliability they demand, compared to other vessel owners and
operators who outsource these functions. We have a track record of safe operations and outperform the industry benchmarks set by Intertanko, the organization of independent tanker vessels, and the OCIMF in its TMSA for operating days, lack of lost
time incidents, and operating expenses, all of which ensures that maximum value can be delivered while minimizing human and environmental risks.
Technical and Commercial Management of Our Vessesls.
Our vessels are technically managed in-house through our wholly-owned subsidiaries, Euronav Ship Management SAS, Euronav SAS and Euronav Ship Management (Hellas) Ltd. Our in-house technical management services
include providing technical expertise necessary for all vessel operations, supervising the maintenance, upkeep and general efficiency of vessels, arranging and supervising newbuilding construction, drydocking, repairs and alterations, and
developing, implementing, certifying and maintaining a safety management system.
Our VLCCs are commercially managed by Tankers
International while operating in the TI Pool. All of the participants in the TI Pool collectively pay a pool management fee equivalent to the costs of running the pool business, after deducting voyage expenses, interest adjustments and
administration costs, including legal, banking and other professional fees. The net charge is the pool administration cost, which is apportioned to each vessel by calendar days. During the year ended December 31, 2013, we paid an aggregate of
$1.8 million for the commercial management of our vessels operating in the TI Pool.
Our Suezmax vessels trading in the spot market are
commercially managed by Euronav (UK) Agencies Ltd., our London commercial department. Commercial management services include securing employment for our vessels.
Our time chartered vessels, both VLCCs and Suezmax vessels, are managed by our operations department based in Antwerp.
Crewing and Employees
As of August 27,
2014, we employed approximately 2,070 people, in our offices in Greece, Belgium, United Kingdom and France, including 126 onshore employees and approximately 1,940 seagoing employees. Some of our employees are represented by collective bargaining
agreements. As part of the legal obligations in some of these agreements, we are required to contribute certain amounts to retirement funds and pension plans and have restricted ability to dismiss employees. In addition, many of these represented
individuals are working under agreements that are subject to salary negotiation. These negotiations could result in higher personnel costs, other increased costs or increased operating restrictions that could adversely affect our financial
performance. We consider our relationships with the various unions as satisfactory. As of the date of this prospectus, there are no ongoing negotiations or outstanding issues.
142
Competition
The operation of tanker vessels and transportation of crude and petroleum products is extremely competitive. We compete with other tanker owners, including major oil companies as well as independent tanker
companies. Competition arises primarily from other tanker owners, including major oil companies as well as independent tanker companies, some of whom have substantially greater resources than we do. We compete for charters on the basis of price,
vessel location, size, age and condition of the vessel, as well as on our reputation as an operator. Competition is also affected by the availability of other size vessels to compete in the trades in which we engage. We currently operate our all of
our vessels in the spot market, either directly or through the TI Pool, or on time charter. For our vessels that operate in the TI Pool, Tankers International LLC, the pool manager, is responsible for their commercial management, including
marketing, chartering, operating and purchasing bunker (fuel oil) for the vessels. From time to time, we may also arrange our time charters and voyage charters in the spot market through the use of brokers, who negotiate the terms of the charters
based on market conditions.
Seasonality
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates. Peaks in tanker demand quite often precede seasonal oil consumption peaks, as
refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can broadly be classified into two main categories: (1) increased demand prior to Northern Hemisphere winters as heating oil consumption increases and
(2) increased demand for gasoline prior to the summer driving season in the United States. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. This seasonality may result in quarter-to-quarter volatility in
our operating results, as many of our vessels trade in the spot market. Seasonal variations in tanker demand will affect any spot market related rates that we may receive.
Properties
We own no properties other than our vessels. We lease office space in various
jurisdictions, and have the following material leases in place such use as of June 30, 2014:
|
|
•
|
|
Belgium, located at Belgica Building, De Gerlachekaai 20, Antwerp, Belgium, for a yearly rent of $196,189 with approximately 37 employees at this location;
|
|
|
•
|
|
Greece, located at 69 Akti Miaouli, Piraeus, Greece 185 37, for a yearly rent of $238,185 with approximately 73 employees at this location;
|
|
|
•
|
|
France, located at Quai Ernest Renaud 15, CS20421, 44104 Nantes Cedex 1, France, for a total yearly rent of $36,104 with approximately 7 employees at this
location;
|
|
|
•
|
|
London, located at Moreau House, 3rd Floor, 116 Brompton Road, London SW3 1JJ for a yearly rent of $372,095, with approximately 9 employees at this location.
|
Please see “Certain Relationships and Related Party Transactions” for further information on leases we have
entered into with related parties.
Environmental and Other Regulations
Government laws and regulations significantly affect the ownership and operation of our vessels. We are subject to various international conventions, laws and regulations in force in the countries in which our
vessels may operate or are registered. Compliance with such laws, regulations and other requirements entails significant expense, including vessel modification and implementation costs.
143
A variety of governmental, quasi-governmental and private organizations subject our vessels to both
scheduled and unscheduled inspections. These organizations include the local port authorities, national authorities, harbor masters or equivalent entities, classification societies, relevant flag state (country of registry) and charterers,
particularly terminal operators and oil companies. Some of these entities require us to obtain permits, licenses, certificates and approvals for the operation of our vessels. Our failure to maintain necessary permits, licenses, certificates or
approvals could require us to incur substantial costs or temporarily suspend operation of one or more of the vessels in our fleet, or lead to the invalidation or reduction of our insurance coverage.
We believe that the heightened levels of environmental and quality concerns among insurance underwriters, regulators and charterers have led to
greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for tankers that conform to stricter environmental
standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with applicable local, national and international
environmental laws and regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses, certificates or other
authorizations necessary for the conduct of our operations; however, because such laws and regulations are frequently changed and may impose increasingly strict requirements, we cannot predict the ultimate cost of complying with these requirements,
or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that results in significant oil pollution or otherwise causes significant adverse environmental impact, such as the
2010
Deepwater Horizon
oil spill in the Gulf of Mexico, could result in additional legislation or regulation that could negatively affect our profitability.
International Maritime Organization
The International Maritime Organization, or the IMO, is a
specialized agency of the United Nations responsible for setting global standards for the safety, security and environmental performance of vessels engaged in international shipping. The IMO primary objective is to create a regulatory framework
for the shipping industry that is fair and effective, and universally adopted and implemented. The IMO has adopted several international conventions that regulate the international shipping industry, including but not limited to the International
Convention on Civil Liability for Oil Pollution Damage of 1969, generally referred to as CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage of 2001, and the International Convention for the Prevention of Pollution
from Ships of 1973, or the MARPOL Convention. The MARPOL Convention is broken into six Annexes, each of which establishes environmental standards relating to different sources of pollution: Annex I relates to the prevention of pollution by oil;
Annexes II and III relate to the prevention of pollution by noxious liquid substances carried in bulk and harmful substances carried by sea in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and
Annex VI, adopted by the IMO in September of 1997, relates to air pollution by ship emissions, including greenhouse gases.
Air
Emissions
In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution. Effective May 2005, Annex VI sets
limits on nitrogen oxide emissions from ships whose diesel engines were constructed (or underwent major conversions) on or after January 1, 2000. It also prohibits “deliberate emissions” of “ozone depleting substances,”
defined to include certain halons and chlorofluorocarbons. “Deliberate emissions” are not limited to times when the ship
144
is at sea; they can for example include discharges occurring in the course of the ship’s repair and maintenance. The shipboard incineration (from incinerators installed after January 1,
2000) of certain substances (such as polychlorinated biphenyls (PCBs)) are also prohibited and the emission of Volatile Organic Compounds is controlled. Annex VI also includes a global cap on the sulfur content of fuel oil (see below).
The amended Annex VI will reduce air pollution from vessels by, among other things, (i) implementing a reduction of sulfur oxide emissions
from ships by reducing the global sulfur fuel cap to 3.50%, which became effective on January 1, 2012, and will be progressively reduced to 0.50%, which will become effective globally as of January 1, 2020, subject to a feasibility review
to be completed no later than 2018; and (ii) establishing new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of installation. The United States ratified the Annex VI amendments in October
2008, and the EPA, promulgated equivalent emissions standards in late 2009.
Sulfur content standards are even stricter within certain
Emission Control Areas (or ECAs). As of July 1, 2010, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 1.0% (reduced from 1.50%), with a further reduction to 0.10% on January 1, 2015. Amended
Annex VI establishes procedures for designating new ECAs, and the Baltic Sea, the North Sea, certain coastal areas of North America, and the United States Caribbean Sea are all within designated ECAs where the 0.10% fuel sulfur content applies. As a
result of these designations or similar future designations, we may be required to incur additional operating or other costs.
As of
January 1, 2013, Amended Annex VI made mandatory certain measures relating to energy efficiency for ships. All new ships must comply with the limits of the Energy Efficiency Design Index (EEDI), and all ships must develop and implement Ship
Energy Efficiency Management Plans (SEEMPs).
If other ECAs are approved by the IMO or other new or more stringent requirements relating
to emissions from marine diesel engines or port operations by vessels are adopted by the EPA or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our
operations. As of the date of this prospectus, we are in compliance with applicable requirements under Annex VI, as amended.
Safety
Management System Requirements
The IMO also adopted SOLAS, and the International Convention on Load Lines, or LL Convention, which
impose a variety of standards that regulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL standards. May 2012 amendments to SOLAS that relate to the safe manning of vessels entered into force on
January 1, 2014. The Convention on Limitation for Maritime Claims (LLMC) was recently amended and the amendments are expected to go into effect on June 8, 2015. The amendments alter the limits of liability for loss of life, personal
injury, and property claims against shipowners.
Our operations are also subject to environmental standards and requirements contained
in the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, promulgated by the IMO under Chapter IX of SOLAS to provide an international standard for the safe management and operation of
ships and for pollution prevention. The ISM Code requires the owner of a vessel, or any person who has taken responsibility for operation of a vessel, to develop an extensive safety management system that
145
includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for
responding to emergencies. We rely upon the safety management system that has been developed for our vessels for compliance with the ISM Code.
The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with code requirements for a
safety management system. No vessel can obtain a certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. We have obtained documents of compliance for our offices and safety management
certificates for all of our vessels for which the certificates are required by the ISM Code. These documents of compliance and safety management certificates are renewed as required.
Noncompliance with the ISM Code and other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to
decreases in, or invalidation of, available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The U.S. Coast Guard and European Union authorities have indicated that vessels not in
compliance with the ISM Code will be prohibited from trading in U.S. and European Union ports.
Pollution Control and Liability
Requirements
IMO has negotiated international conventions that impose liability for pollution in international waters and the
territorial waters of the signatory nations to such conventions. For example, many countries have ratified and follow the liability plan adopted by the IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage of
1969, as amended by different Protocols in 1976, 1984, and 1992, and amended in 2000, or the CLC. Under the CLC and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered
owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions and limitations. The 1992 Protocol changed certain limits on liability, expressed
using the International Monetary Fund currency unit of Special Drawing Rights. The limits on liability have since been amended so that compensation limits on liability were raised. The right to limit liability is forfeited under the CLC where the
spill is caused by the shipowner’s actual fault and under the 1992 Protocol where the spill is caused by the shipowner’s intentional or reckless act or omission where the shipowner knew pollution damage would probably result. The CLC also
covers bunker oil pollution by tankers but only when loaded or when cargo residues remain on board. The CLC requires ships covered by it to maintain insurance covering the liability of the owner in a sum equivalent to the vessel’s limitation
fund for a single incident. Our protection and indemnity insurance covers the liability under the plan adopted by the IMO subject to the rules and conditions of entry.
The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention of 2001, to impose strict liability on shipowners for pollution damage in jurisdictional
waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the
applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims of 1976, as amended). With respect to tankers, this Convention is only
applicable to vessels without cargo or residues thereof on board.
146
With respect to non-ratifying states, liability for spills or releases of oil carried as cargo or fuel
in ships’ bunker tanks typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur. Our protection and indemnity insurance covers the liability for pollution as established by a competent
court, subject to the rules and conditions of entry.
In addition, the IMO adopted an International Convention for the Control and
Management of Ships’ Ballast Water and Sediments, or the BWM Convention, in February 2004. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements to be replaced in time
with mandatory concentration limits. The BWM Convention will not become effective until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world’s
merchant shipping. To date, there has not been sufficient adoption of this standard (in relation to the gross tonnage requirement) for it to take force. Many of the implementation dates in the BWM Convention have already passed, so, on
December 4, 2013, the IMO Assembly passed a resolution revising the dates of applicability of the requirements of the BWM Convention so that they are triggered by the entry into force date, and not the dates originally in the BWM Convention.
This, in effect, made all vessels constructed before the entry into force date “existing vessels” and delayed the date for installation of ballast water management systems on such vessels until the first renewal survey following entry into
force of the convention. Upon entry into force of the BWM Convention, mid-ocean ballast exchange would be mandatory and eventually (based on relevant time deadlines) will require the installation of approved ballast water equipment on our vessels to
treat ballast water before it is discharged. When mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance could increase for ocean carriers. Although we do not believe that the costs of compliance
with a mandatory mid-ocean ballast exchange would be material, the cost of installation of a ballast water treatment system is considerable but at this stage it is difficult to predict the overall impact of such a requirement on our operations.
The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be
passed by the IMO and what effect, if any, such regulations might have on our operations.
U.S. Regulations
The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of the
environment from oil spills. OPA affects all “owners and operators” whose vessels trade in the United States, its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S. territorial sea and its 200
nautical mile exclusive economic zone. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances (including certain forms of oil)
whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Accordingly, both OPA and CERCLA impact our operations.
Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results
solely from the act or omission of a third-party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels. OPA defines these other damages
broadly to include:
|
|
•
|
|
injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
|
147
|
|
•
|
|
injury to, or economic losses resulting from, the destruction of real and personal property;
|
|
|
•
|
|
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
|
|
|
•
|
|
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
|
|
•
|
|
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
|
|
|
•
|
|
net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or
health hazards, and loss of subsistence use of natural resources.
|
OPA contains statutory caps on liability and
damages; such caps do not apply to direct cleanup costs. Effective July 31, 2009, the U.S. Coast Guard adjusted the limits of OPA liability to the greater of $2,000 per gross ton or $17.088 million for any double-hull tanker that is over 3,000
gross tons (subject to periodic adjustment for inflation), and our fleet is entirely composed of vessels of this size class. These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal
safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party’s gross negligence or willful misconduct. The limitation on liability
similarly does not apply if the responsible party fails or refuses to (i) report the incident where the responsibility party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with
oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.
CERCLA, which applies to owners and operators of vessels, contains a similar liability regime whereby owners and operators of vessels are liable
for cleanup, removal and remedial costs, as well as damage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no
liability if the discharge of a hazardous substance results solely from the act or omission of a third-party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5 million for vessels carrying a
hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release
of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if
the responsible person fails or refuses to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.
OPA and CERCLA both require owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial
responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a
surety bond, qualification as a self-insurer or a guarantee. We have provided such evidence and received certificates of financial responsibility from the U.S. Coast Guard’s for each of our vessels as required to have one.
OPA permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries,
provided they accept, at a minimum, the
148
levels of liability established under OPA. Some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, however, in some cases, states
which have enacted this type of legislation have not yet issued implementing regulations defining tanker owners’ responsibilities under these laws.
The 2010 Deepwater Horizon oil spill in the Gulf of Mexico may also result in additional regulatory initiatives or statutes, including the raising of liability caps under OPA. For example, on August 15, 2012,
the U.S. Bureau of Safety and Environmental Enforcement (BSEE) issued a final drilling safety rule for offshore oil and gas operations that strengthens the requirements for safety equipment, well control systems, and blowout prevention practices.
For example, on February 24, 2014, the U.S. Bureau of Ocean Energy Management (BOEM) proposed a rule increasing the limits of liability of damages for offshore facilities under the OPA based on inflation. Compliance with any new requirements of
OPA may substantially impact our cost of operations or require us to incur additional expenses to comply with any new regulatory initiatives or statutes.
Through our P&I Club membership with Gard, West of England and Brittania, we expect to maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the
damages from a catastrophic spill were to exceed our insurance coverage, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The U.S. Clean Water Act, or CWA, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized
by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies
available under OPA and CERCLA. Furthermore, many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a
release of a hazardous substance. These laws may be more stringent than U.S. federal law.
The United States Environmental Protection
Agency, or EPA, has enacted rules requiring a permit regulating ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters under the Vessel General Permit for Discharges Incidental
to the Normal Operation of Vessels, or VGP. For a new vessel delivered to an owner or operator after September 19, 2009 to be covered by the VGP, the owner must submit a Notice of Intent, or NOI, at least 30 days before the vessel operates in
United States waters. On March 28, 2013, the EPA re-issued the VGP for another five years, which took effect December 19, 2013. The 2013 VGP contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive
species in US waters, more stringent requirements for exhaust gas scrubbers and the use of environmentally acceptable lubricants. As of the date of this prospectus, we have obtained coverage under, and are in compliance with, 2013 VGP.
U.S. Coast Guard regulations adopted under the U.S. National Invasive Species Act, or NISA, also impose mandatory ballast water management
practices for all vessels equipped with ballast water tanks entering or operating in U.S. waters, and, as of June 21, 2012, the Coast Guard adopted revised ballast water management regulations that established standards for allowable
concentrations of living organisms in ballast water discharged from ships into U.S. waters. The Coast Guard’s revised ballast water standards are consistent with requirements under the 2004 BWM Convention. Existing vessels with ballast water
capacity exceeding 5.000 m³ will have to comply by the first scheduled drydocking after January 1, 2016. Compliance with the EPA and the U.S. Coast Guard regulations could require the installation of
149
equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, and/or
otherwise restrict our vessels from discharging ballast in U.S. waters which would have an adverse impact to the commercial operation of the vessels.
European Union Regulations
In October 2009,
the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges
individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. Member States were required to enact laws or regulations to comply with
the directive by the end of 2010. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims.
Greenhouse Gas Regulation
Currently, the
emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been
required to implement national programs to reduce greenhouse gas emissions. On January 1, 2013, two new sets of mandatory requirements to address greenhouse gas emissions from ships adopted by the Marine Environment Protection Committee, or
MEPC, entered into force. Currently operating ships are now required to develop and implement Ship Energy Efficiency Management Plans (SEEMPs), and the new ships to be designed in compliance with minimum energy efficiency levels per capacity mile as
defined by the Energy Efficiency Design Index (EEDI). These requirements could cause us to incur additional compliance costs. The IMO is also considering market-based mechanisms to reduce greenhouse gas emissions from ships, and the European Union
has proposed legislation that would require the monitoring and reporting of greenhouse gas emissions from marine vessels. In the United States, the EPA has issued a finding that greenhouse gases endanger the public health and safety and has adopted
regulations to limit greenhouse gas emissions from certain mobile sources and proposed regulations to limit greenhouse gas emissions from certain large stationary sources. Although the mobile source emissions regulations do not apply to greenhouse
gas emissions from vessels, the EPA is considering petitions from the California Attorney General and various environmental groups to regulate greenhouse gas emissions from ocean-going vessels. Any passage of climate control legislation or other
regulatory initiatives by the IMO, European Union, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make
significant financial expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation and regulations, our business may be materially affected to the extent that climate change may result in sea
level changes or more intense weather events.
International Labour Organization
The International Labour Organization (ILO) is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO has adopted the
Maritime Labor Convention 2006 (MLC 2006). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance will be required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. The MLC 2006
entered into force one year after 30 countries with a minimum of 33% of the world’s tonnage have ratified it. On August 20, 2012, the required
150
number of countries was met and MLC 2006 entered into force on August 20, 2013. Following the ratification of MLC 2006 we have developed certain new procedures to ensure full compliance with
its requirements.
Vessel Security Regulations
Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the U.S. Maritime Transportation Security Act of
2002, or the MTSA, came into effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the
jurisdiction of the United States. The regulations also impose requirements on certain ports and facilities, some of which are regulated by the U.S. Environmental Protection Agency (EPA).
Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new
Chapter V became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, and mandates compliance with the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against
terrorism. Amendments to SOLAS Chapter VII, made mandatory in 2004, apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code IMDG Code).
To trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization
approved by the vessel’s flag state. Among the various requirements are:
|
|
•
|
|
onboard installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly
equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status;
|
|
|
•
|
|
onboard installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;
|
|
|
•
|
|
the development of vessel security plans;
|
|
|
•
|
|
ship identification number to be permanently marked on a vessel’s hull;
|
|
|
•
|
|
a continuous synopsis record kept onboard showing a vessel’s history, including the name of the ship, the state whose flag the ship is entitled to fly, the
date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and
|
|
|
•
|
|
compliance with flag state security certification requirements.
|
Ships operating without a valid certificate may be detained at port until it obtains an ISSC, or it may be expelled from port, or refused entry at port.
The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt from MTSA vessel security measures
non-U.S. vessels provided that such vessels have on board a valid ISSC that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. We have implemented the various security measures addressed by MTSA, SOLAS and
the ISPS Code, and our fleet is in compliance with applicable security requirements.
151
Inspection by Classification Societies
Every seagoing vessel must be “classed” by a classification society. The classification society certifies that the vessel is “in class,’’ signifying that the vessel has been built and
maintained in accordance with the rules of the classification society. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on
application or by official order, acting on behalf of the authorities concerned and will certify that such vessel complies with applicable rules and regulations of the vessel’s country of registry and the international conventions of which that
country is a member.
The classification society also undertakes on request other surveys and checks that are required by regulations
and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.
For maintenance of the class, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed are required to be performed as follows:
|
|
•
|
|
Annual Surveys.
For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant,
and where applicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicated in the certificate.
|
|
|
•
|
|
Intermediate Surveys.
Extended annual surveys are referred to as intermediate surveys and are to be carried out either at or
between the second and third Annual Surveys after Special Periodical Survey No. 1 and subsequent Special Periodical Surveys. Those items which are additional to the requirements of the Annual Surveys may be surveyed either at or between the
second and third Annual Surveys. After the completion of the No.3 Special Periodical Survey the following Intermediate Surveys are of the same scope as the previous Special Periodical Survey.
|
|
|
•
|
|
Special Periodical Surveys (or Class Renewal Surveys).
Class renewal surveys, also known as Special Periodical Surveys, are carried
out for the ship’s hull, machinery, including the electrical plant, and for any special equipment classed, and should be completed within five years after the date of build or after the crediting date of the previous Special Periodical Survey.
At the special survey, the vessel is thoroughly examined, including ultrasonic-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than the minimum class requirements, the classification society would
prescribe steel renewals. A Special Periodical Survey may be commenced at the fourth Annual Survey and be continued with completion by the fifth anniversary date. Substantial amounts of money may have to be spent for steel renewals to pass a special
survey if the vessel experiences excessive wear and tear.
|
As mentioned above for vessels that are more than 15 years
old, the Intermediate Survey may also have a considerable financial impact.
At an owner’s application, the surveys required for
class renewal (for tankers only the ones in relation to machinery and automation) may be split according to an agreed schedule to extend over the entire five year period. This process is referred to as continuous survey system. All areas subject to
survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed
five years.
152
Most vessels are subject also to a minimum of two examinations of the outside of a vessel’s
bottom and related items during each five-year special survey period. Examinations of the outside of a vessel’s bottom and related items is normally to be carried out with the vessel in drydock but an alternative examination while the vessel is
afloat by an approved underwater inspection may be considered. One such examination is to be carried out in conjunction with the Special Periodical Survey and in this case the vessel must be in drydock. For vessels older than 15 years (after the 3rd
Special Periodical Survey) the bottom survey must always be in the drydock. In all cases, the interval between any two such examinations is not to exceed 36 months.
In general during the above surveys if any defects are found, the classification surveyor will require immediate repairs or issue a ‘‘recommendation’’ which must be rectified by the shipowner
within prescribed time limits.
Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as
“in-class” by a classification society which is a member of the International Association of Classification Societies (IACS). All our vessels are certified as being “in-class” by American Bureau of Shipping, Lloyds Register or
Bureau Veritas who are all members of IACS. All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard purchase contracts and memoranda of agreement. If the vessel is not certified on the scheduled
date of closing, we have no obligation to take delivery of the vessel.
In addition to the classification inspections, many of our
customers regularly inspect our vessels as a precondition to chartering them for voyages. We believe that our well-maintained, high-quality vessels provide us with a competitive advantage in the current environment of increasing regulation and
customer emphasis on quality.
Risk of Loss and Liability Insurance
General
The operation of any cargo vessel includes risks such as mechanical failure,
collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil
spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which in certain circumstances imposes virtually unlimited liability upon owners, operators and demise charterers of
any vessel trading in the United States exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market. While we believe
that our present insurance coverage is adequate, not all risks can be insured against, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.
Marine and War Risks Insurance
We have in force marine and war risks insurance for all of our vessels. Our marine hull and machinery insurance covers risks of particular and general average and actual or constructive total loss from collision,
fire, grounding, engine breakdown and other insured named perils up to an agreed amount per vessel. Our war risks insurance covers the risks of particular and general average and actual or constructive total loss from acts of war and civil war,
terrorism, piracy, confiscation, seizure, capture, vandalism, sabotage, and other war-related named perils.
153
We have also arranged coverage for increased value for each vessel. Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover amounts in excess of
those recoverable under the hull and machinery policy in order to compensate for additional costs associated with replacement of the loss of the vessel. Each vessel is covered up to at least its fair market value at the time of the insurance
attachment and subject to a fixed deductible per each single accident or occurrence, but excluding actual or constructive total loss. As of the date of this prospectus, nil deductible applies under the war risks insurance.
Protection and Indemnity Insurance
Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, and covers our contractual and third-party liabilities in connection with our shipping
activities in accordance with the Rules of the P&I Association. This covers third-party liability and other related expenses including but not limited to those resulting from injury or death of crew, passengers and other third-parties, loss of
or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances, and mandatory wreck removal (not including towage costs, which is covered by marine or war
risk insurance). Protection and indemnity insurance is a form of mutual indemnity insurance, extended by mutual protection and indemnity associations, or “clubs.”
As a member of a P&I Club that is a member of the International Group of P&I Clubs, or the International Group, we carry protection and indemnity insurance coverage capped at $1 billion for oil pollution
claims and at $3.0 billion for other claims per vessel per incident. The P&I Clubs that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each
association’s liabilities in excess of their own retention (presently $9.0 million). Although the P&I Clubs compete with each other for business, they have found it beneficial to pool their larger risks under the auspices of the
International Group. This pooling is regulated by a contractual agreement which defines the risks that are to be pooled and exactly how these risks are to be shared by the participating P&I Clubs. We are subject to calls payable to the
associations based on our claim records as well as the claim records of all other members of the individual associations and members of the pool of P&I Clubs comprising the International Group.
Permits and Authorizations
We are required
by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity
transported, the waters in which the vessel operates, the nationality of the vessel’s crew and the age of the vessel. We have been able to obtain all permits, licenses and certificates currently required to permit our vessels to operate.
Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business.
Legal Proceedings
We are not involved in any legal proceedings which may have, or have had, a
significant effect on our business, financial position and results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our business, financial position, results of
operations or liquidity. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal
154
injury and property casualty claims. We expect that these claims would be covered by insurance, subject to customary deductibles. Any such claims, even if lacking merit, could result in the
expenditure of managerial resources and materially adversely affect our business, financial condition and results of operations.
155
MANAGEMENT
Directors and Senior Management
Set forth below are the names, ages and positions of our
current Directors and executive officers. Our Board of Directors is elected annually on a staggered basis, and each director holds office for a term of four years, until his or her term expires or until his or her death, resignation, removal or the
earlier termination of his or her term of office. All Directors whose term expires are eligible for re-election. Officers are appointed from time to time by our Board of Directors and hold office until a successor is appointed or their employment is
terminated. The business address of each of our Directors and executive officers listed below is Euronav NV, Belgica House, De Gerlachekaai 20, 2000 Antwerp, Belgium.
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
Date of Expiry of Current Term
(for Directors)
|
|
Peter G. Livanos*
|
|
56
|
|
Chairman of the Board of Directors
|
|
Annual General Meeting 2015
|
|
Marc Saverys
|
|
60
|
|
Vice Chairman of the Board of Directors
|
|
Annual General Meeting 2016
|
|
Daniel R. Bradshaw
|
|
67
|
|
Director
|
|
Annual General Meeting 2017
|
|
Ludwig Criel
|
|
63
|
|
Director
|
|
Annual General Meeting 2016
|
|
Alice Wingfield Digby
|
|
40
|
|
Director
|
|
Annual General Meeting 2016
|
|
Alexandros Drouliscos
|
|
56
|
|
Director
|
|
Annual General Meeting 2017
|
|
Julian Metherell
|
|
51
|
|
Director
|
|
Annual General Meeting 2018
|
|
John Michael Radziwill
|
|
35
|
|
Director
|
|
Annual General Meeting 2017
|
|
William Thomson
|
|
66
|
|
Director
|
|
Annual General Meeting 2015
|
|
Patrick Rodgers
|
|
54
|
|
Chief Executive Officer and Director
|
|
Annual General Meeting 2016
|
|
Hugo De Stoop
|
|
41
|
|
Chief Financial Officer
|
|
|
|
Alex Staring
|
|
48
|
|
Chief Offshore Officer
|
|
|
|
Egied Verbeeck
|
|
40
|
|
General Counsel
|
|
|
|
An Goris
|
|
37
|
|
Secretary General
|
|
|
|
*
|
Mr. Peter Livanos serves on our Board of Directors as the permanent representative of TankLog, which was elected as a director by our shareholders. Under Belgian law, a
corporate entity serving as a director must be represented by a permanent representative who is a natural person. TankLog’s four year term as director will expire at our 2015 Annual General Meeting of Shareholders, at which time it will be up
for re-appointment by shareholder vote.
|
Biographical information concerning the Directors and executive officers listed
above is set forth below.
Peter G. Livanos
serves as the Chairman of our Board through his appointment as the permanent
representative of TankLog. Mr. Livanos has served on our Board of Directors since April 2005 and is a member of our Health, Safety, Security and Environmental Committee and our Remuneration Committee. Mr. Livanos is also the Chairman of the
Board of Directors of GasLog Ltd. (NYSE: GLOG) (since 2003), where he also served as Chief Executive Officer during the period from 2012 to 2013. In addition, Mr. Livanos is the Chairman and sole shareholder of Ceres Shipping Ltd., or Ceres
Shipping, an international shipping group, and currently serves as a Director of GasLog Partners LP (NYSE: GLOP), DryLog Ltd., EnergyLog Ltd. and TankLog. Mr. Livanos is the first cousin of Mr. John Michael Radziwill. In addition,
Mr. Livanos is a member of the Council of the American Bureau of Shipping and Chairman of the Greek National Committee. In 1989, Mr. Livanos formed Seachem Tankers Ltd., which joined forces with Odfjell in 2000, creating Odfjell ASA (OSE:
ODF), one of the world’s largest chemical tanker operators. He served on the board of directors of Odfjell SE until 2008. Mr. Livanos is a graduate of Columbia University in New York.
156
Marc Saverys
our Vice Chairman, has served on our Board since our incorporation in 2003. During
the period from 2003 through July 2014, he served as the Chairman of our Board. In 1976, Mr. Saverys joined the chartering department of Bocimar, the drybulk division of CMB. In 1985, Mr. Saverys established the drybulk division of Exmar
and in 1991 he became Managing Director of CMB, a position that he still holds. Mr. Saverys has also served as the Chairman of Delphis NV since March 2004 and as a Board Member of Sibelco NV and Mediafin NV since June 2005 and October 2005,
respectively. From 1997 to 2012, Mr. Saverys has also served as a Director of Euronav Hong Kong Ltd. and, since 1995, as a Director of Euronav Luxembourg SA, two companies belonging to the Euronav group. He graduated with a degree in law from
the University of Ghent.
Daniel R. Bradshaw
,
one of our directors, has served on our Board of Directors since 2004, and
is a member of our Audit Committee and the chairman of our Corporate Governance and Nomination Committee. Since 2014, Mr. Bradshaw has served as an independent director of GasLog Partners LP (NYSE: GLOP), a Marshall Islands limited partnership.
Since 2013, Mr. Bradshaw has been a Director of Greenship Offshore Manager Pte Ltd. and since 2010, he has served as an independent non-executive Director of IRC Limited, a company listed in Hong Kong, which operates iron mines in far eastern
Russia, and is affiliate of Petropavlovsk PLC, a London-listed mining and exploration company. Since 2006, Mr. Bradshaw has been a Director of Pacific Basin Shipping Company Limited, a company listed in Hong Kong and operating in the Handysize
bulk carrier sector. Since 1978, Mr. Bradshaw has worked at Johnson Stokes & Master, now Mayer Brown JSM, in Hong Kong, from 1983 to 2003 as a partner and since 2003 as a senior consultant. From 2003 until 2008, Mr. Bradshaw was a
member of the Hong Kong Maritime Industry Council. From 1993 to 2001, he served as Vice-Chairman of the Hong Kong Shipowners’ Association and was a member of the Hong Kong Port and Maritime Board until 2003. Mr. Bradshaw began his career
with the New Zealand law firm Bell Gully and in 1974, joined the international law firm Sinclair Roche & Temperley in London. Mr. Bradshaw obtained a Bachelor of Laws and a Master of Laws degree at the Victoria University of Wellington
(New Zealand).
Ludwig Criel
,
one of our directors, has served on our Board of Directors since our incorporation in
2003, and is a member of our Corporate Governance and Nomination Committee. Mr. Criel has been the Chairman of De Persgroep since 1996. Mr. Criel has served as a Director of CMB and of Exmar NV since 1991. Since 1983, he has held various
management functions within the Almabo/Exmar group and was made Chief Financial Officer of CMB in 1993. In 1999, Mr. Criel was appointed Managing Director of the Wah Kwong group in Hong Kong. Mr. Criel joined Boelwerf as a project manager
in 1976. He is Vice-Chairman of the West of England P&I Club. In 1974, Mr. Criel graduated in applied economic sciences from the University of Ghent. He also holds a degree in management from the Vlerick School of Management.
Alice Wingfield Digby
,
one of our directors, has served on our Board of Directors since May 2012, and is the Chairman of our
Health, Safety, Security and Environmental Committee and a member of our Corporate Governance and Nomination Committee, Remuneration Committee. Ms. Wingfield Digby currently works at Pritchard-Gordon Tankers Ltd., where she started as
Chartering Manager in 1999. Since 1995, she has served as a member of the Board of Directors of Giles W. Pritchard-Gordon & Co., Pritchard-Gordon Tankers Ltd. and Giles W. Pritchard-Gordon (Shipowning) Ltd., and since 2005 as a member of
the board of Giles W. Pritchard-Gordon (Farming) Ltd. and Giles W. Pritchard-Gordon (Australia) Pty Ltd. Ms. Wingfield Digby has been a member of the Baltic Exchange since 2002. In the late nineties, Ms. Wingfield Digby joined the
chartering department of Mobil before the merger with Exxon in 1999. From 1995 to 1996, she trained with Campbell Maritime Limited, a ship management company in South Shields, and subsequently at British Marine Mutual P & I Club, SBJ Insurance
157
Brokers and J. Hadjipateras in London after returning from working at sea as a deckhand on board a tanker trading around the Eastern Caribbean. In 1996, Ms. Wingfield Digby was awarded
the Shell International Trading and Shipping Award in tanker chartering from the Institute of Chartered Shipbrokers.
Alexandros
Drouliscos
,
one of our directors, has served on our Board of Directors since May 2013, and is a member of our Audit Committee and is the chairman of our Remuneration Committee. Since 1999, he has held the position of Managing
Director at a family-owned European bank, Union Bancaire Privée. From 1986 to 1992, Mr. Drouliscos held the position of Vice President at Chase Manhattan Bank NA, working as a credit officer and then as an investment officer, and then, from
1992 to 1997, as a Senior Vice President at Merrill Lynch. He graduated from the American University in Athens with a Bachelor’s degree in Business Administration in 1982 and then continued his postgraduate studies at Heriott Watt University in
Edinburgh, with a M.Sc. in International Banking.
Julian Metherell
,
one of our directors, has served on our Board of
Directors since May 2014, and is a member of our Audit Committee and Corporate Governance and Nomination Committee. Mr. Metherell also serves as a Director of Gaslog Ltd., a NYSE listed owner and operator of LNG carriers (since October 2011),
and is the Chief Financial Officer and a Director of Genel Energy plc, a leading independent oil and gas exploration and production company operating in the Kurdistan Region of Iraq (since 2011). Genel Energy plc, the successor to Vallares Plc, is a
publicly listed acquisition company which Mr. Metherell co-founded in April 2011. Mr. Metherell was a partner at The Goldman Sachs Group, Inc., where he served as Chief Executive Officer of the UK investment banking division, prior to
which he was a Director in the European energy group at Dresdner Kleinwort, a London-based investment bank. Mr. Metherell is a graduate of Manchester University, where he received a B.Sc. degree, and of Cambridge University, where he received a
M.B.A.
John Michael Radziwill
,
one of our directors, has served on our Board of Directors since 2013, and is a member of
our Health, Safety, Security and Environmental Committee. Mr. John Michael Radziwill is also the Chief Executive Officer of C Transport Maritime S.A.M. in Monaco (since 2010), prior to which he served in its commercial department as a Capesize
freight trader from 2005 to 2006 and as the head of the sale and purchase division from 2006 through 2010. From 2004 to 2005, Mr. John Michael Radziwill worked at H. Clarkson & Co. Ltd and Seascope Insurance Services Ltd. both in
London, England. In 2003, he joined Ceres Hellenic’s Insurance and Claims Department in Piraeus, Greece. Mr. John Michael Radziwill also serves as an advisor of SCP Clover Maritime, a company that manages assets and investments for
Mr. John Radziwill, his father, and specifically for JM Maritime Investments Inc. and Bretta Tanker Holdings, Inc., Mr. John Michael Radziwill is the first cousin of Mr. Livanos, one of our Directors. In addition, he is a member of
the American Bureau of Shipping and the Baltic Exchange. Mr. Radziwill graduated from Brown University in 2002 with a BA in Economics, after which he served as Administrative Officer at Ceres Hellenic Enterprise’s New Building Site Office
in Koje, South Korea.
William Thomson
,
one of our directors, has served on our Board of Directors since 2011, and is the
Chairman of our Audit Committee and a member of our Remuneration Committee. Currently and since 2005, Mr. Thomson holds a directors’ mandate in Latsco, established to operate under the British Tonnage Tax Regime, operating Very Large Gas
Carriers (VLGC), long-range and medium-range vessels. From 1980 to 2008, Mr. Thomson has been Chairman in several maritime and other companies including Forth Ports Plc, British Ports Federation and Relayfast, and the North of England P&I
club. Mr. Thomson previously served as a Director of Trinity Lighthouse Service, Tibbett and Britten and Caledonian McBrayne. From 1970 to 1986, he
158
was a Director with Ben Line, for which he worked in, amongst others, Japan, Indonesia, Taiwan and Edinburgh. In 1985, he established Edinburgh Tankers and five years later, Forth and Celtic
Tankers. After serving with the army for three years, Mr. Thomson began his professional career with Killick Martin Shipbrokers in London.
Patrick Rodgers
serves and has served on our Board of Directors since June 2003 and has been a member of our Executive Committee since 2004. Mr. Rodgers was appointed Chief Financial Officer of the
predecessor of the Company in 1998 and has been Chief Executive Officer since 2000. Since 2005, Mr. Rodgers has served as a Director of Euronav Luxembourg SA and Seven Seas Shipping Ltd. Mr. Rodgers currently serves as a Director of
International Tanker Owners Pollution Federation Fund, since 2011, Great Hope Enterprises Ltd., since 2003, and Euronav (UK) Agencies, since 1995. From 1990 to 1995, Mr. Rodgers worked at CMB group as an in-house lawyer, and subsequently, as
Shipping Executive. Mr. Rodgers began his career in 1982 as a trainee lawyer with Keene Marsland & Co. In 1984, he joined Bentley, Stokes & Lowless as a qualified lawyer and in 1986 he joined Johnson, Stokes & Master
in Hong Kong as a solicitor. Mr. Rodgers graduated in law from University College London in 1981 and from the College of Law, Guildford in 1982.
Hugo De Stoop
serves and has served as our Chief Financial Officer since 2008, after serving as our Deputy Chief Financial Officer and Head of Investor Relations beginning in 2004. Mr. De Stoop has been
a member of our Executive Committee since 2008. In 2000, he joined Davos Financial Corp., an investment manager for UBS, specializing in Asset Management and Private Equity, where he became an Associate and later a Vice President in 2001. In 1999,
Mr. De Stoop founded First Tuesday in America, the world’s largest meeting place for high tech entrepreneurs, venture capitalists and companies and helped develop the network in the United States and in Latin America and, in 2001, was
appointed member of the Board of Directors of First Tuesday International. Mr. De Stoop started his career in 1998 with Mustad International Group, an industrial group with over 30 companies located in five continents where he worked as a
project manager on various assignments in the United States, Europe and Latin America, in order to integrate recently acquired subsidiaries. Mr. De Stoop studied in Oxford, Madrid and Brussels and graduated from école polytechnique (ULB)
with a Master of Science in engineering. He also holds a MBA from INSEAD.
Alex Staring
serves and has served as our Chief
Offshore Officer since 2010 and has served as a member of our Executive Committee since 2005. From 2005 to 2010, Captain Staring held the position of Chief Operating Officer of the Company. Captain Staring has been a Director of Euronav Hong Kong
Ltd. since 2007, a Director of Euronav SAS and Euronav Ship Management since 2002 and a Director of Euronav Luxembourg SA since 2000. In 2000, international shipping companies, AP Moller, Euronav, Frontline, OSG, Osprey Maritime and
Reederei’Nord’ Klaus E Oldendorff consolidated the commercial management of their VLCCs by operating them in a pool, Tankers International LLC, of which Captain Staring became Director of Operations. In 1988, Captain Staring gained his
master’s and chief engineer’s license and spent the majority of his time at sea on Shell Tankers and CMB tankers, the last 3 years of which he attained the title of Master. From 1997 to 1998, Captain Staring headed the SGS S.A. training
and gas centre. In 1998, Captain Staring rejoined CMB and moved to London to head the operations team at their subsidiary, Euronav UK. Captain Staring graduated with a degree in Maritime Sciences from the Maritime Institute in Flushing, The
Netherlands and started his career at sea in 1985.
Egied Verbeeck
serves and has served as General Counsel of the Company since
2009 and became member of the Executive Committee of the Company in January 2010. From 2006 until June 2014, Mr. Verbeeck served as Secretary General of the Company. Prior to joining Euronav he was a managing associate at Linklaters De Bandt from
1999-2005. Mr. Verbeeck has been a
159
Director of Euronav Ship Management SAS since 2012, a Director of Euronav Hong Kong Ltd. since 2007 and a Director of Euronav Luxembourg S.A. since 2008. Mr. Verbeeck graduated in law from
the Catholic University of Louvain in 1998 and holds a Master Degree in international business law from Kyushu University (Japan) as well as a postgraduate degree in corporate finance from the Catholic University of Louvain.
An Goris
serves and has served as Secretary General of the Company
since June 2014 and in this capacity Ms. Goris is responsible for the general corporate affairs of the Company. From 2011 to 2014, Ms. Goris serves as legal counsel to the Company. In 2001, Ms. Goris became a member of the Antwerp Bar and joined
Linklaters De Bandt, where she gained extensive experience in corporate law, mergers and acquisitions and finance. In 2008, Ms. Goris joined Euroclear as a legal manager where she worked for both the local central securities depository, Euroclear
Belgium, as well as the international central securities depository, Euroclear Bank. Ms. Goris graduated with a law degree from the University of Antwerp in 2000. She also holds a Masters Degree in law from Oxford University, a degree in
international business law from University René Descartes in Paris, France and a degree in corporate law from the Catholic University of Louvain and Brussels. Ms. Goris is a native Dutch speaker and is also fluent in English and French. Mr.
Goris is a sworn legal translator of English and French into Dutch.
Board of Directors and Committees
Our Board of Directors currently consists of ten members, five of which are considered “independent” under Rule 10A-3 under the Exchange
Act and under the rules of the NYSE: Mr. Drouliscos, Mr. Bradshaw, Mr. Thomson, Ms. Wingfield Digby, and Mr. Metherell.
Our Board of Directors has established the following committees, and may, in the future, establish such other committees as it determines from time to time:
Audit Committee
Our Audit
Committee consists of four independent Directors: Mr. Thomson, as Chairman, Mr. Drouliscos, Mr. Bradshaw and Mr. Metherell. Our Audit Committee is responsible for ensuring that we have an independent and effective internal and
external audit system. Additionally, the Audit Committee advises the Board of Directors in order to achieve its supervisory oversight and monitoring responsibilities with respect to financial reporting, internal controls and risk management. Our
Board of Directors has determined that Mr. Thomson qualifies as an “audit committee financial expert” for purposes of SEC rules and regulations.
Corporate Governance and Nomination Committee
Our Corporate Governance and Nomination
Committee consists of five members: Mr. Bradshaw, as Chairman, Mr. Metherell, Ms. Wingfield Digby, Mr. Criel, and Mr. Drouliscos. Our Corporate Governance and Nomination Committee is responsible for evaluating and making
recommendations regarding the size, composition and independence of the Board of Directors and the Executive Committee, including the recommendation of new Director-nominees.
Remuneration Committee
Our Remuneration Committee consists of four members:
Mr. Drouliscos, as Chairman, Mr. Livanos, Mr. Thomson, and Ms. Wingfield Digby. Our remuneration committee is
160
responsible for determining compensation for our executive officers and other employees and administering our compensation programs.
Health, Safety, Security and Environmental Committee.
Our Health, Safety, Security and Environmental, or HSSE, Committee consists of three members: Ms. Wingfield Digby, as Chairman, Mr. Peter Livanos, and Mr. Radziwill. Our HSSE Committee is responsible for
overseeing our policies related to the health, safety, security and environmental procedures with respect to our operations, and to assess our internal systems for ensuring compliance with related laws, regulations and policies.
Corporate Governance Practices
Pursuant to
an exception under the NYSE listing standards available to foreign private issuers, we are not required to comply with all of the corporate governance practices followed by U.S. companies under the NYSE listing standards, which are available at
www.nyse.com
. Pursuant to Section 303.A.11 of the NYSE Listed Company Manual, we are required to list the significant differences between our corporate governance practices and the NYSE standards applicable to listed U.S. companies. Set
forth below is a list of potential differences going forward.
Independence of Directors
.
The NYSE
requires that a U.S. listed company maintain a majority of independent Directors. Our Board of Directors currently consists of ten Directors, six of which are considered “independent” according to NYSE’s standards for independence.
However, as permitted under Belgian law and our articles of association, our Board of Directors may, in the future, not consist of a majority of independent Directors.
Compensation Committee and Nominating/Corporate Governance Committee
.
The NYSE requires that a listed U.S. company have a compensation committee and a nominating/corporate
governance committee of independent Directors. As permitted under Belgian law and our articles of association, our Remuneration Committee and Corporate Governance and Nomination Committee is not comprised entirely of independent Directors.
Audit Committee
. The NYSE requires, among other things, that a listed U.S. company have an audit
committee comprised of three entirely independent Directors. Although we are not required to do so under Rule 10A-3 under the Exchange Act, our audit committee is currently comprised of four independent Directors.
Corporate Governance Guidelines
.
The NYSE requires U.S. companies to adopt and disclose corporate governance
guidelines. The guidelines must address, among other things: Director qualification standards, Director responsibilities, Director access to management and independent advisers, Director compensation, Director orientation and continuing education,
management succession and an annual performance evaluation. We are not required to adopt such guidelines under Belgian law, but we have adopted a corporate governance charter in compliance with Belgian law requirements.
Board of Directors and Executive Compensation
The compensation of our Directors is determined on the basis of four regular meetings of the full board per year. The actual amount of remuneration
is determined by the annual general meeting and is benchmarked periodically with Belgian listed companies and international peer companies. The aggregate annual compensation paid to our executive officers, excluding our
161
Chief Executive Officer, for the year ended December 31, 2013 was EUR 1,652,800, comprised of EUR 870,000 of fixed compensation, EUR 700,000 of variable compensation, pension and
benefits valued at EUR 31,800 and EUR 51,000 in other compensation. The annual aggregate compensation paid to our Chief Executive Officer was GBP 612,800, comprised of GBP 284,000 of fixed compensation, GBP 268,000 of variable compensation,
pension and benefits valued at GBP 50,000 and GBP 10,800 in other compensation. We also paid an aggregate of $630,000 to our non-executive Directors during the year ended December 31, 2013, with an additional aggregate meeting attendance fee of
$340,000. Our Chairman of the Board is entitled to receive a gross fixed amount of EUR 160,000 per year, and each member of the board is entitled to receive a gross fixed amount of EUR 60,000 per year. In addition, our Chairman and
each Director are entitled to receive an attendance fee of EUR 10,000 per board meeting attended, not to exceed EUR 40,000 per year. The Chairman of our audit committee is entitled to receive a gross fixed amount of EUR 40,000, and each
member of the audit committee is entitled to receive a gross fixed amount of EUR 20,000 per year. In addition, the Chairman of our audit committee and members of the audit committee are entitled to receive an attendance fee of EUR
5,000 per audit committee meeting attended, not to exceed EUR 20,000 per year. Our Chairmen of all of our other committees are entitled to receive a gross fixed amount of EUR 7,500 per year, and the members of all of our other
committees are entitled to receive a gross fixed amount of EUR 5,000. In addition, our Chairmen and members of these other committees will also be entitled to receive an attendance fee of EUR 5,000 for each committee meeting attended, with a maximum
of EUR 20,000 per year for each committee served.
Our Chief Executive Officer, who is also a Director, has waived his
Director’s fees.
Equity Incentive Plans
Our Board of Directors has adopted an equity incentive plan, pursuant to which directors, officers and certain employees of us and our subsidiaries were eligible to receive options to purchase ordinary shares of us
at a predetermined price. On December 16, 2013, we granted options to purchase in aggregate 1,750,000 ordinary shares to members of our Executive Committee at an exercise price of EUR 5.7705, subject to customary vesting provisions.
In addition, our Board of Directors has resolved to adopt a long-term equity incentive plan, pursuant to which directors, officers and certain
employees of Euronav and its subsidiaries will be eligible to participate in an incentive plan, which we expect will align the interests of our management with those of our shareholders. The long term incentive plan is currently under review by our
Remuneration Committee, and is expected to be adopted during 2014.
162
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Services Agreement with CMB
We received
legal services from CMB in accordance with the terms of a Services Agreement, dated January 1, 2006, on an arms’ length basis. During the year ended December 31, 2013, we paid CMB $61,895 in consideration for its services, as compared
to $265,000 for the same period in 2012 (2011: $362,000). Mr. Saverys, our Chairman of the Board of Directors, currently controls Saverco, a company that is currently CMB’s majority shareholder and owns 12.4% of our outstanding ordinary
shares. This agreement was terminated at the end of 2013.
Registration Rights Agreements
We expect to enter into a registration rights agreement for the benefit of certain of our affiliates, including Mr. Marc Saverys, including
Saverco, and Mr. Peter Livanos, including TankLog. The registration rights agreement, under certain circumstances and subject to certain restrictions, including restrictions contained in the lock-up agreements to which Mr. Marc Saverys and Mr.
Peter Livanos will be a party, requires us to register under the Securities Act, our ordinary shares held by those persons.
Chartering with Joint
Venture Entities
Ardenne Venture
From September 2001 until September 2012, we chartered-in the VLCC
Ardenne Venture
from Great Hope Enterprises Ltd., one of our 50%-owned joint ventures with Kriss Investment Company at a rate of $35,000 per
day.
Cap Isabella
On March 15, 2013, we sold the newbuilding Suezmax
Cap Isabella
to Belle Shipholdings Ltd., a related party, pursuant to a sale and
leaseback agreement for $54.0 million, which was used to pay the final shipyard installment due at delivery of $55.2 million. The stock of Belle Shipholdings Ltd. is held for the benefit of immediate family members of Peter Livanos, the
representative of our corporate director TankLog Holdings Limited. Mr. Livanos notified our Board of Directors which met on March 14, 2013, that pursuant to the provisions of the Belgian Code of Companies relating to the existence of
conflicts of interest, he had a direct or indirect patrimonial interest that conflicts with the interests of the Company in respect of this sale and therefore, did not participate in the deliberation or the vote that authorized us to sell the
Cap
Isabella
on the basis of current market values.
The
Cap Isabella
was a newbuilding from Samsung Heavy Industries. We
chartered the ship back on bareboat for a fixed period of two years with three options in our favor to extend for a further year. On July 31, 2014, Belle Shipholdings sold the
Cap Isabella
to a third-party. Pursuant to the sale and leaseback
agreement, we are entitled to receive a share of the profit resulting from the sale of the vessel by Belle. We expect to receive approximately $4.3 million and will be recorded in the third or fourth quarter of 2014.
Eugenie, Devon, Capt. Michael, Maria
The
Eugenie, Devon, Capt. Michael, Maria
are owned, respectively, by Fiorano Shipholding Ltd., Larvotto Shipholding Ltd., Fontvieille Shipholding Ltd. and Moneghetti Shipholding Ltd.,
163
our 50%-owned joint ventures which we own with JM Maritime Investments Inc. John Michael Radziwill, one of our directors, is the son of John Radziwill who owns JM Maritime Investments Inc. John
Michael Radziwill is not a shareholder or director of JM Maritime Investments Inc. nor is he employed by JM Maritime.
Loans to Our Joint
Venture Entities
Fontvieille Shareholder Loan
On April 24, 2008, we provided a shareholder loan to Euronav Hong Kong Limited in relation to Fontvieille Shipholding Limited, one of our 50%-owned joint ventures that we own with Bretta Tanker Holdings Ltd.,
or Bretta Tanker Holdings. The proceeds of this loan were used to partially finance the acquisition of
Eugene
and working capital purposes. This loan does not bear interest, and will become due upon demand. The largest amounts outstanding
during 2013, 2012, and 2011 were $26.2 million, $23.9 million and $22.4 million, respectively. As of June 30, 2014 and December 31, 2013, the outstanding balances on this loan were $26.1 million and $26.0 million, respectively.
Moneghetti Shareholder Loan
On April 24, 2008, we provided a shareholder loan to Euronav Hong Kong Limited in relation to Moneghetti Shipholding Limited, one of our
50%-owned joint ventures that we own with Bretta Tanker Holdings. The proceeds of this loan were used to partially finance the acquisition of
Devon
and working capital purposes. This loan does not bear interest, and will become due upon
demand. The largest amounts outstanding during 2013, 2012, and 2011 were $20.2 million, $19.2 million and $19.2 million, respectively. As of June 30, 2014 and December 31, 2013, the outstanding balances on this loan were $21.6 million and $20.2
million, respectively.
Larvotto Shareholder Loan
On May 16, 2008, we provided a shareholder loan to Euronav Hong Kong Limited in relation to Larvotto Shipholding Limited, one of our 50%-owned joint ventures that we own with JM Maritime Investments Inc.,
or JM Maritime. The proceeds of this loan were used to partially finance the acquisition of
Maria
and working capital purposes. This loan does not bear interest, and will become due upon demand. The largest amounts outstanding during 2013,
2012, and 2011 were $23.5 million, $22.4 million and $7.5 million, respectively. As of June 30, 2014 and December 31, 2013, the outstanding balances on this loan were $24.6 million and $23.5 million, respectively.
Fiorano Shareholder Loan
On
August 28, 2008, we provided a shareholder loan to Euronav Hong Kong Limited in relation to Fiorano Shipholding Limited, one of our 50%-owned joint ventures that we own with JM Maritime. The proceeds of this loan were used to partially finance
the acquisition of
Capt. Michael
and working capital purposes. This loan does not bear interest, and will become due upon demand. The largest amounts outstanding during 2013, 2012, and 2011 were $26.0 million, $24.2 million and $5.0 million,
respectively. As of June 30, 2014 and December 31, 2013, the outstanding balances on this loan were $25.3 million and $25.4 million, respectively.
164
Loan Agreements of Our Joint Ventures
$43.0 Million Loan Facility (Great Hope)
On July 12, 2010, one of our 50%-owned joint
ventures, Great Hope Limited, entered into a $43.0 million loan facility with Crédit Agricole Asia Shipfinance Limited to partially finance the acquisition of the
Ardenne Venture
, which we subsequently sold in November 2013 and
delivered in January 2014. This loan has a term of eight years and is payable in 31 quarterly installments without a balloon payment, and bears interest at LIBOR plus a margin of 2.7% per annum. As of December 31, 2013, the outstanding on
this facility was $20.0 million, of which we have a 50% economic interest of $10.0 million. On January 2, 2014, we repaid the loan in full upon the sale of the vessel securing the loan.
$52.0 Million Loan Facility (Seven Seas)
On May 6, 2005, one of our 50%-owned joint ventures, Seven Seas Shipping Limited, entered into a $52.0 million loan facility with Chiao Tung Bank to partially finance the construction of the
V.K.Eddie
.
This loan has a term of 12 years with a maturity of May 2017 and no balloon and bears interest at LIBOR plus a margin of 0.80% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were $13.0
million and $15.2 million, respectively of which we had a 50% economic interest of $6.5 million and $7.6 million, respectively.
$135.0 Million Secured Term Loan Facility (Fontvielle and Moneghetti)
On April 23, 2008, two of our 50%-owned joint ventures, Fontvielle Shipholding Limited and Moneghetti Shipholding Limited, entered into a
$135.0 million secured term loan facility with BNP Paribas (Suisse) SA and Alpha Bank A.E. to finance our acquisition of
Eugenie
and
Devon
. This facility, as amended, is comprised of two tranches; the Fontvielle Tranche of up to
$55.5 million and the Moneghetti Tranche in the amount of $67.5 million. This facility is repayable in quarterly installments over a term of 10 years with a balloon of $43.2 million. This loan bears interest at LIBOR plus a margin of
2.75% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were $94.2 million and $99.2 million, respectively, of which we had a 50% economic interest of $47.1 million and $49.6 million,
respectively.
$76.0 Million Loan Facility (Fiorano)
On October 23, 2008, one of our 50%-owned joint ventures, Fiorano Shipholding Limited, entered into a $76.0 million loan facility with Scotia Bank to partially finance the acquisition of the
Capt.
Michael
. This loan has a term of eight years with a balloon of $14.0 million due at maturity. This loan bears interest at LIBOR plus a margin of 1.225% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on
this facility were $38.4 million and $40.6 million, respectively, of which we had a 50% economic interest of $19.2 million and $20.3 million, respectively.
$67.5 Million Loan Facility (Larvotto)
On August 29, 2008, one of our 50%-owned joint
ventures, Larvotto Shipholding Limited, entered into a $67.5 million loan facility, as supplemented by a supplemental letter dated November 28, 2011, with Fortis Bank S.A./N.V. to partially finance the acquisition of the
Maria
. This loan
has a term of eight years with a balloon payment of $16.2 million due at maturity. This loan bears interest at LIBOR plus a margin of 1.5% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were
$39.1 million and
165
$41.1 million, respectively, of which we had a 50% economic interest of $19.5 million and $20.5 million, respectively.
$500.0 Million FSO Facility (TI Asia and TI Africa)
On October 3, 2008, two of our 50%-owned joint ventures, TI Asia Ltd. and TI Africa Ltd., entered into a $500.0 million senior secured credit facility with a group of commercial lenders with ING Bank N.V. as
Agent and Security Trustee. We used the proceeds of this facility to finance the acquisition of two ULCC vessels,
TI Asia
and
TI Africa
, and to convert these vessels to FSOs, which serve as collateral under this facility. This facility
consists of two tranches; the
FSO Asia
tranche matures in 2017 and bears interest at LIBOR plus a margin of 1.15% per annum, and the
FSO Africa
tranche, following the restructuring of this tranche, matures in 2015 and bears
interest at LIBOR plus a margin of 2.75% per annum. As of June 30, 2014 and December 31, 2013, the outstanding balances on this facility were $171.2 million and $196.5 million, respectively, of which we had a 50% economic interest of
$85.6 million and $98.3 million, respectively.
All of the joint venture loans described above are secured by a mortgage of the
specific vessel and guaranteed by the respective shareholders of each joint venture on a several basis.
Guarantees
We have provided guarantees to financial institutions that have provided credit facilities to six of our joint ventures, in the aggregate amount of
$177.9 million and $206.2 million as of June 30, 2014 and December 31, 2013, respectively. The totals of the related outstanding bank loans as of June 30, 2014 and December 31, 2013 were $355.8 million and $412.4 million, respectively.
In addition, on July 24, 2009, two of our 50%-owned joint ventures, TI Asia Ltd. and TI Africa Ltd., which own the
FSO Asia
and
FSO Africa
, two FSO vessels, respectively, entered into a $50.0 million guarantee facility agreement with Nordea Bank Finland plc in order to issue two guarantees of up to $25.0 million each in favor of Maersk Oil Qatar AS in connection
with its use of the
FSO Asia
and
FSO Africa
after such vessels have been converted to FSO. In August 2010, the amount available under this guarantee facility was reduced to $31.5 million. This guarantee terminates upon the earlier of
(i) eight years after the Guarantee Issue Date for the second Guarantee and (ii) March 31, 2008. As of June 30, 2014, the guarantee has not been called upon.
Properties
We lease office space in Belgium from Reslea N.V., an entity controlled by Saverco,
one of our majority shareholders, on an arms’ length basis. Under this lease, we pay a yearly rent of $196,189.
We lease office
space, through our subsidiary Euronav Ship Management Hellas, in Piraeus, Greece, from Nea Dimitra Ktimatiki Kai Emporiki S.A., an entity controlled by Ceres Shipping, on an arms’-length basis. Mr. Livanos who serves as the Chairman of our
board through his appointment as the permanent representative of TankLog on our board, is the Chairman and sole shareholder of Ceres Shipping. Under this lease, we pay a yearly rent of $238,185.
166
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND
SELLING SHAREHOLDERS
The following table sets forth the beneficial ownership of ordinary shares as of September 1, 2014,
and upon completion of this offering held by beneficial owners of 5% or more of our ordinary shares, the selling shareholders and by all of our directors and officers as a group. All of our shareholders, including the shareholders listed in the
table below, are entitled to one vote for each ordinary share held.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares Beneficially
Owned
Prior
to Offering
|
|
|
Ordinary Shares
Offered Hereby
|
|
Ordinary Shares to
be
Beneficially
Owned After Offering
|
|
Name
|
|
Number
|
|
|
Percentage(1)
|
|
|
Number
|
|
Percentage
|
|
Number
|
|
Percentage(2)
|
|
Peter G. Livanos(3)
|
|
|
21,503,509
|
|
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
Marc Saverys(4)
|
|
|
16,300,039
|
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
York Capital Management Global
Advisors LLC(5)(9)
|
|
|
14,100,267
|
|
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
Victrix NV(6)(9)
|
|
|
7,580,345
|
|
|
|
5.8
|
%
|
|
|
|
|
|
|
|
|
|
Golden Tree Asset Management LLC(7)(9)
|
|
|
6,306,781
|
|
|
|
4.8
|
%
|
|
|
|
|
|
|
|
|
|
Blue Mountain Capital Management LLC(8)(9)
|
|
|
8,867,209
|
|
|
|
6.8
|
%
|
|
|
|
|
|
|
|
|
|
Directors and executive officers as a group*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Less than 1.0% of our outstanding ordinary shares (excluding the shares which are held directly or indirectly by Mr. Peter G. Livanos and Mr. Marc Saverys).
|
|
(1)
|
Calculated based on 131,050,666 ordinary shares outstanding as of September 1, 2014.
|
|
(2)
|
Calculated based on ordinary shares, which assumes that the underwriters do not exercise their option to
purchase additional ordinary shares.
|
|
(3)
|
Mr. Peter Livanos may be deemed to beneficially own 1,250,000 of our ordinary shares directly, and the remainder of the above listed ordinary shares indirectly, through his
control, for his own benefit and the benefit of his immediate family members, of (i) Ceres Investments (Cyprus) Limited, which holds 10,854,805 ordinary shares, (ii) Chiara Holdings Inc., which holds 5,930,283 ordinary shares (iii) Ceres
Investment Partners Ltd., which holds 2,533,715 ordinary shares, and (iv) TankLog, our corporate director, which holds 934,706 ordinary shares. The business address of Mr. Livanos, as permanent representative of TankLog on our Board, is De
Gerlachekaai 20, 2000 Antwerpen, Belgium.
|
|
(4)
|
Mr. Marc Saverys may be deemed to be the beneficial owner of (i) 5,500 ordinary shares, which he owns directly and (ii) 16,294,539 ordinary shares, which he owns indirectly
through his control of Saverco, one of our principal shareholders. Mr. Saverys may also be deemed to be the beneficial owner of 1,891,857 ordinary shares that may be issued upon the conversion of the 6 perpetual convertible preferred equity
securities held by him, which are not included in the presentation of the table above, and which would increase his ownership interest to 13.6% if all such perpetual convertible preferred equity securities were converted into ordinary shares
(calculated based on 132,942,523 ordinary shares, consisting of 131,050,666 ordinary shares outstanding as of September 1, 2014 and 1,891,857 ordinary shares that may be issued upon such conversion). The business address of Mr. Saverys is De
Gerlachekaai 20, 2000 Antwerpen, Belgium.
|
|
(5)
|
The business address of York Capital Management Global Advisors LLC is 767 Fifth Avenue,
17
th
Floor, New York, NY 10153.
|
|
(6)
|
Victrix NV may be deemed to be the beneficial owner of 7,580,345 of our ordinary shares, which it owns directly. Victrix NV may also be deemed to be the beneficial owner of
1,576,548 ordinary shares that may be issued upon the conversion of the 5 perpetual convertible preferred equity securities held by it, which are not included in the presentation of the table above, and which would increase its ownership interest to
6.9% if all such perpetual convertible preferred equity securities were converted into ordinary shares (calculated based on 132,627,214 ordinary shares, consisting of 131,050,666 ordinary shares outstanding as of September 1, 2014 and 1,576,548
ordinary shares that may be issued upon such conversion). Ms. Virginie Saverys, the sister of Mr. Marc Saverys, one of our directors, has voting or dispositive power over the shares held by Victrix NV. The business address of Victrix NV is Le
Grellelei 20, 2000 Antwerpen, Belgium.
|
|
(7)
|
Golden Tree Asset Management LLC may be deemed to be the beneficial owner of 6,306,781 ordinary shares, which it owns directly. Golden Tree Asset Management LLC
may also be deemed to be the beneficial owner of
|
167
|
|
3,153,096 ordinary shares that may be issued upon the conversion of the 10 perpetual convertible preferred equity securities held by it, which are not included in the presentation of the table
above, and which would increase its ownership interest to 7.0% if all such perpetual convertible preferred equity securities were converted into ordinary shares (calculated based on 134,203,762 ordinary shares, consisting of 131,050,666 ordinary
shares outstanding as of September 1, 2014 and 3,153,096 ordinary shares that may be issued upon such conversion). The business address of Golden Tree Asset Management is 300 Park Avenue, New York, NY.
|
|
(8)
|
The business address of Blue Mountain Capital Management LLC is 280 Park Avenue, 5
th
Floor East, New York, NY 10017.
|
|
(9)
|
This information is derived from a Transparency Declaration Notice required to be filed with the Belgian Financial Services and Markets Authority and submitted to us in
accordance with Belgian law.
|
As of September 1, 2014, we had 39 holders of nominative shares, none of which were located
in the United States and held an aggregate of 16,084,320 ordinary shares, representing 12.3% of our outstanding ordinary shares. We are not aware of any arrangements the operation of which may at a subsequent date result in our change of control.
168
DESCRIPTION OF SHARE CAPITAL
The following is a description of the material terms of our Articles of Association currently in effect. Because the following is a summary, it
does not contain all of the information that you may find useful. For more complete information, see our Articles of Association, a copy of which is attached hereto as an exhibit to the registration statement, of which this prospectus is a part.
Purpose
Our objectives are set
forth in Section I, Article 2 of our Articles of Association. Our purpose, as stated therein, is to engage in operations related to maritime transport and shipowning, particularly the chartering in and out, the acquisition and sale of ships, and the
opening and operation of regular shipping lines, but is not restricted to these activities.
Issued and Authorized Capitalization
As of September 1, 2014, our issued (and fully paid up) share capital was $142,440,546.45 which is represented by 131,050,666 ordinary shares with
no par value. The shareholders’ meeting of February 24, 2014 has authorized the Board of Directors to increase the share capital one or several times by a total maximum amount of $73,000,000 for a period of five years. Taking into account
the fractional value of $1.086912 per share, the authorized capital of $73,000,000 allows the Board to issue additionally up to 67,162,750 ordinary shares without future shareholder approval. Upon completion of this offering, we will
have outstanding ordinary shares. We will also have outstanding 250 notes convertible into 1,147,621 ordinary shares at a current conversion price of $21.78 (EUR 15.31).
Share History
On
January 10, 2014, we received gross proceeds of $50.0 million upon the issuance of 5,473,571 of our existing ordinary shares in an equity offering at
€
6.70 per share (based on the USD/EUR exchange rate applied by the European Central Bank of EUR 1.00 per $1.3634 in effect on January 6, 2014). The proceeds of the offering were used to
partially finance the purchase price of the Maersk Acquisition Vessels.
On January 13, 2014, we issued 60 perpetual convertible
preferred equity securities, each with a denomination of $2.5 million, which are convertible into our existing ordinary shares at the holders’ option. The proceeds of the issuance are being used to strengthen our balance sheet liquidity, to
diversify funding sources, and for general corporate and working capital purposes.
On February 6, 2014, we issued 9,459,286
ordinary shares upon the conversion of 30 out of the 60 issued and outstanding perpetual convertible preferred equity securities. The remaining 30 outstanding perpetual convertible preferred equity securities may be converted into ordinary shares at
any time at the holders’ option at a price of $7.928715 per share. We have the option to convert our perpetual convertible preferred equity securities if our share price reaches a certain level over a certain period of time and our ordinary
shares have been admitted to listing on the New York Stock Exchange or the Nasdaq Stock Exchange. In accordance with the terms of the perpetual convertible preferred equity securities, we expect to exercise this option and issue up to 9,459,286
ordinary shares relating to the contribution of the principal amount and, at our option, up to 2,837,785 ordinary shares relating to the payment of interest in shares over
169
five years, totaling 12,297,071 shares, at the closing of this offering upon the conversion of the remaining 30 outstanding perpetual convertible preferred equity securities.
On February 24, 2014, we received gross proceeds of $300.0 million upon the issuance of 32,841,528 of our existing ordinary shares in an
equity offering at
€
6.70 per share (based on the USD/EUR exchange rate applied by the European Central Bank of EUR 1.00 per
$1.3634 in effect on January 6, 2014). The proceeds of the offering are being used to partially finance the purchase price of the Maersk Acquisition Vessels.
During the period from November 12, 2013 through April 22, 2014, we issued an aggregate of 20,969,473 existing ordinary shares upon conversion of $124,900,000 in aggregate principal amount of 1,249 Convertible
Notes due 2018 at the holders’ option. On February 20, 2014, we issued an optional redemption notice and on April 9, 2014, redeemed the last convertible note due 2018 outstanding as of April 2, 2014 for an aggregate of
$101,227.78.
On July 14, 2014, we received gross proceeds of $125.0 million upon the issuance of 10,556,808 of our ordinary shares in
an underwritten private offering in Belgium mainly to a group of qualified investors at €8.70 per share (or $11.84 per share based on the USD/EUR exchange rate of EUR 1.00 per $1.3610). The proceeds of the offering are expected to be
used to partially finance the purchase price of the four VLCC Acquisition Vessels.
Concurrently with the pricing of this offering, we
will offer to exchange all of the outstanding unregistered ordinary shares in Belgium (other than ordinary shares owned by our affiliates) for ordinary shares that have been registered under the Securities Act, which we refer to as the Exchange
Offer. The Exchange Offer will be made only by means of a prospectus contained in our registration statement on Form F-4 that we will file in connection with that Exchange Offer and a related letter of transmittal. This offering is not contingent on
the successful completion of the Exchange Offer.
Ordinary Shares
Each outstanding ordinary share entitles the holder to one vote on all matters submitted to a vote of shareholders. Each share represents an identical fraction of the share capital and is either in registered or
dematerialized form.
During the 120 day period commencing on the date immediately following the pricing of the offering, or the
“Transition Period,” the ordinary shares offered hereby and the existing ordinary shares issued in Belgium which are currently trading on the NYSE Euronext Brussels will have different dividend rights. If a dividend is declared during the
Transition Period, holders of ordinary shares offered hereby would be entitled to receive dividends based only upon the earnings from our operations from and after the date of issuance of such ordinary shares, while holders of existing ordinary
shares would be entitled to receive dividends based upon our earnings from and after the date of issuance of the ordinary shares and for all prior periods. Upon the completion of the Transition Period, (i) the ordinary shares offered hereby
shall immediately have the same dividend rights as the existing ordinary shares and (ii) the ordinary shares and the existing ordinary shares shall have the same rights and privileges in all respects. This temporary dividend difference was
authorized by our board of directors.
Perpetual Convertible Preferred Equity Issues
On January 13, 2014, we issued 60 perpetual convertible preferred securities for net proceeds of $150.0 million, which are convertible into our
ordinary shares, at the holders’
170
option, at any time. The perpetual convertible preferred securities bear interest at 6% during the first five years, which is payable annually in arrears in cash or in shares at our option. On
February 6, 2014, we issued 9,459,286 ordinary shares upon the conversion of 30 out of the 60 issued and outstanding perpetual convertible preferred equity securities. The remaining 30 outstanding perpetual convertible preferred
equity securities may be converted into ordinary shares at any time at the holders’ option at a price of $7.928715 per share. We have the option to convert our perpetual convertible preferred equity securities if our share price reaches a
certain level over a certain period of time and our ordinary shares have been admitted to listing on the New York Stock Exchange or the Nasdaq Stock Exchange. In accordance with the terms of the perpetual convertible preferred equity securities, we
expect to exercise this option and issue up to 9,459,286 ordinary shares relating to the contribution of the principal amount and, at our option, up to 2,837,785 ordinary shares relating to the payment of interest in shares over five years, totaling
12,297,071 shares, at the closing of this offering upon the conversion of the remaining 30 outstanding perpetual convertible preferred equity securities.
Directors
Our articles of association
provide that our Board of Directors shall consist of at least five members. Our Board of Directors currently consists of ten members, two of whom represent the principal shareholders. The articles of association provide that the members of the Board
of Directors remain in office for a period not exceeding 4 years and are eligible for re-election. The term of a director comes to an end immediately after the annual shareholders’ meeting of the last year of his term. Directors can be
dismissed at any time by the vote of a majority of our shareholders.
The Board of Directors is our ultimate decision-making body, with
the exception of the matters reserved for the general shareholders’ meeting as provided by the Belgian Companies Code or by our articles of association.
Shareholder Meetings
The annual general shareholders’ meeting is held annually on the
second Thursday of May at 11 a.m. (Central European Time). If this day is a legal holiday, the meeting is held on the preceding business day.
The Board of Directors or the statutory auditor (or, as the case may be, the liquidators) can convene a special or extraordinary general shareholders’ meeting at any time if the interests of the Company so
require. Such general meetings must also be convened whenever requested by the shareholders who together represent a fifth of our share capital within three weeks of their request, provided that the reason of convening a special or extraordinary
general shareholders’ meeting is given.
In general, there is no quorum requirement for the general shareholders’ meeting and
decisions are taken with a simple majority of the votes, except as provided by law on certain matters.
Anti-Takeover Effect of Certain Provisions of
Our Articles of Association
Our articles of association contain provisions which may have anti-takeover effects. These provisions
are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However,
these anti-takeover
171
provisions could also discourage, delay or prevent (1) the merger or acquisition of us by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best
interest and (2) the removal of incumbent officers and directors.
For example, a shareholder’s voting rights can be suspended
with respect to ordinary shares that give such shareholder the right to voting rights above 5% (or a multiple of 5%) of the total number of voting rights attached to our ordinary shares on the date of the relevant general shareholder’s meeting,
unless we and the Belgian Financial Services and Markets Authority, or the FSMA, have been informed at least 20 days prior to the date of the relevant general shareholder’s meeting in which the holder wishes to vote. In addition, our board of
directors is authorized in our articles of association to (i) increase the Company’s capital within the framework of the authorized capital with a maximum amount of USD 73,000,000 and (ii) buy back and sell the Company’s own
shares. These authorizations may be used by the board of directors in the event of a hostile takeover bid.
Transfer Agent
The registrar and transfer agent for our ordinary shares is Computershare Trust Company, N.A.
172
CERTAIN BELGIAN COMPANY CONSIDERATIONS
Our corporate affairs are governed by our articles of association and by the Belgian Companies Code. You should be aware that the Belgian
Companies Code differs in certain material respects from the laws generally applicable to U.S. companies incorporated in the State of Delaware. Accordingly, you may have more difficulty protecting your interests under Belgian law in the face of
actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction, such as the State of Delaware. The following table provides a comparison between the statutory
provisions of the Belgian Companies Code and the Delaware General Corporation Law relating to shareholders’ rights.
|
|
|
|
|
Belgium
|
|
Delaware
|
|
Shareholder Meetings and Voting Rights
|
|
|
|
|
An annual shareholders’ meeting will be held at such times and places as designated in the articles of association, or if not so designated, as determined in the notice for the
meeting.
|
|
Shareholder meetings may be held at such times and places as designated in the certificate of incorporation or the bylaws, or if not so designated, as determined by the Board of
Directors.
|
|
|
|
|
Special or extraordinary meetings of shareholders may be called by the Board of Directors or the statutory auditor (or liquidators, if appropriate) or must be called when one or more
shareholders holding at least one-fifth of the share capital so demands.
|
|
Special meetings of the shareholders may be called by the Board of Directors or by such person or persons as may be authorized by the certificate of incorporation or by the
bylaws.
|
|
|
|
|
Notices of meetings must be published in the Belgian State Gazette, in another nationally published newspaper, and on the website of the company
at least 30 days prior to the meeting date. Notices must be delivered by letter to the holders of registered shares, registered warrants and registered bonds and to directors and the statutory auditor at least 30 days prior to the meeting date.
Meeting notices and related documentation, including Board of Directors and auditor reports, must be published on the company’s website.
Notices of meetings must contain the agenda items of the meeting and any proposed resolutions to be submitted at the meeting. One or more shareholders holding
jointly 3% or more of a company’s registered capital may request items to be added to the agenda and submit proposed resolutions.
|
|
Written notice shall be given not less than 10 nor more than 60 days before the meeting. Whenever shareholders are required to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote communication, if any.
|
|
|
|
|
In general, meetings must be held in Belgium. Extraordinary shareholders’ meeting before a Belgian notary public must be held in Belgium.
|
|
Shareholder meetings may be held within or without the State of Delaware.
|
173
|
|
|
|
|
|
|
|
Unless otherwise provided for in the articles of association of a company, shareholders may take action by written consent of all shareholders.
|
|
Any action required to be taken by a meeting of shareholders may be taken without a meeting if a consent for such action is in writing and is signed by shareholders having not less than the
minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
|
|
|
|
|
|
Transactions with Significant Shareholders
|
|
|
|
|
Conflicts of interest procedures apply at the board level, not at the level of the shareholders.
In the case of intragroup conflicts of interest involving a Belgian listed company
(
i.e.
, decisions or actions that relate to the relationship between a listed company and a company associated with such listed company, such as a company controlled by the listed company or which has control over the listed company), with the
exception of its subsidiaries, or between a subsidiary of a listed company and a company associated with such subsidiary which is itself not a subsidiary of the former subsidiary, any decision or action must first be assessed by a committee of three
independent directors, assisted by one or more independent experts appointed by the committee. The board is not obligated to follow the advice of the independent committee, however, in case the advice is deviated from, such deviations must be noted
in the minutes of the meeting that decides on the matter. In addition, the statutory auditor of the company must assess the information in the advice of the independent committee and in the minutes. The advice of the independent committee, the
minutes and the opinion of the auditor must be published in the annual report of the company. Following decisions or actions are exempt from the procedure set forth in Article 524 of the Belgian Companies Code: (i) common decisions or actions
under conditions that are at arm’s length, and (ii) decisions or actions that represent less than 1% of the company’s net assets.
|
|
Subject to certain exceptions and conditions, a corporation may not enter into a business combination with an interested shareholder for a period of three years from the time the person
became an interested shareholder without prior approval from shareholders holding at least 66
2
/
3
% of the corporation’s outstanding
voting stock which is not owned by such interested shareholder.
|
174
|
|
|
|
|
|
|
|
Any director who has a direct or indirect personal financial interest in a decision or transaction within the powers of the Board of Directors must disclose this interest to the other
directors before the board takes any action. The interested director must notify the statutory auditor of the conflict. The director may neither participate in the deliberation nor vote on the decision or transaction at issue. The company’s
annual report must contain an excerpt from the minutes of the meeting of the Board of Directors describing the financial impact of the matter and justifying the decision of the board. The auditors’ report must contain descriptions of the
financial impact on the company of each board decision regarding a director conflict of interest.
|
|
|
|
|
|
Dissenters’ Rights of Appraisal
|
|
|
|
|
No such rights are provided for under Belgian law.
|
|
Appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation, subject to limited exceptions, such as a merger or
consolidation of corporations listed on a national securities exchange in which listed stock is the offered consideration.
|
|
|
|
|
|
|
|
Shareholders’ Suits
|
|
|
|
|
An
actio mandati
, a derivative suit instituted on behalf of a company by its shareholders against the company’s directors for breaches
of the law, the articles of association or faults in their management are generally available to shareholders. The decision to bring a suit must be made by the vote at a shareholders’ meeting of a simple majority unless a company’s
articles of association provide differently.
Minority shareholders are permitted to
bring a suit against the company’s directors on behalf of the company provided that (i) such shareholders jointly hold at least 1% of the outstanding shares of the company or hold at least EUR 1,250,000.00 of the company’s capital on
the date on which release from liability is granted to a director and (ii) the shareholders instituting the suit voted against the release from liability, abstained from voting or were not present at the relevant meeting at which a
director’s release from liability was decided.
|
|
Class actions and derivative actions generally are available to shareholders under Delaware law for, among other things, breach of fiduciary duty, corporate waste and actions not taken in
accordance with applicable law. In any derivative suit instituted by a shareholder or a corporation, it shall be averred in the complaint that the plaintiff was a shareholder of the corporation at the time of the transaction of which he complains or
that such shareholder’s stock thereafter developed upon such shareholder by operation of law.
|
175
|
|
|
|
|
|
|
Indemnification of Directors and Officers
|
|
|
|
|
A company may indemnify its directors for liability incurred in the performance of their duties, but may not indemnify its directors for any
liability towards the company itself, or liability with respect to fraud, willful misconduct or intentional fault, or for criminal charges against a director personally.
Any undertaking to indemnify directors for liability must be in the best interest of the company.
|
|
A corporation may indemnify a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in defense of an action, suit or proceeding by reason of such position if (i) such director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with
respect to any criminal action or proceeding, such director or officer had no reasonable cause to believe his conduct was unlawful.
|
|
|
|
Directors
|
|
|
|
|
The Board of Directors must consist of at least three members (except in the event that there are no more than two shareholders, in which case the Board of Directors may consist of two
members).
|
|
The Board of Directors must consist of at least one member.
|
|
|
|
|
Number of directors shall be fixed in a manner provided in the articles of association. If no number is specified therein, the number of directors is decided at a shareholders’ meeting
in accordance with the provisions of the articles of association on this matter, if any. Any deviation from a stipulated minimum or maximum number of directors may only be made by amendment of the articles of association.
|
|
Number of board members shall be fixed by, or in a manner provided by, the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number
shall be made only by amendment of the certificate of incorporation.
|
|
|
|
Duties of Directors
|
|
|
|
|
The relationship between the company and its directors is of a contractual nature. Directors have a fundamental duty to exercise their mandate in the best interests of the company, which also
includes the collective financial interests of the company’s shareholders.
|
|
The business and affairs of a corporation are managed by or under the direction of its Board of Directors. In exercising their powers, directors are charged with a fiduciary duty of care to
protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its shareholders.
|
Disclosure of Significant Shareholdings
In accordance with a May 2, 2007 Belgian law and the Royal Decree of February 14, 2008 relating to disclosure of major holdings in issuers whose shares trade on a regulated market, any natural or legal
person who, directly or indirectly, acquires voting securities of an issuer must notify the issuer and the Belgian Financial Services and Markets Authority of the number and proportion of existing voting rights of the issuer held as a result of the
acquisition when the voting rights attached to the securities reach 5% or more of the total existing voting rights.
176
Notification is also required in the event of a direct or indirect acquisition of voting securities
where, as a result of an acquisition, the proportion of voting rights held reaches or exceeds 10%, 15%, 20%, and so on, by increments of 5%, of the total existing voting rights. Similar notification is required in the event of a direct or indirect
disposal of voting securities where as a result of the disposal, the proportion of voting rights held falls below an incremental 5% threshold.
Mandatory Bids
Belgium implemented the
Thirteenth Company Law Directive (European Directive 2004/25/EC of 21 April 2004) by the Belgian Law of April 1, 2007 on public takeover bids (the “Takeover Law”) and the Belgian Royal Decree of 27 April 2007 on public
takeover bids (the “Takeover Royal Decree”). Pursuant to the Takeover Law, a mandatory bid will need to be launched on all our shares (and our other securities giving access to voting rights) if a person, as a result of its own acquisition
or the acquisition by persons acting in concert with it or by persons acting for their account, directly or indirectly holds more than 30% of our shares.
Public takeover bids on shares and other securities giving access to voting rights (such as, warrants or any convertible bonds) are subject to supervision by the Belgian Financial Services and Markets Authority.
Public takeover bids must be made for all of our shares, as well as for all our other securities giving access to voting rights. Prior to making a bid, a bidder must publish a prospectus, approved by the Belgian Financial Services and Markets
Authority prior to publication.
177
SHARES ELIGIBLE FOR FUTURE SALE
ordinary shares, or %, of our total outstanding
shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our ordinary shares to drop significantly, even if our business is doing well.
After this offering, we will have outstanding ordinary shares. This
includes the we are selling in this offering, which may be resold in the public market immediately. The remaining %,
or shares, of our total outstanding shares will become available for resale in the public market as shown in the chart below.
As restrictions on resale end, the market price could drop significantly if the holders of these restricted shares sell them or are perceived by
the market as intending to sell them.
|
|
|
|
|
Number of shares /
% of total
outstanding
|
|
Date of availability for resale into public
market
|
|
/
%
|
|
days after the date of this prospectus due to an agreement these shareholders have with the underwriters. However, the underwriters can waive this restriction and
allow these shareholders to sell their shares at any time subject to the limitations imposed by the U.S. securities laws applicable to our affiliates. See “Underwriting”.
|
|
|
|
|
/
%
|
|
Following the completion of the Exchange Offer, which will be completed shortly after this offering, up to an additional
ordinary shares that were previously issued in Belgium may be available for trading in the U.S. markets.
|
|
|
|
|
/
%
|
|
Up to 12,297,071 ordinary shares (consisting of 9,459,286 ordinary shares relating to the contribution of the principal amount and, at our option, up to 2,837,785 ordinary shares relating to
the payment of interest in shares over five years) that we will issue at the closing of this offering if we exercise our option to force a conversion of our outstanding perpetual convertible equity preferred securities.
|
178
TAX CONSIDERATIONS
United States Federal Income Tax Considerations
In the opinion of Seward & Kissel LLP, our United States counsel, the following are the material United States federal income tax consequences to us and our U.S. Holders and Non-U.S. Holders, each as
defined below, of our activities and the ownership of our ordinary shares. This discussion does not purport to deal with the tax consequences of owning ordinary shares to all categories of investors, some of which, such as banks, insurance
companies, real estate investment trusts, regulated investment companies, grantor trusts, tax-exempt organizations, dealers in securities or currencies, traders in securities that elect the mark-to-market method of accounting for their securities,
investors whose functional currency is not the United States dollar, investors that are or own our ordinary shares through partnerships or other pass-through entitles, investors that own, actually or under applicable constructive ownership rules,
10% or more of our ordinary shares, persons that will hold the ordinary shares as part of a hedging transaction, “straddle” or “conversion transaction,” persons who are deemed to sell the ordinary shares under constructive sale
rules and persons who are liable for the alternative minimum tax may be subject to special rules. The following discussion of United States federal income tax matters is based on the United States Internal Revenue Code of 1986, as amended, or the
Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the United States Department of the Treasury, or the Treasury Regulations, all of which are subject to change, possibly with retroactive effect.
This discussion deals only with holders who purchase ordinary shares in connection with this offering and hold the ordinary shares as a capital asset. The discussion below is based, in part, on the description of our business as described herein and
assumes that we conduct our business as described herein. Unless otherwise noted, references in the following discussion to the “Company,” “we” and “us” are to Euronav NV and its subsidiaries on a consolidated basis.
United States Federal Income Taxation of the Company
Taxation of Operating Income: In General
Unless exempt from U.S. federal income taxation under
the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis,
from the participation in a pool, partnership, strategic alliance, joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of
services directly related to those uses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to
transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which we refer to as “U.S.-source shipping income.”
Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the
United States. We are not permitted by law to engage in transportation that produces income which is considered to be 100% from sources within the United States.
Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the
United States will not be subject to any U.S. federal income tax.
179
In the absence of exemption from tax under Section 883 of the Code or an applicable U.S. income
tax treaty, our gross U.S.-source shipping income would be subject to a 4% tax imposed without allowance for deductions as described below.
Exemption of Operating Income from U.S. Federal Income Taxation
Under the U.S.-Belgium income
tax treaty (the “Belgian Treaty”), we will be exempt from U.S. federal income tax on our U.S.-source shipping income if (1) we are resident in Belgium for Belgian income tax purposes and (2) we satisfy one of the tests under the Limitation
on Benefits Provision of the Belgian Treaty. Prior to this offering, we have taken the position that we qualify for exemption under the Belgian Treaty. We may continue to satisfy the requirements for exemption under the Belgian Treaty after this
offering. Alternatively, we may qualify for exemption under Section 883, as discussed below.
Under Section 883 of the Code and the
regulations there under, we will be exempt from U.S. federal income tax on our U.S.-source shipping income if:
|
(1)
|
we are organized in a foreign country, or our country of organization, that grants an “equivalent exemption” to corporations organized in the United States; and
|
|
|
(A)
|
more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are “residents” of our country of organization or of another foreign
country that grants an “equivalent exemption” to corporations organized in the United States, which we refer to as the “50% Ownership Test,” or
|
|
|
(B)
|
our stock is “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an “equivalent
exemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test”.
|
Each of the jurisdictions where our ship-owning subsidiaries are incorporated, each grant an “equivalent exemption” to U.S. corporations. Therefore, we will be exempt from U.S. federal income tax with
respect to our U.S.-source shipping income if either the 50% Ownership Test or the Publicly-Traded Test is met.
After this offering, it
will be difficult for us to satisfy the 50% Ownership Test due to the widely-held nature of our stock. Our ability to satisfy the Publicly-Traded Test is discussed below.
Treasury Regulations provide, in pertinent part, that stock of a foreign corporation will be considered to be “primarily traded” on an established securities market if the number of shares of each class
of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded during that year on established securities markets in any other single country.
After the offering, our ordinary shares, which constitute our sole class of issued and outstanding stock, will continue to be “primarily traded” on the NYSE.
Under the Treasury Regulations, our ordinary shares will be considered to be “regularly traded” on an established securities market if one or more classes of our stock representing more than 50% of our
outstanding shares, by total combined voting power of all classes of stock entitled to vote and total value, is listed on the market which we refer to as the listing threshold.
180
After this offering, our ordinary shares, our sole class of stock, will be listed on the NYSE and therefore we will satisfy the listing requirement.
It is further required that with respect to each class of stock relied upon to meet the listing threshold, (i) such class of stock be traded
on the market, other than in minimal quantities, on at least 60 days during the taxable year or one-sixth of the days in a short taxable year, which we refer to as the “trading frequency test”; and (ii) the aggregate number of shares
of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year, which we refer to as the “trading
volume test”. We believe we will satisfy the trading frequency and trading volume tests. Even if this were not the case, the Treasury Regulations provide that the trading frequency and trading volume tests will be deemed satisfied if, as is the
case with our ordinary shares, such class of stock is traded on an established securities market in the United States and such stock is regularly quoted by dealers making a market in such stock.
Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of our stock will not be considered to be
“regularly traded” on an established securities market for any taxable year if 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively under specified stock attribution
rules, on more than half the days during the taxable year by persons who each own 5% or more of the vote and value of the outstanding shares of such class of stock, which we refer to as the “5 Percent Override Rule.”
For purposes of being able to determine the persons who own 5% or more of our stock, or “5% Shareholders,” the Treasury Regulations
permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as having a 5% or more beneficial interest in our ordinary shares. The Treasury Regulations further provide that an investment company
identified on a SEC Schedule 13G or Schedule 13D filing which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% shareholder for such purposes.
In the event the 5 Percent Override Rule is triggered, the Treasury Regulations provide that the 5 Percent Override Rule will not apply if we can
establish that among the closely-held group of 5% Shareholders, there are sufficient 5% Shareholders that are considered to be qualified shareholders for purposes of Section 883 of the Code to preclude non-qualified 5% Shareholders in the
closely-held group from owning 50% or more of each class of our stock for more than half the number of days during such year.
After the
offering, we expect that we and each of our subsidiaries will qualify for exemption under Section 883 of the Code. However, there is a risk that our 5% Stockholders may own 50% or more of our ordinary shares. In such scenario, we would be
subject to the 5% Override Rule unless we can establish that among the closely-held group of 5% Stockholders, there are sufficient 5% Stockholders that are qualified stockholders for purposes of Section 883 of the Code to preclude non-qualified
5% Stockholders in the closely-held group from owning 50% or more of our ordinary shares for more than half the number of days during the taxable year. In order to establish this, sufficient 5% Stockholders that are qualified stockholders would have
to comply with certain documentation and certification requirements designed to substantiate their identity as qualified stockholders. These requirements are onerous and there is no assurance that we will be able to satisfy them.
181
Taxation in the Absence of Exemption under Section 883 of the Code
To the extent the benefits of Section 883 of the Code are unavailable, our U.S.-source shipping income, to the extent not considered to be
“effectively connected” with the conduct of a U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which we refer to as the
“4% gross basis tax regime”. Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping
income would never exceed 2% under the 4% gross basis tax regime.
To the extent the benefits of the exemption under Section 883 of
the Code are unavailable and our U.S.-source shipping income is considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below, any such “effectively connected” U.S.-source shipping
income, net of applicable deductions, would be subject to the U.S. federal corporate income tax currently imposed at rates of up to 35%. In addition, we may be subject to the 30% “branch profits” tax on earnings effectively connected with
the conduct of such U.S. trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of such U.S. trade or business.
Our U.S.-source shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business only if:
|
|
•
|
|
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
|
|
•
|
|
substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a
published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
|
We do not currently have, nor intend to have or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis. Based on the foregoing and on the expected
mode of our shipping operations and other activities, we believe that none of our U.S.-source shipping income will be “effectively connected” with the conduct of a U.S. trade or business.
U.S. Taxation of Gain on Sale of Vessels
Regardless of whether we qualify for exemption under Section 883 of the Code, we will not be subject to U.S. federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is
considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with
respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.
United States Federal Income Taxation of U.S. Holders
As used herein, the term “U.S.
Holder” means a beneficial owner of ordinary shares that is a United States citizen or resident, United States corporation or other United States entity taxable as a corporation, an estate the income of which is subject to United States federal
income taxation regardless of its source, or a trust if (i) a court within the United States is able
182
to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or
(ii) the trust has a valid election in effect to be treated as a United States person for United States federal income tax purposes.
If a partnership holds our ordinary shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership
holding our ordinary shares, you are encouraged to consult your tax advisor.
Distributions
Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our ordinary shares to a U.S.
Holder will generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described in more detail below, to the extent of our current and accumulated earnings and profits, as determined under
United States federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in the holder’s ordinary shares on a
dollar-for-dollar basis and thereafter as capital gain. Because we are not a United States corporation, U.S. Holders that are corporations will not be entitled to claim a dividends received deduction with respect to any distributions they receive
from us. Dividends paid with respect to our ordinary shares will generally be treated as “passive category income” or, in the case of certain types of U.S. Holders, “general category income” for purposes of computing allowable
foreign tax credits for United States foreign tax credit purposes.
Dividends paid on our ordinary shares to a U.S. Holder who is an
individual, trust or estate (a “U.S. Non-Corporate Holder”) will generally be treated as “qualified dividend income” that is taxable to such U.S. Non-Corporate Holders at preferential tax rates provided that (1) either we
qualify for the benefits of the Belgian Treaty (which we expect to be the case) or the ordinary shares are readily tradable on an established securities market in the United States (such as the New York Stock Exchange, on which our ordinary shares
will be listed after this offering); (2) we are not a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year (as discussed below); (3) the U.S. Non-Corporate
Holder has owned the ordinary shares for more than 60 days in the 121-day period beginning 60 days before the date on which the ordinary shares become ex-dividend (and has not entered into certain risk limiting transactions with respect to such
ordinary share); and (4) the U.S. Non-Corporate Holder is not under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar related property. There is no
assurance that any dividends paid on our ordinary shares will be eligible for these preferential tax rates in the hands of a U.S. Non-Corporate Holder.
As discussed below, our dividends may be subject to Belgian withholding taxes. A U.S. Holder may elect to either deduct his share of any foreign taxes paid with respect to our dividends in computing his Federal
taxable income or treat such foreign taxes as a credit against U.S. federal income taxes, subject to certain limitations. No deduction for foreign taxes may be claimed by an individual who does not itemize deductions. Dividends paid with respect to
our ordinary shares will generally be treated as “passive category income” or, in the case of certain types of U.S. Holders, “general category income” for purposes of computing allowable foreign tax credits for United States
foreign tax credit purposes. The rules governing foreign tax credits are complex and U.S. Holders are encouraged to consult their tax advisors regarding the applicability of these rules in a U.S. Holder’s specific situation.
183
Special rules may apply to any “extraordinary dividend” generally, a dividend paid by us in
an amount which is equal to or in excess of ten percent of a U.S. Non-Corporate Holder’s adjusted tax basis (or fair market value in certain circumstances) in a share of ordinary shares paid by us. If we pay an “extraordinary
dividend” on our ordinary shares that is treated as “qualified dividend income,” then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such ordinary shares will be treated as long-term capital loss to the
extent of such dividend.
Sale, Exchange or other Disposition of Ordinary shares
Subject to the discussion of passive foreign investment companies below, a U.S. Holder generally will recognize taxable gain or loss upon a sale,
exchange or other disposition of our ordinary shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder’s tax basis in such shares. The U.S.
Holder’s initial tax basis in its shares generally will be the U.S. Holder’s purchase price for the shares and that tax basis will be reduced (but no below zero) by the amount of any distributions on the shares that are treated as
non-taxable returns of capital (as discussed above under “—United States Federal Income Taxation of U.S. Holders—Distributions”). Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s
holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as United States source income or loss, as applicable, for United States foreign tax credit purposes.
A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.
Passive Foreign Investment Company
Special United States federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a
passive foreign investment company, or PFIC for United States federal income tax purposes. In general, a foreign corporation will be treated as a PFIC with respect to a United States shareholder in such foreign corporation, if, for any taxable
year in which such shareholder holds stock in such foreign corporation, either:
|
|
•
|
|
at least 75 percent of the corporation’s gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents
derived other than in the active conduct of a rental business); or
|
|
|
•
|
|
at least 50 percent of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive
income.
|
For purposes of determining whether a foreign corporation is a PFIC, it will be treated as earning and owning
its proportionate share of the income and assets, respectively, of any of its subsidiary corporations in which it owns at least 25 percent of the value of the subsidiary’s stock.
Income earned by a foreign corporation in connection with the performance of services would not constitute passive income. By contrast, rental
income would generally constitute “passive income” unless the foreign corporation is treated under specific rules as deriving its rental income in the active conduct of a trade or business or receiving the rental income from a related
party.
Based on our current operations and future projections, we do not believe that we are, nor do we expect to become, PFIC with
respect to any taxable year. Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes of
184
determining whether we are a PFIC, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly-owned subsidiaries should constitute
services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular,
the vessels, should not constitute passive assets for purposes of determining whether we are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the
characterization of income derived from time charters and voyage charters as services income for other tax purposes. In addition, we have received an opinion from our counsel Seward & Kissel LLP that, based on the current and anticipated
valuation of our assets, including goodwill, and the composition of our income and assets, we should not be treated as a PFIC for U.S. federal income tax purposes for our current taxable year or in the foreseeable future. This opinion is based and
its accuracy is conditioned on representations, valuations and projections provided by us regarding our assets and income to our counsel. While we believe these representations, valuations and projections to be accurate, no assurance can be given
that they will continue to be accurate. Moreover, we have not sought, and we do not expect to seek, a ruling from the Internal Revenue Service, or the IRS, on this matter. As a result, the IRS or a court could disagree with our position. No
assurance can be given that this result will not occur. In addition, although we intend to conduct our affairs in a manner to avoid, to the extent possible, being classified as a PFIC with respect to any taxable year, we cannot assure you that the
nature of our operations will not change in the future, or that we can avoid PFIC status in the future.
As discussed more fully below,
if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes an election to treat us as a “Qualified Electing Fund,” which election we refer
to as a “QEF election.” As an alternative to making a QEF election, a U.S. Holder should be able to make a “mark-to-market” election with respect to our ordinary shares, as discussed below.
If we were to be treated as a PFIC for any taxable year, a U.S. Holder would be required to file an annual report with the IRS for that year with
respect to such U.S. Holder’s ordinary shares.
Taxation of U.S. Holders Making a Timely QEF Election
If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to as an “Electing Holder,” the Electing Holder must report each
year for United States federal income tax purposes his pro rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not
distributions were received from us by the Electing Holder. The Electing Holder’s adjusted tax basis in the ordinary shares will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that
had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the ordinary shares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange
or other disposition of our ordinary shares. A U.S. Holder would make a QEF election with respect to any year that our company is a PFIC by filing IRS Form 8621 with his United States federal income tax return. If we were aware that we or any of our
subsidiaries were to be treated as a PFIC for any taxable year, we would, if possible, provide each U.S. Holder with all necessary information in order to make the QEF election described above. If we were to be treated as a PFIC, a U.S. Holder would
be treated as owning his proportionate share of stock in each of our subsidiaries which is treated as a PFIC and such U.S. Holder would need to make a separate QEF election for any such subsidiaries. It should be
185
noted that we may not be able to provide such information if we did not become aware of our status as a PFIC in a timely manner.
Taxation of U.S. Holders Making a “Mark-to-Market” Election
Alternatively, if we were to be treated as a PFIC for any taxable year and, as we anticipate, our shares are treated as “marketable
stock,” a U.S. Holder would be allowed to make a “mark-to-market” election with respect to our ordinary shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related
Treasury Regulations. The “mark-to-market” election will not be available for any of our subsidiaries. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the
fair market value of the ordinary shares at the end of the taxable year over such holder’s adjusted tax basis in the ordinary shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S.
Holder’s adjusted tax basis in the ordinary shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S.
Holder’s tax basis in his ordinary shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our ordinary shares would be treated as ordinary income, and any loss realized on
the sale, exchange or other disposition of the ordinary shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included in income by the U.S. Holder. It should be noted that the
mark-to-market election would likely not be available for any of our subsidiaries which are treated as PFICs.
Taxation of U.S.
Holders Not Making a Timely QEF or Mark-to-Market Election
Finally, if we were to be treated as a PFIC for any taxable year, a U.S.
Holder who does not make either a QEF election or a “mark-to-market” election for that year, whom we refer to as a “Non-Electing Holder,” would be subject to special rules with respect to (1) any excess distribution (i.e.,
the portion of any distributions received by the Non-Electing Holder on our ordinary shares in a taxable year in excess of 125 percent of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or,
if shorter, the
Non-Electing
Holder’s holding period before the taxable year for the ordinary shares), and (2) any gain realized on the sale, exchange or other disposition of our ordinary shares.
Under these special rules:
|
|
•
|
|
the excess distribution or gain would be allocated ratably over the Non-Electing Holders’ aggregate holding period for the ordinary shares;
|
|
|
•
|
|
the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
|
|
|
•
|
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for
that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
These rules would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize
leverage in connection with its acquisition of our ordinary shares. If a Non-Electing Holder who is an individual dies while owning our ordinary shares, such holder’s successor generally would not receive a step-up in tax basis with respect to
such shares.
186
United States Federal Income Taxation of “Non-U.S. Holders”
A beneficial owner of our ordinary shares that is not a U.S. Holder is referred to herein as a “Non-U.S. Holder.”
Dividends on Ordinary shares
Non-U.S. Holders generally will not be subject to United States federal income tax or withholding tax on dividends received from us with respect to
our ordinary shares, unless that income is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with
respect to those dividends, that income may be taxable only if it is also attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.
Sale, Exchange or Other Disposition of Ordinary shares
Non-U.S. Holders generally will not be
subject to United States federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our ordinary shares, unless:
|
|
•
|
|
the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the
benefits of an income tax treaty with respect to that gain, that gain may be taxable only if it is also attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States or
|
|
|
•
|
|
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are
met.
|
If the Non-U.S. Holder is engaged in a United States trade or business for United States federal income tax
purposes, the income from the ordinary shares, including dividends and the gain from the sale, exchange or other disposition of the ordinary shares that are effectively connected with the conduct of that trade or business will generally be subject
to regular United States federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, its earnings and profits that are
attributable to the effectively connected income, subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30 percent, or at a lower rate as may be specified by an applicable United States income tax treaty.
Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. Such payments will also be subject to backup withholding
tax if paid to a non-corporate U.S. Holder who:
|
|
•
|
|
fails to provide an accurate taxpayer identification number;
|
|
|
•
|
|
is notified by the IRS that he has failed to report all interest or dividends required to be shown on his federal income tax returns; or
|
|
|
•
|
|
in certain circumstances, fails to comply with applicable certification requirements.
|
Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on IRS
Form W-8BEN, W-8ECI or W-8IMY, as applicable.
187
If a Non-U.S. Holder sells his ordinary shares to or through a United States office of a broker, the
payment of the proceeds is subject to both United States backup withholding and information reporting unless the Non-U.S. Holder certifies that he is a non-U.S. person, under penalties of perjury, or otherwise establishes an exemption. If a Non-U.S.
Holder sells his ordinary shares through a non-United States office of a non-United States broker and the sales proceeds are paid to the Non-U.S. Holder outside the United States then information reporting and backup withholding generally will not
apply to that payment. However, United States information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made to a Non-U.S. Holder outside the United States, if the Non-U.S.
Holder sells ordinary shares through a non-United States office of a broker that is a United States person or has some other contacts with the United States.
Backup withholding is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under backup withholding rules that exceed the taxpayer’s income tax liability by filing a
refund claim with the IRS.
Individuals who are U.S. Holders (and to the extent specified in applicable Treasury Regulations, certain
individuals who are Non-U.S. Holders and certain United States entities) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset
for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury Regulations).
Specified foreign financial assets would include, among other assets, our ordinary shares, unless the shares are held through an account maintained with a United States financial institution. Substantial penalties apply to any failure to timely file
IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury Regulations, an individual Non-U.S.
Holder or a United States entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of United States federal income taxes of such holder for the related tax year may not close
until three years after the date that the required information is filed. U.S. Holders (including United States entities) and Non-U.S. Holders are encouraged consult their own tax advisors regarding their reporting obligations under this legislation.
Belgian Tax Considerations
In
the opinion of Argo Law, the following description addresses material Belgian federal income tax consequences of the acquisition, ownership and disposal of shares by an investor, but does not address all tax consequences of the ownership and
disposal of shares, and does not take into account the specific circumstances of particular investors, some of which may be subject to special rules, or the tax laws of any country other than Belgium. The following does not describe the tax
treatment of investors that are subject to special rules, such as banks, insurance companies, collective investment undertakings, dealers in securities or currencies, persons that hold, or will hold, shares as a position in a straddle,
share-repurchase transaction, conversion transactions, synthetic security or other integrated financial transactions.
A Belgian
resident is (i) an individual subject to Belgian personal income tax (i.e. an individual who has his domicile in Belgium or has the seat of his estate in Belgium, or a person assimilated to a Belgian resident), (ii) a company subject to
Belgian corporate income tax (i.e. a company that has its registered office, its main establishment or its place of management in Belgium), (iii) an Organization for Financing Pensions, or an OFP, subject to Belgian corporate income tax (i.e.,
a Belgian pension fund incorporated under the form of an OFP), or (iv) a legal
188
entity subject to the Belgian tax on legal entities (i.e. a legal entity other than a company subject to the corporate income tax that has its registered office, its main establishment or its
place of management in Belgium). A Belgian non-resident is a person that is not a Belgian resident.
Investors are encouraged to consult
their own advisers as to the tax consequences of the acquisition, ownership and disposal of the shares.
Dividends
For Belgian income tax purposes, the gross amount of all distributions made by the company to its shareholders is generally taxed as dividend,
except for the repayment of statutory capital carried out in accordance with the Belgian Companies Code to the extent that the statutory capital qualifies as “fiscal” capital. The fiscal capital includes, in principle, the paid-up
statutory capital and, subject to certain conditions, the paid issue premiums and the amounts subscribed to at the time of the issue of profit sharing certificates.
In general, a Belgian withholding tax of (currently) 25% is levied on dividends. In the case of a redemption of shares, the redemption price (after deduction of the part of the paid-up fiscal capital represented by
the shares redeemed) will be treated as dividend that is subject to a Belgian withholding tax of 25% unless this redemption is carried out on a stock exchange and meets certain conditions. In the event of liquidation of the Company, as of
October 1, 2014, a withholding tax of 25% will be levied on any distributed amount exceeding the paid-up fiscal capital.
Belgian
tax law provides for certain exemptions from Belgian withholding tax on Belgian source dividends. If there is no exemption applicable under Belgian domestic tax law, the Belgian withholding tax can potentially be reduced for investors who are
non-residents pursuant to the treaties regarding the avoidance of double taxation concluded between the Kingdom of Belgium and the state of residence of the non-resident shareholder (see below).
Belgian resident individuals who hold ordinary shares offered hereby as a private investment do not have to declare the dividend income in their
personal income tax return since 25% Belgian withholding tax has been withheld which is the final tax due. If the dividend income would be declared in the personal income tax return, it will be taxed at 25% or, if lower, at the progressive personal
income tax rates applicable to the taxpayer’s overall declared income.
If the dividends are declared in the personal income tax
return, the Belgian withholding tax paid can be credited against the final personal income tax liability of the investor and may also be refunded if it exceeds the final income tax liability with at least EUR 2.50, provided that the dividend
distribution does not result in a reduction in value of, or capital loss on, the shares. This condition is not applicable if the Belgian individual can demonstrate that he has had full ownership of the shares during an uninterrupted period of 12
months prior to the attribution of the dividends.
Belgian resident individuals who acquire and hold the shares for professional
purposes must always declare the dividend income in their personal income tax return and will be taxable at the individual’s personal income tax rate increased with local surcharges. Withholding tax withheld at source may be credited against
the personal income tax due and is reimbursable if it exceeds the income tax due with at least EUR 2.50, subject to two conditions: (i) the taxpayer must own the shares in full legal ownership at the time the dividends are paid or attributed,
and (ii) the dividend distribution may not result in a reduction in value of or a capital loss on the
189
shares. The latter condition is not applicable if the individual can demonstrate that he has held the full legal ownership of the shares for an uninterrupted period of 12 months prior to the
payment or attribution of the dividends.
For Belgian resident companies, the gross dividend income, including the Belgian withholding
tax and excluding the foreign withholding tax, if any, must be added to their taxable income, which is, in principle, taxed at the ordinary corporate income tax rate of 33.99%. In certain circumstances lower tax rates may apply.
Belgian resident companies can generally deduct up to 95% of the gross dividend received from the taxable income (“dividend received
deduction”), provided that at the time of a dividend payment or attribution: (1) the Belgian resident company holds shares representing at least 10% of the share capital of the company or a participation in the company with an acquisition
value of at least EUR 2,500,000; (2) the shares have been held or will be held in full legal ownership for an uninterrupted period of at least one year; and (3) the conditions relating to the taxation of the underlying distributed income,
as described in article 203 of the Belgian Income Tax Code are met (together the “Conditions for the application of the dividend received deduction regime”).
For qualifying investment companies and for financial institutions and insurance companies, certain of the aforementioned conditions with respect to the dividend received deduction do not apply.
The Conditions for the application of the dividend received deduction regime depend on a factual analysis and for this reason the availability of
this regime should be verified upon each dividend distribution.
The Belgian withholding tax may, in principle, be credited against the
corporate income tax and is reimbursable if it exceeds the corporate income tax payable with at least EUR 2.50, subject to the two following conditions: (i) the taxpayer must own the shares in full legal ownership at the time of payment or
attribution of the dividends and (ii) the dividend distribution may not give rise to a reduction in the value of, or a capital loss on, the shares. The latter condition is not applicable if the company proves that it held the shares in full
legal ownership during an uninterrupted period of 12 months prior to the attribution of the dividends or if, during that period, the shares never belonged to a taxpayer who was not a resident company or who was not a non-resident company that held
the shares through a permanent establishment in Belgium.
No Belgian withholding tax will be due on dividends paid by the Company to a
resident company provided the resident company owns, at the time of the distribution of the dividend, at least 10% of the share capital of the Company for an uninterrupted period of at least one year and, provided further, that the resident company
provides the Company or its paying agent with a certificate as to its status as a resident company and as to the fact that it has owned a 10% shareholding for an uninterrupted period of one year. For those companies owning a share participation of
at least 10% in the share capital of the Company for less than one year, the Company will levy the withholding tax but, provided the company certifies its resident status and the date on which it acquired the shareholding, will not transfer it to
the Belgian Treasury. As soon as the investor owns the share participation of at least 10% in the capital of the Company for one year, it will receive the amount of this temporarily levied withholding tax.
For Belgian pension funds incorporated under the form of an Organization for Financing Pensions, the dividend income is generally tax-exempt.
Subject to certain limitations, any
190
Belgian dividend withholding tax levied at source may be credited against the corporate income tax due and is reimbursable to the extent that it exceeds the corporate income tax due.
The Belgian legal entities will be subject to the Belgian withholding tax on the dividends distributed by the Company. Under the current Belgian
tax rules, Belgian withholding tax will represent the final tax liability and the dividends should, therefore, not be included in the tax returns of the legal entities.
For non-resident individuals and companies, the dividend withholding tax will be the only tax on dividends in Belgium, unless the non-resident holds the shares in connection with a business conducted in Belgium
through a fixed base in Belgium or a Belgian permanent establishment.
If the shares are acquired by a non-resident in connection with a
business in Belgium, the investor must report any dividends received, which will be taxable at the applicable non-resident individual or corporate income tax rate, as appropriate. Belgian withholding tax levied at source may be credited against
non-resident individual or corporate income tax and is reimbursable if it exceeds the income tax due with at least EUR 2.50 and subject to two conditions: (1) the taxpayer must own the shares in full legal ownership at the time the dividends
are paid or attributed and (2) the dividend distribution may not result in a reduction in value of or a capital loss on the shares. The latter condition is not applicable if (a) the non-resident individual or the non-resident company can
demonstrate that the shares were held in full legal ownership for an uninterrupted period of 12 months prior to the payment or attribution of the dividends or (b) with regard to non-resident companies only, if, during the relevant period, the
shares have not belonged to a taxpayer other than a resident company or a non-resident company which has, in an uninterrupted manner, invested the shares in a Belgian establishment.
For non-resident companies whose shares are invested in a fixed base in Belgium or Belgian establishment the dividend received deduction will apply
on the same conditions as apply for Belgian resident companies.
Belgian tax law provides for certain exemptions from withholding tax on
Belgian source dividends distributed to non-resident investors. No Belgian withholding tax is due on dividends paid by the Company to a non-resident organization that is not engaged in any business or other profit making activity and is exempt from
income taxes in its country of residence, provided that it is not contractually obligated to redistribute the dividends to any beneficial owner of such dividends for whom it would manage the shares. The exemption will only apply if the organization
signs a certificate confirming that it is the full legal owner or usufruct holder of shares, that it is a non-resident that is not engaged in any business or other profit making activity and is exempt from income taxes in its country of residence
and that it has no contractual redistribution obligation. The organization must then forward that certificate to the Company or the paying agent.
If there is no exemption applicable under Belgian domestic tax law, the Belgian dividend withholding tax can potentially be reduced for investors who are nonresidents pursuant to the treaties regarding the
avoidance of double taxation concluded between the Kingdom of Belgium and the state of residence of the nonresident shareholder. Belgium has concluded tax treaties with more than 95 countries, reducing the dividend withholding tax rate to 15%, 10%,
5% or 0% for residents of those countries, depending on conditions related to the size of the shareholding and certain identification formalities.
191
Belgium and the United States have concluded a double tax treaty concerning the avoidance of double
taxation (the “U.S.—Belgium Treaty”). The U.S.—Belgium Treaty reduces the applicability of Belgian withholding tax to 15%, 5% or 0% for U.S. taxpayers, provided that the U.S. taxpayer meets the limitation of benefits conditions
imposed by the U.S.—Belgium Treaty. The Belgian withholding tax is generally reduced to 15% under the U.S.—Belgium Treaty. The 5% withholding tax applies in case where the U.S. shareholder is a company which holds at least 10% of the
shares in the Company. A 0% Belgian withholding tax applies when the shareholder is a company which has held at least 10% of the shares in the Company during at least 12 months, or is, subject to certain conditions, a U.S. pension fund. The U.S.
shareholders are encouraged to consult their own tax advisers to determine whether they can invoke the benefits and meet the limitation of benefits conditions as imposed by the U.S.—Belgium Treaty.
Additionally, dividends distributed to non-resident companies that (i) are either established in a Member State of the EU or in a country with
which Belgium has concluded a double tax treaty, where that treaty or any other treaty concluded between Belgium and that jurisdiction includes a qualifying exchange of information clause; and (ii) qualify as a parent company, will be exempt
from Belgian withholding tax provided that the shares held by the non-resident company, upon payment or attribution of the dividends, amount to at least 10% of the Company’s share capital and are held or will be held during an uninterrupted
period of at least one year. A company qualifies as a parent company if: (i) for companies established in a Member State of the EU, it has a legal form as listed in the annex to the EU Parent-Subsidiary Directive of July 23, 1990
(90/435/EC), as amended, or, for companies established in a country with which Belgium has concluded a double tax treaty and where that treaty or any other treaty concluded between Belgium and that country includes a qualifying exchange of
information clause, it has a legal form similar to the ones listed in such annex, (ii) it is considered to be a tax resident according to the tax laws of the country where it is established and the double tax treaties concluded between such
country and third countries and (iii) it is subject to corporate income tax or a similar tax without benefiting from a tax regime that derogates from the ordinary tax regime.
In order to benefit from this exemption, the investor must provide the Company or its paying agent with a certificate confirming its qualifying
status and the fact that it satisfies the required conditions. If the investor holds the shares for less than one year, at the time the dividends are paid on or attributed to the shares, the Company must deduct the withholding tax but does not need
to transfer it to the Belgian Treasury provided that the investor certifies its qualifying status, the date from which the investor has held the shares, and the investor’s commitment to hold the shares for an uninterrupted period of at least
one year. The investor must also inform the Company or its paying agent when the one-year period has expired or if its shareholding drops below 10% of the Company’s share capital before the end of the one-year holding period. Upon satisfying
the one-year shareholding requirement, the deducted dividend withholding tax will be paid to the investor.
Prospective holders are
encouraged to consult their own tax advisers to determine whether they qualify for an exemption or a reduction of the withholding tax rate upon payment of dividends and, if so, the procedural requirements for obtaining such an exemption or a
reduction upon the payment of dividends or making claims for reimbursement.
Capital gains and losses
Belgian resident individuals acquiring the shares as a private investment should not be subject to Belgian capital gains tax on the disposal of the
shares and capital losses are not tax deductible. However, capital gains realized by a private individual are taxable at 33% (plus local
192
surcharges) if the capital gain is deemed to be realized outside the scope of the normal management of the individual’s private estate. Capital losses incurred in such transactions are
generally not tax deductible.
Capital gains realized by Belgian resident individuals on the disposal of the shares for consideration,
outside the exercise of a professional activity, to a non-resident company (or a body constituted in a similar legal form), to a foreign state (or one of its political subdivisions or local authorities) or to a non-resident legal entity, are in
principle taxable at a rate of 16.5% (plus local surcharges) if, at any time during the five years preceding the sale, the Belgian resident individual has owned directly or indirectly, alone or with his/her spouse or with certain relatives, a
substantial shareholding in the Company (i.e., a shareholding of more than 25% in the Company). This capital gains tax does, in principal, not apply if the shares are transferred to the above-mentioned persons provided that they are established in
the European Economic Area (EEA).
Belgian resident individuals who hold shares for professional purposes are taxed at the ordinary
progressive income tax rates increased by the applicable local surcharges on any capital gains realized upon the disposal of the shares. If the shares were held for at least five years prior to such disposal, the capital gains tax would, however, be
levied at a reduced rate of 16.5% (plus local surcharges). Losses on shares incurred by such an investor are tax deductible.
Belgian
resident companies are normally not subject to Belgian capital gains taxation on gains realized upon the disposal of the shares provided that (i) the conditions relating to the taxation of the underlying distributed income in the framework of
the dividend received deduction, as described in article 203 of the Belgian Income Tax Code, are satisfied, and (ii) that the shares have been held in full legal ownership for an uninterrupted period of at least one year, except for companies
which do not qualify as a small-and-medium sized company as any realized capital gain will be taxed at 0.412%.
If the holding condition
mentioned under (ii) is not met (but the condition relating to the taxation of the underlying distributed income mentioned under (i) is met) then the capital gain will be taxable at a separate corporate income tax rate of 25.75%. If the
condition mentioned under (i) would not be met, the capital gains realized will be taxable at the ordinary corporate income tax rate of principally 33.99%.
Capital losses on shares are, in principle, not tax deductible. However, shares held in the trading portfolios of qualifying credit institutions, investment enterprises and management companies of collective
investment undertakings are subject to a different regime. In general, the capital gains on such shares are taxable at the corporate income tax rate of 33.99% and capital losses on such shares are tax deductible. Internal transfers to and from the
trading portfolio are assimilated to a realization.
Belgian pension funds incorporated under the form of an OFP are, in principle, not
subject to Belgian capital gains taxation on the disposal of the shares, and capital losses are not tax deductible.
Belgian resident
legal entities subject to the legal entities income tax are, in principle, not subject to Belgian capital gains taxation on the disposal of the shares, except in the case of the transfer of a substantial shareholding to an entity established outside
the EEA (see the sub-section regarding Belgian resident individuals above).
Capital losses on shares incurred by Belgian resident legal
entities are not tax deductible.
193
Capital gains realized on the shares by a Belgian non-resident individual that has not acquired the
shares in connection with a business conducted in Belgium through a fixed base in Belgium or a Belgian permanent establishment are generally not subject to taxation, unless the gain is deemed to be realized outside the scope of the normal management
of the individual’s private estate. In such an event the gain is subject to a final professional withholding tax of 30.28%. However, Belgium has concluded tax treaties with more than 95 countries which generally provide for a full exemption
from Belgian capital gain taxation on such gains realized by residents of those countries. Capital losses are principally not tax deductible.
Other Income Tax Considerations
In addition to the income tax consequences discussed above, we
may be subject to tax in one or more other jurisdictions where we conduct activities. The amount of any such tax imposed upon our operations may be material.
194
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement, the underwriters named below, through their representatives, Deutsche Bank
Securities Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC have severally agreed to purchase from us and the selling shareholders the following respective number of ordinary shares at a public
offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus:
|
|
|
|
|
Underwriters
|
|
Number of
Shares
|
|
Deutsche Bank Securities Inc.(1)
|
|
|
|
Citigroup Global Markets Inc.(2)
|
|
|
|
J.P. Morgan Securities LLC(3)
|
|
|
|
Morgan Stanley & Co. LLC(4)
|
|
|
|
Total
|
|
|
|
(1)
|
Deutsche Bank Securities Inc. is located at: 60 Wall Street, New York, NY 10005.
|
|
(2)
|
Citigroup Global Markets Inc. is located at: 388 Greenwich Street, New York, NY 10013.
|
|
(3)
|
J.P. Morgan Securities LLC is located at: 383 Madison Avenue, New York, NY 10017.
|
|
(4)
|
Morgan Stanley & Co. LLC is located at: 1585 Broadway, New York, NY 10036.
|
The underwriting agreement provides that the obligations of the several underwriters to purchase the ordinary shares offered hereby are subject to certain conditions precedent and that the underwriters will
purchase all of the ordinary shares offered by this prospectus, other than those covered by the over-allotment option described below, if any of these ordinary shares are purchased. The underwriting agreement also provides that if an underwriter
defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.
We have been
advised by the representatives of the underwriters that the underwriters propose to offer the ordinary shares to the public at the public offering price set forth on the cover of this prospectus and to dealers at a price that represents a concession
not in excess of $ per share under the public offering price. The underwriters may allow, and these dealers may re-allow, a concession of not more than
$ per share to other dealers. After the initial public offering, the representatives of the underwriters may change the offering price and other selling terms. Sales of the
ordinary shares made outside of the United States may be made by affiliates of the underwriters.
We and the selling shareholders have
granted to the underwriters an option, exercisable not later than 30 days after the date of this prospectus, to purchase up to additional ordinary shares at the public offering
price less the underwriting discounts and commissions set forth on the cover page of this prospectus. To the extent that the underwriters exercise this option, each of the underwriters will become obligated, subject to conditions, to purchase
approximately the same percentage of these additional ordinary shares as the number of ordinary shares to be purchased by it in the above table bears to the total number of ordinary shares offered by this prospectus. We and the selling shareholders
will be obligated, pursuant to the option, to sell these additional ordinary shares to the underwriters to the extent the option is exercised. If any additional ordinary shares are purchased, the underwriters will offer the additional
ordinary shares on the same terms as those on which the ordinary shares are being offered.
The underwriting discounts and commissions per share are equal to the public offering price per ordinary share less the amount paid by the underwriters to us and the selling shareholders per ordinary share. The
underwriting discounts and commissions are % of the initial public offering price. We and the selling shareholders have agreed to pay the
195
underwriters the following discounts and commissions, assuming either no exercise or full exercise by the underwriters of the underwriters’ over-allotment option:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
|
|
|
Fee per share
|
|
|
Without Exercise of
Over-Allotment
Option
|
|
|
With Full Exercise of
Over-Allotment
Option
|
|
|
Discounts and commissions paid by us
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Discounts and commissions paid by the selling shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition, we estimate that our share of the total expenses of this offering, excluding underwriting discounts
and commissions, will be approximately $ . We will pay all costs, expenses and fees of the selling shareholders in connection with this offering, including the fees and
disbursements of any legal counsel to the selling shareholders, but excluding underwriting discounts and commissions.
We and the
selling shareholders have agreed to indemnify the underwriters against some specified types of liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect of any of
these liabilities.
We intend to apply to have our ordinary shares approved for listing on the New York Stock Exchange under the symbol
“EURN.”
We, each of our officers and directors, and the selling shareholders have agreed not to offer, sell, contract to sell
or otherwise dispose of, or enter into any transaction that is designed to, or could be expected to, result in the disposition of any ordinary shares or other securities convertible into or exchangeable or exercisable for ordinary shares or
derivatives of our ordinary shares owned by these persons prior to this offering or ordinary shares issuable upon exercise of options or warrants held by these persons for a period of 90 days after the effective date of the registration statement of
which this prospectus is a part without the prior written consent of Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities LLC. This consent may be given at any time without public notice except in limited
circumstances. There are no agreements between the representatives and any of our shareholders or affiliates releasing them from these lock-up agreements prior to the expiration of the 90-day period.
The representatives of the underwriters have advised us that the underwriters do not intend to confirm sales to any account over which they
exercise discretionary authority.
In connection with the offering, the underwriters may purchase and sell ordinary shares in the open
market. These transactions may include short sales, purchases to cover positions created by short sales and stabilizing transactions.
Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. Covered short
sales are sales made in an amount not greater than the underwriters’ option to purchase additional ordinary shares from us in the offering. The underwriters may close out any covered short position by either exercising their option to purchase
additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market
as compared to the price at which they may purchase shares through the over-allotment option.
196
Naked short sales are any sales in excess of the over-allotment option. The underwriters must close
out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if underwriters are concerned that there may be downward pressure on the price of the shares in the open market prior to the
completion of the offering.
Stabilizing transactions consist of various bids for or purchases of our ordinary shares made by the
underwriters in the open market prior to the completion of the offering.
The underwriters may impose a penalty bid. This occurs when a
particular underwriter repays to the other underwriters a portion of the underwriting discount received by it because the representatives of the underwriters have repurchased shares sold by or for the account of that underwriter in stabilizing or
short covering transactions.
Purchases to cover a short position and stabilizing transactions may have the effect of preventing or
slowing a decline in the market price of our ordinary shares. Additionally, these purchases, along with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our ordinary shares. As a result, the price of
our ordinary shares may be higher than the price that might otherwise exist in the open market. These transactions may be effected on the New York Stock Exchange in the over-the-counter market or otherwise.
Prior to this offering, there has been no public market for our ordinary shares in the United States. The initial public offering price will
be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:
|
|
•
|
|
the information set forth in this prospectus and otherwise available to the representatives;
|
|
|
•
|
|
our prospects and the history and prospects for the industry in which we compete;
|
|
|
•
|
|
an assessment of our management;
|
|
|
•
|
|
our prospects for future earnings;
|
|
|
•
|
|
the general condition of the securities markets at the time of this offering;
|
|
|
•
|
|
the recent market prices of, and demand for, publicly traded common shares of generally comparable companies;
|
|
|
•
|
|
the price of our shares in connection with our existing listing on the NYSE Euronext Brussels; and
|
|
|
•
|
|
other factors deemed relevant by the underwriters and us.
|
Neither we nor the underwriters can assure investors that an active trading market will develop for our ordinary shares, or that the shares will trade in the public market at or above the initial public offering
price.
Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the
securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material
or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction.
Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions
197
relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this
prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
A prospectus in electronic format is being made
available on internet websites maintained by one or more of the lead underwriters of this offering and may be made available on websites maintained by other underwriters. Other than the prospectus in electronic format, the information on any
underwriter’s website and any information contained in any other web site maintained by an underwriter is not part of the prospectus or the registration statement of which the prospectus forms a part.
Notice to Investors in the European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each underwriter has represented and agreed that with
effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (referred to as the “Relevant Implementation Date”) it has not made and will not make an offer of shares to the public in
that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and
notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that
Relevant Member State at any time:
(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150,
natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of our ordinary shares shall
result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of shares to the public” in relation to any of our ordinary shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our ordinary shares to be offered so as to enable an investor to decide to purchase or subscribe for any of our
ordinary shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments
thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State, and the expression “2010 PD Amending Directive” means
Directive 2010/73/EU.
Notice to Investors in the United Kingdom
Each underwriter has represented and agreed that:
(a) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within
198
the meaning of Section 21 of the FSMA received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to the
company; and (b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the ordinary shares in, from or otherwise involving the United Kingdom.
Notice to Prospective Investors in Norway
This document has not been produced in accordance with the prospectus requirements laid down in the Norwegian Securities Trading Act 2007 nor in
accordance with the prospectus requirements laid down in the Norwegian Securities Fund Act 1981 as amended. This document has not been approved or disapproved by, or registered with the Oslo Stock Exchange, the Norwegian FSA or the Norwegian
Registry of Business Enterprises.
This document is only and exclusively addressed to the addressees and cannot be distributed, offered
or presented, either directly or indirectly to other persons or entities domiciled in Norway.
Notice to Prospective Investors in Canada
The ordinary shares may be sold only to purchasers purchasing as principal that are both “accredited investors” as defined
in National Instrument 45-106 Prospectus and Registration Exemptions and “permitted clients” as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the ordinary
shares must be made in accordance with an exemption from the prospectus requirements and in compliance with the registration requirements of applicable securities laws.
Other Relationships
Some of the underwriters or their affiliates have provided investment
banking services to us and our affiliates in the past and may do so in the future. They receive customary fees and commissions for these services. In addition, from time to time, certain of the underwriters and their affiliates may effect
transactions for their own account or the account of customers, and held on the behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.
SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES
We are incorporated under the laws of Belgium as a corporation. Belgium has a less developed body of securities laws as compared to the United
States and provides protections for investors to a lesser extent.
Most of our directors and officers and those of our subsidiaries are
residents of countries other than the United States. Substantially all of our and our subsidiaries’ assets and a substantial portion of the assets of our directors and officers are located outside the United States. As a result, it may be
difficult or impossible for United States investors to effect service of process within the United States upon us, our directors or officers or our subsidiaries or to realize against us or them judgments obtained in United States courts, including
judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. However, we have expressly submitted to the jurisdiction of the U.S. federal and New York state courts
sitting in the City of New York for the
199
purpose of any suit, action or proceeding arising under the securities laws of the United States or any state in the United States, and we have appointed Seward & Kissel LLP, One Battery
Park Plaza, New York, New York 10004, to accept service of process on our behalf in any such action.
Argo Law, our counsel as to
Belgian law, has advised us that there is uncertainty as to whether the courts of Belgium would (1) recognize or enforce against us or our directors or officers judgments of courts of the United States based on civil liability provisions of
applicable U.S. federal and state securities laws; or (2) impose liabilities against us or our directors and officers in original actions brought in Belgium, based on these laws.
LEGAL MATTERS
Matters relating to United States law will be passed upon for us by Seward & Kissel LLP, One Battery Park Plaza, New York, New York 10004. The validity of the ordinary shares and certain other matters
relating to Belgian law will be passed upon for us by Argo Law, De Keyserlei 5, Box 15, 2018 Antwerp, Belgium. Certain legal matters with respect to United States Federal and New York law in connection with this offering will be passed upon for the
underwriters by Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178. The selling shareholders are being advised as to certain legal matters by Cravath, Swaine & Moore, LLP, 825 8th Avenue, New York, NY, 10019.
EXPERTS
The consolidated financial statements of Euronav NV as of December 31, 2013 and 2012, and for each of the years in the three-year period ended December 31, 2013, have been included herein in reliance upon
the report of KPMG Bedrijfsrevisoren—Réviseurs d’ Entreprises (KPMG), independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. KPMG is
located at 24D, Prins Boudewijnlaan, 2550 Kontich, Belgium.
This prospectus has been reviewed by Drewry Shipping Consultants Ltd., or
Drewry, 15-17 Christopher Street, London, EC2A 2BS, UK. The section in this prospectus entitled “The International Oil Tanker Shipping Industry” and the data specifically attributed to Drewry under the sections entitled “Prospectus
Summary,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business” have been supplied by Drewry, which has confirmed to us that this prospectus and such sections accurately
describe, to the best of its knowledge, the oil tanker shipping industry, subject to the availability and reliability of the data supporting the statistical information presented in this prospectus.
The section in this prospectus entitled “Overview of the Offshore Oil and Gas Industry” has been supplied by Energy Maritime Associates
Pte Ltd., which has confirmed to us that this prospectus and such section accurately describes, to the best of its knowledge, the offshore oil and gas industry, subject to the availability and reliability of the data supporting the statistical
information presented in this prospectus.
200
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Commission a registration statement on Form F-1 regarding our ordinary shares. This prospectus does not contain all of the
information found in the registration statement. For further information regarding us and the ordinary shares offered in this prospectus, you may wish to review the full registration statement, including its exhibits. The registration statement,
including the exhibits, may be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549. Copies of this material can also be obtained upon written request from the Public
Reference Section of the Commission at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or from the Commission’s web site on the Internet at http://www.sec.gov free of charge. Please call the Commission at 1-800-SEC-0330 for
further information on public reference room. You may request a free copy of the above-mentioned filing by writing or telephoning us at the following address: Euronav NV, De Gerlachekaai 20, 2000 Antwerpen Belgium, Tel: 011-32-3-247-4411.
Upon completion of this offering, we will be subject to the information requirements of the Securities Exchange Act of 1934, and, in
accordance therewith, we will be required to file with the Commission annual reports on Form 20-F within four months of our fiscal year-end, and provide to the Commission other material information on Form 6-K. These reports and other information
may be inspected and copied at the public reference facilities maintained by the Commission or obtained from the Commission’s website as provided above. We expect to make our periodic reports and other information filed with or furnished to the
Commission available, free of charge, through our website on the Internet at http://www.euronav.com, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the Commission.
As a foreign private issuer, we are exempt under the Exchange Act from, among other things, certain rules prescribing the furnishing
and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be
required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, including the filing of quarterly reports or
current reports on Form 6-K. However, we intend to furnish or make available to our shareholders annual reports containing our audited consolidated financial statements prepared in accordance with IFRS and make available to our shareholders
quarterly reports containing our unaudited interim financial information for the first three fiscal quarters of each fiscal year. Our annual report will contain a detailed statement of any transactions between us and our related parties.
201
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
We estimate the expenses in connection with the distribution of our ordinary shares in this offering, other than underwriting discounts and
commissions, will be as set forth in the table below. We will be responsible for paying the following expenses associated with this offering.
|
|
|
|
|
|
|
SEC Registration Fee
|
|
$
|
12,880
|
|
|
Printing and Engraving Expenses
|
|
$
|
*
|
|
|
Legal Fees and Expenses
|
|
$
|
*
|
|
|
Accountants’ Fees and Expenses
|
|
$
|
*
|
|
|
NYSE Listing Fee
|
|
$
|
*
|
|
|
FINRA Fee
|
|
$
|
*
|
|
|
Blue Sky Fees and Expenses
|
|
$
|
*
|
|
|
Transfer Agent’s Fees and Expenses
|
|
$
|
*
|
|
|
Miscellaneous Costs
|
|
$
|
*
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
*
|
|
|
|
|
|
|
|
|
*
|
To be provided by amendment.
|
202
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
OF
EURONAV
NV
Index to Unaudited Condensed Consolidated Interim Financial Statements
Index to Audited Consolidated Financial Statements
F-1
EURONAV NV
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
as
of June 30, 2014 and December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
2,022,168
|
|
|
|
1,728,993
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
1,732,676
|
|
|
|
1,445,433
|
|
|
Vessels(Note 8)
|
|
|
1,683,472
|
|
|
|
1,434,800
|
|
|
Other tangible assets(Note 8)
|
|
|
704
|
|
|
|
633
|
|
|
Prepayments(Note 8)
|
|
|
48,500
|
|
|
|
10,000
|
|
|
Intangible assets
|
|
|
28
|
|
|
|
32
|
|
|
Financial assets
|
|
|
271,274
|
|
|
|
259,535
|
|
|
Investments
|
|
|
1
|
|
|
|
1
|
|
|
Receivables
|
|
|
271,273
|
|
|
|
259,534
|
|
|
Investments in equity accounted investees
|
|
|
17,354
|
|
|
|
23,113
|
|
|
Deferred tax assets(Note 14)
|
|
|
836
|
|
|
|
880
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
607,513
|
|
|
|
191,768
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables(Note 15)
|
|
|
155,025
|
|
|
|
95,913
|
|
|
Current tax assets
|
|
|
1
|
|
|
|
36
|
|
|
Cash and cash equivalents
|
|
|
274,487
|
|
|
|
74,309
|
|
|
Non-current assets held for sale(Note 6)
|
|
|
178,000
|
|
|
|
21,510
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
2,629,681
|
|
|
|
1,920,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
EQUITY and LIABILITIES
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
1,374,321
|
|
|
|
800,990
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity attributable to owners of the Company
|
|
|
1,374,321
|
|
|
|
800,990
|
|
|
Share capital(Note 9)
|
|
|
130,966
|
|
|
|
58,937
|
|
|
Share premium(Note 9)
|
|
|
828,244
|
|
|
|
365,574
|
|
|
Translation reserve
|
|
|
892
|
|
|
|
946
|
|
|
Hedging reserve(Note 9)
|
|
|
—
|
|
|
|
(1,291
|
)
|
|
Treasury shares(Note 9)
|
|
|
(46,062
|
)
|
|
|
(46,062
|
)
|
|
Retained earnings
|
|
|
385,281
|
|
|
|
422,886
|
|
|
Other Equity(Note 9)
|
|
|
75,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
893,991
|
|
|
|
874,979
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and borrowings
|
|
|
886,210
|
|
|
|
835,908
|
|
|
Bank loans(Note 11)
|
|
|
678,954
|
|
|
|
710,086
|
|
|
Convertible and other Notes(Note 11)
|
|
|
207,256
|
|
|
|
125,822
|
|
|
Other payables(Note 12)
|
|
|
—
|
|
|
|
31,291
|
|
|
Employee benefits
|
|
|
1,901
|
|
|
|
1,900
|
|
|
Amounts due to equity-accounted joint ventures
|
|
|
5,880
|
|
|
|
5,880
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
361,369
|
|
|
|
244,792
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables(Note 12)
|
|
|
143,200
|
|
|
|
107,094
|
|
|
Tax liabilities
|
|
|
108
|
|
|
|
21
|
|
|
Bank loans(Note 11)
|
|
|
195,383
|
|
|
|
137,677
|
|
|
Convertible and other Notes(Note 11)
|
|
|
22,678
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY and LIABILITIES
|
|
|
2,629,681
|
|
|
|
1,920,761
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes on pages F-7 to F-22 are an integral part of these
condensed consolidated interim financial statements
F-2
EURONAV NV
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS
for the
six month periods ended June 30, 2014 and 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six month period
ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
Revenue(Note 7)
|
|
|
201,157
|
|
|
|
153,818
|
|
|
Gains on disposal of vessels/other tangible assets(Note 6)
|
|
|
6,390
|
|
|
|
0
|
|
|
Other operating income
|
|
|
3,534
|
|
|
|
2,702
|
|
|
Expenses for shipping activities
|
|
|
(117,851
|
)
|
|
|
(99,228
|
)
|
|
Losses on disposal of vessels(Note 6)
|
|
|
(1
|
)
|
|
|
(215
|
)
|
|
Impairment on non-current assets held for sale(Note 6)
|
|
|
(7,415
|
)
|
|
|
—
|
|
|
Depreciation tangible assets(Note 8)
|
|
|
(67,674
|
)
|
|
|
(67,880
|
)
|
|
Depreciation intangible assets
|
|
|
(10
|
)
|
|
|
(63
|
)
|
|
Employee benefits
|
|
|
(9,653
|
)
|
|
|
(6,505
|
)
|
|
Other operating expenses
|
|
|
(7,569
|
)
|
|
|
(5,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Result from operating activities
|
|
|
908
|
|
|
|
(23,203
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
623
|
|
|
|
720
|
|
|
Finance expenses (Note 11)
|
|
|
(37,138
|
)
|
|
|
(26,302
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net finance expense
|
|
|
(36,515
|
)
|
|
|
(25,582
|
)
|
|
Share of profit(loss) of equity accounted investees (net of income tax)
|
|
|
14,393
|
|
|
|
9,584
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit(loss) before income tax
|
|
|
(21,214
|
)
|
|
|
(39,201
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
(38
|
)
|
|
|
(72
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Profit(loss) for the period
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (in U.S.$) (Note 10)
|
|
|
(0.20
|
)
|
|
|
(0.79
|
)
|
|
Diluted earnings per share (in U.S.$) (Note 10)
|
|
|
(0.20
|
)
|
|
|
(0.79
|
)
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes on pages F-7 to F-22 are an integral part of these
condensed consolidated interim financial statements
F-3
EURONAV NV
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
for the six month periods ended June 30, 2014 and 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six month period
ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
Profit (loss) for the period
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
Items that will never be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
Remeasurements of the defined benefit liability(asset)
|
|
|
—
|
|
|
|
—
|
|
|
Items that are or may be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
|
|
(54
|
)
|
|
|
(44
|
)
|
|
Cash flow hedges—effective portion of changes in fair value
|
|
|
1,291
|
|
|
|
2,742
|
|
|
Equity-accounted investees—share of other comprehensive income
|
|
|
960
|
|
|
|
2,090
|
|
|
Other comprehensive income for the period, net of tax
|
|
|
2,197
|
|
|
|
4,788
|
|
|
Total comprehensive income for the period
|
|
|
(19,055
|
)
|
|
|
(34,485
|
)
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
(19,055
|
)
|
|
|
(34,485
|
)
|
The accompanying notes on pages F-7 to F-22 are an integral part of these
condensed consolidated interim financial statements
F-4
EURONAV NV
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
for
the six month period ended June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
Share
premium
|
|
|
Translation
reserve
|
|
|
Hedging
reserve
|
|
|
Treasury
shares
|
|
|
Retained
earnings
|
|
|
Capital
and
reserves
|
|
|
Other
equity
|
|
|
Non-
controlling
interest
|
|
|
Total
equity
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
Balance at January 1, 2013
|
|
|
56,248
|
|
|
|
353,063
|
|
|
|
730
|
|
|
|
(6,721
|
)
|
|
|
(46,062
|
)
|
|
|
509,762
|
|
|
|
867,020
|
|
|
|
—
|
|
|
|
—
|
|
|
|
867,020
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(39,273
|
)
|
|
|
(39,273
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(39,273
|
)
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
|
|
—
|
|
|
|
—
|
|
|
|
(44
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(44
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(44
|
)
|
|
Cash flow hedges—effective portion of changes in fair value
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,742
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,742
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,742
|
|
|
Equity-accounted investees, share of other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,090
|
|
|
|
2,090
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,090
|
|
|
Remeasurements of the defined benefit liability(asset)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
(44
|
)
|
|
|
2,742
|
|
|
|
—
|
|
|
|
2,090
|
|
|
|
4,788
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
(44
|
)
|
|
|
2,742
|
|
|
|
—
|
|
|
|
(37,183
|
)
|
|
|
(34,485
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(34,485
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners of the company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Issue and conversion of convertible Notes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
Dividends to equity holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total contributions by and distributions to owners
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transactions with owners
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
(23
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2013
|
|
|
56,248
|
|
|
|
353,063
|
|
|
|
686
|
|
|
|
(3,979
|
)
|
|
|
(46,062
|
)
|
|
|
472,556
|
|
|
|
832,512
|
|
|
|
—
|
|
|
|
—
|
|
|
|
832,512
|
|
|
Balance at January 1, 2014
|
|
|
58,937
|
|
|
|
365,574
|
|
|
|
946
|
|
|
|
(1,291
|
)
|
|
|
(46,062
|
)
|
|
|
422,886
|
|
|
|
800,990
|
|
|
|
—
|
|
|
|
—
|
|
|
|
800,990
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,252
|
)
|
|
|
(21,252
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,252
|
)
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences
|
|
|
—
|
|
|
|
—
|
|
|
|
(54
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(54
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(54
|
)
|
|
Cash flow hedges—effective portion of changes in fair value
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291
|
|
|
Equity-accounted investees, share of other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
960
|
|
|
|
960
|
|
|
|
—
|
|
|
|
—
|
|
|
|
960
|
|
|
Remeasurements of the defined benefit liability(asset)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
(54
|
)
|
|
|
1,291
|
|
|
|
—
|
|
|
|
960
|
|
|
|
2,197
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
(54
|
)
|
|
|
1,291
|
|
|
|
—
|
|
|
|
(20,292
|
)
|
|
|
(19,055
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(19,055
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners of the company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary shares(Note 9)
|
|
|
41,645
|
|
|
|
308,355
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(8,601
|
)
|
|
|
341,399
|
|
|
|
—
|
|
|
|
—
|
|
|
|
341,399
|
|
|
Issue and conversion of convertible Notes(Note 9)
|
|
|
20,103
|
|
|
|
89,597
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,422
|
)
|
|
|
102,278
|
|
|
|
—
|
|
|
|
—
|
|
|
|
102,278
|
|
|
Issue and conversion of perpetual convertible preferred equity(Note 9)
|
|
|
10,281
|
|
|
|
64,718
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,500
|
)
|
|
|
71,499
|
|
|
|
75,000
|
|
|
|
—
|
|
|
|
146,499
|
|
|
Dividends to equity holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Equity(settled share(based payment(Note 9)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,210
|
|
|
|
2,210
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,210
|
|
|
Total contributions by and distributions to owners
|
|
|
72,029
|
|
|
|
462,670
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,313
|
)
|
|
|
517,386
|
|
|
|
75,000
|
|
|
|
—
|
|
|
|
592,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total transactions with owners
|
|
|
72,029
|
|
|
|
462,670
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,313
|
)
|
|
|
517,386
|
|
|
|
75,000
|
|
|
|
—
|
|
|
|
592,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2014
|
|
|
130,966
|
|
|
|
828,244
|
|
|
|
892
|
|
|
|
—
|
|
|
|
(46,062
|
)
|
|
|
385,281
|
|
|
|
1,299,321
|
|
|
|
75,000
|
|
|
|
—
|
|
|
|
1,374,321
|
|
The accompanying notes on pages F-7 to F-22 are an integral part of these
condensed consolidated interim financial statements
F-5
EURONAV NV
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
for the
six month periods ended June 30, 2014 and June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six month
period ended
June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
(in thousands
of U.S.$)
|
|
|
Profit (loss) for the period
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
Adjustments for:
|
|
|
93,079
|
|
|
|
84,010
|
|
|
Depreciation of tangible assets(Note 8)
|
|
|
67,674
|
|
|
|
67,880
|
|
|
Depreciation of intangible assets
|
|
|
10
|
|
|
|
63
|
|
|
Impairment on non-current assets held for sale(Note 6)
|
|
|
7,415
|
|
|
|
—
|
|
|
Tax expenses
|
|
|
38
|
|
|
|
72
|
|
|
Share of profit of equity-accounted investees, net of tax
|
|
|
(14,393
|
)
|
|
|
(9,584
|
)
|
|
Net finance expense
|
|
|
36,515
|
|
|
|
25,582
|
|
|
Capital gain(loss) on disposal of assets(Note 6)
|
|
|
(6,390
|
)
|
|
|
(3
|
)
|
|
Equity-settled share-based payment transactions(Note 9)
|
|
|
2,210
|
|
|
|
—
|
|
|
Changes in working capital requirements
|
|
|
(52,668
|
)
|
|
|
(55,168
|
)
|
|
Change in trade receivables
|
|
|
(7,332
|
)
|
|
|
562
|
|
|
Change in accrued income
|
|
|
(11,483
|
)
|
|
|
2,679
|
|
|
Change in deferred charges
|
|
|
(25,603
|
)
|
|
|
(9,430
|
)
|
|
Change in other receivables
|
|
|
(15,134
|
)
|
|
|
(2,458
|
)
|
|
Change in trade payables
|
|
|
(1,817
|
)
|
|
|
7,308
|
|
|
Change in accrued payroll
|
|
|
(825
|
)
|
|
|
(550
|
)
|
|
Change in accrued expenses
|
|
|
10,132
|
|
|
|
5,892
|
|
|
Change in deferred income
|
|
|
(2,454
|
)
|
|
|
(3,461
|
)
|
|
Change in other payables
|
|
|
1,828
|
|
|
|
(55,644
|
)
|
|
Change in provisions for employee benefits
|
|
|
20
|
|
|
|
(66
|
)
|
|
Change in non-current trade payables
|
|
|
—
|
|
|
|
—
|
|
|
Income taxes paid during the period
|
|
|
129
|
|
|
|
139
|
|
|
Interest paid
|
|
|
(27,564
|
)
|
|
|
(28,192
|
)
|
|
Interest received
|
|
|
244
|
|
|
|
222
|
|
|
Dividends received(Note 4)
|
|
|
9,410
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) operating activities
|
|
|
1,378
|
|
|
|
(38,262
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of vessels(Note 8)
|
|
|
(452,096
|
)
|
|
|
—
|
|
|
Proceeds from the sale of vessels(Note 6)
|
|
|
27,900
|
|
|
|
52,920
|
|
|
Acquisition of other tangible/intangible assets(Note 8)
|
|
|
(88,244
|
)
|
|
|
(187
|
)
|
|
Proceeds from the sale of other tangible/intangible assets
|
|
|
2
|
|
|
|
13
|
|
|
Loans to related parties
|
|
|
(38
|
)
|
|
|
(7,000
|
)
|
|
Purchase of subsidiaries, joint ventures & associates net of cash acquired
|
|
|
—
|
|
|
|
(2,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) investing activities
|
|
|
(512,476
|
)
|
|
|
43,746
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issue of share capital(Note 9)
|
|
|
350,000
|
|
|
|
—
|
|
|
Transaction costs related to issue of share capital(Note 9)
|
|
|
(8,601
|
)
|
|
|
—
|
|
|
Proceeds from issue of perpetual convertible preferred equity(Note 9)
|
|
|
150,000
|
|
|
|
—
|
|
|
Transaction costs related to issue perpetual convertible preferred equity(Note 9)
|
|
|
(3,500
|
)
|
|
|
—
|
|
|
Purchase / sale of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
Proceeds from new long-term borrowings(Note 11)
|
|
|
536,399
|
|
|
|
—
|
|
|
Repayment of long-term borrowings(Note 11)
|
|
|
(300,834
|
)
|
|
|
(55,310
|
)
|
|
Transaction costs related to issue of loans and borrowings
|
|
|
(11,886
|
)
|
|
|
—
|
|
|
Dividends paid
|
|
|
—
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) financing activities
|
|
|
711,578
|
|
|
|
(55,312
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
200,480
|
|
|
|
(49,828
|
)
|
|
Net cash and cash equivalents at the beginning of the period
|
|
|
74,309
|
|
|
|
113,051
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of changes in exchange rates
|
|
|
(302
|
)
|
|
|
(498
|
)
|
|
Net cash and cash equivalents at the end of the period
|
|
|
274,487
|
|
|
|
62,725
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes on pages F-7 to F-22 are an integral part of these
condensed consolidated interim financial statements
F-6
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Note 1—General
Information and Basis of Preparation
1. Reporting Entity
Euronav N.V. (the “Company”) is a company domiciled in Belgium. The address of the Company’s registered office is De Gerlachekaai
20,2000 Antwerpen, Belgium. The condensed consolidated interim financial statements of the Company comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and joint
ventures.
Euronav NV is a fully-integrated provider of international maritime shipping and offshore services engaged in the
transportation and storage of crude oil. The Company was incorporated under the laws of Belgium on June 26, 2003, and grew out of three companies that had a strong presence in the shipping industry; Compagnie Maritime Belge NV, or CMB, formed
in 1895, Compagnie Nationale de Navigation SA, or CNN, formed in 1938, and Ceres Hellenic formed in 1950. The Company started doing business under the name “Euronav” in 1989 when it was initially formed as the international tanker
subsidiary of CNN.
Euronav NV charters its vessels to leading international energy companies. The Company pursues a balanced chartering
strategy by employing its vessels on a combination of spot market voyages, fixed-rate contracts and long-term time charters, which typically include a profit sharing component.
2. Basis of Preparation
These condensed consolidated interim financial statements for the six months period ended June 30, 2014 have been prepared in accordance with lAS 34 Interim Financial Reporting. They do not include all the
information required for a complete set of IFRS annual financial statements and should therefore be read in conjunction with the consolidated financial statements for the year ended December 31, 2013 that have been prepared in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”), collectively “IFRS”.
The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and
expenses. Actual results may differ from these estimates. The significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the
consolidated financial statements for the year ended December 31, 2013.
These condensed consolidated interim financial statements
were authorized for issue by the Board of Directors on August 27, 2014.
Note 2—Changes in Significant Accounting Policies
A summary of the Company’s significant accounting policies can be found in the Company’s Consolidated Financial
Statements for the years ended December 31, 2013, 2012 and 2011. Except as described below, the accounting policies and calculation methods adopted in the preparation of the condensed consolidated interim financial statements are consistent
with those applied in the consolidated financial statements for the year ended December 31, 2013, that have been prepared in accordance with IFRS.
F-7
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
A number of new standards, amendments to standard and interpretations became effective for annual
periods beginning on or after January 1, 2014. None of these had a significant impact on the Group’s condensed consolidated interim financial statements and none have given rise to any restatements of previous periods.
Note 3—Changes in Consolidation Scope
In comparison to the consolidation scope for the year ended at December 31, 2013, two wholly owned subsidiaries (Euronav Shipping NV and Euronav Tankers NV), incorporated in the first quarter of 2014, were
included in the consolidation scope. These two subsidiaries became the owner and operator of (part of) the acquired Maersk fleet. (See Note 8)
Note 4—Significant Events
On
December 16, 2013, the board of directors announced that the Group had raised U.S. $150 million via a private placement of a perpetual convertible preferred equity instrument. This instrument was issued on January 13, 2014.
On January 2, 2014 Great Hope Enterprises Ltd, a joint venture in which the Group has a 50% share, delivered the VLCC Ardenne
Venture (2004 - 318,658 dwt) to its new owners after the sale announced on November 14, 2013 for U.S. $41.7 million. Euronav’s share in the capital gain amounts to U.S. $2.2 million and was recognized in the first quarter of 2014 in the
share of profit of equity-accounted investees. As a result of this sale, the Group received a dividend of U.S. $9.4 million from the joint venture.
On January 3, 2014, the Group signed a contract to acquire fifteen (15) Very Large Crude Carriers (VLCC) from Maersk Tankers Singapore Pte Ltd for a total acquisition price of U.S. $980 million
payable as the vessels are being delivered. The vessels have an average age of 4 years. The vessels will be operated in the Tankers International VLCC Pool of which Euronav is a founding member.
Each vessel will be sold under the industry standard sale form as a stand-alone asset with deliveries taking place between late February and July
2014 with the exception of one vessel currently under charter, which will be delivered in October 2014. On February 20 and 25, 2014 Euronav successfully took delivery of the first two vessels, respectively the Nautilus and Nucleus. In the
course of the second quarter of 2014 six vessels were successfully delivered to Euronav , Navarin May 9, Newton and Sara June 3, Ilma June 11, Nautic and Ingrid June 19.
The transaction was financed by a U.S. $350 million capital increase, a 7-year bond for a total amount of U.S. $235.5 million and a U.S. $500
million senior secured credit facility.
The U.S. $350 million raise of new capital consisted of a U.S. $50 million capital increase
under Euronav’s authorized capital, for which 5,473,571 new ordinary shares were issued on January 10, 2014, and a U.S. $300 million capital increase which was approved by the extraordinary shareholders’ meeting on February 24,
2014 and which resulted in the creation of 32,841,528 new ordinary shares.
The U.S. $235.5 million 7-year bonds were issued on
February 4, 2014 to the same investors who participated in the U.S. $350 million capital increase. These bonds were issued at 85% of
F-8
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
their principal amount and bear interest at a rate of 5.95% per annum for the first year, payable semi-annually in arrears. The interest rate will increase to 8.5% per annum for the
second and third year and will increase again to 10.20% per annum from year four until maturity. The bonds are at any time redeemable by Euronav at par.
The U.S. $500 million senior secured credit facility was fully underwritten in equal part by DnB, Nordea and SEB and was successfully syndicated on March 25, 2014. The credit facility has a 6-year maturity as
from closing the syndication and will bear interest at a rate based on LIBOR plus a margin of 2.75%.
On February 6, 2014, 30 of
the 60 perpetual convertible preferred equity instruments issued on December 15, 2013, were contributed in kind, resulting in the issuance of 9,459,286 ordinary shares.
In the course of 2014, the majority of the remaining convertible Notes issued in 2013 and maturing in 2018 were converted in new ordinary shares, as the following table illustrates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 10,
2014
|
|
|
January 23,
2014
|
|
|
February 06,
2014
|
|
|
February 25,
2014
|
|
|
March 10,
2014
|
|
|
April 22,
2014
|
|
|
Number of notes converted
|
|
|
491.00
|
|
|
|
97.00
|
|
|
|
453.00
|
|
|
|
8.00
|
|
|
|
47.00
|
|
|
|
1.00
|
|
|
Issued shares
|
|
|
8,163,810
|
|
|
|
1,679,010
|
|
|
|
7,841,164
|
|
|
|
134,808
|
|
|
|
662,763
|
|
|
|
14,101
|
|
The Group sent out a notice to the holders of convertible Notes issued in 2013 to redeem the outstanding Notes on
April 9, 2014. Bondholders retained the ability to exercise the right to convert the Notes up to close of business on April 2, 2014. Only one of the remaining outstanding Notes was not offered for conversion before the cutoff date and was
therefore redeemed on April 9, 2014.
On February 27, 2014, Euronav bought back 13 bonds of the unsecured convertible Note due
in 2015. The face value of each Note is U.S. $100,000 and the Group paid an average of U.S. $103,445.
On March 1, 2014,
Euronav Ship Management Antwerp (ESMA) acquired the complete ship management of the vessel FSO Africa, owned by TI Africa LTD. Her sister vessel FSO ASIA is already in management of ESMA as from the conversion of the vessel into an FSO in 2009. The
transition of management was carried out as planned. ESMA will receive a ship management fee for these services.
In March 2014, the
Group agreed to extend the period of the purchase option on the Antarctica (2009—315,981, dwt) and the Olympia (2008—315,981 dwt) by one month, until April 30, 2014.
On February 5, 2014 Euronav entered into timecharters with Maersk Tankers A/S for a period of 12 months for the VLCC Maersk Hojo and Maersk
Hirado, which were delivered to the Group on March 24, 2014 and May 3, 2014 respectively.
In April 2014, the purchase option
to buy the Olympia (2008—315,981 dwt) and the Antarctica (2009—315,981 dwt) was exercised for an aggregate purchase price of U.S. $178 million of which U.S. $20 million had been received as an option fee deductible from
F-9
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
the purchase price back in January 2011. We expect to deliver the Olympia in September 2014 and the Antarctica in January 2015, respectively. Both vessels will remain employed under their current
Time Charter contract until their respective delivery. The sale resulted in a combined loss of U.S. $7.4 million which was recorded as an impairment on non-current assets held for sale in the second quarter of 2014.
On January 7, 2014, the Group sold its oldest double-hulled VLCC Luxembourg (1999—299,150 dwt), which was recorded as an asset held for
sale at December 31, 2013, for U.S. $28 million. The vessel was wholly owned by Euronav. The vessel was delivered on May 28, 2014 to its new owner at which moment the capital gain of U.S. $6.4 million was recognized. The net cash
proceeds available to Euronav after the mandatory repayment of its debt obligation were U.S. $5 million.
Note 5—Segment Reporting
The Group distinguishes two operating segments: the operation of crude oil tankers on the international markets (tankers) and
the floating production, storage and offloading operations (FSO/FpSO). These two divisions operate in completely different markets, where in the latter the assets are tailor made or converted for specific long term projects. The tanker market
requires a different marketing strategy as this is considered a very volatile market, contract duration is often less than two years and the assets are to a big extent standardized. Equity accounted investees are monitored by the CODM in the same
way as the subsidiaries and therefore they are presented according to the proportionate consolidation in the internal reporting instead of using the equity accounting method. The reconciliation between the figures of all segments combined on the one
hand and with the consolidated statements of financial position and profit or loss on the other hand is presented in a separate column Equity-accounted investees.
The Group’s internal organizational and management structure does not distinguish any geographical segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
|
June 30, 2013
|
|
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less:
Equity-
accounted
investees
|
|
|
Total
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less:
Equity-
accounted
investees
|
|
|
Total
|
|
For the six month
period ended:
|
|
in thousands of U.S.$
|
|
|
Turnover
|
|
|
218,571
|
|
|
|
31,815
|
|
|
|
49,229
|
|
|
|
201,157
|
|
|
|
171,030
|
|
|
|
31,619
|
|
|
|
48,831
|
|
|
|
153,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit(loss) before income tax
|
|
|
-35,350
|
|
|
|
14,136
|
|
|
|
—
|
|
|
|
-21,214
|
|
|
|
-54,267
|
|
|
|
15,066
|
|
|
|
—
|
|
|
|
-39,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of :
|
|
June 30, 2014
|
|
|
December 31, 2013
|
|
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less:
Equity-
accounted
investees
|
|
|
Total
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less:
Equity-
accounted
investees
|
|
|
Total
|
|
|
Total assets
|
|
|
2,826,958
|
|
|
|
294,213
|
|
|
|
491,490
|
|
|
|
2,629,681
|
|
|
|
2,149,372
|
|
|
|
295,297
|
|
|
|
523,909
|
|
|
|
1,920,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
1,355,187
|
|
|
|
391,663
|
|
|
|
491,490
|
|
|
|
1,255,360
|
|
|
|
1,235,839
|
|
|
|
407,840
|
|
|
|
523,908
|
|
|
|
1,119,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-10
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
Note 6—Assets and Liabilities Held for Sale and Discontinued Operations
Assets held for sale
The
assets held for sale can be detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
|
|
in thousands of U.S.$
|
|
|
Vessels
|
|
|
178,000
|
|
|
|
21,510
|
|
|
Of which in Tankers segment
|
|
|
178,000
|
|
|
|
21,510
|
|
|
Of which in FSO segment
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Sale price
|
|
|
Book
Value
|
|
|
Gain
|
|
|
Loss
|
|
|
At January 1, 2014
|
|
|
—
|
|
|
|
21,510
|
|
|
|
|
|
|
|
|
|
|
Luxembourg sold
|
|
|
27,900
|
|
|
|
21,510
|
|
|
|
6,390
|
|
|
|
—
|
|
|
Olympia
|
|
|
89,000
|
|
|
|
91,560
|
|
|
|
—
|
|
|
|
(2,560
|
)
|
|
Antarctica
|
|
|
89,000
|
|
|
|
93,855
|
|
|
|
—
|
|
|
|
(4,855
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2014
|
|
|
178,000
|
|
|
|
185,415
|
|
|
|
6,390
|
|
|
|
(7,415
|
)
|
On January 7, 2014, the Group sold its oldest double-hulled VLCC Luxembourg (1999—299,150 dwt), for U.S.
$28 million. Because the sale process commenced in 2013 and management had good indications that the sale would occur in the near future, the asset was transferred to non-current assets held for sale as of December 31, 2013. The capital gain on
that sale of U.S. $6.4 million was recorded upon delivery on May 28, 2014.
In April 2014, a purchase option to buy the Olympia
(2008—315,981 dwt) and the Antarctica (2009—315,981 dwt) was exercised for an aggregate purchase price of U.S. $178 million of which U.S. $20 million had been received as an option fee deductible from the purchase price back in January
2011. We expect to deliver the Olympia in September 2014 and the Antarctica in January 2015, respectively. Both vessels will remain employed under their current time charter contract until their respective delivery. The sale resulted in a combined
loss of U.S. $7.4 million which was recorded as an impairment on non-current assets held for sale in the second quarter of 2014.
Discontinued operations
As
per June 30, 2014 and per December 31, 2013 the Group had no operations that meet the criteria of a discontinued operation.
Note
7—Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six month
period ended June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
in thousands of U.S.$
|
|
|
Pool Revenue
|
|
|
43,385
|
|
|
|
23,299
|
|
|
Time Charters
|
|
|
71,050
|
|
|
|
72,534
|
|
|
Spot Voyages
|
|
|
86,722
|
|
|
|
57,985
|
|
|
Total
|
|
|
201,157
|
|
|
|
153,818
|
|
F-11
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
The increase in revenue is mostly related to the increase in freight rates received for spot
voyages and more Euronav vessels delivered to the pool during the second quarter of 2014.
Note 8—Property, Plant and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1, 2014
|
|
Tankers
|
|
|
Vessels
under
construction
|
|
|
Other
equipment &
vehicles
|
|
|
Prepayment
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
Cost
|
|
|
2,424,978
|
|
|
|
—
|
|
|
|
2,487
|
|
|
|
10,000
|
|
|
|
2,437,465
|
|
|
Depreciation & impairment losses
|
|
|
(990,178
|
)
|
|
|
—
|
|
|
|
(1,854
|
)
|
|
|
—
|
|
|
|
(992,032
|
)
|
|
Net carrying amount
|
|
|
1,434,800
|
|
|
|
—
|
|
|
|
633
|
|
|
|
10,000
|
|
|
|
1,445,433
|
|
|
Acquisitions
|
|
|
452,096
|
|
|
|
—
|
|
|
|
239
|
|
|
|
88,000
|
|
|
|
540,335
|
|
|
Disposals and cancellations
|
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
Depreciation charge
|
|
|
(67,509
|
)
|
|
|
—
|
|
|
|
(165
|
)
|
|
|
—
|
|
|
|
(67,674
|
)
|
|
Transfer to assets held for sale
|
|
|
(185,415
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(185,415
|
)
|
|
Transfers
|
|
|
49,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(49,500
|
)
|
|
|
—
|
|
|
Balance at June 30, 2014
|
|
|
1,683,472
|
|
|
|
—
|
|
|
|
704
|
|
|
|
48,500
|
|
|
|
1,732,676
|
|
|
At June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
2,674,664
|
|
|
|
—
|
|
|
|
2,516
|
|
|
|
48,500
|
|
|
|
2,725,680
|
|
|
Depreciation & impairment losses
|
|
|
(991,192
|
)
|
|
|
—
|
|
|
|
(1,811
|
)
|
|
|
—
|
|
|
|
(993,003
|
)
|
|
Net carrying amount
|
|
|
1,683,472
|
|
|
|
—
|
|
|
|
705
|
|
|
|
48,500
|
|
|
|
1,732,677
|
|
On January 3, 2014, the Group signed a contract to acquire fifteen (15) Very Large Crude Carriers (VLCC)
from Maersk Tankers Singapore Pte Ltd for a total acquisition price of U.S. $980 million, payable as the vessels are being delivered. For this transaction the Group made a prepayment in December 2013 of U.S. $10 million and a remaining
deposit of U.S. $88 million on January 15, 2014. On February 20 and 25, 2014 Euronav successfully took delivery of the first two vessels, respectively the Nautilus and Nucleus.
In April 2014, a purchase option to buy the Olympia (2008—315,981 dwt) and the Antarctica (2009—315,981 dwt) was exercised and
consequently transferred to assets held for sale (Note 6).
On May 9, 2014, the Group successfully took delivery of the third
double-hulled VLCC from Maersk Tankers Singapore Pte Ltd, the Navarin.
On June 3, 2014, the Group successfully took delivery of
the fourth and fifth double-hulled VLCC from Maersk Tankers Singapore Pte Ltd, the Sara and Newton.
On June 11, 2014, the Group
successfully took delivery of the sixth double-hulled VLCC from Maersk Tankers Singapore Pte Ltd, the Ilma.
On June 19, 2014, the
Group successfully took delivery of the seventh and eight double-hulled VLCC from Maersk Tankers Singapore Pte Ltd, the Nautica and Ingrid.
F-12
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
During the first semester of 2014 Antarctica and Flandre have been dry-docked in respectively
March and June. The cost of planned repairs and maintenance is capitalized and included under the heading acquisitions.
As at June 30,
2014, the Group’s total capital commitment (including the four Japanese built VLCCs as discussed in Note 17) amounts to U.S. $778.5 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at June 30, 2014
payments scheduled
for
|
|
|
|
|
total
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
in thousands of U.S.$
|
|
|
Commitments in respect of VLCCs
|
|
|
778,500
|
|
|
|
706,500
|
|
|
|
72,000
|
|
|
|
—
|
|
|
Commitments in respect of Suezmaxes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Commitments in respect of FSOs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
|
|
778,500
|
|
|
|
706,500
|
|
|
|
72,000
|
|
|
|
—
|
|
Impairment
Given the current circumstances in the tanker market, the board of Euronav NV has carefully reviewed all potential impairment indicators such as the current low freight environment as well as the current market
value of the fleet compared to its carrying amount.
Based on this review, the Board of directors concluded that no impairment test
would be required. The board will continue to closely monitor developments in the tanker market and review possible impairment indicators again at every reporting date.
Note 9—Equity
Issues of ordinary shares
On January 10, 2014, the Group raised U.S. $50 million under the authorized capital against the issuance of 5,473,571 new ordinary shares. On
February 24, 2014, the meeting of shareholders approved a U.S. $300 million capital increase against the issuance of 32,841,528 new ordinary shares. The transaction costs related to these capital increases for a total amount of U.S. $8.6
million were recognized directly in retained earnings. (See Note 4)
Issue and conversion of convertible notes
In the course 2014, 1,097 of the remaining convertible Notes issued in 2013 and maturing in 2018 were converted into a total of 18,495,656 new
ordinary shares. The last outstanding Note issued in 2013 and maturing in 2018 was redeemed on April 9,2014. The difference between the face value and book value of these converted Notes amounted to U.S. $7.4 million which was recognized
directly in retained earnings.
250 of the convertible Notes issued in 2009 and maturing in 2015 remain outstanding at the date of this
report, of which the Group holds 18.
Hedging reserves
The Group, in connection to the U.S. $300 million facility raised in April 2009 has also entered in several Interest Rate Swap (“IRSs”) instruments for a combined notional value of
F-13
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
U.S. $300 million. These IRSs are used to hedge the risk related to the fluctuation of the Libor rate and qualify for hedging instruments in a cash flow hedge relationship under IAS 39. These
instruments are measured at their fair value; effective changes in fair value are recognized in equity and the ineffective portion is recognized in profit or loss. These IRSs had a duration of 5 years matching the repayment profile of that
facility and matured on April 2, 2014. Therefore, the fair value of these instruments at June 30, 2014 amounted to U.S. $0.
Issue and contribution of perpetual convertible preferred equity
On December 16, 2013, Euronav raised U.S. $150 million through a private placement of a perpetual convertible preferred equity instrument. (“PCPs”). The instrument has been issued in January 2014 at
par and will bear an interest of 6% during the first 5 years payable annually in arrears in cash or in shares at the option of the Group. The price against which the PCPs can be contributed is EUR 5.776000 (or U.S. $7.928715 at EUR/U.S.$ exchange
rate of 1.3727) per common share. The Group will have an option to force the contribution if the share price reaches a certain level over a certain period of time and the Group has completed a listing in New York (NYSE or NASDAQ). Following
IFRS, the instrument is considered as an equity instrument and is shown in the statement of financial position as Other equity.
On
February 6,2014, 30 of the 60 perpetual convertible preferred equity instruments issued on December 15, 2013, were contributed in kind, resulting in the issuance of 9,459,286 ordinary shares.
The transaction costs related to the issuance of the instrument for a total of U.S. $3.5 million, were recognized in retained earnings.
Treasury shares
As of June 30, 2014 Euronav owned 1,750,000 of its own shares, the same number of shares owned on December 31, 2013.
Dividend
No distribution of
dividend was made or approved after December 31, 2013.
Share-based payment arrangements
On December 16, 2013, the Group established a share option program that entitles key management personnel to purchase existing shares in the
Company. Under the program, holders of vested options are entitled to purchase shares at the market price of the shares at the grant date. Currently this program is limited to key management personnel.
The key terms and conditions did not change after December 31, 2013.
For this option program a total amount of U.S. $2.2 million was recognized in the consolidated statement of profit or loss during the six months period ended June 30, 2014.
F-14
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
Note 10—Earnings Per Share
Basic earnings per share
The
calculation of basic earnings per share at June 30, 2014 was based on a result attributable to ordinary shares of U.S. $(21,251,943) (2013: U.S. $(39,273,403)) and a weighted average number of ordinary shares outstanding during the period ended
June 30, 2014 of 104,324,074 (2013: 50,000,000), calculated as follows:
Result attributable to ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
As at June 30,
2014
|
|
|
As at June 30,
2013
|
|
|
|
|
in thousands of U.S.$
|
|
|
Result for the period
|
|
|
(21,252
|
)
|
|
|
(39,273
|
)
|
|
Weighted average
|
|
|
104,324,074
|
|
|
|
50,000,000
|
|
|
Basic earnings per share (in U.S.$)
|
|
|
(0.20
|
)
|
|
|
(0.79
|
)
|
Weighted average number of ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued
|
|
|
Treasury shares
|
|
|
Shares
outstanding
|
|
|
Weighted
number of
shares
|
|
|
|
|
in shares
|
|
|
On issue at December 31, 2013
|
|
|
54,223,817
|
|
|
|
1,750,000
|
|
|
|
52,473,817
|
|
|
|
50,230,438
|
|
|
Issuance of shares
|
|
|
66,270,041
|
|
|
|
—
|
|
|
|
66,270,041
|
|
|
|
—
|
|
|
purchases of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
withdrawal of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
sales of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
On issue at June 30, 2014
|
|
|
120,493,858
|
|
|
|
1,750,000
|
|
|
|
118,743,858
|
|
|
|
104,324,074
|
|
Diluted earnings per share
At June 30, 2014, 250 convertible notes (2013: 1348) and 30 PCPs (2013: 0) were excluded from the diluted weighted-average number of ordinary shares calculation because their effect would have been
anti-dilutive (2013 and 2014 earnings per share would increase).
Number of ordinary shares (diluted)
The table below shows the potential number of shares that could be created if all the convertible notes were to be converted into ordinary shares.
|
|
|
|
|
|
|
|
|
As at June 30,
2014
|
|
|
|
|
in shares
|
|
|
Ordinary shares outstanding (basic)
|
|
|
118,743,858
|
|
|
Effect of potential conversion of 250 convertible notes
|
|
|
1,147,621
|
|
|
Effect of potential conversion of 30 PCPs
|
|
|
9,459,286
|
|
|
Number of ordinary shares (diluted)
|
|
|
129,350,765
|
|
F-15
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
On July 9, 2014, the Grouped raised a total U.S. $125 million through a private placement of
10,556,808 new shares to institutional investors selected through an accelerated book building offering. As this transaction occurred after balance sheet date, these new shares are not yet included in the basic ordinary shares outstanding. (Note 17)
Note 11—Loans and Borrowings
Long-term loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans
|
|
|
Convertible and
other notes
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Between 1 and 5 years
|
|
|
710,086
|
|
|
|
125,822
|
|
|
|
835,908
|
|
|
More than 1 year
|
|
|
710,086
|
|
|
|
125,822
|
|
|
|
835,908
|
|
|
Less than 1 year
|
|
|
137,677
|
|
|
|
—
|
|
|
|
137,677
|
|
|
At January 1, 2014
|
|
|
847,763
|
|
|
|
125,822
|
|
|
|
973,585
|
|
|
New loans
|
|
|
336,224
|
|
|
|
200,175
|
|
|
|
536,399
|
|
|
Scheduled repayments
|
|
|
(62,148
|
)
|
|
|
—
|
|
|
|
(62,148
|
)
|
|
Early repayments
|
|
|
(237,292
|
)
|
|
|
(1,394
|
)
|
|
|
(238,686
|
)
|
|
Conversions of bonds
|
|
|
—
|
|
|
|
(109,700
|
)
|
|
|
(109,700
|
)
|
|
Other changes
|
|
|
(10,210
|
)
|
|
|
15,031
|
|
|
|
4,821
|
|
|
Balance at June 30, 2014
|
|
|
874,337
|
|
|
|
229,934
|
|
|
|
1,104,271
|
|
|
More than 5 years
|
|
|
70,837
|
|
|
|
—
|
|
|
|
70,837
|
|
|
Between 1 and 5 years
|
|
|
608,117
|
|
|
|
207,256
|
|
|
|
815,373
|
|
|
More than 1 year
|
|
|
678,954
|
|
|
|
207,256
|
|
|
|
886,210
|
|
|
Less than 1 year
|
|
|
195,383
|
|
|
|
22,678
|
|
|
|
218,061
|
|
|
At June 30, 2014
|
|
|
874,337
|
|
|
|
229,934
|
|
|
|
1,104,271
|
|
The terms and conditions of outstanding loans were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
|
December 31, 2013
|
|
|
|
|
Currency
|
|
Nominal
interest rate
|
|
Year of
maturity
|
|
Face
value
|
|
|
Carrying
value
|
|
|
Face
value
|
|
|
Carrying
value
|
|
|
|
|
In thousands of U.S.$
|
|
|
Secured vessels loan
|
|
US$
|
|
libor +340%
|
|
2017
|
|
|
294,876
|
|
|
|
293,304
|
|
|
|
350,079
|
|
|
|
347,845
|
|
|
Secured vessels Revolving loan**
|
|
US$
|
|
libor +340%
|
|
2017
|
|
|
230,372
|
|
|
|
200,000
|
|
|
|
239,780
|
|
|
|
218,500
|
|
|
Secured vessels loan
|
|
US$
|
|
libor +340%
|
|
2018
|
|
|
201,433
|
|
|
|
199,783
|
|
|
|
211,433
|
|
|
|
209,510
|
|
|
Secured vessels loan
|
|
US$
|
|
libor +2,95%
|
|
2017
|
|
|
56,400
|
|
|
|
56,210
|
|
|
|
58,550
|
|
|
|
58,320
|
|
|
Secured vessels loan
|
|
US$
|
|
libor +2,75%
|
|
2020
|
|
|
136,225
|
|
|
|
125,040
|
|
|
|
—
|
|
|
|
—
|
|
|
Unsecured bank facility
|
|
EUR
|
|
euribor +1,00%
|
|
2015
|
|
|
5,000
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
13,588
|
|
|
Total interest-bearing bank loans
|
|
|
|
|
|
|
|
|
924,306
|
|
|
|
874,337
|
|
|
|
884,842
|
|
|
|
847,763
|
|
F-16
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
The face amount of the vessel loans can be reduced if the value of the collateralized vessels
falls under a certain percentage of the outstanding amount under that loan.
|
**
|
The total amount available under the Revolving Credit Facility depends on the total value of the fleet of tankers securing the facility.
|
For the acquisition of the 15 Maersk vessels, a U.S. $500 million senior secured credit facility was fully underwritten in equal part by DnB,
Nordea and SEB and was successfully syndicated on March 25, 2014. The credit facility has a 6-year maturity as from closing the syndication and bears interest at a rate based on LIBOR plus a margin of 2.75%.
On June 30, 2014, U.S. $200 million was drawn under the Revolving Credit Facility and the unsecured bank facility.
Convertible and other notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
|
December 31, 2013
|
|
|
|
|
Currency
|
|
|
Nominal
interest
rate
|
|
|
Year of
maturity
|
|
|
Face
value
|
|
|
Carrying
value
|
|
|
Classified
as
equity
|
|
|
Amount
under
par
|
|
|
Face
value
|
|
|
Carrying
value
|
|
|
Classified
as
equity
|
|
|
|
|
in thousands of U.S.$
|
|
|
Unsecured convertible Notes
|
|
U.S.$
|
|
|
|
|
6.50
|
%
|
|
|
2015
|
|
|
|
25,000
|
|
|
|
22,678
|
|
|
|
—
|
|
|
|
522
|
|
|
|
25,000
|
|
|
|
23,517
|
|
|
|
1,483
|
|
|
Unsecured convertible Notes
|
|
U.S.$
|
|
|
|
|
6.50
|
%
|
|
|
2018
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
109,800
|
|
|
|
102,305
|
|
|
|
7,495
|
|
|
Unsecured Notes
|
|
U.S.$
|
|
|
|
|
5.95
|
%
|
|
|
2021
|
|
|
|
235,500
|
|
|
|
207,256
|
|
|
|
28,244
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total convertible Notes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
260,500
|
|
|
|
229,934
|
|
|
|
28,244
|
|
|
|
522
|
|
|
|
134,800
|
|
|
|
125,822
|
|
|
|
8,978
|
|
On February 4, 2014, Euronav issued U.S. $235.5 million 7-year bond to the same investors who participated in
the U.S. $350 million capital increase. These bonds were issued at 85% of their principal amount and bear interest at a rate of 5.95% per annum for the first year, payable semi-annually in arrears. The interest rate will increase to
8.5% per annum for the second and third year and will increase again to 10.20% per annum from year four until maturity. The bonds are at any time redeemable by Euronav at par.
Transaction and other financial costs
In the first semester the Group noted an increase in the financial charges (June 30, 2014: U.S. $(37.1) million, June 30, 2013: U.S. $(26.3) million) due to the increase in loans and borrowings, amortizations
of additional transaction costs and the amortization of the under par issuance of the U.S. $235 million 7-year bond. (Note 9)
Note 12—Trade
and Other Payables
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
2014
|
|
|
December 31,
2013
|
|
|
Trade and other payables
|
|
|
143,200
|
|
|
|
107,094
|
|
|
Non-current other payables
|
|
|
—
|
|
|
|
31,291
|
|
F-17
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
The decrease in non-current other payables and the corresponding increase in trade and other
payables is mainly related to the sellers credit obtained from a shipyard which is due in the first quarter of 2015 and is therefore transferred from non-current to current payables and the increase of the Group’s fleet due to the Maersk
acquisition and the accompanying accrued charges.
Note 13—Financial Instruments
Carrying amounts and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for
financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts
|
|
|
Fair value
|
|
|
|
|
Fair value-
Hedging
instruments
|
|
|
Loans and
Receivables
|
|
|
Other
financial
liabilities
|
|
|
TOTAL
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current other receivables
|
|
|
—
|
|
|
|
259,534
|
|
|
|
—
|
|
|
|
259,534
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Trade and other receivables
|
|
|
—
|
|
|
|
95,913
|
|
|
|
—
|
|
|
|
95,913
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Cash and cash equivalents
|
|
|
—
|
|
|
|
74,309
|
|
|
|
—
|
|
|
|
74,309
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
429,756
|
|
|
|
—
|
|
|
|
429,756
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps used for hedging
|
|
|
1,291
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
Forward exchange contracts used for hedging
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured bank loans
|
|
|
—
|
|
|
|
—
|
|
|
|
834,175
|
|
|
|
834,175
|
|
|
|
—
|
|
|
|
859,842
|
|
|
|
—
|
|
|
|
859,842
|
|
|
Unsecured bank loans
|
|
|
—
|
|
|
|
—
|
|
|
|
13,588
|
|
|
|
13,588
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Unsecured convertible Notes
|
|
|
—
|
|
|
|
—
|
|
|
|
125,822
|
|
|
|
125,822
|
|
|
|
169,120
|
|
|
|
—
|
|
|
|
—
|
|
|
|
169,120
|
|
|
Trade and other payables
|
|
|
—
|
|
|
|
—
|
|
|
|
107,094
|
|
|
|
107,094
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,080,679
|
|
|
|
1,080,679
|
|
|
|
169,120
|
|
|
|
859,842
|
|
|
|
—
|
|
|
|
1,028,962
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-18
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts
|
|
|
Fair value
|
|
|
|
|
Fair value-
Hedging
instruments
|
|
|
Loans and
Receivables
|
|
|
Other
financial
liabilities
|
|
|
TOTAL
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current other receivables
|
|
|
—
|
|
|
|
271,273
|
|
|
|
—
|
|
|
|
271,273
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Trade and other receivables
|
|
|
—
|
|
|
|
155,025
|
|
|
|
—
|
|
|
|
155,025
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Cash and cash equivalents
|
|
|
—
|
|
|
|
274,487
|
|
|
|
—
|
|
|
|
274,487
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
700,785
|
|
|
|
—
|
|
|
|
700,785
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured bank loans
|
|
|
—
|
|
|
|
—
|
|
|
|
874,337
|
|
|
|
874,337
|
|
|
|
—
|
|
|
|
888,934
|
|
|
|
—
|
|
|
|
888,934
|
|
|
Unsecured bank loans
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Unsecured (convertible) Notes
|
|
|
—
|
|
|
|
—
|
|
|
|
229,934
|
|
|
|
229,934
|
|
|
|
22,440
|
|
|
|
236,159
|
|
|
|
—
|
|
|
|
258,599
|
|
|
Trade and other payables
|
|
|
—
|
|
|
|
—
|
|
|
|
143,200
|
|
|
|
143,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,247,471
|
|
|
|
1,247,471
|
|
|
|
22,440
|
|
|
|
1,125,093
|
|
|
|
—
|
|
|
|
1,147,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Valuation techniques and significant unobservable inputs
Level 1 fair value was determined on the actual trading of the unsecured convertible Notes, due in 2015 and 2018 and the trading price on
June 30, 2014.
The following tables show the valuation techniques used in measuring Level 2 fair values, as well as the
significant unobservable inputs used.
|
|
|
|
|
|
|
Type
|
|
Valuation Techniques
|
|
Significant unobservable
inputs
|
|
Forward exchange contracts and interest rate swaps for which no hedge accounting applies
|
|
Market comparison technique:
The fair values are based on broker quotes. Similar contracts are traded in an active market and the quotes reflect the actual
transactions in similar instruments
|
|
Not applicable
|
|
|
|
|
|
|
|
Interest rate swaps for which hedge accounting applies
|
|
Fair value calculation:
The fair values are computed by calculating the present value of the future cash flows (Fixed and floating), which depends on the forward
rates. The forward rates are calculated on the interest rate curves such as LIBOR.
|
|
Not applicable
|
F-19
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
Financial instruments not measured at fair value
|
|
|
|
|
|
|
Type
|
|
Valuation Techniques
|
|
Significant unobservable inputs
|
|
Debt Securities
|
|
Discounted cash flow
|
|
Not applicable
|
|
Other financial liabilities*
|
|
Discounted cash flow
|
|
Not applicable
|
|
*
|
Other financial liabilities include secured and unsecured bank loans
|
Transfers between Level 1 and 2
There were no transfers in either direction in 2013 and 2014.
Note 14—Deferred Tax Assets and Liabilities
Euronav NV and its subsidiaries had
available combined cumulative tax losses and other tax credits carried forward of U.S. $273.9 million and U.S. $100.5 million as of June 30, 2014 and December 31, 2013, respectively. Under current local tax laws, these loss carry forwards
have an indefinite life and may be used to offset future taxable income of Euronav NV and its subsidiaries.
Deferred tax assets are
recognized for tax losses and other tax credits carried forward to the extent that the realization of the related tax benefit through the future taxable profits is probable.
The Company did not recognize deferred tax assets of U.S. $89.5 million and U.S. $30.5 million as of June 30, 2014 and December 31, 2013, respectively, that can be carried forward against future taxable
income, because it is not considered more likely than not that these deferred tax assets will be utilized in the foreseeable future.
Note
15—Trade and Other Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
|
December 31,
2013
|
|
|
Trade and other receivables
|
|
|
155,025
|
|
|
|
95,913
|
|
The increase in trade and other receivables is mainly related to the increase of the Group’s fleet due to the
Maersk Acquisition and the accompanying increase in working capital such as bunker inventory, lube oils, and accrued income, this combined with a bigger spot exposure compared to December 31, 2013.
Note 16—Contingencies
There
were no changes in contingencies compared to the consolidated financial statements for the year ended December 31, 2013.
F-20
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
Note 17—Subsequent Events
On July 7, 2014, the Group entered into a contract to acquire four (4) modern Japanese built Very Large Crude Carriers (VLCC) for a total
acquisition price of U.S. $342 million payable upon the delivery of each vessel (U.S. $270 million in 2014 and U.S. $72 million in 2015). The vessels have an average age of three years. Each vessel will be sold under the industry standard sale form
as a stand-alone asset with deliveries during the third and fourth quarter of this year other than one vessel that is currently under charter, which will be delivered during the second quarter of 2015.
The acquisition of the vessels will be partly financed by a new senior secured credit facility and by funds raised through a private placement of
new ordinary shares within the authorized capital. On July 9, 2014, a total U.S. $125 million was raised through a private placement of 10,556,808 new shares to institutional investors selected through an accelerated book building offering. The
remainder will be financed by available cash on hand, other existing liquidity sources, and borrowings under new secured credit facilities for which we received in August 2014 a bank commitment letter.
On July 2, 2014, the Group successfully took delivery of the ninth and tenth double-hulled VLCC from Maersk Tankers Singapore Pte Ltd, the
Nectar and the Noble
On July 7, 2014, the Group successfully took delivery of the eleventh double-hulled VLCC from Maersk Tankers
Singapore Pte Ltd, the Simone.
On July 17, 2014, the Group successfully took delivery of the twelfth double-hulled VLCC from
Maersk Tankers Singapore Pte Ltd, the Neptun.
On July 22, 2014, the Group successfully took delivery of the thirteenth
double-hulled VLCC from Maersk Tankers Singapore Pte Ltd, the Sonia.
On July 29, 2014, the Group successfully took delivery of the
fourteenth double-hulled VLCC from Maersk Tankers Singapore Pte Ltd, the Iris.
On August 11, 2014, the Group cancelled the time
charter out contract on the VLCC Maersk Hakone against a payment of U.S. $2.5 million.
On July 31, 2014, the Cap Isabella,
currently on bareboat charter to the Group, was sold by its owner Belle Shipholdings Ltd., a company related to us, to a third-party. In the beginning of 2013, the Group had sold the Cap Isabella through a sale and lease back agreement which
included a profit sharing mechanism for a future sale by Belle Shipholdings Ltd. This profit amounts to approximately U.S. $4.3 million and will be recorded in the third or fourth quarter of 2014.
On August 5, 2014, Overseas Shipholding Group (“OSG”) announced that it had emerged from Chapter 11 as a newly reorganized company.
As a consequence of OSG’s emergence from Chapter 11, the waiver issued by Maersk Oil Qatar (“MOQ”) on November 12, 2012 to the FSO joint venture agreeing not to exercise its rights to terminate the service contracts and
subsequently extended to August 31, 2014 has automatically expired and the FSO joint venture
F-21
EURONAV NV
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS—(Continued)
and the guarantee provided by the sponsors (OSG and Euronav) are now back in compliance with all aspects of the contracts linked to the FSO operation, including the loan and swap agreements.
The OSG’s Chapter 11 filing has had no impact on the continued operations of the FSO joint venture, including the ability of the
joint venture to continue to perform its obligations under the existing charters as well as its ability to continue to service its outstanding debt obligations and maintain continued compliance with the covenants under such debt agreements.
F-22
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of Euronav NV:
We have audited the accompanying consolidated statement of financial position of Euronav NV and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of profit or loss,
comprehensive income, cash flows and changes in equity for each of the years in the
three-year
period ended December 31, 2013. These consolidated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Euronav NV and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the years in the
three-year
period ended December 31, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
|
|
|
KPMG Bedrijfsrevisoren—Réviseurs d’Entreprises
|
|
|
|
/s/ Jos Briers
|
|
Bedrijfsrevisor / Réviseur d’Entreprises
|
|
|
|
Kontich, BELGIUM
|
April 25, 2014
F-23
EURONAV NV
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the years ended December 31, 2013 and 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
1,728,993
|
|
|
|
1,841,779
|
|
|
Property, plant and equipment
|
|
|
1,445,433
|
|
|
|
1,593,503
|
|
|
Vessels(Note 8)
|
|
|
1,434,800
|
|
|
|
1,592,837
|
|
|
Other tangible assets(Note 8)
|
|
|
633
|
|
|
|
666
|
|
|
Prepayments(Note 8)
|
|
|
10,000
|
|
|
|
—
|
|
|
|
|
|
|
Intangible assets
|
|
|
32
|
|
|
|
78
|
|
|
|
|
|
|
Financial assets
|
|
|
259,535
|
|
|
|
226,161
|
|
|
Investments
|
|
|
1
|
|
|
|
2
|
|
|
Receivables(Note 10)
|
|
|
259,534
|
|
|
|
226,159
|
|
|
|
|
|
|
Investments in equity accounted investees (Note 25)
|
|
|
23,113
|
|
|
|
21,075
|
|
|
|
|
|
|
Deferred tax assets(Note 9)
|
|
|
880
|
|
|
|
963
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
191,768
|
|
|
|
247,424
|
|
|
Trade and other receivables(Note 11)
|
|
|
95,913
|
|
|
|
81,426
|
|
|
Current tax assets
|
|
|
36
|
|
|
|
27
|
|
|
Cash and cash equivalents(Note 12)
|
|
|
74,309
|
|
|
|
113,051
|
|
|
Non-current assets held for sale(Note 3)
|
|
|
21,510
|
|
|
|
52,920
|
|
|
TOTAL ASSETS
|
|
|
1,920,761
|
|
|
|
2,089,203
|
|
|
|
|
|
|
EQUITY and LIABILITIES
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
800,990
|
|
|
|
866,970
|
|
|
Equity attributable to owners of the Company(Note 13)
|
|
|
800,990
|
|
|
|
866,970
|
|
|
Share capital
|
|
|
58,937
|
|
|
|
56,248
|
|
|
Share premium
|
|
|
365,574
|
|
|
|
353,063
|
|
|
Translation reserve
|
|
|
946
|
|
|
|
730
|
|
|
Hedging reserve(Note 19)
|
|
|
(1,291
|
)
|
|
|
(6,721
|
)
|
|
Treasury shares(Note 13)
|
|
|
(46,062
|
)
|
|
|
(46,062
|
)
|
|
Retained earnings
|
|
|
422,886
|
|
|
|
509,712
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
874,979
|
|
|
|
978,467
|
|
|
Loans and borrowings(Note 15)
|
|
|
835,908
|
|
|
|
933,547
|
|
|
Bank loans
|
|
|
710,086
|
|
|
|
800,853
|
|
|
Convertible Notes
|
|
|
125,822
|
|
|
|
132,694
|
|
|
|
|
|
|
Other payables(Note 16)
|
|
|
31,291
|
|
|
|
36,875
|
|
|
|
|
|
|
Deferred tax liabilities(Note 9)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Employee benefits(Note 17)
|
|
|
1,900
|
|
|
|
2,165
|
|
|
|
|
|
|
Amounts due to equity-accounted joint ventures(Note 25)
|
|
|
5,880
|
|
|
|
5,880
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
244,792
|
|
|
|
243,766
|
|
|
Trade and other payables(Note 18)
|
|
|
107,094
|
|
|
|
133,145
|
|
|
Tax liabilities
|
|
|
21
|
|
|
|
—
|
|
|
Loans and borrowings(Note 15)
|
|
|
137,677
|
|
|
|
110,621
|
|
|
TOTAL EQUITY and LIABILITIES
|
|
|
1,920,761
|
|
|
|
2,089,203
|
|
See accompanying notes on pages F-30 through F-97 that are an integral part of these consolidated financial
statements
F-24
EURONAV NV
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the years ended December, 31 2013, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
|
|
|
|
|
Revenue(Note 4)
|
|
|
304,622
|
|
|
|
320,836
|
|
|
|
326,315
|
|
|
Gains on disposal of vessels/other tangible assets(Note 8)
|
|
|
8
|
|
|
|
10,067
|
|
|
|
22,153
|
|
|
Other operating income
|
|
|
11,520
|
|
|
|
10,478
|
|
|
|
5,773
|
|
|
Expenses for shipping activities(Note 5)
|
|
|
(206,528
|
)
|
|
|
(210,558
|
)
|
|
|
(212,459
|
)
|
|
Losses on disposal of vessels(Note 8)
|
|
|
(215
|
)
|
|
|
(32,080
|
)
|
|
|
(25,501
|
)
|
|
Depreciation tangible assets(Note 8)
|
|
|
(136,882
|
)
|
|
|
(146,881
|
)
|
|
|
(142,358
|
)
|
|
Depreciation intangible assets
|
|
|
(75
|
)
|
|
|
(181
|
)
|
|
|
(213
|
)
|
|
Employee benefits(Note 5)
|
|
|
(13,881
|
)
|
|
|
(15,733
|
)
|
|
|
(15,581
|
)
|
|
Other operating expenses(Note 5)
|
|
|
(13,283
|
)
|
|
|
(15,065
|
)
|
|
|
(13,074
|
)
|
|
Result from operating activities
|
|
|
(54,714
|
)
|
|
|
(79,117
|
)
|
|
|
(54,945
|
)
|
|
Finance income(Note 6)
|
|
|
1,993
|
|
|
|
5,349
|
|
|
|
5,663
|
|
|
Finance expenses(Note 6)
|
|
|
(54,637
|
)
|
|
|
(55,507
|
)
|
|
|
(52,484
|
)
|
|
Net finance expense(Note 6)
|
|
|
(52,644
|
)
|
|
|
(50,158
|
)
|
|
|
(46,821
|
)
|
|
Share of profit(loss) of equity accounted investees (net of income tax)(Note 25)
|
|
|
17,853
|
|
|
|
9,953
|
|
|
|
5,897
|
)
|
|
Profit(loss) before income tax
|
|
|
(89,505
|
)
|
|
|
(119,322
|
)
|
|
|
(95,869
|
)
|
|
Income tax expense(Note 7)
|
|
|
(178
|
)
|
|
|
726
|
|
|
|
(118
|
)
|
|
Profit(loss) for the period
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
Basic earnings per share (in U.S.$)(Note 14)
|
|
|
(1.79
|
)
|
|
|
(2.37
|
)
|
|
|
(1.92
|
)
|
|
Diluted earnings per share (in U.S.$)(Note 14)
|
|
|
(1.79
|
)
|
|
|
(2.37
|
)
|
|
|
(1.92
|
)
|
See accompanying notes on pages F-30 through F-97 that are an integral part of these consolidated financial
statements
F-25
EURONAV NV
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the years ended December 31, 2013, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended
December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
|
|
|
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will never be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurements of the defined benefit liability(asset)(Note 17)
|
|
|
263
|
|
|
|
(386
|
)
|
|
|
—
|
|
|
Items that are or may be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences(Note 6)
|
|
|
216
|
|
|
|
78
|
|
|
|
(170
|
)
|
|
Cash flow hedges—effective portion of changes in fair value(Note 19)
|
|
|
5,430
|
|
|
|
3,871
|
|
|
|
651
|
|
|
Equity-accounted investees—share of other comprehensive income(Note 25)
|
|
|
3,077
|
|
|
|
1,015
|
|
|
|
(2,014
|
)
|
|
Other comprehensive income for the period, net of tax
|
|
|
8,986
|
|
|
|
4,578
|
|
|
|
(1,533
|
)
|
|
Total comprehensive income for the period
|
|
|
(80,697
|
)
|
|
|
(114,018
|
)
|
|
|
(97,520
|
)
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
(80,697
|
)
|
|
|
(114,018
|
)
|
|
|
(97,520
|
)
|
See accompanying notes on pages F-30 through F-97 that are an integral part of these consolidated financial
statements
F-26
EURONAV NV
CONSOLIDATED STATEMENT OF CASH FLOWS
for the years ended December 31 2013, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
Profit (loss) for the period
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
Adjustments for:
|
|
|
172,095
|
|
|
|
189,948
|
|
|
|
177,716
|
|
|
Depreciations of tangible assets
(Note 8)
|
|
|
136,882
|
|
|
|
146,881
|
|
|
|
142,358
|
|
|
Depreciations of intangible assets
|
|
|
75
|
|
|
|
180
|
|
|
|
213
|
|
|
Impairment on non-current assets held for sale
(Note 3)
|
|
|
—
|
|
|
|
32,080
|
|
|
|
—
|
|
|
Leasing
(Note 15)
|
|
|
—
|
|
|
|
(18,509
|
)
|
|
|
(8,986
|
)
|
|
Provisions
|
|
|
—
|
|
|
|
—
|
|
|
|
(267
|
)
|
|
Tax expenses
(Note 7)
|
|
|
178
|
|
|
|
(726
|
)
|
|
|
118
|
|
|
Share of profit of equity-accounted investees, net of tax
(Note 25)
|
|
|
(17,853
|
)
|
|
|
(9,953
|
)
|
|
|
(5,897
|
)
|
|
Net finance expense
(Note 6)
|
|
|
52,644
|
|
|
|
50,159
|
|
|
|
46,821
|
|
|
Capital gain(loss) on disposal of assets
|
|
|
(14
|
)
|
|
|
(10,164
|
)
|
|
|
3,356
|
|
|
Equity-settled share-based payment transactions
(Note 5)
|
|
|
183
|
|
|
|
—
|
|
|
|
—
|
|
|
Changes in working capital requirements
|
|
|
(43,442
|
)
|
|
|
51,713
|
|
|
|
9,351
|
|
|
Change in cash guarantees
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
3
|
|
|
Change in trade receivables
(Note 11)
|
|
|
(79
|
)
|
|
|
(9,887
|
)
|
|
|
3,879
|
|
|
Change in accrued income
(Note 11)
|
|
|
(1,706
|
)
|
|
|
(1,650
|
)
|
|
|
(4,350
|
)
|
|
Change in deferred charges
(Note 11)
|
|
|
(8,664
|
)
|
|
|
(162
|
)
|
|
|
(1,601
|
)
|
|
Change in other receivables
(Notes10-11)
|
|
|
(4,036
|
)
|
|
|
23,899
|
|
|
|
10,915
|
|
|
Change in trade payables
(Note 18)
|
|
|
19,899
|
|
|
|
(6,237
|
)
|
|
|
7,339
|
|
|
Change in accrued payroll
(Note 18)
|
|
|
(28
|
)
|
|
|
934
|
|
|
|
(1,114
|
)
|
|
Change in accrued expenses
(Note 18)
|
|
|
8,342
|
|
|
|
2,530
|
|
|
|
1,001
|
|
|
Change in deferred income
(Note 18)
|
|
|
(1,065
|
)
|
|
|
(1,735
|
)
|
|
|
(3,268
|
)
|
|
Change in other payables
(Note 18)
|
|
|
(56,018
|
)
|
|
|
14,118
|
|
|
|
(3,620
|
)
|
|
Change in provisions for employee benefits
(Note 17)
|
|
|
(86
|
)
|
|
|
(96
|
)
|
|
|
167
|
|
|
Change in non-current trade payables
(Note 16)
|
|
|
—
|
|
|
|
30,000
|
|
|
|
—
|
|
|
Income taxes paid during the period
|
|
|
(82
|
)
|
|
|
523
|
|
|
|
337
|
|
|
Interest paid(Notes 6-18)
|
|
|
(47,895
|
)
|
|
|
(54,707
|
)
|
|
|
(63,651
|
)
|
|
Interest received(Notes 6-11)
|
|
|
90
|
|
|
|
931
|
|
|
|
294
|
|
|
Net cash from (used in) operating activities
|
|
|
(8,917
|
)
|
|
|
69,812
|
|
|
|
28,060
|
|
|
Acquisition of vessels(Note 8)
|
|
|
(10,000
|
)
|
|
|
(101,801
|
)
|
|
|
(600
|
)
|
|
Proceeds from the sale of vessels(Note 8)
|
|
|
52,920
|
|
|
|
47,593
|
|
|
|
52,013
|
|
|
Acquisition of other tangible/intangible assets
|
|
|
(355
|
)
|
|
|
(145
|
)
|
|
|
(354
|
)
|
|
Proceeds from the sale of other tangible/intangible assets
|
|
|
24
|
|
|
|
39
|
|
|
|
—
|
|
|
Loans to related parties(Note 25)
|
|
|
(11,475
|
)
|
|
|
(32,672
|
)
|
|
|
(9,353
|
)
|
|
Repayment of loans to related parties
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Purchase of subsidiaries, joint ventures & associates net of cash acquired(Note 25)
|
|
|
(3,000
|
)
|
|
|
—
|
|
|
|
(3,237
|
)
|
|
Dividends received from related parties(Note 25)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,383
|
|
|
Net cash from (used in) investing activities
|
|
|
28,114
|
|
|
|
(86,986
|
)
|
|
|
39,852
|
|
|
Proceeds from new long-term borrowings(Note 15)
|
|
|
61,390
|
|
|
|
746,211
|
|
|
|
80,940
|
|
|
Repayment of long-term borrowings(Note 15)
|
|
|
(118,770
|
)
|
|
|
(779,281
|
)
|
|
|
(129,491
|
)
|
|
Dividends paid
|
|
|
(4
|
)
|
|
|
(47
|
)
|
|
|
(55
|
)
|
|
Net cash from (used in) financing activities
|
|
|
(57,384
|
)
|
|
|
(33,117
|
)
|
|
|
(48,606
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(38,187
|
)
|
|
|
(50,291
|
)
|
|
|
19,306
|
|
|
Net cash and cash equivalents at the beginning of the period
|
|
|
113,051
|
|
|
|
163,108
|
|
|
|
144,995
|
|
|
Effect of changes in exchange rates
|
|
|
(555
|
)
|
|
|
234
|
|
|
|
(1,193
|
)
|
|
Net cash and cash equivalents at the end of the period(Note 12)
|
|
|
74,309
|
|
|
|
113,051
|
|
|
|
163,108
|
|
See accompanying notes on pages F-30 through F-97 that are an integral part of these consolidated financial
statements
F-27
EURONAV NV
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the years ended December 31, 2013, 2012 and 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
Share
premium
|
|
|
Translation
reserve
|
|
|
Hedging
reserve
|
|
|
Treasury
shares
|
|
|
Retained
earnings
|
|
|
Capital and
reserves
|
|
|
Non-
controlling
interest
|
|
|
Total equity
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
Balance at January 1, 2013
|
|
|
56,248
|
|
|
|
353,063
|
|
|
|
730
|
|
|
|
(6,721
|
)
|
|
|
(46,062
|
)
|
|
|
509,712
|
|
|
|
866,970
|
|
|
|
—
|
|
|
|
866,970
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(89,683
|
)
|
|
|
(89,683
|
)
|
|
|
—
|
|
|
|
(89,683
|
)
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
216
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
216
|
|
|
|
—
|
|
|
|
216
|
|
|
Cash flow hedges—effective portion of changes in fair value(19)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,430
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,430
|
|
|
|
—
|
|
|
|
5,430
|
|
|
Equity-accounted investees, share of other comprehensive income(25)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,077
|
|
|
|
3,077
|
|
|
|
—
|
|
|
|
3,077
|
|
|
Remeasurements of the defined benefit liability(asset)(17)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
263
|
|
|
|
263
|
|
|
|
—
|
|
|
|
263
|
|
|
Total other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
216
|
|
|
|
5,430
|
|
|
|
—
|
|
|
|
3,340
|
|
|
|
8,986
|
|
|
|
—
|
|
|
|
8,986
|
|
|
Total comprehensive income for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
216
|
|
|
|
5,430
|
|
|
|
—
|
|
|
|
(86,343
|
)
|
|
|
(80,697
|
)
|
|
|
—
|
|
|
|
(80,697
|
)
|
|
Transactions with owners of the company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issue of ordinary shares(13)
|
|
|
2,689
|
|
|
|
12,511
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15,200
|
|
|
|
—
|
|
|
|
15,200
|
|
|
Issue and conversion of convertible Notes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(666
|
)
|
|
|
(666
|
)
|
|
|
—
|
|
|
|
(666
|
)
|
|
Dividends to equity holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Equity-settled share-based
payment(23)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
183
|
|
|
|
183
|
|
|
|
—
|
|
|
|
183
|
|
|
Total contributions by and distributions to owners
|
|
|
2,689
|
|
|
|
12,511
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(483
|
)
|
|
|
14,717
|
|
|
|
—
|
|
|
|
14,717
|
|
|
Total transactions with owners
|
|
|
2,689
|
|
|
|
12,511
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(483
|
)
|
|
|
14,717
|
|
|
|
—
|
|
|
|
14,717
|
|
|
Balance at December 31, 2013
|
|
|
58,937
|
|
|
|
365,574
|
|
|
|
946
|
|
|
|
(1,291
|
)
|
|
|
(46,062
|
)
|
|
|
422,886
|
|
|
|
800,990
|
|
|
|
—
|
|
|
|
800,990
|
|
|
Balance at January 1, 2012
|
|
|
56,248
|
|
|
|
353,063
|
|
|
|
652
|
|
|
|
(10,592
|
)
|
|
|
(46,062
|
)
|
|
|
627,679
|
|
|
|
980,988
|
|
|
|
—
|
|
|
|
980,988
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(118,596
|
)
|
|
|
(118,596
|
)
|
|
|
—
|
|
|
|
(118,596
|
)
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
78
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
78
|
|
|
|
—
|
|
|
|
78
|
|
|
Cash flow hedges—effective portion of changes in fair value(19)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,871
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,871
|
|
|
|
—
|
|
|
|
3,871
|
|
|
Equity-accounted investees, share of other comprehensive income(25)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,015
|
|
|
|
1,015
|
|
|
|
—
|
|
|
|
1,015
|
|
|
Remeasurements of the defined benefit liability(asset)(17)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(386
|
)
|
|
|
(386
|
)
|
|
|
—
|
|
|
|
(386
|
)
|
|
Total other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
78
|
|
|
|
3,871
|
|
|
|
—
|
|
|
|
629
|
|
|
|
4,578
|
|
|
|
—
|
|
|
|
4,578
|
|
|
Total comprehensive income for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
78
|
|
|
|
3,871
|
|
|
|
—
|
|
|
|
(117,967
|
)
|
|
|
(114,018
|
)
|
|
|
—
|
|
|
|
(114,018
|
)
|
|
Transactions with owners of the company
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total transactions with owners
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Balance at December 31, 2012
|
|
|
56,248
|
|
|
|
353,063
|
|
|
|
730
|
|
|
|
(6,721
|
)
|
|
|
(46,062
|
)
|
|
|
509,712
|
|
|
|
866,970
|
|
|
|
—
|
|
|
|
866,970
|
|
|
Balance at January 1, 2011
|
|
|
56,248
|
|
|
|
353,063
|
|
|
|
822
|
|
|
|
(11,243
|
)
|
|
|
(46,062
|
)
|
|
|
725,680
|
|
|
|
1,078,508
|
|
|
|
—
|
|
|
|
1,078,508
|
|
|
Total comprehensive income for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
capital
|
|
|
Share
premium
|
|
|
Translation
reserve
|
|
|
Hedging
reserve
|
|
|
Treasury
shares
|
|
|
Retained
earnings
|
|
|
Capital and
reserves
|
|
|
Non-
controlling
interest
|
|
|
Total equity
|
|
|
|
|
(in thousands of U.S.$)
|
|
|
Profit (loss) for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(95,987
|
)
|
|
|
(95,987
|
)
|
|
|
—
|
|
|
|
(95,987
|
)
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
(170
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(170
|
)
|
|
|
—
|
|
|
|
(170
|
)
|
|
Cash flow hedges—effective portion of changes in fair value(19)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
651
|
|
|
|
—
|
|
|
|
—
|
|
|
|
651
|
|
|
|
—
|
|
|
|
651
|
|
|
Equity-accounted investees, share of other comprehensive income(25)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,014
|
)
|
|
|
(2,014
|
)
|
|
|
—
|
|
|
|
(2,014
|
)
|
|
Remeasurements of the defined benefit liability(asset)(17)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
(170
|
)
|
|
|
651
|
|
|
|
—
|
|
|
|
(2,014
|
)
|
|
|
(1,533
|
)
|
|
|
—
|
|
|
|
(1,533
|
)
|
|
Total comprehensive income for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
(170
|
)
|
|
|
651
|
|
|
|
—
|
|
|
|
(98,001
|
)
|
|
|
(97,520
|
)
|
|
|
—
|
|
|
|
(97,520
|
)
|
|
Transactions with owners of the company
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total transactions with owners
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Balance at December 31, 2011
|
|
|
56,248
|
|
|
|
353,063
|
|
|
|
652
|
|
|
|
(10,592
|
)
|
|
|
(46,062
|
)
|
|
|
627,679
|
|
|
|
980,988
|
|
|
|
—
|
|
|
|
980,988
|
|
See accompanying notes on pages F-30 through F-97 that are an integral part of these consolidated financial
statements
F-29
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1—Significant Accounting Policies
1. Reporting Entity
Euronav N.V. (the “Company”) is a company domiciled in Belgium. The address of the Company’s registered office is De Gerlachekaai 20,
2000 Antwerpen, Belgium. The consolidated financial statements of the Company comprise the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and joint ventures.
Euronav NV is a fully-integrated provider of international maritime shipping and offshore services engaged in the transportation and storage of
crude oil. The Company was incorporated under the laws of Belgium on June 26, 2003, and grew out of three companies that had a strong presence in the shipping industry; Compagnie Maritime Belge NV, or CMB, formed in 1895, Compagnie Nationale de
Navigation SA, or CNN, formed in 1938, and Ceres Hellenic formed in 1950. The Company started doing business under the name “Euronav” in 1989 when it was initially formed as the international tanker subsidiary of CNN.
Euronav NV charters its vessels to leading international energy companies. The Company pursues a balanced chartering strategy by employing its
vessels on a combination of spot market voyages, fixed-rate contracts and long-term time charters, which typically include a profit sharing component.
2. Basis of Preparation
(A) Statement of compliance
These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”), collectively “IFRS.”
All accounting policies have been consistently applied for all periods presented in the consolidated financial statements, unless disclosed otherwise.
The consolidated financial statements were authorized for issue by the Board of Directors on April 25, 2014.
(B) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of
financial position
|
|
•
|
|
Derivative financial instruments are measured at fair value
|
|
|
•
|
|
Non-derivative financial instruments at fair value through profit and loss are measured at fair value
|
|
|
•
|
|
Available for sale financial assets are measured at fair value
|
(C) Functional and presentation currency
The consolidated financial statements are presented
in USD, which is the Company’s functional and presentation currency. All financial information presented in USD has been rounded to the nearest thousand except when otherwise indicated.
F-30
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(D) Use of estimates and judgments
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable
under the circumstances, the results of which are the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which
the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statement is included in the following note:
Information about assumptions and estimation uncertainties that have a significant risk on resulting in a material adjustment within the next
financial year are included in the following note:
|
|
•
|
|
Note 8—Impairment test: key assumptions underlying the recoverable amount.
|
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets
and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a
valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the CFO.
The valuation team regularly reviews significant unobservable inputs and valuations adjustments. If third-party information, such as broker quotes or pricing services, is used to measure fair values, then the
valuation team assesses the evidence obtained from the third-parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.
Drydocking-Component approach
Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment. Costs associated with routine
repairs and maintenance are expensed as incurred including routine maintenance performed whilst the vessel is in drydock. After each drydock, all the components installed (as replacements or as additional components) during the drydock are
classified in two categories (according to their estimated lifetime and their respective cost).
F-31
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
When the useful life is higher than 1 year, the component is amortized if their cost is higher than the established threshold. The components will then be amortized over their estimated lifetime
(3-5 years). The thresholds are reviewed by the board on an annual basis.
Significant valuation issues are reported to the Group
Audit Committee
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible.
Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
|
|
•
|
|
Level 1
: quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
|
|
•
|
|
Level 2
: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
|
|
|
•
|
|
Level 3
: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of
the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
(E) Basis of Consolidation
(i) Business Combinations
Business combinations are accounted for using the acquisition method
as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the
Group takes into consideration potential voting rights that currently are exercisable.
For acquisitions on or after January 1,
2010, the Group measures goodwill at the acquisition date as:
|
|
•
|
|
the fair value of the consideration transferred; plus
|
|
|
•
|
|
the recognized amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing
equity interest in the acquire; less
|
|
|
•
|
|
the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
|
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are
recognized in profit or loss.
F-32
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Transaction costs, other than those associated with the issue of debt or equity securities, that
the Group incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is measured
at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration
are recognized in profit or loss.
(ii) Acquisitions of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is
recognized as a result. Adjustments to non-controlling interests arising from transactions that do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.
(iii) Subsidiaries
Subsidiaries are those entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable return from
its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which the control
commences until the date on which control ceases.
(iv) Loss of control
On the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests and the other components
of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
(v) Interests in equity-accounted investees
The Group’s interests in equity-accounted
investees comprise interest in associates and joint ventures.
Associates are those entities in which the Group has significant
influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to
its assets and obligations for its liabilities.
Interest in associates and joint ventures are accounted for using the equity method.
They are recognized initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity-accounted investees, until the
date on which significant influence or joint control ceases.
Interests in associates and joint ventures include any long-term interests
that, in substance, form part of the Group’s investment in those associates or joint ventures and include unsecured
F-33
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
shareholder loans for which settlement is neither planned nor likely to occur in the foreseeable future, which, therefore, are an extension of the Group’s investment in those associates and
joint ventures. The Group’s share of losses that exceeds its investment is applied to the carrying amount of those loans. After the Group’s interest is reduced to zero, a liability is recognized to the extent that the Group has a legal or
constructive obligation to fund the associates’ or joint ventures’ operations or has made payments on their behalf.
(vii)
Transactions eliminated on consolidation
Intragroup balances and transactions, and any unrealized gains arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the
investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
(F) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to USD at the foreign exchange rate applicable at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are translated to USD at the foreign exchange rate applicable at that date. Foreign exchange differences arising on translation are recognized in profit or loss. Non-monetary
assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
(ii) Foreign operations
The assets and liabilities of foreign operations, including goodwill
and fair value adjustments arising on acquisition, are translated to USD at exchange rates at the reporting date. The income and expenses of foreign operations are translated to USD at rates approximating the exchange rates at the dates of the
transactions.
Foreign currency differences are recognized directly in equity (translation reserve). When a foreign operation is
disposed of, in part or in full, the relevant amount in the translation reserve is transferred to profit or loss.
(G) Financial
Instruments
(i) Non-derivative financial assets
The group initially recognizes loans and receivables on the date that they are originated. All other financial assets (including assets designated as at fair value through profit and loss) are recognized initially
on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument
The Group
derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of
the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.
F-34
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Financial assets and liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted
securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option
pricing models refined to reflect the issuer’s specific circumstances.
The Group classifies non-derivative financial assets into
the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity financial assets and available-for-sale financial assets. The Company determines the classification of its investments at
initial recognition and re-evaluates this designation at every reporting date.
Financial assets at fair value through profit or loss
A financial asset is classified as at fair value through profit or loss if it is classified as held for trading or is designated as
such on initial recognition. Financial assets are designated as at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s documented
risk management or investment strategy. Attributable transaction costs are recognized in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value and changes therein, which takes into account any
dividend income, are recognized in profit or loss.
Financial assets designated as at fair value through profit or loss comprise equity
securities that otherwise would have been classified as available for sale.
Assets in this category are classified as current assets if
they are expected to be realized within 12 months of the balance sheet date.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized
initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.
They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in
current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are included in trade and other receivables in the statement of financial position.
F-35
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less from the acquisition date that are
subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments.
Held-to-maturity financial assets
If the Group has the positive intent and ability to hold
debt securities to maturity, then such financial assets are classified as held-to-maturity. Held-to-maturity financial assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition,
held-to-maturity financial assets are measured at amortized cost using the effective interest method, less any impairment losses. Held-to-maturity financial assets comprise debentures.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. Available-for-sale financial assets are recognized initially at
fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, they are measured at fair value and
changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented in the fair value reserve in equity. When an investment is
derecognized, the gain or loss accumulated in equity is reclassified to profit or loss.
Available-for-sale financial assets comprise
equity securities and debt securities.
They are included in non-current assets unless the Company intends to dispose of the investment
within 12 months of the balance sheet date.
(ii) Non-derivative financial liabilities
The Group initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial
liabilities (including liabilities designated as at fair value through profit or loss) are recognized initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.
Non-derivative financial liabilities are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortized cost using the effective interest method.
Non-derivative financial
liabilities comprise loans and borrowings, bank overdrafts, and trade and other payables.
F-36
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash
management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
(iii) Share
capital
Ordinary share capital
Ordinary share capital is classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.
Repurchase of share capital
When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax
effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and presented in the reserve for own shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an
increase in equity, and the resulting surplus or deficit on the transaction is presented in share premium.
(iv) Derivative financial
instruments
The Group holds derivative financial instruments to hedge its exposure to market fluctuations, foreign exchange and
interest rate risks arising from operational, financing and investment activities.
On initial designation of the derivative as hedging
instrument, the Group formally documents the relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used
to assess the effectiveness of the hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be “highly effective”
in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125 percent. For a cash flow hedge of
a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported net income.
Derivative financial instruments are recognized initially at fair value; attributable transaction costs are expensed as incurred. Subsequent to
initial recognition, all derivatives are remeasured to fair value, and changes therein are accounted for as follows:
Cash flow
hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in other comprehensive
income and presented in the hedging reserve in equity.
F-37
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The amount recognized in other comprehensive income is removed and included in profit or loss in
the same period as the hedged cash flows affect profit or loss under the same line item in the statement of comprehensive income as the hedged item. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in
profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of
the asset when the asset is recognized. In other cases, the amount accumulated in equity is reclassified to profit or loss in the same period that the hedged item affects profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is
revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the balance in equity is reclassified to profit or loss.
Other non-trading derivatives
When a derivative financial instrument is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair
value are recognized immediately in profit or loss.
(v) Compound financial instruments
Compound financial instruments issued by the Group comprise Notes denominated in USD that can be converted to ordinary shares at the option of the
holder, when the number of shares is fixed and does not vary with changes in fair value.
The liability component of compound financial
instruments in initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument
as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity component in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective
interest method. The equity component of a compound financial instrument is not remeasured.
Interest related to the financial liability
is recognized in profit and loss. On conversion, the financial liability is reclassified to equity and no gain or loss is recognized.
(H) Intangible assets
(i) Goodwill
Goodwill that
arises on the acquisition of subsidiaries is presented as intangible asset. For the measurement of goodwill at initial recognition (refer to accounting policy (E)).
After initial recognition goodwill is measured at cost less accumulated impairment losses (refer to accounting policy (J)). In respect of equity accounted investees, the carrying amount of
F-38
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity accounted investee as a whole.
(ii) Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and
impairment losses (refer to accounting policy (J)).
The cost of an intangible asset acquired in a separate acquisition is the cash paid
or the fair value of any other consideration given. The cost of an internally generated intangible asset includes the directly attributable expenditure of preparing the asset for its intended use.
(iii) Subsequent expenditure
Subsequent expenditure on intangible assets is capitalized only when it increases the future economic benefits embodied in the specific asset to
which it relates and its cost can be measured reliably. All other expenditure is expensed as incurred.
(iv) Amortization
Amortization is charged to the income statement on a straight-line basis over the estimated useful lives of the intangible assets
from the date they are available for use. The estimated useful lives are as follows:
Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(I) Vessels, property, plant and equipment
(i) Owned assets
Vessels and items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation (see below) and impairment losses
(refer to accounting policy (J)).
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of
self-constructed assets includes the following:
|
|
•
|
|
The cost of materials and direct labor;
|
|
|
•
|
|
Any other costs directly attributable to bringing the assets to a working condition for their intended use;
|
|
|
•
|
|
When the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site
on which they are located; and
|
|
|
•
|
|
Capitalized borrowing costs.
|
Property that is being constructed or developed for future use as investment property is classified as property, plant and equipment and stated at
cost until construction or development is complete, at which time it is reclassified as investment property.
F-39
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Where an item of property, plant and equipment comprises major components having different useful
lives, they are accounted for as separate items of property, plant and equipment.
Gains and losses on disposal of a vessel or of
another item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of the vessel or the item of property, plant and equipment and are recognized in profit or loss.
For the sale of vessels or other items of property, plant and equipment, transfer of risk and rewards usually occurs upon delivery of the vessel to
the new owner.
(ii) Leased assets
Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases. Plant and equipment acquired by way of finance lease is stated at an amount equal
to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation (see below) and impairment losses (refer to accounting policy (J)). Lease payments are accounted for as
described in accounting policy (P).
Other leases are operating leases and are not recognized in the Group’s statement of financial
position.
(iii) Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services
or for administrative purposes. Investment property is measured at cost less accumulated depreciation and impairment losses (refer to accounting policy (I)). As such, the accounting policies as described in Note (I) Vessels, property, plant and
equipment apply.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of
self-constructed investment property includes the cost of materials and direct labor, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalized borrowing costs.
Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the
carrying amount of the item) is recognized in profit or loss.
(iv) Assets under construction
Assets under construction, especially newbuilding vessels, are accounted for in accordance with the stage of completion of the newbuilding contract.
Typical stages of completion are the milestones that are usually part of a newbuilding contract: signing or receipt of refund guarantee, steel cutting, keel laying, launching and delivery. All stages of completion are guaranteed by a refund
guarantee provided by the shipyard.
F-40
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(v) Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of property, plant and equipment and
its cost can be measured reliably. The carrying amount of the replaced part is derecognized. All other expenditure is recognized in the consolidated statement of profit or loss as an expense as incurred.
(vi) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the
cost of that asset.
(vi) Depreciation
Depreciation is charged to the consolidated statement of profit or loss on a straight-line basis over the estimated useful lives of vessels and items of property, plant and equipment. Leased assets are depreciated
over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
Vessels and items of property, plant and equipment are depreciated from the date that they are available for use, in respect of internally
constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives of significant items of
property, plant and equipment are as follows:
|
|
|
|
|
|
|
•
|
|
tankers
|
|
20 years
|
|
|
|
|
|
•
|
|
FSO/FpSO/FPSO
|
|
25 years
|
|
|
|
|
|
•
|
|
buildings
|
|
33 years
|
|
|
|
|
|
•
|
|
plant and equipment
|
|
5 - 20 years
|
|
|
|
|
|
•
|
|
fixtures and fittings
|
|
5 - 10 years
|
|
|
|
|
|
•
|
|
other tangible assets
|
|
3 - 20 years
|
|
|
|
|
|
•
|
|
drydocking
|
|
3 - 5 years
|
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(J) Impairment
(i) Non-derivative financial assets
A financial asset not classified as at fair value through
profit or loss is assessed at each reporting date whether there is objective evidence that it is impaired.
A financial asset is
impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be
estimated reliably.
F-41
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Objective evidence that financial assets are impaired includes default or delinquency by a debtor,
restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that
correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security a significant or prolonged decline in the fair value of the security below its cost is objective evidence of
impairment.
Financial assets measured at amortized cost
The Group considers evidence of impairment for financial assets measured at amortized cost (loans and receivables and held-to-maturity financial assets) at both a specific asset and collective level. All
individually significant assets are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually
significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.
In assessing
collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such
that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a
financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in
profit or loss and reflected in an allowance account against loans and receivables or held-to maturity financial assets. Interest on the impaired asset continues to be recognized. When an event occurring after the impairment was recognized causes
the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
Available-for-sale
financial assets
Impairment losses on available-for-sale financial assets are recognized by reclassifying the losses accumulated in
the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortization, and the current fair value,
less any impairment loss recognized previously in profit or loss. Changes in cumulative impairment losses attributable to the application of the effective interest method are reflected as a component of interest income. If, in a subsequent period,
the fair value of an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was recognized, then the impairment loss is reversed, with the amount of the
reversal recognized in profit or loss. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in other comprehensive income.
Equity-accounted investees
An impairment loss in respect of an equity-accounted investee is measured by comparing the recoverable amount of the investment with its carrying
amount. An impairment loss is recognized in profit or loss, and is reversed if there has been a favorable change in the estimates used to determine the recoverable amount.
F-42
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets (refer to accounting policy (R)), are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Goodwill and indefinite-lived intangible assets are tested annually for
impairment. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit (“CGU”) exceeds its recoverable amount.
The recoverable amount of an asset or CGU is the greater of its fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. Future cash flows are based on current market conditions, historical trends as well as future expectations. For
the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU’s. Goodwill acquired in a
business combination is allocated to groups of CGU’s that are expected to benefit from the synergies of the combination.
Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGU’s are allocated first to reduce the
carrying amount of any goodwill allocated to the CGU (group of CGU’s), and then to reduce the carrying amounts of the other assets in the CGU (group of CGU’s) on a pro rata basis.
An impairment loss recognized for goodwill shall not be reversed. For other assets, an impairment loss is reversed only to the extent that the
asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
(K) Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than
through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter generally
the assets or disposal group are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on pro rata
basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets or investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses
on initial classification as held for sale and subsequent gains and losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.
Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any
equity-accounted investee is no longer equity accounted.
F-43
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(L) Employee benefits
(i) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal
or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees.
Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the
employees render the services are discounted to their present value.
(ii) Defined benefit plans
The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future
benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized
asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to
any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and
losses, the return of plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Group determines the net interest expense (income) on the net defined benefit liability
(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability(asset), taking into account any changes in the net defined benefit
liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit and loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or
loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined plan when the settlement occurs.
(iii) Other long-term employee benefits
The Group’s net obligation in respect of
long-term employee benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and
is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit rated bonds that have maturity dates approximating the terms of the Group’s obligations
and that are denominated in the currency in which the benefits are expected to be paid.
Remeasurements are recognized in OCI in the
period in which they arise.
F-44
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(iv) Termination benefits
Termination benefits are recognized as an expense when the Group is demonstrably committed, without realistic possibility or withdrawal, to a formal
detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an
expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they
are discounted to their present value.
(v) Short-term employee benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is
recognized for the amount expected to be paid under short-term cash bonus or profit sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation
can be estimated reliably.
(vi) Share-based payment transactions
The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognized as an expense, with a
corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such
that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.
(M) Provisions
A provision is recognized when the Group has a legal or constructive obligation
that can be estimated reliably, as result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. The provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
Restructuring
A provision
for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.
Onerous contracts
A
provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under
F-45
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a
provision is established, the Group recognizes any impairment loss on the assets associated with that contract.
(N) Revenue
(i) Pool revenues
Aggregated revenue recognized on a daily basis from vessels operating on voyage charters in the spot market and on contract of affreightment (“COA”) within the pool is converted into an aggregated net
revenue amount by subtracting aggregated voyage expenses (such as fuel and port charges) from gross voyage revenue. These aggregated net revenues are combined with aggregate time charter revenues to determine aggregate pool Time Charter Equivalent
revenue (“TCE”). Aggregate pool TCE revenue is then allocated to pool partners in accordance with the allocated pool points earned for each vessel that recognizes each vessel’s earnings capacity based on its cargo, capacity, speed and
fuel consumption performance and actual on hire days. The TCE revenue earned by our vessels operated in the pools is equal to the pool point rating of the vessels multiplied by time on hire, as reported by the pool manager.
(ii) Time—and bareboat charters
Revenues from time charters and bareboat charters are accounted for as operating leases and are recognized on a straight line basis over the periods of such charters, as service is performed.
The Group does not recognize time charter revenues during periods that vessels are off-hire.
(iii) Spot voyages
Within
the shipping industry, there are two methods used to account for voyage revenues: rateably over the estimated length of each voyage and completed voyage.
The recognition of voyage revenues rateably on a daily basis over the estimated length of each voyage is the most prevalent method of accounting for voyage revenues and the method used by the Group and the pools in
which we participate. Under each method, voyages may be calculated on either a load-to-load or discharge-to-discharge basis. In applying its revenue recognition method, management believes that the discharge-to-discharge basis of calculating voyages
more accurately estimates voyage results than the load-to-load basis. Since, at the time of discharge, management generally knows the next load port and expected discharge port, the discharge-to-discharge calculation of voyage revenues can be
estimated with a greater degree of accuracy. Euronav does not begin recognizing voyage revenue until a charter has been agreed to by both the Group and the customer, even if the vessel has discharged its cargo and is sailing to the anticipated load
port on its next voyage because it is only at this time the charter rate is determinable for the specified load and discharge ports and collectability is reasonably assured.
No revenue is recognized if there are significant uncertainties regarding recovery of the consideration due and associated costs.
F-46
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(O) Gain and losses on disposal of vessels
In view of their importance the Group reports capital gains and losses on the sale of vessels as a separate line item in the consolidated statement
of profit or loss. For the sale of vessels, transfer of risks and awards usually occurs upon delivery of the vessel to the new owner.
(P) Leases
Lease
payments
Payments made under operating leases are recognized in the income statement on a straight-line basis over the term of the
lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.
Minimum
lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant period rate of
interest on the remaining balance of the liability.
(Q) Finance income and finance cost
Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method, dividends on redeemable preference
shares, interest receivable on funds invested, dividend income, foreign exchange gains and losses, and gains and losses on hedging instruments that are recognized in the consolidated statement of profit or loss (refer to accounting policy (G)).
Interest income is recognized in the income statement as it accrues, taking into account the effective yield on the asset. Dividend
income is recognized in the consolidated statement of profit or loss on the date that the dividend is declared.
The interest expense
component of finance lease payments is recognized in the consolidated statement of profit or loss using the effective interest rate method.
(R) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred
tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is recognized using the balance sheet method, in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for: the initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither
accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax recognized, is based on the expected manner of realization
or settlement of the carrying amount
F-47
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to
offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can
be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
In application of an IFRIC agenda decision on IAS 12 Income taxes, tonnage tax is not accounted for as income taxes in accordance with IAS 12 and
is not presented as part of income tax expense in the income statement but is shown as an administrative expense under the heading “Other operating expenses”.
(S) Segment reporting
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The Group distinguishes two segments: the operation of crude oil
tankers on the international markets and the floating storage and offloading operation of FSOs/FPSOs. The Group’s internal organizational and management structure does not distinguish any geographical segments.
(T) Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of
operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as
held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss is re-presented as if the operation had been discontinued from the start of the comparative period.
(U) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December 2013, and have not been applied in preparing these consolidated financial statements:
IFRS 9 Financial Instruments
is intended to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 deals with
classification and measurement of financial assets and financial liabilities. This standard is the first phase in the replacement of IAS 39 The IASB currently has an active project to make limited amendments to the classification and measurement
requirements of IFRS 9 and add new requirements to address the impairment of financial assets. In 2013 the IASB issued a new general hedge accounting standard as part of IFRS 9 which will align hedge accounting more closely with risk management. The
IASB will determine an effective date once the classification and measurement and impairment phases of IFRS 9 are finalized. The Group does not plan to adopt this standard early and the extent of the impact has not yet been determined.
F-48
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Annual Improvements to IFRS 2010-2012 cycle
is a collection of minor improvements to six
existing standards. This collection, which is expected to become mandatory for the Group’s 2015 consolidated financial statements, is not expected to have a material impact on its consolidated financial statements.
Annual Improvements to IFRS 2011-2013 cycle
is a collection of minor improvements to four existing standards. This collection, which is
expected to become mandatory for the Group’s 2015 consolidated financial statements, is not expected to have a material impact on its consolidated financial statements.
Amendments to IAS 19 Employee Benefits—Defined Benefit Plans: Employee Contributions
introduce a relief that will reduce the complexity and burden of accounting for certain contributions from employees
or third-parties. The amendments which are expected to become mandatory for the Group’s 2015 consolidated financial statements, are not expected to have a material impact on the Group’s consolidated financial statements.
Amendments to IAS 36 Impairment of Assets—Recoverable Amount Disclosures for Non-Financial Assets
requires the recoverable amount of
every cash-generating unit to which significant goodwill or indefinite-lived intangible assets have been allocated to be disclosed only when an impairment loss has been recognized or reversed. The amendments will become mandatory for the
Group’s 2014 consolidated financial statements, with retrospective application. It is expected not to have a material impact on the Group’s consolidated financial statements.
IFRIC 21 Levies
provides guidance on accounting for levies in accordance with the requirements of IAS 37 Provisions, Contingent Liabilities
and Contingent Assets. The interpretation is expected to become mandatory for the Group’s 2014 consolidated financial statements, with retrospective application. It is expected not to have a material impact on the Group’s consolidated
financial statements.
Amendments to IAS 39 Financial Instruments—Novation of Derivatives and Continuation of Hedge
Accounting
add a limited exception to IAS 39, to provide relief from discontinuing an existing hedging relationship when a novation that was not contemplated in the original hedging documentation meets specific criteria. The amendments will
become mandatory for the Group’s 2014 consolidated financial statements, with retrospective application. It is expected not to have a material impact on the Group’s consolidated financial statements.
Note 2—Segment Reporting
The
Group distinguishes two operating segments: the operation of crude oil tankers on the international markets (tankers) and the floating production, storage and offloading operation of FSOs/FPSOs. These two divisions operate in completely different
markets, where in the latter the assets are tailor made or converted for specific long-term projects. The tanker market requires a different marketing strategy as this is considered a very volatile market, contract duration is often less than two
years and the assets are to a big extent standardized. The segment profit or loss figures and key assets as set out below are presented to the Executive Committee on at least a quarterly basis to help the key decision makers in evaluating the
respective segments. It was decided by the Chief Operating Decision Makers (“CODM”) to present the figures per segment based on proportionate consolidation for the joint ventures and not by applying equity accounting. The reconciliation
between the figures of all segments
F-49
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
combined on the one hand and with the consolidated statements of financial position and profit or loss on the other hand is presented in a separate column Equity-accounted investees.
The Group has two clients in the tanker segment that represent respectively 14% and 11% of the Tankers segment’s total revenue in 2013 (2012:
20% and 14%, respectively, and 2011: 26% and 14%, respectively). All the other clients represent less than 10% of total revenues.
The
Group’s internal organizational and management structure does not distinguish any geographical segments.
Consolidated statement of financial
position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
1,922,035
|
|
|
|
244,138
|
|
|
|
437,180
|
|
|
|
1,728,993
|
|
|
|
2,100,055
|
|
|
|
260,784
|
|
|
|
519,060
|
|
|
|
1,841,779
|
|
|
Property, plant and equipment
|
|
|
1,625,302
|
|
|
|
240,383
|
|
|
|
420,252
|
|
|
|
1,445,433
|
|
|
|
1,803,610
|
|
|
|
258,453
|
|
|
|
468,560
|
|
|
|
1,593,503
|
|
|
Intangible assets
|
|
|
32
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32
|
|
|
|
78
|
|
|
|
—
|
|
|
|
—
|
|
|
|
78
|
|
|
Financial assets
|
|
|
295,412
|
|
|
|
3,755
|
|
|
|
39,632
|
|
|
|
259,535
|
|
|
|
295,404
|
|
|
|
2,331
|
|
|
|
71,575
|
|
|
|
226,161
|
|
|
Investments in equity accounted investees
|
|
|
409
|
|
|
|
—
|
|
|
|
(22,704
|
)
|
|
|
23,113
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,075
|
)
|
|
|
21,075
|
|
|
Deferred tax assets
|
|
|
880
|
|
|
|
—
|
|
|
|
—
|
|
|
|
880
|
|
|
|
963
|
|
|
|
—
|
|
|
|
—
|
|
|
|
963
|
|
|
CURRENT ASSETS
|
|
|
227,337
|
|
|
|
51,159
|
|
|
|
86,728
|
|
|
|
191,768
|
|
|
|
263,034
|
|
|
|
35,214
|
|
|
|
50,824
|
|
|
|
247,424
|
|
|
TOTAL ASSETS
|
|
|
2,149,372
|
|
|
|
295,297
|
|
|
|
523,908
|
|
|
|
1,920,761
|
|
|
|
2,363,089
|
|
|
|
295,998
|
|
|
|
569,884
|
|
|
|
2,089,203
|
|
|
EQUITY and LIABILITIES EQUITY
|
|
|
913,533
|
|
|
|
(112,543
|
)
|
|
|
—
|
|
|
|
800,990
|
|
|
|
1,010,773
|
|
|
|
(143,804
|
)
|
|
|
(1
|
)
|
|
|
866,970
|
|
|
Equity attributable to equity holders of the Company
|
|
|
913,533
|
|
|
|
(112,543
|
)
|
|
|
—
|
|
|
|
800,990
|
|
|
|
1,010,773
|
|
|
|
(143,804
|
)
|
|
|
(1
|
)
|
|
|
866,970
|
|
|
Non-controlling interest
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
NON-CURRENT LIABILITIES
|
|
|
966,196
|
|
|
|
379,044
|
|
|
|
470,261
|
|
|
|
874,979
|
|
|
|
1,089,907
|
|
|
|
391,625
|
|
|
|
503,065
|
|
|
|
978,467
|
|
|
Loans and borrowings
|
|
|
923,005
|
|
|
|
367,988
|
|
|
|
455,085
|
|
|
|
835,908
|
|
|
|
1,040,867
|
|
|
|
374,267
|
|
|
|
481,587
|
|
|
|
933,547
|
|
|
Other payables
|
|
|
41,291
|
|
|
|
11,056
|
|
|
|
21,056
|
|
|
|
31,291
|
|
|
|
46,875
|
|
|
|
17,358
|
|
|
|
27,358
|
|
|
|
36,875
|
|
|
Employee benefits
|
|
|
1,900
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,900
|
|
|
|
2,165
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,165
|
|
|
Amounts due to equity-accounted joint ventures
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,880
|
)
|
|
|
5,880
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,880
|
)
|
|
|
5,880
|
|
|
CURRENT LIABILITIES
|
|
|
269,643
|
|
|
|
28,796
|
|
|
|
53,647
|
|
|
|
244,792
|
|
|
|
262,409
|
|
|
|
48,177
|
|
|
|
66,820
|
|
|
|
243,766
|
|
|
TOTAL EQUITY and LIABILITIES
|
|
|
2,149,372
|
|
|
|
295,297
|
|
|
|
523,908
|
|
|
|
1,920,761
|
|
|
|
2,363,089
|
|
|
|
295,998
|
|
|
|
569,884
|
|
|
|
2,089,203
|
|
F-50
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of
profit or
loss
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
Revenue
|
|
|
337,383
|
|
|
|
63,698
|
|
|
|
96,459
|
|
|
|
304,622
|
|
|
|
357,197
|
|
|
|
53,684
|
|
|
|
90,045
|
|
|
|
320,836
|
|
|
|
344,711
|
|
|
|
49,926
|
|
|
|
68,322
|
|
|
|
326,315
|
|
|
Capital gains on disposal of vessels
|
|
|
8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
|
10,067
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,067
|
|
|
|
22,153
|
|
|
|
—
|
|
|
|
—
|
|
|
|
22,153
|
|
|
Other operating income
|
|
|
11,756
|
|
|
|
333
|
|
|
|
569
|
|
|
|
11,520
|
|
|
|
10,260
|
|
|
|
241
|
|
|
|
23
|
|
|
|
10,478
|
|
|
|
5,990
|
|
|
|
100
|
|
|
|
317
|
|
|
|
5,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses for shipping activities
|
|
|
(234,250
|
)
|
|
|
(12,316
|
)
|
|
|
(40,038
|
)
|
|
|
(206,528
|
)
|
|
|
(236,504
|
)
|
|
|
(10,849
|
)
|
|
|
(36,795
|
)
|
|
|
(210,558
|
)
|
|
|
(221,259
|
)
|
|
|
(11,110
|
)
|
|
|
(19,910
|
)
|
|
|
(212,459
|
)
|
|
Capital losses on disposal of vessels
|
|
|
(215
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(215
|
)
|
|
|
(32,080
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(32,080
|
)
|
|
|
(25,501
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(25,501
|
)
|
|
Depreciation tangible assets
|
|
|
(149,216
|
)
|
|
|
(18,071
|
)
|
|
|
(30,405
|
)
|
|
|
(136,882
|
)
|
|
|
(159,257
|
)
|
|
|
(18,075
|
)
|
|
|
(30,451
|
)
|
|
|
(146,881
|
)
|
|
|
(150,235
|
)
|
|
|
(18,075
|
)
|
|
|
(25,952
|
)
|
|
|
(142,358
|
)
|
|
Depreciation intangible assets
|
|
|
(75
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(75
|
)
|
|
|
(181
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(181
|
)
|
|
|
(213
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(213
|
)
|
|
Employee benefits
|
|
|
(13,881
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(13,881
|
)
|
|
|
(15,733
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,733
|
)
|
|
|
(15,581
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,581
|
)
|
|
Other operating expenses
|
|
|
(13,483
|
)
|
|
|
(589
|
)
|
|
|
(789
|
)
|
|
|
(13,283
|
)
|
|
|
(15,300
|
)
|
|
|
(264
|
)
|
|
|
(499
|
)
|
|
|
(15,065
|
)
|
|
|
(20,404
|
)
|
|
|
(658
|
)
|
|
|
(7,988
|
)
|
|
|
(13,074
|
)
|
|
Result from operating activities
|
|
|
(61,973
|
)
|
|
|
33,055
|
|
|
|
25,796
|
|
|
|
(54,714
|
)
|
|
|
(81,531
|
)
|
|
|
24,737
|
|
|
|
22,323
|
|
|
|
(79,117
|
)
|
|
|
(60,339
|
)
|
|
|
20,183
|
|
|
|
14,789
|
|
|
|
(54,945
|
)
|
|
Finance income
|
|
|
1,998
|
|
|
|
33
|
|
|
|
38
|
|
|
|
1,993
|
|
|
|
5,364
|
|
|
|
55
|
|
|
|
70
|
|
|
|
5,349
|
|
|
|
5,676
|
|
|
|
19
|
|
|
|
32
|
|
|
|
5,663
|
|
|
Finance expenses
|
|
|
(58,123
|
)
|
|
|
(4,904
|
)
|
|
|
(8,390
|
)
|
|
|
(54,637
|
)
|
|
|
(59,624
|
)
|
|
|
(8,323
|
)
|
|
|
(12,440
|
)
|
|
|
(55,507
|
)
|
|
|
(48,525
|
)
|
|
|
(12,883
|
)
|
|
|
(8,924
|
)
|
|
|
(52,484
|
)
|
|
Net finance expense
|
|
|
(56,125
|
)
|
|
|
(4,871
|
)
|
|
|
(8,352
|
)
|
|
|
(52,644
|
)
|
|
|
(54,260
|
)
|
|
|
(8,268
|
)
|
|
|
(12,370
|
)
|
|
|
(50,158
|
)
|
|
|
(42,849
|
)
|
|
|
(12,864
|
)
|
|
|
(8,892
|
)
|
|
|
(46,821
|
)
|
|
Share of profit(loss) of equity accounted investees (net of income tax)
|
|
|
409
|
|
|
|
—
|
|
|
|
(17,444
|
)
|
|
|
17,853
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(9,953
|
)
|
|
|
9,953
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,897
|
)
|
|
|
5,897
|
|
|
Profit(loss) before income tax
|
|
|
(117,689
|
)
|
|
|
28,184
|
|
|
|
—
|
|
|
|
(89,505
|
)
|
|
|
(135,791
|
)
|
|
|
16,469
|
|
|
|
—
|
|
|
|
(119,322
|
)
|
|
|
(103,188
|
)
|
|
|
7,319
|
|
|
|
—
|
|
|
|
(95,869
|
)
|
|
Income tax expense
|
|
|
(178
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(178
|
)
|
|
|
726
|
|
|
|
—
|
|
|
|
—
|
|
|
|
726
|
|
|
|
(118
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(118
|
)
|
|
Profit(loss) for the period
|
|
|
(117,867
|
)
|
|
|
28,184
|
|
|
|
—
|
|
|
|
(89,683
|
)
|
|
|
(135,065
|
)
|
|
|
16,469
|
|
|
|
—
|
|
|
|
(118,596
|
)
|
|
|
(103,306
|
)
|
|
|
7,319
|
|
|
|
—
|
|
|
|
(95,987
|
)
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
(117,867
|
)
|
|
|
28,184
|
|
|
|
—
|
|
|
|
(89,683
|
)
|
|
|
(135,065
|
)
|
|
|
16,469
|
|
|
|
—
|
|
|
|
(118,596
|
)
|
|
|
(103,306
|
)
|
|
|
7,319
|
|
|
|
—
|
|
|
|
(95,987
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated statement of
cash
flows
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
Tankers
|
|
|
FSO
|
|
|
Less
Equity-
accounted
investees
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
Net cash from operating activities
|
|
|
41,491
|
|
|
|
38,497
|
|
|
|
88,905
|
|
|
|
(8,917
|
)
|
|
|
44,577
|
|
|
|
33,254
|
|
|
|
8,019
|
|
|
|
69,812
|
|
|
|
30,271
|
|
|
|
26,179
|
|
|
|
28,390
|
|
|
|
28,060
|
|
|
Net cash from (used in) investing activities
|
|
|
(11,606
|
)
|
|
|
—
|
|
|
|
(39,720
|
)
|
|
|
28,114
|
|
|
|
(101,093
|
)
|
|
|
51
|
|
|
|
(14,056
|
)
|
|
|
(86,986
|
)
|
|
|
35,996
|
|
|
|
(1,064
|
)
|
|
|
(4,920
|
)
|
|
|
39,852
|
|
|
Net cash from (used in) financing activities
|
|
|
(67,897
|
)
|
|
|
(25,015
|
)
|
|
|
(35,528
|
)
|
|
|
(57,384
|
)
|
|
|
7,719
|
|
|
|
(24,306
|
)
|
|
|
16,530
|
|
|
|
(33,117
|
)
|
|
|
(48,651
|
)
|
|
|
(23,076
|
)
|
|
|
(23,121
|
)
|
|
|
(48,606
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
(55,630
|
)
|
|
|
—
|
|
|
|
|
|
|
|
(55,630
|
)
|
|
|
(204,128
|
)
|
|
|
51
|
|
|
|
|
|
|
|
(204,077
|
)
|
|
|
(15,543
|
)
|
|
|
(1,064
|
)
|
|
|
|
|
|
|
(16,607
|
)
|
|
Impairment losses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Impairment losses reversed
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-51
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 3—Assets and Liabilities Held for Sale and Discontinued Operations
Assets held for sale
The
assets held for sale can be detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
|
|
|
|
Vessels
|
|
|
21,510
|
|
|
|
52,920
|
|
|
Of which in Tankers segment
|
|
|
21,510
|
|
|
|
52,920
|
|
|
Of which in FSO segment
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Sale price
|
|
|
Book
Value
|
|
|
Expected
Gain (Loss)
|
|
|
|
|
in thousands of U.S.$
|
|
|
Cap Isabella
|
|
|
52,920
|
|
|
|
85,000
|
|
|
|
(32,080
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
52,920
|
|
|
|
85,000
|
|
|
|
(32,080
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The expected loss on the disposal of the
Cap Isabella
was recognized in 2012. The
Cap Isabella
was
sold in 2013 (See Note 8).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Sale price
|
|
|
Book
Value
|
|
|
Expected
Gain
(Loss)
|
|
|
Luxembourg
|
|
|
28,000
|
|
|
|
21,510
|
|
|
|
6,490
|
|
|
At December 31, 2013
|
|
|
28,000
|
|
|
|
21,510
|
|
|
|
6,490
|
|
The capital gain on the sale of the Luxembourg will be taken when the vessel is delivered to the new owner in 2014
(See Note 28—Subsequent events).
Discontinued operations
As of December 31, 2013, December 31, 2012 and December 31, 2011, the Group had no operations that met the criteria of a
discontinued operation.
F-52
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 4—Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
|
|
|
|
|
Pool Revenue
|
|
|
49,792
|
|
|
|
70,066
|
|
|
|
76,430
|
|
|
Time Charters(Note 20)
|
|
|
133,396
|
|
|
|
144,889
|
|
|
|
187,050
|
|
|
Spot Voyages
|
|
|
121,434
|
|
|
|
105,881
|
|
|
|
62,835
|
|
|
Total
|
|
|
304,622
|
|
|
|
320,836
|
|
|
|
326,315
|
|
For the accounting treatment of revenues, we refer to the accounting policies (N)—Revenues
Note 5—Expenses for Shipping Activities and Other Expenses from Operating Activities
Expenses for shipping activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(112,085)
|
|
|
|
(109,538)
|
|
|
|
(123,078)
|
|
|
Charterhire(Note 20)
|
|
|
(18,029
|
)
|
|
|
(28,920
|
)
|
|
|
(42,497
|
)
|
|
Bareboat hire(Note 20)
|
|
|
(3,002
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Voyage expenses
|
|
|
(73,412
|
)
|
|
|
(72,100
|
)
|
|
|
(46,884
|
)
|
|
Total
|
|
|
(206,528
|
)
|
|
|
(210,558
|
)
|
|
|
(212,459
|
)
|
The operating expenses relate mainly to the crewing, technical and other costs to operate tankers and FSOs. The
majority of voyage expenses are port costs, bunkers and agent fees paid to operate the vessels on the spot market.
F-53
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Employee benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
|
|
|
|
|
Wages and salaries
|
|
|
(9,498)
|
|
|
|
(11,439)
|
|
|
|
(11,328)
|
|
|
Social security costs
|
|
|
(2,149
|
)
|
|
|
(2,323
|
)
|
|
|
(2,313
|
)
|
|
Provision for employee benefits(Note 17)
|
|
|
86
|
|
|
|
96
|
|
|
|
100
|
|
|
Equity-settled share-based payments(Note 23)
|
|
|
(183
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Other employee benefits
|
|
|
(2,137
|
)
|
|
|
(2,067
|
)
|
|
|
(2,040
|
)
|
|
Total
|
|
|
(13,881
|
)
|
|
|
(15,733
|
)
|
|
|
(15,581
|
)
|
|
Average number of full time equivalents
|
|
|
97.30
|
|
|
|
102.00
|
|
|
|
101.66
|
|
Other operating expenses in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
thousands of U.S.$
|
|
|
|
|
|
|
|
Administrative expenses
|
|
|
(13,283)
|
|
|
|
(15,064)
|
|
|
|
(13,074)
|
|
|
Total
|
|
|
(13,283
|
)
|
|
|
(15,064
|
)
|
|
|
(13,074
|
)
|
The administrative expenses include amongst other director fees, office rental, consulting- and audit fees and
Tonnage Tax.
Note 6—Net Finance Expense
Recognized in profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Interest income on bank deposits
|
|
|
98
|
|
|
|
929
|
|
|
|
226
|
|
|
Foreign exchange gains
|
|
|
1,895
|
|
|
|
4,420
|
|
|
|
5,437
|
|
|
Finance income
|
|
|
1,993
|
|
|
|
5,349
|
|
|
|
5,663
|
|
|
Interest expense on financial liabilities measured at amortized cost
|
|
|
(49,240
|
)
|
|
|
(47,930
|
)
|
|
|
(57,097
|
)
|
|
Fair value adjustment on interest rate swaps
|
|
|
154
|
|
|
|
273
|
|
|
|
17,840
|
|
|
Other financial charges
|
|
|
(2,809
|
)
|
|
|
(3,551
|
)
|
|
|
(6,812
|
)
|
|
Foreign exchange losses
|
|
|
(2,742
|
)
|
|
|
(4,299
|
|
|
|
(6,415
|
)
|
|
Finance expense
|
|
|
(54,637
|
)
|
|
|
(55,507
|
)
|
|
|
(52,484
|
)
|
|
|
|
|
|
|
Net finance expense recognized in profit or loss
|
|
|
(52,644
|
)
|
|
|
(50,158
|
)
|
|
|
(46,821
|
)
|
|
The above finance income and expenses include the following in respect of assets (liabilities) not at fair value through profit or
loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income on financial assets
|
|
|
98
|
|
|
|
929
|
|
|
|
226
|
|
|
Total interest expense on financial liabilities
|
|
|
(49,240
|
)
|
|
|
(47,930
|
)
|
|
|
(57,097
|
)
|
|
Total other financial charges
|
|
|
(2,809
|
)
|
|
|
(3,551
|
)
|
|
|
(6,812
|
)
|
F-54
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Recognized directly in equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Foreign currency translation differences for foreign operations
|
|
|
216
|
|
|
|
78
|
|
|
|
(170
|
)
|
|
Cash flow hedges—effective portion of changes in fair value
|
|
|
5,430
|
|
|
|
3,871
|
|
|
|
651
|
|
|
Cash flow hedges—reclassified to profit or loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net finance expense recognized directly in equity
|
|
|
5,646
|
|
|
|
3,949
|
|
|
|
481
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Company
|
|
|
5,646
|
|
|
|
3,949
|
|
|
|
481
|
|
|
Net finance expense recognized directly in equity
|
|
|
5,646
|
|
|
|
3,949
|
|
|
|
481
|
|
|
Recognized in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Translation reserve
|
|
|
216
|
|
|
|
78
|
|
|
|
(170
|
)
|
|
Hedging reserve
|
|
|
5,430
|
|
|
|
3,871
|
|
|
|
651
|
|
|
|
|
|
5,646
|
|
|
|
3,949
|
|
|
|
481
|
|
Note 7—Tax Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
|
|
|
|
|
Current tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current period
|
|
|
(58
|
)
|
|
|
(12
|
)
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(58
|
)
|
|
|
(12
|
)
|
|
|
(33
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of temporary differences
|
|
|
(120
|
)
|
|
|
738
|
|
|
|
(85
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
(120
|
)
|
|
|
738
|
|
|
|
(85
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total tax expense
|
|
|
(178
|
)
|
|
|
726
|
|
|
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of effective tax
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Profit (loss) before tax
|
|
|
|
|
|
|
(89,005
|
)
|
|
|
|
|
|
|
(119,322
|
)
|
|
|
|
|
|
|
(95,869
|
)
|
|
|
|
|
|
|
|
|
|
Tax at domestic rate
|
|
|
(33.99
|
)%
|
|
|
30,423
|
|
|
|
(33.99
|
)%
|
|
|
40,558
|
|
|
|
(33.99
|
)%
|
|
|
32,585
|
|
|
Effects on tax of :
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax exempt profit / loss
|
|
|
|
|
|
|
(2,863
|
)
|
|
|
|
|
|
|
(845
|
)
|
|
|
|
|
|
|
(1,571
|
)
|
|
Non-deductible expenses
|
|
|
|
|
|
|
(180
|
)
|
|
|
|
|
|
|
(270
|
)
|
|
|
|
|
|
|
(7,544
|
)
|
|
Use of Unrecognized tax losses, tax credits and tax allowances
|
|
|
|
|
|
|
138
|
|
|
|
|
|
|
|
168
|
|
|
|
|
|
|
|
239
|
|
|
Tonnage Tax regime
|
|
|
|
|
|
|
(33,717
|
)
|
|
|
|
|
|
|
(42,620
|
)
|
|
|
|
|
|
|
(25,545
|
)
|
|
Effect of share of profit of equity-accounted investees
|
|
|
|
|
|
|
6,068
|
|
|
|
|
|
|
|
3,383
|
|
|
|
|
|
|
|
2,004
|
|
|
Effects of tax regimes in foreign jurisdictions
|
|
|
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
352
|
|
|
|
|
|
|
|
(286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total taxes
|
|
|
0.20
|
%
|
|
|
(178
|
)
|
|
|
(0.61
|
)%
|
|
|
726
|
|
|
|
0.12
|
%
|
|
|
(118
|
)
|
F-55
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In application of an IFRIC agenda decision on IAS 12 Income taxes, tonnage tax is not accounted
for as income taxes in accordance with IAS 12 and is not presented as part of income tax expense in the consolidated statement of profit or loss but has been shown as an administrative expense under the heading Other operating expenses (see Note 5).
Note 8—Property, Plant and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tankers
|
|
|
Vessels under
construction
|
|
|
Other
equipment
& vehicles
|
|
|
Prepayment
|
|
|
Total PPE
|
|
|
|
|
in thousands of U.S.$
|
|
|
At January 1, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
2,490,765
|
|
|
|
114,518
|
|
|
|
2,440
|
|
|
|
—
|
|
|
|
2,607,723
|
|
|
Depreciation & impairment losses
|
|
|
(732,632
|
)
|
|
|
—
|
|
|
|
(1,466
|
)
|
|
|
—
|
|
|
|
(734,098
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amount
|
|
|
1,758,133
|
|
|
|
114,518
|
|
|
|
974
|
|
|
|
—
|
|
|
|
1,873,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
—
|
|
|
|
600
|
|
|
|
347
|
|
|
|
—
|
|
|
|
947
|
|
|
Disposals and cancellations
|
|
|
—
|
|
|
|
(25,499
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
(25,500
|
)
|
|
Depreciation charge
|
|
|
(141,955
|
)
|
|
|
—
|
|
|
|
403
|
|
|
|
—
|
|
|
|
(142,358
|
)
|
|
Transfer to assets held for sale
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Transfers
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Translation differences
|
|
|
—
|
|
|
|
—
|
|
|
|
(11
|
)
|
|
|
—
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2011
|
|
|
1,616,178
|
|
|
|
89,619
|
|
|
|
906
|
|
|
|
—
|
|
|
|
1,706,703
|
|
|
At January 1, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
2,490,765
|
|
|
|
89,619
|
|
|
|
2,500
|
|
|
|
—
|
|
|
|
2,582,884
|
|
|
Depreciation & impairment losses
|
|
|
(874,587
|
)
|
|
|
—
|
|
|
|
(1,594
|
)
|
|
|
—
|
|
|
|
(876,181
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amount
|
|
|
1,616,178
|
|
|
|
89,619
|
|
|
|
906
|
|
|
|
—
|
|
|
|
1,706,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
—
|
|
|
|
157,051
|
|
|
|
127
|
|
|
|
—
|
|
|
|
157,178
|
|
|
Disposals and cancellations
|
|
|
(37,459
|
)
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
—
|
|
|
|
(37,469
|
)
|
|
Depreciation charge
|
|
|
(146,518
|
)
|
|
|
—
|
|
|
|
(362
|
)
|
|
|
—
|
|
|
|
(146,880
|
)
|
|
Transfer to assets held for sale
|
|
|
—
|
|
|
|
(86,034
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(86,034
|
)
|
|
Transfers
|
|
|
160,636
|
|
|
|
(160,636
|
)
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Translation differences
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
|
1,592,837
|
|
|
|
—
|
|
|
|
666
|
|
|
|
—
|
|
|
|
1,593,503
|
|
|
At January 1, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
2,506,756
|
|
|
|
—
|
|
|
|
2,377
|
|
|
|
—
|
|
|
|
2,509,133
|
|
|
Depreciation & impairment losses
|
|
|
(913,919
|
)
|
|
|
—
|
|
|
|
(1,711
|
)
|
|
|
—
|
|
|
|
(915,630
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amount
|
|
|
1,592,837
|
|
|
|
—
|
|
|
|
666
|
|
|
|
—
|
|
|
|
1,593,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
—
|
|
|
|
—
|
|
|
|
325
|
|
|
|
10,000
|
|
|
|
10,325
|
|
|
Disposals and cancellations
|
|
|
—
|
|
|
|
—
|
|
|
|
(10
|
)
|
|
|
—
|
|
|
|
(10
|
)
|
|
Depreciation charge
|
|
|
(136,527
|
)
|
|
|
—
|
|
|
|
(355
|
)
|
|
|
—
|
|
|
|
(136,882
|
)
|
F-56
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tankers
|
|
|
Vessels under
construction
|
|
|
Other
equipment
& vehicles
|
|
|
Prepayment
|
|
|
Total PPE
|
|
|
|
|
in thousands of U.S.$
|
|
|
Transfer to assets held for sale
|
|
|
(21,510
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(21,510
|
)
|
|
Transfers
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Translation differences
|
|
|
—
|
|
|
|
—
|
|
|
|
7
|
|
|
|
—
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2013
|
|
|
1,434,800
|
|
|
|
—
|
|
|
|
633
|
|
|
|
10,000
|
|
|
|
1,445,433
|
|
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
2,424,978
|
|
|
|
—
|
|
|
|
2,487
|
|
|
|
10,000
|
|
|
|
2,437,465
|
|
|
Depreciation & impairment losses
|
|
|
(990,178
|
)
|
|
|
—
|
|
|
|
(1,854
|
)
|
|
|
—
|
|
|
|
(992,032
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net carrying amount
|
|
|
1,434,800
|
|
|
|
—
|
|
|
|
633
|
|
|
|
10,000
|
|
|
|
1,445,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposal of assets—gain/losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
Sale price
|
|
|
Book
Value
|
|
|
Gain
|
|
|
Loss
|
|
|
|
|
in thousands of U.S.$
|
|
|
Pacific Lagoon
|
|
|
—
|
|
|
|
52,013
|
|
|
|
29,869
|
|
|
|
22,144
|
|
|
|
—
|
|
|
Newbuilding (Cancellation)
|
|
|
—
|
|
|
|
—
|
|
|
|
25,500
|
|
|
|
—
|
|
|
|
(25,500
|
)
|
|
Other
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
|
|
—
|
|
|
|
52,013
|
|
|
|
55,369
|
|
|
|
22,153
|
|
|
|
(25,500
|
)
|
|
Ti Guardian (Financial lease)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,831
|
|
|
|
—
|
|
|
Algarve
|
|
|
—
|
|
|
|
35,775
|
|
|
|
28,571
|
|
|
|
7,204
|
|
|
|
—
|
|
|
Cap Isabella
|
|
|
—
|
|
|
|
52,920
|
|
|
|
85,000
|
|
|
|
—
|
|
|
|
(32,080
|
)
|
|
Other
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December, 31 2012
|
|
|
—
|
|
|
|
88,695
|
|
|
|
113,571
|
|
|
|
10,067
|
|
|
|
(32,080
|
)
|
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
Sale price
|
|
|
Book
Value
|
|
|
Gain
|
|
|
Loss
|
|
|
Cap Isabella
|
|
|
215
|
|
|
|
52,920
|
|
|
|
53,135
|
|
|
|
—
|
|
|
|
(215
|
)
|
|
Other
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December, 31 2013
|
|
|
215
|
|
|
|
52,920
|
|
|
|
53,135
|
|
|
|
8
|
|
|
|
(215
|
)
|
On November 22, 2010, the Group announced it had sold one of its oldest double hulled VLCCs, the
Pacific
Lagoon
(1999—305,839 dwt). The gain was recognized in 2011 since the vessel was delivered to its new owner in 2011.
During
2011, the Group cancelled the contract for a newbuilding VLCC, which resulted in a loss of U.S. $25.5 million, which was equal to the amount of the installment already paid to the shipyard.
During 2006 the Group entered into a sale and lease-back transaction on the
TI Guardian
. This transaction has been classified as a finance
lease. The excess of the sale proceeds over the carrying value at the time of the sale amounted to U.S.$ 11,678,000 which is being amortized over the period of the lease-back, or seven years. Furthermore, the Group had options to
F-57
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
acquire the vessel beginning in the third year (2009). On November 7, 2012, the time charter contract, the original term of which expired October 2013 was terminated. As a result, the Group
booked a capital gain of U.S.$ 2.8 million in 2012.
On October 24, 2012, the Group sold the VLCC
Algarve
(1999—298,969 dwt) for a sale price of U.S.$ 35.8 million. The capital gain of U.S.$ 7.2 million was recorded in 2012, when the vessel was delivered to its new owner.
On March 15, 2013, the Group sold the Suezmax
Cap Isabella
(2013—157,258 dwt) to Belle Shipholdings Ltd. The Suezmax
Cap
Isabella
was a newbuilding from Samsung Heavy Industries Co., Ltd., or Samsung Heavy Industries. The sale price of the vessel was U.S.$ 54 million, while Euronav still had a capital commitment to the yard of U.S.$ 55.2 million. As this
transaction was signed before the announcement of the 2012 final figures and was the result of negotiations with various parties which started in the financial year 2012, the Group recorded the capital loss of U.S.$ 32 million already in 2012
(See Note 3 - Assets and liabilities held for sale and discontinued operations) with a small adjustment in 2013 of U.S.$ 215,000.
On
January 7, 2014, the Group entered into an agreement for the sale of its oldest double-hulled VLCC
Luxembourg
(1999—299,150 dwt), for U.S.$28.0 million. Because the sale process commenced in 2013 and management had good indications
that the sale would occur in the near future, the asset was transferred to non-current assets held for sale as of December 31, 2013. The capital gain on that sale was approximately U.S.$6.0 million which has been recorded at delivery in 2014
(See Note 28—Subsequent Events).
Impairment
As a result of the decline in charter rates and vessels value, the Group has performed an impairment test where the carrying amount of an asset or CGU is compared to its recoverable amount, which is the greater of
its value in use and its fair value less cost to sell. In assessing value in use, the following assumptions were used:
|
|
•
|
|
10-year historical average spot freight rates are used as forecast charter rates for tankers
|
|
|
•
|
|
Weighted Average Cost of Capital (WACC) of 6.38% (2012: 7.41%, 2011: 8.02%)
|
|
|
•
|
|
20 year useful life with residual value equal to zero for tankers
|
Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are subject to judgment. The impairment test did not result in a requirement
to record an impairment loss in 2013. Even with an increase of the WACC of 5%, there was no need to record an impairment loss in 2013.
Security
All tankers
financed are subject to a mortgage to secure bank loans (see Note 15).
F-58
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Vessels on order or under construction
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands
of U.S.$
|
|
|
|
|
|
|
VLCC
|
|
|
—
|
|
|
|
—
|
|
|
Suezmax tankers
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
|
|
—
|
|
|
|
—
|
|
The group does not have any vessels under construction.
Prepayment
On
January 3, 2014, the Group signed a contract to acquire 15 VLCCs from Maersk Tankers Singapore Pte Ltd. for a total acquisition price of U.S.$ 980 million, payable as the vessels are being delivered. For this transaction, the Group made a
prepayment in December 2013 for a total of U.S.$ 10 million. For more information on this transaction, please refer to Note 28—Subsequent Events.
As at December 31, 2013 the Group’s total capital commitment (including the Maersk transaction discussed above) amounts to U.S.$ 970 million (2012: U.S.$ 55.3 million).
These can be detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31, 2012
payments scheduled
for
|
|
|
|
|
Total
|
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
|
|
in thousands of U.S.$
|
|
|
Commitments in respect of VLCCs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Commitments in respect of Suezmaxes
|
|
|
55,250
|
|
|
|
55,250
|
|
|
|
—
|
|
|
|
—
|
|
|
Commitments in respect of FSOs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
55,250
|
|
|
|
55,250
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31, 2013
|
|
|
|
|
payments scheduled for
|
|
|
|
|
Total
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
|
|
in thousands of U.S.$
|
|
|
Commitments in respect of VLCCs
|
|
|
970,000
|
|
|
|
970,000
|
|
|
|
|
|
|
|
—
|
|
|
Commitments in respect of Suezmaxes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Commitments in respect of FSOs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
|
|
970,000
|
|
|
|
970,000
|
|
|
|
—
|
|
|
|
—
|
|
F-59
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 9—Deferred Tax Assets and Liabilities
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
Liabilities
|
|
|
Net
|
|
|
|
|
in thousands of U.S.$
|
|
|
|
|
|
|
|
Employee benefits
|
|
|
41
|
|
|
|
—
|
|
|
|
41
|
|
|
Unused tax losses & tax credits
|
|
|
922
|
|
|
|
—
|
|
|
|
922
|
|
|
|
|
|
963
|
|
|
|
—
|
|
|
|
963
|
|
|
Offset
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Balance at December, 31 2012
|
|
|
963
|
|
|
|
—
|
|
|
|
|
|
|
Employee benefits
|
|
|
52
|
|
|
|
—
|
|
|
|
52
|
|
|
Unused tax losses & tax credits
|
|
|
828
|
|
|
|
—
|
|
|
|
828
|
|
|
|
|
|
880
|
|
|
|
—
|
|
|
|
880
|
|
|
Offset
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Balance at December 31, 2013
|
|
|
880
|
|
|
|
—
|
|
|
|
|
|
Unrecognized deferred tax assets and liabilities
Deferred tax assets and liabilities have not been recognized in respect of the following items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
Assets
|
|
|
Liabilities
|
|
|
Assets
|
|
|
Liabilities
|
|
|
|
|
in thousands of U.S.$
|
|
|
Deductible temporary differences
|
|
|
352
|
|
|
|
—
|
|
|
|
420
|
|
|
|
—
|
|
|
Taxable temporary differences
|
|
|
—
|
|
|
|
(16,587
|
)
|
|
|
—
|
|
|
|
(16,601
|
)
|
|
Tax losses & tax credits
|
|
|
30,148
|
|
|
|
—
|
|
|
|
31,167
|
|
|
|
—
|
|
|
|
|
|
30,500
|
|
|
|
(16,587
|
)
|
|
|
31,587
|
|
|
|
(16,601
|
)
|
|
Offset
|
|
|
(16,587
|
)
|
|
|
16,587
|
|
|
|
(16,601
|
)
|
|
|
16,601
|
|
|
Total
|
|
|
13,913
|
|
|
|
—
|
|
|
|
14,986
|
|
|
|
—
|
|
The unrecognized deferred tax assets in respect of tax losses and tax credits are entirely related to tax losses
carried forward, investment deduction allowances and excess dividend received deduction. These unrecognized tax losses and tax credits have no expiration date. Deferred tax assets have not been recognized because future taxable profits cannot be
measured on a reliable basis.
The unrecognized tax liabilities in respect of taxable temporary differences relate to tax liabilities in
respect of non distributed reserves of the Group that will be taxed when distributed. No deferred tax liability has been recognized because the Group controls whether the liability will be incurred and management is satisfied that the liability will
not be incurred in the foreseeable future.
F-60
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Movement in deferred tax balances during the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
Jan 1, 2011
|
|
|
Recognized in
income
|
|
|
Recognized in
equity
|
|
|
Translation
differences
|
|
|
Balance at
Dec 31, 2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Employee benefits
|
|
|
104
|
|
|
|
(44
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
60
|
|
|
Unused tax losses & tax credits
|
|
|
190
|
|
|
|
(42
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
294
|
|
|
|
(86
|
)
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
Jan 1, 2012
|
|
|
Recognized in
income
|
|
|
Recognized in
equity
|
|
|
Translation
differences
|
|
|
Balance at
Dec 31, 2012
|
|
|
Employee benefits
|
|
|
60
|
|
|
|
(21
|
)
|
|
|
—
|
|
|
|
2
|
|
|
|
41
|
|
|
Unused tax losses & tax credits
|
|
|
145
|
|
|
|
758
|
|
|
|
—
|
|
|
|
19
|
|
|
|
922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
205
|
|
|
|
737
|
|
|
|
—
|
|
|
|
21
|
|
|
|
963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
Jan 1, 2013
|
|
|
Recognized in
income
|
|
|
Recognized in
equity
|
|
|
Translation
differences
|
|
|
Balance at
Dec 31, 2013
|
|
|
Employee benefits
|
|
|
41
|
|
|
|
9
|
|
|
|
—
|
|
|
|
2
|
|
|
|
52
|
|
|
Unused tax losses & tax credits
|
|
|
922
|
|
|
|
(129
|
)
|
|
|
—
|
|
|
|
35
|
|
|
|
828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
963
|
|
|
|
(120
|
)
|
|
|
—
|
|
|
|
37
|
|
|
|
880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 10—Non-Current Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
Shareholders loans to joint ventures
|
|
|
259,517
|
|
|
|
226,150
|
|
|
Other non-current receivables
|
|
|
17
|
|
|
|
9
|
|
|
Total
|
|
|
259,534
|
|
|
|
226,159
|
|
Please refer to Note 25 for more information on the Shareholders loans to joint ventures.
The ageing of the non-current receivables is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
Receivables:
|
|
|
|
|
|
|
|
|
|
Between one and two years
|
|
|
—
|
|
|
|
—
|
|
|
Between two and three years
|
|
|
—
|
|
|
|
—
|
|
|
Between three and four years
|
|
|
—
|
|
|
|
—
|
|
|
Between four and five years
|
|
|
—
|
|
|
|
—
|
|
|
More than five years
|
|
|
259,534
|
|
|
|
226,159
|
|
|
Total
|
|
|
259,534
|
|
|
|
226,159
|
|
F-61
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 11—Trade and Other Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of
U.S.$
|
|
|
|
|
|
|
Trade receivables
|
|
|
24,315
|
|
|
|
24,236
|
|
|
Accrued income
|
|
|
9,765
|
|
|
|
8,059
|
|
|
Accrued interest
|
|
|
14
|
|
|
|
6
|
|
|
Deferred charges
|
|
|
29,368
|
|
|
|
20,704
|
|
|
Other receivables
|
|
|
32,451
|
|
|
|
28,421
|
|
|
Total
|
|
|
95,913
|
|
|
|
81,426
|
|
The other receivables relate to income to be received by the Group from Tankers International.
The increase in deferred charges relates to the bunkers on board of the vessels, which increased in 2013 due to the higher spot exposure of the
Euronav fleet resulting in increased bunker costs. Furthermore, many vessels have bunkered late December 2013.
For currency and
credit risk, see Note 19.
Note 12—Cash and Cash Equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of
U.S.$
|
|
|
|
|
|
|
Bank deposits
|
|
|
34,254
|
|
|
|
78,758
|
|
|
Cash at bank and in hand
|
|
|
40,055
|
|
|
|
34,293
|
|
|
Total
|
|
|
74,309
|
|
|
|
113,051
|
|
|
Of which restricted cash
|
|
|
1,750
|
|
|
|
—
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Bank overdrafts used for cash management purposes
|
|
|
—
|
|
|
|
—
|
|
|
Net cash and cash equivalents
|
|
|
74,309
|
|
|
|
113,051
|
|
Note 13—Equity
|
|
|
|
|
|
|
|
|
|
|
Share capital and share premium
|
|
2013
|
|
|
2012
|
|
|
|
|
in shares
|
|
|
On issue at January 1
|
|
|
51,750,000
|
|
|
|
51,750,000
|
|
|
Capital increase
|
|
|
2,473,817
|
|
|
|
—
|
|
|
On issue at December 31—fully paid
|
|
|
54,223,817
|
|
|
|
51,750,000
|
|
On November 12, 2013 and December 19, 2013, the Group’s share capital was increased following the
exercise of the conversion option of respectively 88 and 64 Notes issued in 2013 and maturing in 2018 for a total amount of U.S.$ 15.2 million resulting in the issuance of 1,432,210 and 1,041,607 new ordinary shares, respectively.
At December 31, 2013 the share capital was represented by 54,223,817 shares. The shares have no par value.
F-62
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On December 16, 2013, Euronav raised U.S.$ 150 million through a private placement of a
perpetual convertible preferred equity instrument (“PCPs”). The instrument has been issued in January 2014 at par and will bear an interest of 6% during the first five years payable annually in arrears in cash or in shares at the option of
the Group. The price against which the PCPs can be contributed is EUR 5.776000 (or U.S.$ 7.928715 at EUR/U.S.$ exchange rate of 1.3727) per common share. The Group will have an option to force the conversion if the share price reaches a certain
level over a certain period of time and the Group has completed a listing on the New York Stock Exchange or NASDAQ. As based on the subscription agreement with the relevant investors, the funds were received in 2014 and the instrument was only
issued in January 2014, the transaction had no effect on the 2013 figures. (See Note 28—Subsequent Events).
At December 31,
2013, the authorized share capital amounts to U.S.$ 47,311,178 (2012: U.S.$ 50,000,000) or the equivalent of 43,528,067 shares (2012: 46,001,884 shares).
The holders of ordinary shares are entitled to receive dividends when declared and are entitled to one vote per share at the shareholders’ meetings of the Group.
Convertible Notes
There are
no share options outstanding except the options granted to the holders of the 6.50% convertible notes (the “Notes”) (see Note 15 and Note 28).
Translation reserve
The translation reserve is comprised of all foreign exchange differences
arising from the translation of the financial statements of foreign operations.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to
hedged transactions that have not yet occurred (see also Note 19).
Treasury shares
At December 31, 2013, the Group held 1,750,000 treasury shares (December 31, 2012: 1,750,000 shares).
The Group has purchased the shares at an average price of EUR 18.1605 or U.S.$ 26.3210.
The treasury shares have been deducted from equity and amount to U.S.$ 46,061,831 at December 31, 2013 (December 31, 2012:
U.S.$ 46,061,831).
Dividends
In 2012 and 2013, the directors of the Group proposed not to declare a dividend.
Dividend
limitations
The Group is subject to a dividend covenant in relation to its senior secured credit facilities: the dividend shall not
exceed 50% of the net income earned in a financial year or part thereof to
F-63
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
which that dividend relates, unless the majority of the lenders of those particular facilities agree to a dividend in excess of the said 50%.
Note 14—Earnings Per Share
Basic
earnings per share
The calculation of basic earnings per share at December 31, 2013 was based on a result attributable to
ordinary shares of U.S.$ (89,683,000) (2012: U.S.$ (118,596,000) and 2011: U.S.$ (95,987,000)) and a weighted average number of ordinary shares outstanding during the period ended December 31, 2013 of 50,230,438 (2012:
50,000,000 and 2011: 50,000,000), calculated as follows:
Result attributable to ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Result for the period
|
|
|
(89,683
|
)
|
|
|
(118,596
|
)
|
|
|
(95,987
|
)
|
|
Weighted average
|
|
|
50,230,438
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Basic earnings per share (in U.S.$)
|
|
|
(1.79
|
)
|
|
|
(2.37
|
)
|
|
|
(1.92
|
)
|
Weighted average number of ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued
|
|
|
Treasury
shares
|
|
|
Shares
outstanding
|
|
|
Weighted
number of
shares
|
|
|
|
|
in shares
|
|
|
On issue at December 31, 2010
|
|
|
51,750,000
|
|
|
|
1,750,000
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
purchases of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
withdrawal of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
sales of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On issue at December 31, 2011
|
|
|
51,750,000
|
|
|
|
1,750,000
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
purchases of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
withdrawal of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
sales of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On issue at December 31, 2012
|
|
|
51,750,000
|
|
|
|
1,750,000
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
2,473,817
|
|
|
|
—
|
|
|
|
2,473,817
|
|
|
|
230,438
|
|
|
purchases of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
withdrawal of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
sales of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On issue at December 31, 2013
|
|
|
54,223,817
|
|
|
|
1,750,000
|
|
|
|
52,473,817
|
|
|
|
50,230,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
The potential issuance of ordinary shares relating to the conversion of the convertible notes and to the contribution in kind of the Perpetual Convertible Preferred Equity were not included in the calculation of
diluted earnings per share because such issuances would have been anti-dilutive to existing shareholders for the periods presented, as applicable, (earnings per share
F-64
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
would increase). Such issuances could, however, dilute basic earnings per share in future periods.
Number of ordinary shares (diluted)
The table below shows the potential number of shares that
could be created if all the convertible notes were to be converted into ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in shares
|
|
|
Ordinary shares outstanding (basic)
|
|
|
52,473,817
|
|
|
|
50,000,000
|
|
|
|
50,000,000
|
|
|
Effect of potential conversion of Notes
|
|
|
18,949,134
|
|
|
|
6,474,307
|
|
|
|
6,474,307
|
|
|
Effect of potential conversion of PCPS
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Effect of Share-based Payment arrangements
|
|
|
1,750,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of ordinary shares (diluted)
|
|
|
73,172,951
|
|
|
|
56,474,307
|
|
|
|
56,474,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The number of shares related to a potential conversion of Notes may vary according to potential adjustments of the
conversion price in certain events such as a change of control, a distribution of a dividend exceeding certain threshold amounts or early voluntary conversion.
On January 31, 2013, Euronav launched an offer to current bondholders to exchange any and all outstanding Notes due in January 2015 for new 6.50% convertible Notes due in January 2018. The conversion price of
the new convertible Note was set to EUR 5.65 or U.S.$ 7.54. In case of an early voluntary conversion an additional number of shares will be made available at the same price as the conversion price to compensate for the unpaid coupons of the first 4
years. 1,250 2015 Notes were tendered for exchange.
In the beginning of 2012, the Group performed a buyback of 68 Notes issued in 2009
and maturing January 2015. These Notes were exchanged in February 2013 for new 6.50% Notes due in January 2018. In the course of 2013, these Notes were sold.
In the course of 2014, the majority of the Notes issued in 2013 and maturing in 2018, were converted to new ordinary shares. (See Note 28)
On February 6, 2014, 30 of the 60 perpetual convertible preferred equity instruments issued on January 10, 2014, were contributed in kind. (See Note 28)
F-65
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table illustrates all the capital increases that occurred in 2014 and the remaining
possible dilution for the outstanding Notes and perpetual convertible equity instruments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of
transaction
|
|
|
Number of
instruments
Converted/
Contributed
|
|
|
Amount in
U.S.$
|
|
|
Issued
Ordinary
shares
|
|
|
Total
number of
ordinary
shares in
issue
|
|
|
Capital Increases in 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding on
|
|
|
12/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,223,817
|
|
|
Exercise Conversion Option Convertible Note 2018
|
|
|
1/10/2014
|
|
|
|
491
|
|
|
|
49,100,000
|
|
|
|
8,163,810
|
|
|
|
62,387,627
|
|
|
First Capital Increase
|
|
|
1/10/2014
|
|
|
|
NA
|
|
|
|
49,999,867
|
|
|
|
5,473,571
|
|
|
|
67,861,198
|
|
|
Exercise Conversion Option Convertible Note 2018
|
|
|
1/23/2014
|
|
|
|
97
|
|
|
|
9,700,000
|
|
|
|
1,679,010
|
|
|
|
69,540,208
|
|
|
Exercise Conversion Option Convertible Note 2018
|
|
|
2/6/2014
|
|
|
|
453
|
|
|
|
45,300,000
|
|
|
|
7,841,164
|
|
|
|
77,381,372
|
|
|
Contribution in kind of the PCPS
|
|
|
2/6/2014
|
|
|
|
30
|
|
|
|
75,000,000
|
|
|
|
9,459,286
|
|
|
|
86,840,658
|
|
|
Second Capital Increase
|
|
|
2/24/2014
|
|
|
|
NA
|
|
|
|
300,000,133
|
|
|
|
32,841,528
|
|
|
|
119,682,186
|
|
|
Exercise Conversion Option Convertible Note 2018
|
|
|
2/25/2014
|
|
|
|
8
|
|
|
|
800,000
|
|
|
|
134,808
|
|
|
|
119,816,994
|
|
|
Exercise Conversion Option Convertible Note 2018
|
|
|
3/10/2014
|
|
|
|
47
|
|
|
|
4,700,000
|
|
|
|
662,763
|
|
|
|
120,479,757
|
|
|
Exercise Conversion Option Convertible Note 2018
|
|
|
4/22/2014
|
|
|
|
1
|
|
|
|
100,000
|
|
|
|
14,101
|
|
|
|
120,493,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66,270,041
|
|
|
|
120,493,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The above transactions resulted in the following capital structure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued
|
|
|
Treasury
shares
|
|
|
Shares
outstanding
|
|
|
Weighted
number of
shares
|
|
|
On issue at December 31, 2013
|
|
|
54,223,817
|
|
|
|
1,750,000
|
|
|
|
52,473,817
|
|
|
|
50,230,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares
|
|
|
66,270,041
|
|
|
|
—
|
|
|
|
66,270,041
|
|
|
|
46,368,322
|
|
|
purchases of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
withdrawal of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
sales of treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On issue YTD 2014
|
|
|
120,493,858
|
|
|
|
1,750,000
|
|
|
|
118,743,858
|
|
|
|
96,598,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After all the conversions of the Notes and the contributions in kind, the remaining outstanding instruments which
can give rise to dilution are summarized as follows:
|
|
|
|
|
|
|
|
|
in shares
|
|
|
Ordinary shares outstanding (basic)
|
|
|
118,743,858
|
|
|
Effect of potential conversion of Notes
|
|
|
1,147,621
|
|
|
Effect of potential conversion of PCPS
|
|
|
9,459,286
|
|
|
|
|
|
|
|
|
Number of ordinary shares (diluted)
|
|
|
129,350,765
|
|
|
|
|
|
|
|
F-66
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 15—Interest-Bearing Loans and Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease
|
|
|
Bank loans
|
|
|
Convertible
Notes
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Between 1 and 5 years
|
|
|
8,616
|
|
|
|
815,241
|
|
|
|
134,456
|
|
|
|
958,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
More than 1 year
|
|
|
8,616
|
|
|
|
815,241
|
|
|
|
134,456
|
|
|
|
958,313
|
|
|
Less than 1 year
|
|
|
9,894
|
|
|
|
123,751
|
|
|
|
—
|
|
|
|
133,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1, 2012
|
|
|
18,510
|
|
|
|
938,992
|
|
|
|
134,456
|
|
|
|
1,091,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New loans
|
|
|
—
|
|
|
|
750,000
|
|
|
|
—
|
|
|
|
750,000
|
|
|
Scheduled repayments
|
|
|
(8,375
|
)
|
|
|
(67,150
|
)
|
|
|
—
|
|
|
|
(75,525
|
)
|
|
Early repayments
|
|
|
(10,135
|
)
|
|
|
(712,351
|
)
|
|
|
(6,800
|
)
|
|
|
(729,286
|
)
|
|
Other changes
|
|
|
—
|
|
|
|
1,982
|
|
|
|
5,038
|
|
|
|
7,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
|
—
|
|
|
|
911,474
|
|
|
|
132,694
|
|
|
|
1,044,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Between 1 and 5 years
|
|
|
—
|
|
|
|
800,853
|
|
|
|
132,694
|
|
|
|
933,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
More than 1 year
|
|
|
—
|
|
|
|
800,853
|
|
|
|
132,694
|
|
|
|
933,547
|
|
|
Less than 1 year
|
|
|
—
|
|
|
|
110,621
|
|
|
|
—
|
|
|
|
110,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
|
—
|
|
|
|
911,474
|
|
|
|
132,694
|
|
|
|
1,044,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance lease
|
|
|
Bank loans
|
|
|
Convertible
Notes
|
|
|
Total
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Between 1 and 5 years
|
|
|
—
|
|
|
|
800,853
|
|
|
|
132,694
|
|
|
|
933,547
|
|
|
More than 1 year
|
|
|
—
|
|
|
|
800,853
|
|
|
|
132,694
|
|
|
|
933,547
|
|
|
Less than 1 year
|
|
|
—
|
|
|
|
110,621
|
|
|
|
—
|
|
|
|
110,621
|
|
|
At January 1, 2013
|
|
|
—
|
|
|
|
911,474
|
|
|
|
132,694
|
|
|
|
1,044,168
|
|
|
New loans
|
|
|
—
|
|
|
|
56,587
|
|
|
|
6,800
|
|
|
|
63,387
|
|
|
Scheduled repayments
|
|
|
—
|
|
|
|
(110,621
|
)
|
|
|
|
|
|
|
(110,621
|
)
|
|
Early repayments
|
|
|
—
|
|
|
|
(9,500
|
)
|
|
|
(500
|
)
|
|
|
(10,000
|
)
|
|
Conversion
|
|
|
—
|
|
|
|
—
|
|
|
|
(15,200
|
)
|
|
|
(15,200
|
)
|
|
Other changes
|
|
|
—
|
|
|
|
(177
|
)
|
|
|
2,028
|
|
|
|
1,851
|
|
|
Balance at December 31, 2013
|
|
|
—
|
|
|
|
847,763
|
|
|
|
125,822
|
|
|
|
973,585
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Between 1 and 5 years
|
|
|
—
|
|
|
|
710,086
|
|
|
|
125,822
|
|
|
|
835,908
|
|
|
More than 1 year
|
|
|
—
|
|
|
|
710,086
|
|
|
|
125,822
|
|
|
|
835,908
|
|
|
Less than 1 year
|
|
|
—
|
|
|
|
137,677
|
|
|
|
—
|
|
|
|
137,677
|
|
|
Balance at December 31, 2013
|
|
|
—
|
|
|
|
847,763
|
|
|
|
125,822
|
|
|
|
973,585
|
|
Bank Loans
In April 2009, Euronav entered into a U.S.$ 300 million senior secured credit facility. The facility consists of a term loan of U.S.$ 300 million for the purpose of financing two VLCCs and
4 Suezmaxes. The facility has a term of five years at a rate equal to Libor plus a margin of 2.50%. During 2013, the maturity was extended by four years until 2018 with the same repayment profile. The rate increased to Libor plus a margin of
3.40%. The total amount drawn under this facility on December 31, 2013 was U.S.$ 211,433,333.00.
F-67
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In June 2011, Euronav entered into a U.S.$ 750 million senior secured credit facility. The
main purpose of this facility was to repay and retire the U.S.$ 1,600 million facility signed in April 2005. The credit facility is comprised of (i) a U.S.$ 250 million non-amortizing revolving credit facility and (ii) a U.S.$
500 million term loan facility. The credit facilities have a term of six years commencing from the date of signing at a rate of LIBOR plus 2.25% and have the same financial covenants as the existing facilities. On the closing date, the
facilities were secured by 22 of the wholly-owned vessels of the Group’s fleet, which is comprised of 1 ULCC, 7 VLCCs, and 14 Suezmaxes. On March 19, 2012, Euronav drew down part of the revolving credit facility (RCF) and the full term
loan under these facilities. Following the sale of the VLCC
Algarve
in October 2012, the term loan facility was prepaid with an amount of U.S.$ 18.6 million and the non-amortizing revolving loan facility was reduced by U.S.$ 10.2
million.
Short-term loans
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
Current portion of long-term loans
|
|
|
137,677
|
|
|
|
110,621
|
|
|
|
|
|
137,677
|
|
|
|
110,621
|
|
Undrawn borrowing facilities
At December 31, 2013, the Group has undrawn borrowing facilities amounting to EUR 15,000,000 (2012: EUR 55,000,000) expiring in January 2015. At the same date, an amount of U.S.$ 21,280,237 (2012: U.S.$
54,780,237) was undrawn on the non-amortizing revolving loan facility.
Loan covenant
For the U.S.$ 750 million senior secured credit facility, Euronav negotiated during 2013 with its lenders a two-year relaxation of the Asset
Protection clause from 125% down to 110% against an increase of the margin above the LIBOR rate to 3.40%. On April 10, 2014, the Group voluntarily cancelled the waiver after which the margin was reduced to 3.00% and the ratio was set at the
original value of 125%.
Terms and debt repayment schedule
The terms and conditions of outstanding loans were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
Nominal
interest
rate
|
|
Year of
maturity
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
Face
value
|
|
|
Carrying
value
|
|
|
Face
value
|
|
|
Carrying
value
|
|
|
|
|
in thousands of U.S.$
|
|
|
Secured vessels loan
|
|
U.S.$
|
|
libor +3.40%
|
|
|
2017
|
|
|
|
350,079
|
|
|
|
347,845
|
|
|
|
436,400
|
|
|
|
432,505
|
|
|
Secured vessels Revolving loan*
|
|
U.S.$
|
|
libor +3.40%
|
|
|
2017
|
|
|
|
239,780
|
|
|
|
218,500
|
|
|
|
239,780
|
|
|
|
185,000
|
|
|
Secured vessels loan
|
|
U.S.$
|
|
libor +3.40%
|
|
|
2018
|
|
|
|
211,433
|
|
|
|
209,510
|
|
|
|
231,433
|
|
|
|
231,433
|
|
|
Secured vessels loan
|
|
U.S.$
|
|
libor +2.95%
|
|
|
2017
|
|
|
|
58.550
|
|
|
|
58,320
|
|
|
|
62,850
|
|
|
|
62,540
|
|
|
Unsecured bank facility
|
|
EUR
|
|
euribor +1.00%
|
|
|
2015
|
|
|
|
25,000
|
|
|
|
13,588
|
|
|
|
55,000
|
|
|
|
—
|
|
|
Total interest-bearing bank loans
|
|
|
|
|
|
|
|
|
|
|
884,842
|
|
|
|
847,763
|
|
|
|
1,025,463
|
|
|
|
911,478
|
|
F-68
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The carrying amount of the vessel loans can be reduced if the value of the collateralized vessels
falls under a certain percentage of the outstanding amount under that loan.
|
*
|
The total amount available under the revolving credit facility depends on the total value of the fleet of tankers securing the facility.
|
Convertible notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
Nominal
interest
rate
|
|
|
Year of
Maturity
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
Face
Value
|
|
|
Carrying
value
|
|
|
Classified
as Equity
|
|
|
Face
Value
|
|
|
Carrying
Value
|
|
|
Classified
as Equity
|
|
|
|
|
in thousands of U.S.$
|
|
|
Unsecured convertible Notes
|
|
U.S.$
|
|
|
|
|
6.50
|
%
|
|
|
2015
|
|
|
|
25,000
|
|
|
|
23,517
|
|
|
|
1,483
|
|
|
|
150,000
|
|
|
|
132,694
|
|
|
|
17,306
|
|
|
Unsecured convertible Notes
|
|
U.S.$
|
|
|
|
|
6.50
|
%
|
|
|
2018
|
|
|
|
109,800
|
|
|
|
102,305
|
|
|
|
7,495
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Total convertible Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,800
|
|
|
|
125,822
|
|
|
|
8,978
|
|
|
|
150,000
|
|
|
|
132,694
|
|
|
|
17,306
|
|
On September 24, 2009, the Company issued U.S.$ 150 million fixed-rate senior unsecured Notes, due 2015.
The Notes were issued at 100% of their principal amount and bear interest at a rate of 6.5% per annum, payable semi-annually in arrears. The initial conversion price is EUR 16,283750 (or U.S.$ 23,168520 at EUR/U.S.$ exchange rate of
1,4228) per share and was set at a premium of 25 percent to the volume weighted average price of Euronav’s ordinary shares on Euronext Brussels on September 3, 2009. If all of the Notes were to be converted into new ordinary shares at
the initial conversion price, 6,474,307 new ordinary shares would be issued, representing 11.12% of the Company’s share capital on a fully diluted basis.
The Notes are convertible between November 4, 2009 and January 24, 2015 into ordinary shares of the Company at the conversion price applicable at such conversion date and in accordance with the conditions
set out in a trust deed in relation to the Notes. Unless previously redeemed, converted or purchased and cancelled, the Notes will be redeemed in cash on January 31, 2015 at 100% of their principal amount.
The Notes were added to the official list of the Luxembourg Stock Exchange and are traded on the Luxembourg Stock Exchange’s Euro MTF Market.
During the first quarter 2012, the Group repurchased 68 Notes of its U.S.$ 150 million fixed-rate senior unsecured Notes, due
2015. The face value of each Note is U.S.$ 100,000 and the Group paid an average of U.S.$ 78,441.
In 2013, the Group offered to
exchange the Notes against a new Note which bears the same interest rate of 6.5% but which would mature in 2018 and would have a lower conversion price of EUR 5.650000. The new Notes have a feature to compensate the bondholders for the forgiven
coupons in case of conversion to shares during the first 4 years. The exchange offer resulted in U.S.$ 125 millions of Notes (face value) being exchanged for new Notes, including the 68 Notes acquired by the Group in 2012 (see also Note 28).
In the second quarter of 2013, Euronav bought back an additional 5 of its Notes due in 2015 for an average price of U.S.$ 92,000, while
selling in the third quarter the 68 Notes due in 2018 it held after the above exchange.
F-69
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
During 2013, 152 Notes of the U.S.$ 125 million Notes due in 2018, were converted into
ordinary shares (See Note 13).
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
Carrying amount of liability at the beginning of period
|
|
|
132,694
|
|
|
|
134,456
|
|
|
Interest
|
|
|
2,448
|
|
|
|
4,678
|
|
|
Amortization of transaction costs
|
|
|
(1,023
|
)
|
|
|
360
|
|
|
Buyback of Convertible Note
|
|
|
(470
|
)
|
|
|
(6,800
|
)
|
|
Sale of Convertible Note
|
|
|
5,898
|
|
|
|
—
|
|
|
Conversion of Convertible Note
|
|
|
(13,725
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount of liability at the end of the period
|
|
|
125,822
|
|
|
|
132,694
|
|
|
|
|
|
|
|
|
|
|
|
Note 16—Non-Current Other Payables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
derivatives
|
|
|
Sellers Credit
|
|
|
TOTAL
|
|
|
|
|
in thousands of U.S.$
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Between 1 and 5 years
|
|
|
6,875
|
|
|
|
30,000
|
|
|
|
36,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
|
|
6,875
|
|
|
|
30,000
|
|
|
|
36,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
derivatives
|
|
|
Sellers Credit
|
|
|
TOTAL
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Between 1 and 5 years
|
|
|
1,291
|
|
|
|
30,000
|
|
|
|
31,291
|
|
|
Balance at December 31, 2013
|
|
|
1,291
|
|
|
|
30,000
|
|
|
|
31,291
|
|
The amount of other payables represents the non-current portion of amounts payable in relation to interest rate
swaps, or IRS, (see Note 19) and a sellers credit obtained by the Group.
F-70
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 17—Employee Benefits
The amounts recognized in the balance sheet are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of USD
|
|
|
Net liability at beginning of period
|
|
|
(2,166
|
)
|
|
|
(1,832
|
)
|
|
|
(1,988
|
)
|
|
Recognized in profit or loss
|
|
|
86
|
|
|
|
96
|
|
|
|
100
|
|
|
Recognized in other comprehensive income
|
|
|
263
|
|
|
|
(386
|
)
|
|
|
—
|
|
|
Foreign currency translation differences
|
|
|
(83
|
)
|
|
|
(44
|
)
|
|
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net liability at end of period
|
|
|
(1,900
|
)
|
|
|
(2,166
|
)
|
|
|
(1,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present value of funded obligations
|
|
|
(1,495
|
)
|
|
|
(1,345
|
)
|
|
|
(1,276
|
)
|
|
Fair value of plan assets
|
|
|
1,215
|
|
|
|
911
|
|
|
|
988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(280
|
)
|
|
|
(434
|
)
|
|
|
(288
|
)
|
|
Present value of unfunded obligations
|
|
|
(1,620
|
)
|
|
|
(1,732
|
)
|
|
|
(1,544
|
)
|
|
Net liability
|
|
|
(1,900
|
)
|
|
|
(2,166
|
)
|
|
|
(1,832
|
)
|
|
Amounts in the balance sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
(1,900
|
)
|
|
|
(2,166
|
)
|
|
|
(1,832
|
)
|
|
Assets
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net liability
|
|
|
(1,900
|
)
|
|
|
(2,166
|
)
|
|
|
(1,832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability for defined benefit obligations
The Group makes contributions to three defined benefit plans that provide pension benefits for employees upon retirement. One plan—the Belgian
plan—is fully insured through an insurance company. The second and third—French and Greek plans—are uninsured and unfunded.
The Group expects to contribute the following amount to its defined benefit pension plans in 2014: U.S.$ 112,902.
Note 18—Trade and Other Payables—Current
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
Trade payables
|
|
|
32,356
|
|
|
|
12,458
|
|
|
Accrued payroll
|
|
|
2,298
|
|
|
|
2,326
|
|
|
Dividends payable
|
|
|
10
|
|
|
|
14
|
|
|
Derivatives
|
|
|
—
|
|
|
|
—
|
|
|
Accrued expenses
|
|
|
27,257
|
|
|
|
18,916
|
|
|
Accrued interest
|
|
|
12,123
|
|
|
|
9,301
|
|
|
Deferred income
|
|
|
12,263
|
|
|
|
13,329
|
|
|
Other payables
|
|
|
20,787
|
|
|
|
76,801
|
|
|
Total
|
|
|
107,094
|
|
|
|
133,145
|
|
The amount under other payables relates to the option fee received in cash to sell both the VLCC
Antarctica
(2009—315,981 dwt) and the VLCC
Olympia
(2008—315,981 dwt) for delivery in
F-71
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the first half 2015. In 2012, it also included the remaining payment to Samsung Heavy Industries for the delivery of the Suezmax
Cap Isabella
, which was paid in 2013.
The increase in trade payables and accrued expenses mainly relates to the increase in spot exposure of our fleet resulting in increased bunker
costs. In addition, many vessels have bunkered late December 2013.
Note 19—Financial Instruments—Market and Other Risks
Accounting classifications and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for
financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount
|
|
|
Fair value
|
|
|
|
|
Note
|
|
|
Fair
value -
Hedging
instruments
|
|
|
Loans
and
receivables
|
|
|
Other
financial
liabilities
|
|
|
TOTAL
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current other receivables
|
|
|
10
|
|
|
|
—
|
|
|
|
226,159
|
|
|
|
—
|
|
|
|
226,159
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Trade and other receivables
|
|
|
11
|
|
|
|
—
|
|
|
|
81,426
|
|
|
|
—
|
|
|
|
81,426
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Cash and cash equivalents
|
|
|
12
|
|
|
|
—
|
|
|
|
113,051
|
|
|
|
—
|
|
|
|
113,051
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
420,636
|
|
|
|
—
|
|
|
|
420,636
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Financial liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps used for hedging
|
|
|
|
|
|
|
6,721
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,721
|
|
|
|
—
|
|
|
|
6,721
|
|
|
|
—
|
|
|
|
6,721
|
|
|
Forward exchange contracts used for hedging
|
|
|
|
|
|
|
154
|
|
|
|
—
|
|
|
|
—
|
|
|
|
154
|
|
|
|
—
|
|
|
|
154
|
|
|
|
—
|
|
|
|
154
|
|
|
|
|
|
16
|
|
|
|
6,875
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,875
|
|
|
|
—
|
|
|
|
6,875
|
|
|
|
—
|
|
|
|
6,875
|
|
|
Financial liabilities not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured bank loans
|
|
|
15
|
|
|
|
—
|
|
|
|
—
|
|
|
|
911,474
|
|
|
|
911,474
|
|
|
|
—
|
|
|
|
970,463
|
|
|
|
—
|
|
|
|
970,463
|
|
|
Unsecured bank loans
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Unsecured convertible Notes
|
|
|
15
|
|
|
|
—
|
|
|
|
—
|
|
|
|
132,694
|
|
|
|
132,694
|
|
|
|
124,328
|
|
|
|
—
|
|
|
|
—
|
|
|
|
124,328
|
|
|
Trade payables
|
|
|
18
|
|
|
|
—
|
|
|
|
—
|
|
|
|
133,145
|
|
|
|
133,145
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Sellers Credit
|
|
|
16
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,207,313
|
|
|
|
1,207,313
|
|
|
|
124,328
|
|
|
|
970,463
|
|
|
|
—
|
|
|
|
1,094,791
|
|
F-72
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount
|
|
|
Fair value
|
|
|
|
|
Note
|
|
|
Fair
value -
Hedging
instruments
|
|
|
Loans
and
receivables
|
|
|
Other
financial
liabilities
|
|
|
TOTAL
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
|
|
in thousands of U.S.$
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current other receivables
|
|
|
10
|
|
|
|
—
|
|
|
|
259,534
|
|
|
|
—
|
|
|
|
259,534
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Trade and other receivables
|
|
|
11
|
|
|
|
—
|
|
|
|
95,913
|
|
|
|
—
|
|
|
|
95,913
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Cash and cash equivalents
|
|
|
12
|
|
|
|
—
|
|
|
|
74,309
|
|
|
|
—
|
|
|
|
74,309
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
429,756
|
|
|
|
—
|
|
|
|
429,756
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Financial liabilities measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps used for hedging
|
|
|
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
Forward exchange contracts used for hedging
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
16
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
|
—
|
|
|
|
1,291
|
|
|
Financial liabilities not measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured bank loans
|
|
|
15
|
|
|
|
—
|
|
|
|
—
|
|
|
|
834,175
|
|
|
|
834,175
|
|
|
|
—
|
|
|
|
859,842
|
|
|
|
—
|
|
|
|
859,842
|
|
|
Unsecured bank loans
|
|
|
15
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,588
|
|
|
|
13,588
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Unsecured convertible Notes
|
|
|
15
|
|
|
|
—
|
|
|
|
—
|
|
|
|
125,822
|
|
|
|
125,822
|
|
|
|
169,120
|
|
|
|
—
|
|
|
|
—
|
|
|
|
169,120
|
|
|
Trade payables
|
|
|
18
|
|
|
|
—
|
|
|
|
—
|
|
|
|
107,094
|
|
|
|
107,094
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Sellers Credit
|
|
|
16
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,110,679
|
|
|
|
1,110,679
|
|
|
|
169,120
|
|
|
|
859,842
|
|
|
|
—
|
|
|
|
1,028,962
|
|
Measurement of fair values
Valuation techniques and significant unobservable inputs
Level 1 fair value was
determined on the actual trading of the unsecured Notes, due in 2015 and 2018 and the trading price on December 31, 2013.
F-73
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following tables show the valuation techniques used in measuring Level 2 fair values, as well
as the significant unobservable inputs used.
Financial instruments measured at fair value
|
|
|
|
|
|
|
Type
|
|
Valuation Techniques
|
|
Significant unobservable inputs
|
|
Forward exchange contracts and interest rate swaps for which no hedge accounting applies
|
|
Market comparison technique:
The fair values are based on broker quotes. Similar contracts are traded in an active market and the quotes reflect the actual
transactions in similar instruments
|
|
Not applicable
|
|
|
|
|
|
Interest rate swaps for which hedge accounting applies
|
|
Fair value calculation:
The fair values are computed by calculating the present value of the future cash flows (Fixed and floating), which depends on the forward
rates. The forward rates are calculated on the interest rate curves such as LIBOR.
|
|
Not applicable
|
Financial instruments not measured at fair value
|
|
|
|
|
|
|
Type
|
|
Valuation Techniques
|
|
Significant unobservable inputs
|
|
Debt Securities
|
|
Discounted cash flow
|
|
Not applicable
|
|
Other financial liabilities*
|
|
Discounted cash flow
|
|
Not applicable
|
|
*
|
Other financial liabilities include secured and unsecured bank loans
|
Transfers between Level 1 and 2
There were no transfers in either direction in 2012 and
2013.
Financial risk Management
In the course of its normal business, the Group is exposed to following risks:
Credit risk
Liquidity risk
Market
risk (tanker market risk, interest rate risk and currency risk)
F-74
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Credit risk
Trade and other receivables
The Group has no formal credit policy. Credit
evaluations, when necessary, are performed on an ongoing basis. At the balance sheet date there were no significant concentrations of credit risk. In particular, the clients representing 14% and 11% of the tanker segment’s total revenue in 2013
(see Note 2) only represented 0.48% of the total trade and other receivables at December 31, 2013 (2012: 1.90% and 2011: 0.30%). The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including
derivative financial instruments, in the balance sheet.
The aging of trade and other receivables is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of
U.S.$
|
|
|
Not past due
|
|
|
93,589
|
|
|
|
77,008
|
|
|
Past due 0-30 days
|
|
|
872
|
|
|
|
(3,626
|
)
|
|
Past due 31-365 days
|
|
|
1,243
|
|
|
|
7,745
|
|
|
More than one year
|
|
|
209
|
|
|
|
299
|
|
|
Total
|
|
|
95,913
|
|
|
|
81,426
|
|
For the ageing of the non-current receivables we refer to Note 10.
Past due amounts are not impaired as collection is still considered to be likely and management is confident the outstanding amounts can be
recovered. As at December 31, 2013, 31.08% of the total trade and other receivables relate to TI Pool which are paid after completion of the voyages but which only deals with oil majors, national oil companies and other actors of the oil
industry whose credit worthiness is very high. Amounts not past due are also with customers with very high credit worthiness and are therefore not impaired.
Cash and cash equivalents
The Group held cash and cash equivalents of U.S.$ 74.3 million
at December 31, 2013 (2012: U.S.$ 113.0 million). The cash and cash equivalents are held with bank and financial institution counterparties, which are rated A- to AA+, based on rating agency S&P (Note 12).
Derivatives
The derivatives
are entered into with banks and financial institution counterparties, which are rated A- to AA+, based on rating agency S&P.
Guarantees
The Group’s
policy is to provide financial guarantees only for subsidiaries and joint ventures. At December 31, 2013, the Group has issued a guarantee to certain banks in respect of credit facilities granted to 6 joint ventures (Note 25).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it
F-75
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation. Despite the crisis on the financial markets since the summer of 2008, the liquidity risk of the Group remains under control. The sources of finance have been diversified with the first issuance of a convertible Note in September 2009 and
the bulk of the loans are irrevocable, long-term and maturities are spread over different years.
The following are the remaining
contractual maturities of financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual cash flows December 31, 2012
|
|
|
|
|
Note
|
|
|
Carrying
Amount
|
|
|
Total
|
|
|
Less than
1 year
|
|
|
Between 1 and
5 years
|
|
|
More than
5 years
|
|
|
|
|
|
|
|
in thousands of U.S.$
|
|
|
Non derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans
|
|
|
15
|
|
|
|
911,473
|
|
|
|
982,540
|
|
|
|
135,446
|
|
|
|
847,094
|
|
|
|
—
|
|
|
Convertible Notes
|
|
|
15
|
|
|
|
132,694
|
|
|
|
170,328
|
|
|
|
9,750
|
|
|
|
160,578
|
|
|
|
|
|
|
Current trade and other payables
|
|
|
18
|
|
|
|
133,145
|
|
|
|
133,145
|
|
|
|
133,145
|
|
|
|
—
|
|
|
|
—
|
|
|
Non-current other payables
|
|
|
16
|
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,207,312
|
|
|
|
1,316,013
|
|
|
|
278,341
|
|
|
|
1,037,672
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
16
|
|
|
|
6,721
|
|
|
|
6,882
|
|
|
|
6,882
|
|
|
|
—
|
|
|
|
—
|
|
|
Forward exchange contracts
|
|
|
16
|
|
|
|
154
|
|
|
|
154
|
|
|
|
154
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
6,875
|
|
|
|
7,036
|
|
|
|
7,036
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contractual cash flows December 31, 2013
|
|
|
|
|
|
|
|
Carrying
Amount
|
|
|
Total
|
|
|
Less than
1 year
|
|
|
Between 1 and
5 years
|
|
|
More than
5 years
|
|
|
|
|
|
|
|
in thousands of U.S.$
|
|
|
Non derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank loans
|
|
|
15
|
|
|
|
847,763
|
|
|
|
938,569
|
|
|
|
147,882
|
|
|
|
790,687
|
|
|
|
—
|
|
|
Convertible Notes
|
|
|
15
|
|
|
|
125,822
|
|
|
|
165,193
|
|
|
|
8,730
|
|
|
|
156,463
|
|
|
|
—
|
|
|
Current trade and other payables
|
|
|
18
|
|
|
|
107,094
|
|
|
|
107,094
|
|
|
|
107,094
|
|
|
|
—
|
|
|
|
|
|
|
Non-current other payables
|
|
|
16
|
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
30,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,110,679
|
|
|
|
1,240,856
|
|
|
|
263,706
|
|
|
|
977,150
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
|
16
|
|
|
|
1,291
|
|
|
|
1,442
|
|
|
|
1,442
|
|
|
|
—
|
|
|
|
—
|
|
|
Forward exchange contracts
|
|
|
16
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,291
|
|
|
|
1,442
|
|
|
|
1,442
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As disclosed in Note 15, the Group has secured bank loans that contain loan covenants. A future breach of covenant
may require the Group to repay the loan earlier than indicated in the above table. The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as
market
F-76
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
interest rate change. The future cash flows on derivative instruments may be different from the amount in the above table as interest rates and exchange rates change. Except for these financial
liabilities, it is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
Interest swaps
with hedge
accounting
|
|
|
Interest rate swaps
with no hedge
accounting
|
|
|
Forward
exchange
contracts used
for hedging
|
|
|
TOTAL
|
|
|
|
|
in thousands of U.S.$
|
|
|
Dirty value
|
|
|
—
|
|
|
|
(10,749
|
)
|
|
|
(4,673
|
)
|
|
|
(46
|
)
|
|
|
(15,468
|
)
|
|
Accrued Interest
|
|
|
—
|
|
|
|
157
|
|
|
|
4,292
|
|
|
|
—
|
|
|
|
4,449
|
|
|
Clean value at January 1, 2012
|
|
|
—
|
|
|
|
(10,592
|
)
|
|
|
(381
|
)
|
|
|
(46
|
)
|
|
|
(11,019
|
)
|
|
Effective portion recognized directly in OCI
|
|
|
—
|
|
|
|
3,871
|
|
|
|
—
|
|
|
|
|
|
|
|
3,871
|
|
|
Ineffective portion recognized in profit or loss
|
|
|
—
|
|
|
|
—
|
|
|
|
381
|
|
|
|
(108
|
)
|
|
|
273
|
|
|
Dirty value
|
|
|
—
|
|
|
|
(6,882
|
)
|
|
|
—
|
|
|
|
(154
|
)
|
|
|
(7,036
|
)
|
|
Accrued Interest
|
|
|
—
|
|
|
|
161
|
|
|
|
—
|
|
|
|
—
|
|
|
|
161
|
|
|
Clean value at December 31, 2012
|
|
|
16
|
|
|
|
(6,721
|
)
|
|
|
—
|
|
|
|
(154
|
)
|
|
|
(6,875
|
)
|
|
Dirty value
|
|
|
—
|
|
|
|
(6,882
|
)
|
|
|
—
|
|
|
|
(154
|
)
|
|
|
(7,036
|
)
|
|
Accrued Interest
|
|
|
—
|
|
|
|
161
|
|
|
|
—
|
|
|
|
—
|
|
|
|
161
|
|
|
Clean value at January 1, 2013
|
|
|
|
|
|
|
(6,721
|
)
|
|
|
—
|
|
|
|
(154
|
)
|
|
|
(6,875
|
)
|
|
Effective portion recognized directly in OCI
|
|
|
—
|
|
|
|
5,430
|
|
|
|
—
|
|
|
|
|
|
|
|
5,430
|
|
|
Ineffective portion recognized in profit or loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
154
|
|
|
|
154
|
|
|
Dirty value
|
|
|
—
|
|
|
|
(1,443
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,443
|
)
|
|
Accrued Interest
|
|
|
—
|
|
|
|
152
|
|
|
|
—
|
|
|
|
—
|
|
|
|
152
|
|
|
Clean value at December 31, 2013
|
|
|
16
|
|
|
|
(1,291
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,291
|
)
|
Market risk
Tanker market risk
The Spot Tanker freight market is a highly volatile market in the world and
the Group cannot predict what the market will be. In order to manage the risk associated to this volatility, the Group has adopted a balanced strategy of operating part of its fleet on the spot market and the other part under fixed time charter
contract. The proportion of vessels operated on the spot will vary according to the many factors affecting both the spot and fixed time charter contract markets.
A Spot tanker freight market (VLCC and Suezmax) increase (decrease) of 1.000 U.S.$ per day would have increased (decreased) profit or loss by the amounts shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
Profit or loss
|
|
|
Profit or loss
|
|
|
Profit or loss
|
|
|
|
|
1000 U.S.$
increase
|
|
|
1000 U.S.$
decrease
|
|
|
1000 U.S.$
increase
|
|
|
1000 U.S.$
decrease
|
|
|
1000 U.S.$
increase
|
|
|
1000 U.S.$
decrease
|
|
|
effect in thousands of U.S.$
|
|
|
6,836
|
|
|
|
(6,836
|
)
|
|
|
7,149
|
|
|
|
(7,149
|
)
|
|
|
6,296
|
|
|
|
(6,296
|
)
|
F-77
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Interest rate risk
The Group hedges part of its exposure to changes in interest rates on borrowings. All borrowings contracted for the financing of vessels are on the basis of a floating interest rate, increased by a margin. The
Group uses various interest rate related derivatives (IRS, caps and floors) to achieve an appropriate mix of fixed and floating rate exposure as defined by the Group.
The Group, in connection to the U.S.$ 300 million facility dated April 2009, entered into several interest rate swap instruments for a combined notional value of U.S.$ 300 million. These IRSs are used to hedge
the risk related to any fluctuation of the Libor rate and qualify for hedging instruments in a cash flow hedge relationship under IAS 39. These instruments are measured at their fair value; effective changes in fair value are recognized in equity
and the ineffective portion is recognized in profit or loss. These IRS have a duration of five years matching the repayment profile of that facility. Fair value of these instruments at December 31, 2013: U.S.$ (1,291,121.00) (2012: U.S.$
(6,721,015.00)
The senior unsecured convertible bond loan of U.S.$ 25 million, was issued at a fixed-rate of 6.5% per annum.
The senior unsecured convertible bond loan of U.S.$ 109.8 million, was issued at a fixed-rate of 6.5% per annum.
At the reporting date the interest rate profile of the Group’s interest-bearing financial liabilities was:
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
Fixed-rate instruments
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
—
|
|
|
|
—
|
|
|
Financial liabilities
|
|
|
125,822
|
|
|
|
132,694
|
|
|
|
|
|
125,822
|
|
|
|
132,694
|
|
|
Variable rate instruments
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
847,763
|
|
|
|
911,474
|
|
Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed-rate financial assets and liabilities at fair value through profit or loss, and the Group does not
designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss nor equity.
F-78
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Cash flow sensitivity analysis for variable rate instruments
A change of 50 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit or loss
|
|
|
Equity
|
|
|
|
|
50 bp
increase
|
|
|
50 bp
decrease
|
|
|
50 bp
increase
|
|
|
50 bp
decrease
|
|
|
|
|
effect in thousands of U.S.$
|
|
|
December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable rate instruments
|
|
|
(5,987
|
)
|
|
|
5,987
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest rate swaps
|
|
|
1,765
|
|
|
|
(1,816
|
)
|
|
|
4,266
|
|
|
|
(4,355
|
)
|
|
Cash flow sensitivity (net)
|
|
|
(4,222
|
)
|
|
|
4,171
|
|
|
|
4,266
|
|
|
|
(4,355
|
)
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable rate instruments
|
|
|
(6,102
|
)
|
|
|
6,102
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest rate swaps
|
|
|
1,335
|
|
|
|
(1,353
|
)
|
|
|
2,629
|
|
|
|
2,260
|
|
|
Cash flow sensitivity (net)
|
|
|
(4,767
|
)
|
|
|
4,749
|
|
|
|
2,629
|
|
|
|
2,260
|
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable rate instruments
|
|
|
(5,510
|
)
|
|
|
5,510
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest rate swaps
|
|
|
900
|
|
|
|
(922
|
)
|
|
|
1,164
|
|
|
|
(902
|
)
|
|
Cash flow sensitivity (net)
|
|
|
(4,610
|
)
|
|
|
4,588
|
|
|
|
1,164
|
|
|
|
(902
|
)
|
Currency Risk
The Group’s exposure to currency risk is related to its operating expenses (Note 5) expressed in Euros. In 2013 about 55% (2012: 51% and 2011: 61%) of the Group’s total operating expenses were incurred in
Euros. Revenue and the financial instruments are expressed in U.S.$ only.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
December, 31 2011
|
|
|
|
|
EUR
|
|
|
U.S.$
|
|
|
EUR
|
|
|
U.S.$
|
|
|
EUR
|
|
|
U.S.$
|
|
|
|
|
in thousands of U.S.$
|
|
|
Trade payables
|
|
|
(5,541
|
)
|
|
|
(21,926
|
)
|
|
|
(1,314
|
)
|
|
|
(12,905
|
)
|
|
|
(5,340
|
)
|
|
|
(13,277
|
)
|
|
Operating Expenses
|
|
|
(48,117
|
)
|
|
|
(49,210
|
)
|
|
|
(45,223
|
)
|
|
|
(54,243
|
)
|
|
|
(53,855
|
)
|
|
|
(48,735
|
)
|
|
Net Exposure
|
|
|
(53,658
|
)
|
|
|
(71,136
|
)
|
|
|
(46,537
|
)
|
|
|
(67,148
|
)
|
|
|
(59,195
|
)
|
|
|
(62,012
|
)
|
For the average and closing rates applied during the year, we refer to Note 27.
Sensitivity analysis
A ten percent strengthening of the EUR against the U.S.$ at December 31 would have increased (decreased) equity and profit or loss by the
amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Equity
|
|
|
74
|
|
|
|
442
|
|
|
|
545
|
|
|
Profit or loss
|
|
|
(8,179
|
)
|
|
|
(7,794
|
)
|
|
|
(8,995
|
)
|
F-79
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
A ten percent weakening of the EUR against the U.S.$ at December 31 would have had the equal
but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
Master netting or similar agreements
The Group enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owned by each counterparty on a
single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other.
Capital management
Euronav is continuously adjusting its capital structure (mix between debt
and equity). The main objective is to maximize shareholder value while keeping the desired financial flexibility to execute the strategic projects. Some of the Group’s other key drivers when making capital structure decisions are pay-out
restrictions and the maintenance of the strong financial health of the Group. Besides the statutory minimum equity funding requirements that apply to the Group’s subsidiaries in the various countries, the Group is also subject to covenants in
relation to some of its senior secured credit facilities: the ratio of stockholders’ Equity to total assets should be no less than 30% and has been met at year end. When analyzing the Group’s capital structure, the same debt/equity
classification as applied in the IFRS reporting is used. Within this context, the Group concluded a convertible Notes offering in September 2009 (see Note 15).
Note 20—Operating Leases
Leases as lessee
Future minimum lease payments
The Group leases in some of its vessels under time charter and bareboat agreements (operating leases). The future minimum lease payments with an
average duration of 9 months under non-cancellable leases are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of U.S.$
|
|
|
Less than 1 year
|
|
|
(11,812
|
)
|
|
|
(19,301
|
)
|
|
Between 1 and 5 years
|
|
|
(914
|
)
|
|
|
(7,889
|
)
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
|
|
(12,726
|
)
|
|
|
(27,190
|
)
|
On some of the abovementioned vessels the Group has the option to extend the charter period. These option periods
have not been taken into account when calculating the future minimum lease payments.
The decrease in leases relates to two existing
time charter contracts that will terminate at the beginning of 2014.
F-80
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Non-cancellable operating lease rentals for office space with an average duration of 6 years and 4
months are payable as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of
U.S.$
|
|
|
Less than 1 year
|
|
|
(1,135
|
)
|
|
|
(1,145
|
)
|
|
Between 1 and 5 years
|
|
|
(3,113
|
)
|
|
|
(3,814
|
)
|
|
More than 5 years
|
|
|
(643
|
)
|
|
|
(783
|
)
|
|
Total
|
|
|
(4,891
|
)
|
|
|
(5,742
|
)
|
Amounts recognized in profit and loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Bareboat charter
|
|
|
(3,002
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Time charter
|
|
|
(18,029
|
)
|
|
|
(28,920
|
)
|
|
|
(42,497
|
)
|
|
Office rental
|
|
|
(1,141
|
)
|
|
|
(1,167
|
)
|
|
|
(1,112
|
)
|
|
|
|
|
(22,172
|
)
|
|
|
(30,087
|
)
|
|
|
(43,609
|
)
|
Leases as lessor
The Group leases out some of its vessels under time charter agreements (operating leases). The future minimum lease receivables with an average duration of 8 months under non-cancellable leases are as follows:
Future minimum lease receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
in thousands of
U.S.$
|
|
|
Less than 1 year
|
|
|
79,686
|
|
|
|
116,565
|
|
|
Between 1 and 5 years
|
|
|
15,929
|
|
|
|
82,090
|
|
|
More than 5 years
|
|
|
—
|
|
|
|
—
|
|
|
Total
|
|
|
95,615
|
|
|
|
198,655
|
|
On some of the abovementioned vessels the Group has granted the option to extend the charter period. These option
periods have not been taken into account when calculating the future minimum lease receivables.
Amounts recognized in profit and
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Bareboat charter
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Time charter
|
|
|
133,396
|
|
|
|
144,889
|
|
|
|
187,050
|
|
|
|
|
|
133,396
|
|
|
|
144,889
|
|
|
|
187,050
|
|
F-81
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 21—Provisions & Contingencies
The Group is involved in a number of disputes in connection with its day-to-day activities, both as claimant and defendant. Such disputes and the
associated expenses of legal representation are covered by insurance. Moreover, they are not of a magnitude that lies outside the ordinary, and their scope is not of such a nature that they could jeopardize the Group’s financial position.
Note 22—Related Parties
Identity of related parties
The Group has a related party relationship with its subsidiaries
(see Note 26) and joint ventures (see Note 25) and with its directors and executive officers (see Note 23).
Transactions with key
management personnel
The total amount of the remuneration paid to all non-executive directors for their services as members of the
board and committees (if applicable) is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of EUR
|
|
|
Total remuneration
|
|
|
1,189
|
|
|
|
1,040
|
|
|
|
1,049
|
|
The nominating and remuneration committee annually reviews the remuneration of the members of the Executive
Committee. The remuneration (excluding the Chief Executive Officer) consists of a fixed and a variable component and can be summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of EUR
|
|
|
Total fixed remuneration
|
|
|
953
|
|
|
|
938
|
|
|
|
1,277
|
|
|
of which
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of pension
|
|
|
32
|
|
|
|
32
|
|
|
|
98
|
|
|
Other benefits
|
|
|
51
|
|
|
|
52
|
|
|
|
23
|
|
|
Total variable remuneration
|
|
|
700
|
|
|
|
225
|
|
|
|
268
|
|
All amounts mentioned refer to the Executive Committee in its official composition throughout 2013.
The remuneration of the Chief Executive Officer can be summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of GBP
|
|
|
Total fixed remuneration
|
|
|
345
|
|
|
|
336
|
|
|
|
358
|
|
|
of which
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of pension
|
|
|
50
|
|
|
|
50
|
|
|
|
50
|
|
|
Other benefits
|
|
|
11
|
|
|
|
10
|
|
|
|
10
|
|
|
Total variable remuneration
|
|
|
268
|
|
|
|
61
|
|
|
|
41
|
|
Within the framework of a stock option plan, the Board of Directors has on December 16, 2013 granted options
on its 1,750,000 treasury shares to the members of the Executive
F-82
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Committee for no consideration. 525,000 options were granted to the Chief Executive Officer and 1,225,000 options were granted to the other members of the Executive Committee. The exercise price
of the options is EUR 5.7705. All of the beneficiaries have accepted the options granted to them. At the date of this report 2/3 of the options have vested and 1/3 will vest only if certain conditions (stock price and business related) are met. A
maximum of 50% of the options will be exercisable at the latest as from January 1, 2015. The other 50% of the options can be exercised as from January 1, 2016 (see Note 23).
Relationship with CMB
We
received legal services from CMB in accordance with the terms of a Services Agreement, dated January 1, 2006, on an arms’-length basis. During the year ended December 31, 2013, we paid CMB $61,895 in consideration for its services, as
compared to $265,000 for the same period in 2012 (2011: $362,000). Mr. Saverys, our Chairman of the Board of Directors, is also currently the Managing Director of CMB, one of our principal shareholders. This agreement was terminated at the end
of 2013.
Relationship with Saverco
We received travel services from Saverco on an arms’-length basis during the year ended December 31, 2013, for which we paid $25,533 in consideration for its services, as compared to $27,000 for the same
period in 2012 (2011: $0). Saverco owns approximately 13.5% of our outstanding ordinary shares. We do not expect to receive travel services from Saverco in the future.
Relationship with Chartwell Management Inc.
Chartwell Management Inc. and Euronav both have
Ceres as reference shareholder. Chartwell Management Inc. rendered general services on an arms’ length basis. In 2013, Chartwell Management Inc. invoiced a total amount of EUR 40,603 (2012:EUR 0 and 2011: EUR 0)
Properties
We lease office
space in Belgium from Reslea N.V., an entity controlled by Saverco, one of our majority shareholders, on an arms’ length basis. Under this lease, we pay a yearly rent of $196,189.
We lease office space, through our subsidiary Euronav Ship Management Hellas, in Piraeus, Greece, from Nea Dimitra Ktimatiki Kai Emporik S.A., an
entity controlled by Ceres Shipping, on an arms’-length basis. Mr. Livanos, a member of our board acting as permanent representative of TankLog, is the Chairman and sole shareholder of Ceres Shipping. Under this lease, we pay a yearly rent
of $238,185.
Transactions with subsidiaries and joint ventures
The Group is 50% owner of the VLCC
Ardenne Venture
and until September 2012 time-chartered-in the vessel and traded it on the spot market via
the TI pool. The vessel continues to be traded in the TI pool but directly from its joint-ownership company and the Group does no longer time-charters it in.
F-83
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On March 15, 2013, the Group sold the Suezmax
Cap Isabella
(2013 – 157,258 dwt)
to Belle Shipholdings Ltd. Peter Livanos, the member of the Board of Directors of the Group, directly or indirectly holds a majority ownership interest in Belle Shipholdings Ltd. Peter Livanos, as the permanent representative of TankLog Holdings
Ltd., notified Euronav’s Board of Directors which met on March 14, 2013, that pursuant to the provisions of the Belgian Code of Companies relating to the existence of conflicts of interest, he had a direct or indirect patrimonial interest
that conflicts with the interests of the Company in respect of this sale and therefore, did not participate in the deliberation or the vote that authorized the Group to sell the
Cap Isabella
on the basis of current market values.
The
Cap Isabella
was a newbuilding from Samsung Heavy Industries. The Group chartered the ship back on bareboat for a fixed period of two
years with three options in favor of the charterer to extend for a further year. In case of a sale by the new owner during the bareboat charter contract the Group will also share in any surplus if the vessel value exceeds a certain threshold. The
selling price of the vessel was U.S. $54 million.
As this transaction was signed before the announcement of the 2012 final figures and
was the result of negotiations with various parties which started in the financial year 2012, the Group recorded the capital loss of U.S. $32 million in 2012.
The Group has supplied funds in the form of shareholder’s advances to some of its joint ventures at pre-agreed conditions which are always similar for the other party involved in the joint venture in question
(see Note 25).
Guarantees
The Group has provided guarantees to financial institutions that have provided credit facilities to our joint ventures. As of December 31, 2013, U.S. $412.4 million was outstanding under the joint venture loan
agreements, of which we have guaranteed U.S. $206.2 million.
Note 23—Share-Based Payment Arrangements
Description of share-based payment arrangements:
At December 31, 2013, the Group had the following share-based payment arrangements:
Share
option programs (Equity-settled)
On December 16, 2013, the Group established a share option program that entitles key management
personnel to purchase existing shares in the Company. Under the program, holders of vested options are entitled to purchase shares at the market price of the shares at the grant date. Currently this program is limited to key management personnel.
The Group intends to use its treasury shares to settle all the options.
F-84
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The key terms and conditions related to the grants under these programs are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant date/employees entitled
|
|
Number of
instruments
|
|
|
Vesting Conditions
|
|
Contractual
life of
Options
|
|
|
Options granted to key management personnel
|
|
|
|
|
|
|
|
|
|
|
|
December 16, 2013 (“Tranche 1”)
|
|
|
583,000
|
|
|
Share price to be at least EUR 7.5
|
|
|
5 years
|
|
|
December 16, 2013 (“Tranche 2”)
|
|
|
583,000
|
|
|
Share price to be at least EUR 8.66
|
|
|
5 years
|
|
|
December 16, 2013 (“Tranche 3”)
|
|
|
583,000
|
|
|
Share price to be at least EUR 11.54 and US listing
|
|
|
5 years
|
|
|
Total Share options
|
|
|
1,750,000
|
|
|
|
|
|
|
|
In addition, 50% of the options can only be exercised at the earliest if the shares of the Group are admitted for
listing in a recognized US listing exchange platform (the “listing event”). The other 50% can only be exercised one year after the listing event. If the shares are not listed on a US listing exchange, then only 2/3 of the shares will be
exercisable and will have to meet the first two vesting conditions listed above.
Measurement of Fair Value
The fair value of the employee share options has been measured using the Black-Scholes formula. Service and non-market performance conditions
attached to the transactions were not taken into account in measuring fair value.
The inputs used in measurement of the fair values at
grant date for the equity-settled share-based payments plan were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share option programs
|
|
|
|
|
2013
|
|
|
|
|
Tranche 1
|
|
|
Tranche 2
|
|
|
Tranche 3
|
|
|
|
|
Figures in EUR
|
|
|
Fair value at grant date
|
|
|
2.270
|
|
|
|
2.260
|
|
|
|
2.120
|
|
|
Share price at grant date
|
|
|
6.070
|
|
|
|
6.070
|
|
|
|
6.070
|
|
|
Exercise price
|
|
|
5.770
|
|
|
|
5.770
|
|
|
|
5.770
|
|
|
Expected volatility (weighted average)
|
|
|
40
|
%
|
|
|
40
|
%
|
|
|
40
|
%
|
|
Expected life (Days) (weighted average)
|
|
|
303
|
|
|
|
467
|
|
|
|
730
|
|
|
Expected dividends
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Risk-free interest rate
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price,
particularly over the historical periods commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behavior using a Monte Carlo simulation.
Expenses recognized in profit or loss
For details on related employee benefits expense see Note 5.
F-85
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Reconciliation of outstanding share options
The number and weighted-average exercise prices of options under the share option programs are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
options
|
|
|
Weighted average
exercise price
|
|
|
|
|
Figures in EUR
|
|
|
Outstanding at January 1, 2013
|
|
|
—
|
|
|
|
—
|
|
|
Forfeited during the year
|
|
|
—
|
|
|
|
—
|
|
|
Exercised during the year
|
|
|
—
|
|
|
|
—
|
|
|
Granted during the year
|
|
|
1,750,000
|
|
|
|
5.770
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2013
|
|
|
1,750,000
|
|
|
|
5.770
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2013
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Note 24—Group Entities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Country of
formation
|
|
Accounting
method
|
|
Ownership interest
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
Parent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euronav NV
|
|
Belgium
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euronav (UK) Agencies Limited
|
|
UK
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
Euronav Luxembourg SA
|
|
Luxembourg
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
Euronav SAS
|
|
France
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
Euronav Ship Management SAS
|
|
France
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
Euronav Ship Management Ltd.
|
|
Liberia
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
Euronav Ship Management (Hellas) (branch office)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Euronav Hong Kong Limited
|
|
Hong Kong
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
E.S.M.C. Euro-Ocean Ship Management (Cyprus) Ltd.
|
|
Cyprus
|
|
full
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
|
Joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa Conversion Corporation
|
|
Marshall Islands
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Asia Conversion Corporation
|
|
Marshall Islands
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Fiorano Shipholding Limited
|
|
Hong Kong
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Fontvieille Shipholding Limited
|
|
Hong Kong
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Great Hope Enterprises Limited
|
|
Hong Kong
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Kingswood Co. Ltd.
|
|
Marshall Islands
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Larvotto Shipholding Limited
|
|
Hong Kong
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Moneghetti Shipholding Limited
|
|
Hong Kong
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Seven Seas Shipping Ltd.
|
|
Marshall Islands
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
TI Africa Limited
|
|
Hong Kong
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
TI Asia Limited
|
|
Hong Kong
|
|
equity
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
|
50.00
|
%
|
|
Front Tobago Inc.
|
|
Liberia
|
|
equity
|
|
|
NA
|
|
|
|
NA
|
|
|
|
30.00
|
%
|
|
Associates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tankers International LLC
|
|
Marshall Islands
|
|
equity
|
|
|
41.10
|
%
|
|
|
NA
|
|
|
|
NA
|
|
F-86
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 25—Equity-Accounted Investees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
in thousands of U.S.$
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest in joint ventures
|
|
|
22,704
|
|
|
|
21,075
|
|
|
|
19,583
|
|
|
Interest in associates
|
|
|
409
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
23,113
|
|
|
|
21,075
|
|
|
|
19,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest in joint ventures
|
|
|
(5,880
|
)
|
|
|
(5,880
|
)
|
|
|
(5,880
|
)
|
|
Interest in associates
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
(5,880
|
)
|
|
|
(5,880
|
)
|
|
|
(5,880
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates
The Group holds 41.1% in Tankers International LLC (Note 24).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
In thousands of U.S.$
|
|
|
Carrying amount of interest at the beginning of the year
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of profit (loss) for the period
|
|
|
409
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Carrying amount of interest at the end of the year
|
|
|
409
|
|
|
|
—
|
|
|
|
—
|
|
F-87
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Joint Ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
|
|
Note
|
|
Asset
|
|
|
Liability
|
|
|
Asset
|
|
|
Liability
|
|
|
Asset
|
|
|
Liability
|
|
|
|
|
|
|
In thousands of U.S.$
|
|
|
Group’s share in the net assets at the beginning of the year
|
|
—
|
|
|
(134,223
|
)
|
|
|
(5,880
|
)
|
|
|
(145,191
|
)
|
|
|
(5,880
|
)
|
|
|
(150,925
|
)
|
|
|
(5,880
|
)
|
|
Shareholders loans to joint ventures
|
|
—
|
|
|
381,447
|
|
|
|
—
|
|
|
|
348,604
|
|
|
|
—
|
|
|
|
339,080
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount of interest at the beginning of the year
|
|
—
|
|
|
21,075
|
|
|
|
(5,880
|
)
|
|
|
19,583
|
|
|
|
(5,880
|
)
|
|
|
14,980
|
|
|
|
(5,880
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining shareholders loans to joint ventures
|
|
10
|
|
|
226,150
|
|
|
|
—
|
|
|
|
183,831
|
|
|
|
—
|
|
|
|
173,175
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group’s share of profit (loss) for the period
|
|
—
|
|
|
17,445
|
|
|
|
—
|
|
|
|
9,953
|
|
|
|
—
|
|
|
|
5,897
|
|
|
|
—
|
|
|
Group’s share of other comprehensive income
|
|
—
|
|
|
3,077
|
|
|
|
—
|
|
|
|
1,015
|
|
|
|
—
|
|
|
|
(2,014
|
)
|
|
|
—
|
|
|
Capital increase in joint ventures
|
|
—
|
|
|
3,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,237
|
|
|
|
—
|
|
|
Dividends received from joint ventures
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
(1,386
|
)
|
|
|
—
|
|
|
Movement Shareholders loans to joint ventures
|
|
—
|
|
|
11,475
|
|
|
|
—
|
|
|
|
32,843
|
|
|
|
—
|
|
|
|
9,524
|
|
|
|
—
|
|
|
Group’s share in the net assets at the end of the year
|
|
—
|
|
|
(110,702
|
)
|
|
|
(5,880
|
)
|
|
|
(134,223
|
)
|
|
|
(5,880
|
)
|
|
|
(145,191
|
)
|
|
|
(5,880
|
)
|
|
Shareholders loans to joint ventures
|
|
—
|
|
|
392,922
|
|
|
|
—
|
|
|
|
381,447
|
|
|
|
—
|
|
|
|
348,604
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount of interest at the end of the year
|
|
—
|
|
|
22,704
|
|
|
|
(5,880
|
)
|
|
|
21,075
|
|
|
|
(5,880
|
)
|
|
|
19,583
|
|
|
|
(5,880
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining shareholders loans to joint ventures
|
|
10
|
|
|
259,517
|
|
|
|
—
|
|
|
|
226,150
|
|
|
|
—
|
|
|
|
183,831
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-88
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Group distinguishes the following joint ventures:
|
|
|
|
|
|
|
Joint Venture
|
|
Segment
|
|
Description
|
|
Great Hope Enterprises Ltd
|
|
Tankers
|
|
Single ship company, owner of 1 VLCC
|
|
Kingswood Co. Ltd
|
|
Tankers
|
|
Holding company; parent of Seven Seas Shipping Ltd.
|
|
Seven Seas Shipping Ltd
|
|
Tankers
|
|
Single ship company, owner of 1 VLCC
|
|
Fiorano Shipholding Ltd
|
|
Tankers
|
|
Single ship company, owner of 1 Suezmax
|
|
Fontvieille Shipholding Ltd
|
|
Tankers
|
|
Single ship company, owner of 1 Suezmax
|
|
Larvotto Shipholding Ltd
|
|
Tankers
|
|
Single ship company, owner of 1 Suezmax
|
|
Moneghetti Shipholding Ltd
|
|
Tankers
|
|
Single ship company, owner of 1 Suezmax
|
|
Front Tobago Inc
|
|
Tankers
|
|
No operating activities, liquidated in 2013.
|
|
TI Africa Ltd
|
|
FSO
|
|
Operator and owner of a single floating storage and offloading facility (FSO Africa)*
|
|
TI Asia Ltd
|
|
FSO
|
|
Operator and owner of a single floating storage and offloading facility (FSO Asia)*
|
|
Africa Conversion Corp
|
|
FSO
|
|
No operating activities, intention to liquidate
|
|
Asia Conversion Corp
|
|
FSO
|
|
No operating activities, intention to liquidate
|
|
*
|
Both
FSO Asia
and
FSO Africa
are on a FSO service contract to Maersk Oil Qatar AS, or Maersk Oil Qatar, until respectively mid 2017 and mid 2017, 2018 or 2019
depending on the lifting of the options on the
FSO Africa
.
|
F-89
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table contains summarized financial information for all
of the Group’s joint ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
|
|
|
Liability
|
|
|
|
|
Great
Hope
Enterprises
Ltd
|
|
|
Kingswood
Co. Ltd
|
|
|
Seven
Seas
Shipping
Ltd
|
|
|
Fiorano
Ship-
holding
Ltd
|
|
|
Fontvieille
Ship-
holding
Ltd
|
|
|
Larvotto
Ship-
holding
Ltd
|
|
|
Moneghetti
Ship-
holding Ltd
|
|
|
TI Africa
Ltd
|
|
|
TI Asia
Ltd
|
|
|
Front
Tobago
Inc.
|
|
|
Total
|
|
|
Africa
Conversion
Corp
|
|
|
Asia
Conversion
Corp
|
|
|
Total
|
|
|
|
|
In thousands of U.S.$
|
|
|
At December 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
Tankers
|
|
|
Tankers
|
|
|
Tankers
|
|
|
Tankers
|
|
|
Tankers
|
|
|
Tankers
|
|
|
Tankers
|
|
|
FSO
|
|
|
FSO
|
|
|
Tankers
|
|
|
|
|
|
FSO
|
|
|
FSO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage ownership interest
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
30
|
%
|
|
|
|
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
|
|
|
Non-Current assets
|
|
|
41,842
|
|
|
|
434
|
|
|
|
44,865
|
|
|
|
48,479
|
|
|
|
82,585
|
|
|
|
46,106
|
|
|
|
87,193
|
|
|
|
280,974
|
|
|
|
272,182
|
|
|
|
—
|
|
|
|
904,660
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
of which Vessel
|
|
|
41,842
|
|
|
|
—
|
|
|
|
44,865
|
|
|
|
—
|
|
|
|
82,585
|
|
|
|
—
|
|
|
|
87,193
|
|
|
|
280,974
|
|
|
|
272,182
|
|
|
|
|
|
|
|
809,641
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Current Assets
|
|
|
6,761
|
|
|
|
567
|
|
|
|
4,295
|
|
|
|
19
|
|
|
|
5,828
|
|
|
|
93
|
|
|
|
10,461
|
|
|
|
31,713
|
|
|
|
74,878
|
|
|
|
—
|
|
|
|
134,615
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
of which cash and cash equivalents
|
|
|
3,024
|
|
|
|
—
|
|
|
|
696
|
|
|
|
19
|
|
|
|
1,003
|
|
|
|
93
|
|
|
|
542
|
|
|
|
17,561
|
|
|
|
21,672
|
|
|
|
—
|
|
|
|
44,610
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Non-Current Liabilities
|
|
|
25,882
|
|
|
|
—
|
|
|
|
19,934
|
|
|
|
42,454
|
|
|
|
89,952
|
|
|
|
45,714
|
|
|
|
98,322
|
|
|
|
427,475
|
|
|
|
448,280
|
|
|
|
—
|
|
|
|
1,198,013
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Of which bank loans
|
|
|
25,882
|
|
|
|
—
|
|
|
|
19,500
|
|
|
|
32,438
|
|
|
|
46,908
|
|
|
|
30,772
|
|
|
|
59,900
|
|
|
|
63,750
|
|
|
|
182,575
|
|
|
|
|
|
|
|
461,725
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Current Liabilities
|
|
|
9,198
|
|
|
|
1
|
|
|
|
4,584
|
|
|
|
9,134
|
|
|
|
4,896
|
|
|
|
4,458
|
|
|
|
4,562
|
|
|
|
68,144
|
|
|
|
26,666
|
|
|
|
—
|
|
|
|
131,643
|
|
|
|
6,880
|
|
|
|
4,880
|
|
|
|
11,760
|
|
|
Of which bank loans
|
|
|
7,000
|
|
|
|
—
|
|
|
|
4,333
|
|
|
|
3,188
|
|
|
|
3,124
|
|
|
|
2,978
|
|
|
|
3,800
|
|
|
|
25,000
|
|
|
|
23,611
|
|
|
|
|
|
|
|
73,034
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net assets (100%)
|
|
|
13,523
|
|
|
|
1,000
|
|
|
|
24,642
|
|
|
|
(3,090
|
)
|
|
|
(6,435
|
)
|
|
|
(3,973
|
)
|
|
|
(5,230
|
)
|
|
|
(182,932
|
)
|
|
|
(127,886
|
)
|
|
|
—
|
|
|
|
(290,381
|
)
|
|
|
(6,880
|
)
|
|
|
(4,880
|
)
|
|
|
(11,760
|
)
|
|
Group’s share of net assets
|
|
|
6,762
|
|
|
|
500
|
|
|
|
12,321
|
|
|
|
(1,545
|
)
|
|
|
(3,218
|
)
|
|
|
(1,987
|
)
|
|
|
(2,615
|
)
|
|
|
(91,466
|
)
|
|
|
(63,943
|
)
|
|
|
—
|
|
|
|
(145,191
|
)
|
|
|
(3,440
|
)
|
|
|
(2,440
|
)
|
|
|
(5,880
|
)
|
|
Shareholders loans to joint venture
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,008
|
|
|
|
21,522
|
|
|
|
7,471
|
|
|
|
19,211
|
|
|
|
172,055
|
|
|
|
123,337
|
|
|
|
—
|
|
|
|
348,604
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net Carrying amount of interest in joint venture
|
|
|
6,762
|
|
|
|
500
|
|
|
|
12,321
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19,583
|
|
|
|
(3,440
|
)
|
|
|
(2,440
|
)
|
|
|
(5,880
|
)
|
|
Remaining shareholders loan to joint venture
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,463
|
|
|
|
18,305
|
|
|
|
5,485
|
|
|
|
16,596
|
|
|
|
80,589
|
|
|
|
59,394
|
|
|
|
—
|
|
|
|
183,831
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Revenue
|
|
|
12,773
|
|
|
|
—
|
|
|
|
6,763
|
|
|
|
—
|
|
|
|
16,263
|
|
|
|
—
|
|
|
|
14,440
|
|
|
|
36,741
|
|
|
|
63,110
|
|
|
|
—
|
|
|
|
150,090
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Depreciations and amortization
|
|
|
(3,298
|
)
|
|
|
—
|
|
|
|
(3,360
|
)
|
|
|
—
|
|
|
|
(4,561
|
)
|
|
|
—
|
|
|
|
(4,536
|
)
|
|
|
(18,216
|
)
|
|
|
(17,933
|
)
|
|
|
—
|
|
|
|
(51,904
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest Expense
|
|
|
(1,205
|
)
|
|
|
(9
|
)
|
|
|
(370
|
)
|
|
|
(885
|
)
|
|
|
(997
|
)
|
|
|
(1,137
|
)
|
|
|
(1,606
|
)
|
|
|
(15,222
|
)
|
|
|
(10,923
|
)
|
|
|
—
|
|
|
|
(32,354
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Profit (loss) for the period (100%)
|
|
|
5,324
|
|
|
|
(13
|
)
|
|
|
(560
|
)
|
|
|
(1,292
|
)
|
|
|
(2,020
|
)
|
|
|
(1,856
|
)
|
|
|
(3,171
|
)
|
|
|
(7,537
|
)
|
|
|
22,172
|
|
|
|
1,246
|
|
|
|
12,293
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive income (100%)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,028
|
)
|
|
|
—
|
|
|
|
(4,028
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of profit (loss) for the period
|
|
|
2,662
|
|
|
|
(7
|
)
|
|
|
(280
|
)
|
|
|
(646
|
)
|
|
|
(1,010
|
)
|
|
|
(928
|
)
|
|
|
(1,586
|
)
|
|
|
(3,769
|
)
|
|
|
11,086
|
|
|
|
374
|
|
|
|
5,897
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,014
|
)
|
|
|
—
|
|
|
|
(2,014
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
F-90
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage ownership interest
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
|
|
|
Non-Current assets
|
|
|
38,544
|
|
|
|
934
|
|
|
|
41,506
|
|
|
|
92,587
|
|
|
|
78,024
|
|
|
|
86,946
|
|
|
|
82,606
|
|
|
|
264,457
|
|
|
|
257,116
|
|
|
|
—
|
|
|
|
942,720
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
of which Vessel
|
|
|
38,544
|
|
|
|
—
|
|
|
|
41,506
|
|
|
|
92,587
|
|
|
|
78,024
|
|
|
|
86,946
|
|
|
|
82,606
|
|
|
|
262,657
|
|
|
|
254,250
|
|
|
|
|
|
|
|
937,120
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Current Assets
|
|
|
4,259
|
|
|
|
68
|
|
|
|
4,289
|
|
|
|
5,498
|
|
|
|
4,999
|
|
|
|
7,615
|
|
|
|
6,679
|
|
|
|
38,115
|
|
|
|
91,594
|
|
|
|
—
|
|
|
|
163,116
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
of which cash and cash equivalents
|
|
|
1,890
|
|
|
|
|
|
|
|
449
|
|
|
|
650
|
|
|
|
1,172
|
|
|
|
1,677
|
|
|
|
2,499
|
|
|
|
22,049
|
|
|
|
35,192
|
|
|
|
—
|
|
|
|
65,578
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Non-Current Liabilities
|
|
|
19,638
|
|
|
|
—
|
|
|
|
16,101
|
|
|
|
98,894
|
|
|
|
87,305
|
|
|
|
94,709
|
|
|
|
91,037
|
|
|
|
361,828
|
|
|
|
421,423
|
|
|
|
—
|
|
|
|
1,190,935
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Of which bank loans
|
|
|
19,638
|
|
|
|
—
|
|
|
|
15,166
|
|
|
|
40,563
|
|
|
|
42,470
|
|
|
|
41,053
|
|
|
|
55,750
|
|
|
|
0
|
|
|
|
157,750
|
|
|
|
|
|
|
|
372,390
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Current Liabilities
|
|
|
7,163
|
|
|
|
1
|
|
|
|
4,548
|
|
|
|
6,626
|
|
|
|
7,444
|
|
|
|
7,254
|
|
|
|
6,435
|
|
|
|
115,443
|
|
|
|
28,433
|
|
|
|
—
|
|
|
|
183,347
|
|
|
|
6,880
|
|
|
|
4,880
|
|
|
|
11,760
|
|
|
Of which bank loans
|
|
|
6,300
|
|
|
|
—
|
|
|
|
4,333
|
|
|
|
4,250
|
|
|
|
4,000
|
|
|
|
3,970
|
|
|
|
4,000
|
|
|
|
63,750
|
|
|
|
24,826
|
|
|
|
|
|
|
|
115,429
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net assets (100%)
|
|
|
16,002
|
|
|
|
1,001
|
|
|
|
25,146
|
|
|
|
(7,435
|
)
|
|
|
(11,726
|
)
|
|
|
(7,402
|
)
|
|
|
(8,187
|
)
|
|
|
(174,699
|
)
|
|
|
(101,146
|
)
|
|
|
—
|
|
|
|
(268,446
|
)
|
|
|
(6,880
|
)
|
|
|
(4,880
|
)
|
|
|
(11,760
|
)
|
|
Group’s share of net assets
|
|
|
8,001
|
|
|
|
501
|
|
|
|
12,573
|
|
|
|
(3,718
|
)
|
|
|
(5,863
|
)
|
|
|
(3,701
|
)
|
|
|
(4,094
|
)
|
|
|
(87,350
|
)
|
|
|
(50,573
|
)
|
|
|
—
|
|
|
|
(134,223
|
)
|
|
|
(3,440
|
)
|
|
|
(2,440
|
)
|
|
|
(5,880
|
)
|
|
Shareholders loans to joint venture
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24,166
|
|
|
|
22,417
|
|
|
|
21,828
|
|
|
|
17,644
|
|
|
|
172,055
|
|
|
|
123,337
|
|
|
|
—
|
|
|
|
381,447
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net Carrying amount of interest in joint venture
|
|
|
8,001
|
|
|
|
501
|
|
|
|
12,573
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21,075
|
|
|
|
(3,440
|
)
|
|
|
(2,440
|
)
|
|
|
(5,880
|
)
|
|
Remaining shareholders loan to joint venture
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,449
|
|
|
|
16,554
|
|
|
|
18,127
|
|
|
|
13,551
|
|
|
|
84,706
|
|
|
|
72,764
|
|
|
|
—
|
|
|
|
226,150
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Revenue
|
|
|
10,176
|
|
|
|
—
|
|
|
|
7,449
|
|
|
|
12,682
|
|
|
|
18,134
|
|
|
|
18,478
|
|
|
|
16,397
|
|
|
|
43,750
|
|
|
|
63,618
|
|
|
|
—
|
|
|
|
190,684
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Depreciations and amortization
|
|
|
(3,298
|
)
|
|
|
—
|
|
|
|
(3,360
|
)
|
|
|
(4,467
|
)
|
|
|
(4,561
|
)
|
|
|
(4,483
|
)
|
|
|
(4,586
|
)
|
|
|
(18,216
|
)
|
|
|
(17,933
|
)
|
|
|
—
|
|
|
|
(60,904
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest Expense
|
|
|
(998
|
)
|
|
|
—
|
|
|
|
(369
|
)
|
|
|
(1,371
|
)
|
|
|
(1,656
|
)
|
|
|
(1,668
|
)
|
|
|
(2,136
|
)
|
|
|
(6,801
|
)
|
|
|
(9,855
|
)
|
|
|
—
|
|
|
|
(24,854
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Profit (loss) for the period (100%)
|
|
|
2,480
|
|
|
|
1
|
|
|
|
504
|
|
|
|
(4,346
|
)
|
|
|
(5,290
|
)
|
|
|
(3,428
|
)
|
|
|
(2,957
|
)
|
|
|
8,232
|
|
|
|
24,709
|
|
|
|
—
|
|
|
|
19,905
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive income (100%)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,030
|
|
|
|
—
|
|
|
|
2,030
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of profit (loss) for the period
|
|
|
1,240
|
|
|
|
1
|
|
|
|
252
|
|
|
|
(2,173
|
)
|
|
|
(2,645
|
)
|
|
|
(1,714
|
)
|
|
|
(1,479
|
)
|
|
|
4,116
|
|
|
|
12,355
|
|
|
|
—
|
|
|
|
9,953
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,015
|
|
|
|
—
|
|
|
|
1,015
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage ownership interest
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
|
|
|
|
|
|
|
|
50
|
%
|
|
|
50
|
%
|
|
|
|
|
|
Non-Current assets
|
|
|
—
|
|
|
|
109
|
|
|
|
38,146
|
|
|
|
87,735
|
|
|
|
73,463
|
|
|
|
82,376
|
|
|
|
78,020
|
|
|
|
247,797
|
|
|
|
240,477
|
|
|
|
—
|
|
|
|
848,123
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
of which Vessel
|
|
|
—
|
|
|
|
—
|
|
|
|
38,146
|
|
|
|
87,735
|
|
|
|
73,463
|
|
|
|
82,376
|
|
|
|
78,020
|
|
|
|
244,448
|
|
|
|
236,317
|
|
|
|
|
|
|
|
840,505
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Current Assets
|
|
|
40,494
|
|
|
|
898
|
|
|
|
6,785
|
|
|
|
6,063
|
|
|
|
5,913
|
|
|
|
6,083
|
|
|
|
9,173
|
|
|
|
54,300
|
|
|
|
107,297
|
|
|
|
—
|
|
|
|
237,006
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
of which cash and cash equivalents
|
|
|
240
|
|
|
|
|
|
|
|
2,040
|
|
|
|
729
|
|
|
|
1,223
|
|
|
|
1,685
|
|
|
|
2,764
|
|
|
|
38,795
|
|
|
|
45,406
|
|
|
|
—
|
|
|
|
92,882
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
F-91
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Current Liabilities
|
|
|
4,645
|
|
|
|
—
|
|
|
|
10,942
|
|
|
|
97,044
|
|
|
|
90,455
|
|
|
|
94,139
|
|
|
|
92,137
|
|
|
|
368,919
|
|
|
|
389,167
|
|
|
|
—
|
|
|
|
1,147,448
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Of which bank loans
|
|
|
—
|
|
|
|
—
|
|
|
|
10,833
|
|
|
|
36,313
|
|
|
|
38,470
|
|
|
|
37,082
|
|
|
|
51,750
|
|
|
|
13,543
|
|
|
|
131,646
|
|
|
|
|
|
|
|
319,637
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
Current Liabilities
|
|
|
20,907
|
|
|
|
2
|
|
|
|
4,528
|
|
|
|
7,209
|
|
|
|
6,507
|
|
|
|
6,540
|
|
|
|
8,280
|
|
|
|
76,556
|
|
|
|
28,555
|
|
|
|
—
|
|
|
|
159,084
|
|
|
|
6,880
|
|
|
|
4,880
|
|
|
|
11,760
|
|
|
Of which bank loans
|
|
|
19,695
|
|
|
|
—
|
|
|
|
4,333
|
|
|
|
4,250
|
|
|
|
4,000
|
|
|
|
3,970
|
|
|
|
5,000
|
|
|
|
25,000
|
|
|
|
26,103
|
|
|
|
|
|
|
|
92,351
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net assets (100%)
|
|
|
14,942
|
|
|
|
1,005
|
|
|
|
29,461
|
|
|
|
(10,455
|
)
|
|
|
(17,586
|
)
|
|
|
(12,220
|
)
|
|
|
(13,224
|
)
|
|
|
(143,378
|
)
|
|
|
(69,948
|
)
|
|
|
—
|
|
|
|
(221,403
|
)
|
|
|
(6,880
|
)
|
|
|
(4,880
|
)
|
|
|
(11,760
|
)
|
|
Group’s share of net assets
|
|
|
7,471
|
|
|
|
503
|
|
|
|
14,731
|
|
|
|
(5,228
|
)
|
|
|
(8,793
|
)
|
|
|
(6,110
|
)
|
|
|
(6,612
|
)
|
|
|
(71,689
|
)
|
|
|
(34,974
|
)
|
|
|
—
|
|
|
|
(110,702
|
)
|
|
|
(3,440
|
)
|
|
|
(2,440
|
)
|
|
|
(5,880
|
)
|
|
Shareholders loans to joint venture
|
|
|
2,450
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,366
|
|
|
|
25,992
|
|
|
|
23,528
|
|
|
|
20,194
|
|
|
|
172,055
|
|
|
|
123,337
|
|
|
|
—
|
|
|
|
392,922
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net Carrying amount of interest in joint venture
|
|
|
7,471
|
|
|
|
503
|
|
|
|
14,731
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
22,704
|
|
|
|
(3,440
|
)
|
|
|
(2,440
|
)
|
|
|
(5,880
|
)
|
|
Remaining shareholders loan to joint venture
|
|
|
2,450
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,139
|
|
|
|
17,199
|
|
|
|
17,418
|
|
|
|
13,582
|
|
|
|
100,366
|
|
|
|
88,363
|
|
|
|
—
|
|
|
|
259,517
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Revenue
|
|
|
5,477
|
|
|
|
—
|
|
|
|
6,572
|
|
|
|
15,181
|
|
|
|
12,551
|
|
|
|
14,007
|
|
|
|
13,998
|
|
|
|
63,849
|
|
|
|
63,548
|
|
|
|
—
|
|
|
|
195,183
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Depreciations and amortization
|
|
|
(2,738
|
)
|
|
|
—
|
|
|
|
(3,360
|
)
|
|
|
(4,852
|
)
|
|
|
(4,561
|
)
|
|
|
(4,571
|
)
|
|
|
(4,586
|
)
|
|
|
(18,209
|
)
|
|
|
(17,933
|
)
|
|
|
—
|
|
|
|
(60,810
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest Expense
|
|
|
(730
|
)
|
|
|
—
|
|
|
|
(232
|
)
|
|
|
(1,166
|
)
|
|
|
(1,506
|
)
|
|
|
(1,376
|
)
|
|
|
(1,958
|
)
|
|
|
(1,087
|
)
|
|
|
(8,720
|
)
|
|
|
—
|
|
|
|
(16,775
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Profit (loss) for the period (100%)
|
|
|
(1,059
|
)
|
|
|
4
|
|
|
|
(1,686
|
)
|
|
|
(3,019
|
)
|
|
|
(5,861
|
)
|
|
|
(4,818
|
)
|
|
|
(5,038
|
)
|
|
|
31,321
|
|
|
|
25,045
|
|
|
|
—
|
|
|
|
34,889
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Other comprehensive income (100%)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6,154
|
|
|
|
—
|
|
|
|
6,154
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of profit (loss) for the period
|
|
|
(530
|
)
|
|
|
2
|
|
|
|
(843
|
)
|
|
|
(1,510
|
)
|
|
|
(2,931
|
)
|
|
|
(2,409
|
)
|
|
|
(2,519
|
)
|
|
|
15,661
|
|
|
|
12,523
|
|
|
|
—
|
|
|
|
17,445
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Group’s share of other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3,077
|
|
|
|
—
|
|
|
|
3,077
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
F-92
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Loans and borrowings
In October 2008, TI Asia Ltd. and TI Africa Ltd. entered into a U.S.$ 500 million senior secured credit facility. The facility consists of a
term loan of U.S.$ 180 million which was used to finance the acquisition of two ULCC vessels, the
FSO Asia
and the
FSO Africa
, respectively from Euronav and OSG and a project finance loan of U.S.$ 320 million which has been
used to finance the conversion of the above mentioned vessels into FSO. Following the termination of the original service contract related to the
FSO Africa
and the signature of a new contract for the
FSO Africa
with the same client
the tranche of the facility related to
FSO Africa
was restructured. The tranche related to
FSO Asia
matures in 2017 and has a rate of Libor plus a margin of 1.15%. After the restructuring the tranche related to
FSO Africa
was
maturing in August 2013 with a balloon of U.S.$ 45,000,000 and had a rate of Libor plus a margin of 2.25%. In 2013, the Africa Tranche was extended until 2015 at which point it will be fully repaid and the margin increased with 50 basis points to
2.75%. The total amount drawn under this facility (Euronav share) on December 31, 2013 was U.S.$ 98,249,785.50.
In the course of
2008, the joint venture companies, Fiorano Shipholding Ltd, Fontvieille Shipholding Ltd, Larvotto Shipholding Ltd and Moneghetti Shipholding Ltd have concluded pre and post-delivery senior secured credit facilities to build a total of 4 Suezmax
Vessels.
The following table summarizes the terms and debt repayment profile of the bank loans held by the joint ventures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
|
Nominal
interest rate
|
|
Year of
maturity
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
Face
value
|
|
|
Carrying
value
|
|
|
Face
value
|
|
|
Carrying
value
|
|
|
|
|
in thousands of U.S.$
|
|
|
TI Asia Ltd *
|
|
U.S.$
|
|
|
|
libor +1,15%
|
|
|
2017
|
|
|
|
157,750
|
|
|
|
157,750
|
|
|
|
182,574
|
|
|
|
182,574
|
|
|
TI Africa Ltd *
|
|
U.S.$
|
|
|
|
libor +2,75%
|
|
|
2015
|
|
|
|
38,750
|
|
|
|
38,546
|
|
|
|
63,750
|
|
|
|
63,750
|
|
|
Great Hope Enterprises Ltd
|
|
U.S.$
|
|
|
|
libor +2,70%
|
|
|
2018
|
|
|
|
19,950
|
|
|
|
19,694
|
|
|
|
26,250
|
|
|
|
25,938
|
|
|
Seven Seas Shipping Ltd
|
|
U.S.$
|
|
|
|
libor +0,80%
|
|
|
2017
|
|
|
|
15,166
|
|
|
|
15,166
|
|
|
|
19,498
|
|
|
|
19,498
|
|
|
Moneghetti Shipholding Ltd *
|
|
U.S.$
|
|
|
|
libor +2,75%
|
|
|
2021
|
|
|
|
56,750
|
|
|
|
56,750
|
|
|
|
59,750
|
|
|
|
59,750
|
|
|
Fontvieille Shipholding Ltd *
|
|
U.S.$
|
|
|
|
libor +2.75%
|
|
|
2020
|
|
|
|
42,470
|
|
|
|
42,470
|
|
|
|
46,470
|
|
|
|
46,470
|
|
|
Larvotto Shipholding Ltd *
|
|
U.S.$
|
|
|
|
libor+1,50%
|
|
|
2020
|
|
|
|
41,052
|
|
|
|
41,052
|
|
|
|
45,022
|
|
|
|
45,022
|
|
|
Fiorano Shipholding Ltd *
|
|
U.S.$
|
|
|
|
libor+1,225%
|
|
|
2020
|
|
|
|
40,562
|
|
|
|
40,562
|
|
|
|
44,812
|
|
|
|
44,812
|
|
|
Total interest-bearing bank loans
|
|
|
|
|
|
|
|
|
|
|
|
|
412,450
|
|
|
|
411,990
|
|
|
|
488,126
|
|
|
|
487,814
|
|
|
*
|
The mentioned secured bank loans are subject to loan covenants such as an Asset Protection clause. A future breach of covenants might require the joint venture to repay (part of)
the loan earlier than expected.
|
All bank loans in the joint ventures are secured by the underlying vessel or FSO.
Loan covenant
The OSG’s Chapter 11 filing has had no impact on the continued operations of the FSO joint venture, including the ability of the joint venture
to continue to perform its obligations under the existing charters as well as its ability to continue to service its outstanding debt obligations and maintain continued compliance with the covenants under such debt agreements. On November 12,
2012, Maersk Oil Qatar (MOQ) issued a waiver to the FSO joint venture agreeing not to exercise its rights to terminate the service contracts. The initial waiver period expired on February 15, 2013 and was subsequently extended to
February 15, 2014, with MOQ having the
F-93
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
right to terminate such waiver at an earlier date upon occurrence of certain events or after giving a 90-day notice of its intent to do so. In November 2012, the joint venture also obtained
waivers of any events of default arising as a result of the commencement of the Chapter 11 cases from (i) the bank syndicate that funds its loan facilities, (ii) the counterparties to the interest rate swaps agreements described below, and
(iii) the bank that has issued performance guarantees of the joint venture’s performance of certain of its obligations under the
FSO Africa
and
FSO Asia
service contracts. The initial waiver periods on all such waivers
expired on February 15, 2013 and were subsequently extended to February 15, 2014 and again extended until July 15, 2014 subject to the occurrence of certain events.
For two secured vessel loans of its joint ventures, Euronav negotiated in the course of 2013 with the lenders a one year relaxation of the Asset
Protection clause from 125% down to 100% (until December 31, 2013) against an increase of the margin above the LIBOR rate to 2.75%. The margin will be reduced to 2.00% at the end of the relaxation period in 2014. The asset protection clause
will be tested again at the end of April 2014, and if necessary the Group will ask for an extension on the relaxation period or opt to repay part of the facility(ies).
Interest rate swaps
The Group, through several of its joint venture companies in connection to
the FSO conversion project of the
TI Asia
and
TI Africa
has also entered in two interest rate swap instruments for a combined notional value of U.S.$ 480 million (Euronav’s share amounts to 50%). These IRSs are used to hedge
the risk related to any fluctuation of the Libor rate and have duration of 8 years starting respectively in July 2009 and September 2009 for
FSO Asia
and
FSO Africa
.
Following the termination of the original service contract related to the
FSO Africa
on January 22, 2010 and the consecutive reduction
of financing, the hedge related to that tranche lost its qualification as hedging instrument in a cash flow hedge relationship under IAS 39. As such the cash flows from this IRS are expected to occur and affect profit or loss as from 2010 throughout
2017. Fair value at December 31, 2013: U.S.$(5,632.334) (2012: U.S.$(8,858.507)).
The hedge related to the financing of
FSO
Asia
still qualifies fully as a hedging instrument in a cash flow hedge relationship under IAS 39. This instrument is measured at fair value; effective changes in fair value are recognized in equity and the ineffective portion is recorded in
profit or loss accounts. Fair value at December 31, 2013: U.S.$(5,423,358) (2012: U.S.$(8,499,589)).
Vessels
On January 5, 2011, Moneghetti Shipholding Ltd took delivery of the Suezmax
Devon
(2011—157,642 dwt) from the shipyard.
On January 9, 2012, Larvotto Shipholding Ltd took delivery of the Suezmax
Maria
(2012—157,523 dwt) from the shipyard.
On January 31, 2012, Fiorano Shipholding Ltd took delivery of the Suezmax
Captain Michael
(2012—157,648 dwt) from the shipyard.
F-94
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On January 2, 2014 Great Hope Enterprise Ltd. delivered the VLCC
Ardenne Venture
(2004—318,658 dwt) to its new owners after the sale announced on November 14, 2013 for U.S.$ 41.7M. The capital gain of approximately U.S.$ 2.2 million will therefore be recognized in the first quarter of 2014.
There were no capital commitments as per December 31, 2013 and December 31, 2012.
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
2013
|
|
|
2012
|
|
|
Cash and cash equivalents of the joint ventures
|
|
|
92,882
|
|
|
|
65,578
|
|
|
Group’s share of cash and cash equivalents
|
|
|
46,441
|
|
|
|
32,789
|
|
|
Of which restricted cash
|
|
|
16,015
|
|
|
|
15,123
|
|
Note 26—Subsidiaries
The Group holds 100% of the voting rights in all of its subsidiaries (See Note 24).
In 2013, 2012
and 2011 no new subsidiaries were established or acquired, nor were there any sales or liquidations of subsidiaries.
Note 27—Major Exchange
Rates
The following major exchange rates have been used in preparing the consolidated financial statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
closing rates
|
|
|
average rates
|
|
|
1 XXX = x,xxxx U.S.$
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
|
EUR
|
|
|
1.3791
|
|
|
|
1.3194
|
|
|
|
1.2939
|
|
|
|
1.3259
|
|
|
|
1.2909
|
|
|
|
1.4031
|
|
|
GBP
|
|
|
1.6542
|
|
|
|
1.6167
|
|
|
|
1.5490
|
|
|
|
1.5629
|
|
|
|
1.5873
|
|
|
|
1.6066
|
|
Note 28—Subsequent Events
On December 16, 2013, the Board of Directors announced that the Group has raised U.S.$ 150 million via a private placement of a perpetual convertible preferred equity instrument. This instrument was
issued on January 13, 2014 and this transaction therefore had no impact on the 2013 consolidated financial statements.
On
January 3, 2014, the Group signed a contract to acquire the 15 VLCCs from Maersk Tankers Singapore Pte Ltd. for a total acquisition price of U.S.$ 980 million payable as the vessels are being delivered. The vessels have an average age of
four years. The vessels will be operated in the TI Pool, of which Euronav is a founding member.
Each vessel will be sold under the
industry standard sale form as a stand-alone asset with deliveries taking place between late January and June 2014 with the exception of one vessel currently under charter, which will be delivered in the fourth quarter of 2014 or the first half of
2015 at the latest. On February 20 and 25, 2014 Euronav successfully took delivery of the first two vessels, respectively the VLCC
Nautilus
and VLCC
Nucleus
.
The transaction was financed by a U.S.$ 350 million capital increase, a seven-year bond for a total amount of U.S.$ 235.5 million and a
U.S.$ 500 million senior secured credit facility.
F-95
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The U.S.$ 350 million raise of new capital consisted of a U.S.$ 50 million capital
increase under the authorized capital, for which 5,473,571 new ordinary shares were issued on January 10, 2014, and a U.S.$ 300 million capital increase which was approved by the extraordinary shareholders’ meeting on
February 24, 2014 and which resulted in the creation of 32,841,528 new ordinary shares.
The U.S.$ 235.5 million seven-year
bonds were issued on February 4, 2014 to the same investors who participated in the U.S.$ 350 million capital increase. These bonds were issued at 85% of their principal amount and bear interest at a rate of 5.95% per annum for the
first year, payable semi-annually in arrears. The interest rate will increase to 8.5% per annum for the second and third year and will increase again to 10.20% per annum from year four until maturity. The bonds are at any time redeemable
by Euronav at par.
The U.S.$ 500 million senior secured credit facility was fully underwritten in equal part by DNB Bank ASA
(DnB), Nordea Bank Norge ASA (Nordea), and Skandinaviska Enskilda Banken AB (SEB) and was successfully syndicated on March 25, 2014. The credit facility has a six-year maturity as from closing the syndication and will bear interest at a rate
based on LIBOR plus a margin of 2.75%.
On January 7, 2014, the Group sold its oldest double-hulled VLCC
Luxembourg
(1999—299,150 dwt) for U.S.$ 28 million. The capital gain on that sale of approximately U.S.$ 6 million will be recorded at delivery. The net cash proceeds available to Euronav after the mandatory repayment of its debt obligation will
be U.S.$ 5 million. The vessel is foreseen to be delivered to its new owner between May 1, 2014 and mid June 2014.
On
February 6, 2014, 30 of the 60 perpetual convertible preferred equity instruments issued on December 15, 2013, were contributed in kind, resulting in the issuance of 9,459,286 ordinary shares.
In the course of Q1 2014, the majority of the remaining Notes issued in 2013 and maturing in 2018 were converted in new ordinary shares, as the
following table illustrates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Friday,
January 10,
2014
|
|
|
Thursday,
January 23,
2014
|
|
|
Thursday,
February 06,
2014
|
|
|
Tuesday,
February 25,
2014
|
|
|
Monday,
March 10,
2014*
|
|
|
Tuesday,
April 22,
2014*
|
|
|
Nr of Notes converted
|
|
|
491.00
|
|
|
|
97.00
|
|
|
|
453.00
|
|
|
|
8.00
|
|
|
|
47.00
|
|
|
|
1.00
|
|
|
Issued shares
|
|
|
8,163,810.00
|
|
|
|
1,679,010.00
|
|
|
|
7,841,164.00
|
|
|
|
134,808.00
|
|
|
|
662,763.00
|
|
|
|
14,101
|
|
|
*
|
The Notes and conversion notices were received after the optional redemption notice, given on February 20, 2014 by the Executive Committee.
|
The Group sent out a notice to the holders of Notes issued in 2013 to redeem the outstanding Notes on April 9, 2014. Bondholders retained the
ability to exercise the right to convert the Notes up to close of business on April 2, 2014. Only one of the remaining outstanding Notes was not offered for conversion before the cut off date and was therefore redeemed on April 9, 2014.
On February 27, 2014, Euronav bought back 13 bonds of the unsecured convertible Note due in 2015. The face value of each Note is
U.S.$ 100,000 and the Group paid an average of U.S.$ 103,445.
F-96
EURONAV NV
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On March 1, 2014, Euronav Ship Management Antwerp, or ESMA, acquired the complete ship
management of the vessel
FSO Africa
, owned by TI Africa Ltd. Her sister vessel
FSO Asia
is already in management of ESMA as from the conversion of the vessel into an FSO in 2009. The transition of management was carried out as planned.
ESMA will receive a ship management fee for these services.
In March 2014, the Group agreed to extend the period of the purchase option
on the VLCC
Antarctica
(2009—315,981 dwt) and the VLCC
Olympia
(2008—315,981 dwt) by one month, until April 30 2014.
In April 2014, a purchase option to buy the Olympia and the Antarctica was exercised for an aggregate purchase price of $178.0 million of which $20.0 million had been received as an option fee deductible from the
purchase price back in January 2011. We expect to deliver the Olympia in September 2014 and the Antarctica January 2015, respectively. Both vessels will remain employed under their current time charter contract until their respective delivery dates.
The sale will result in an estimated combined loss of $6.5 million which will be recorded in the second quarter of 2014.
On
February 5, 2014 Euronav entered into timecharter with Maersk Tankers A/S for a period of 12 months for the VLCC
Maersk Hojo
.
Maersk Hojo
was delivered to us on March 24, 2014.
On February 5, 2014 Euronav entered into timecharter with Maersk Tankers A/S for a period of 12 months for the VLCC
Maersk Hirado
. The
vessel is expected to be delivered to Euronav on or about May 1, 2014.
F-97
APPENDIX A—GLOSSARY OF TERMS
Aframax
—A medium size crude oil tanker of approximately 80,000 to 120,000 deadweight tons. Aframaxes can generally transport from
500,000 to 800,000 barrels of crude oil and are also used in Lightering. A coated Aframax operating in the refined petroleum products trades may be referred to as an LR2.
Ballast
—Seawater taken into a vessel’s tanks in order to increase draught, to change trim or to improve stability. Ballast can be taken into cargo tanks, double bottoms, fore and aft peak tanks
and/or segregated ballast tanks (“SBT”). All Euronav vessels are equipped with segregated ballast tanks.
Bareboat
Charter
—A Charter under which a customer pays a fixed daily or monthly rate for a fixed period of time for use of the vessel. The customer pays all costs of operating the vessel, including voyage and vessel expenses. Bareboat charters are
usually long-term.
Barrel
—A volumetric unit of measurement equal to 42 US gallons or 158.99 liter. There are 6.2898 barrels
in one cubic meter. Note that while oil tankers do not carry oil in barrels (although ships once did in the 19th century), the term is still used to define the volume.
Charter
—Contract entered into with a customer for the use of the vessel for a specific voyage at a specific rate per unit of cargo (“Voyage Charter”), or for a specific period of time at a
specific rate per unit (day or month) of time (“Time Charter”).
Charterer
—The company or person given the use of
the vessel for the transportation of cargo or passengers for a specified time.
Classification Societies
—Organizations that
establish and administer standards for the design, construction and operational maintenance of vessels. As a practical matter, vessels cannot trade unless they meet these standards.
Commercial Management or Commercially Managed
—The management of the employment, or chartering, of a vessel and associated functions,
including seeking and negotiating employment for vessels, billing and collecting revenues, issuing voyage instructions, purchasing fuel, and appointing port agents.
Commercial Pool
—A commercial pool is a group of similar size and quality vessels with different shipowners that are placed under one administrator or manager. Pools allow for scheduling and other
operating efficiencies such as multi-legged charters and Contracts of Affreightment and other operating efficiencies.
Contract of
Affreightment or COA
—An agreement providing for the transportation between specified points for a specific quantity of cargo over a specific time period but without designating specific vessels or voyage schedules, thereby allowing
flexibility in scheduling since no vessel designation is required. COAs can either have a fixed-rate or a market-related rate.
Crude
Oil
—Oil in its natural state that has not been refined or altered.
Deadweight
—Deadweight Tonnage (dwt)—The
lifting or carrying capacity of a ship when fully loaded. This measure is expressed in metric tons when the ship is in salt water and loaded to her marks. It includes cargo, bunkers, water, stores, passengers and crew.
A-1
Demurrage
—Additional revenue paid to the shipowner on its Voyage Charters for delays
experienced in loading and/or unloading cargo that are not deemed to be the responsibility of the shipowner, calculated in accordance with specific Charter terms.
Double Hull
—A design of tanker with double sides and a double bottom. The spaces created between the double sides and bottom are used for ballast, and provide a protective distance between the cargo
tanks and the outside world.
Draft
—The vertical distance measured from the lowest point of a ship’s hull to the water
surface. Draft marks are cut into or welded onto the surface of a ship’s plating. They are placed forward and aft on both sides of the hull and also amidships. The Plimosoll line which designate maximum drafts allowed for vessels under various
conditions are also found amidships.
Dry-dock
—An out-of-service period during which planned repairs and maintenance are
carried out, including all underwater maintenance such as external hull painting. During the drydocking, certain mandatory Classification Society inspections are carried out and relevant certifications issued. Modern vessels are designed to operate
for 5 years between dry-dockings. Normally, as the age of a vessel increases, the cost and frequency of drydockings increase. After the third Special Survey, Dry-docks will be conducted every 2.5 years.
FPSO
—Stands for Floating Production, Storage and Offloading. FPSO are designed to receive all of the hydrocarbon fluids pumped by
nearby offshore platform (oil and gas), process it, and store it. FPSOs are typically a moored offshore ship-shaped vessel, with processing equipment, or topsides, aboard the vessel’s deck and hydrocarbon storage below, in the hull of the
vessel.
FSO
—A Floating Storage and Offloading vessel is commonly used in oil fields where it is not possible or efficient
to lay a pipeline to the shore. The production platform will transfer the oil to the FSO where it will be stored until a tanker arrives and connects to the FSO to offload it.
IMO
—International Maritime Organization—IMO’s main task is to develop and maintain a comprehensive regulatory framework for shipping including safety, environmental concerns, legal matters,
technical co-operation, maritime security and the efficiency of shipping. The Convention establishing the International Maritime Organization (IMO) was adopted in Geneva in 1948.
Intertanko
—International Association of Independent Tanker Owners.
ISM
—International Safety Management is a set of regulations that operators of tankers must comply with, which aims to improve the
safety standards of the tanker industry.
Laden/ballast ratio
—The time a vessel spends employed (laden) compared with the
time spent without a cargo, often used as a management tool to assess performance.
MARPOL regulations
—A series of
internationally ratified IMO regulations pertaining to the marine environment and the prevention of pollution.
OECD
—Organization for Economic Cooperation and Development is a group of developed countries in North America, Europe and Asia.
OPA 90
—OPA 90 is the abbreviation for the U.S. Oil Pollution Act of 1990.
A-2
P&I Insurance
—Protection and indemnity insurance, commonly known as P&I insurance,
is a form of marine insurance provided by a P&I club. A P&I club is a mutual (i.e., a co-operative) insurance association that provides cover for its members, who will typically be ship-owners, ship-operators or demise charterers.
Profit share
—is a mechanism where, depending on the outcome of the negotiations and under certain time charter contracts it
is being agreed that the owner of the vessel is entitled to an increase of the agreed base hire rate (minimum or floor) amounting to a certain percentage of the difference between that base rate and the average of rates applicable for a certain
period on certain routes.
Rate
—The cost, or revenue, for a particular voyage based on a standard reference, e.g.
Worldscale, INTASCALE, ATRS.
Safety Management System or SMS
—A framework of processes and procedures that addresses a
spectrum of operational risks associated with quality, environment, health and safety. The SMS is certified by ISM (International Safety Management Code), ISO 9001 (Quality Management) and ISO 14001 (Environmental Management).
Scrapping
—The disposal of vessels by demolition for scrap metal.
Special Survey
—The survey required by the Classification Society that usually takes place every five years and usually in a dry-dock.
During the special survey all vital pieces of equipment and compartments and steel structures are opened up and inspected by the classification surveyor.
Spill
—Oil getting into the sea, in any amount, for any reason.
Spot (Voyage)
Charter
—A charter for a particular vessel to transport a single cargo between specified loading port(s) and discharge port(s) in the immediate future. Contract rate (spot rate) covers total operating expenses such as port charges,
bunkering, crew expenses, insurance, repairs, and canal tolls. The charterer will generally pay all cargo-related costs. The rate is usually quoted in terms of Worldscale (see below).
Spot Market
—The market for the immediate charter of a vessel.
Suezmax
—The maximum size vessel that can sail through the Suez canal. This is generally considered to be between 120,000 and 199,999—dwt depending on a ship’s dimensions and draft.
Technical Management
—The management of the operation of a vessel, including physically maintaining the vessel, maintaining necessary
certifications, and supplying necessary stores, spares, and lubricating oils. Responsibilities also generally include selecting, engaging and training crew, and could also include arranging necessary insurance coverage.
Time Charter (T/C)
—A charter for a fixed period of time, usually between one and ten years, under which the owner hires out the vessel
to the charterer fully manned, provisioned and insured. The charterer is usually responsible for bunkers, port charges, canal tolls and any extra cost related to the cargo. The charter rate (hire) is quoted in terms of a total cost per day. Subject
to any restrictions in the Charter, the customer decides the type and quantity of cargo to be carried and the ports of loading and unloading
A-3
Time Charter Equivalent (TCE)
. TCE revenues, which are voyage revenues less voyage expenses,
serve as an industry standard for measuring and managing fleet revenue and for comparing results between geographical regions and among competitors.
Tonne
-
mile
—A unit for freight transportation equivalent to a ton of freight moved one mile.
Tonne-mile demand
—A calculation that multiplies the average distance of each route a tanker travels by the volume of cargo moved. The greater the increase in long haul movement compared with shorter
haul movements, the higher the increase in tonne-mile demand.
ULCC or V-Plus
—ULCC is an abbreviation for Ultra Large Crude
Carrier, a crude oil tanker of more than 350,000 deadweight tons. ULCCs can transport three million barrels or more of crude oil and are mainly used on the same long haul routes as VLCCs.
Vessel Expenses
—Includes crew costs, vessel stores and supplies, lubricating oils, maintenance and repairs, insurance and communication
costs associated with the operations of vessels.
VLCC
—The abbreviation for Very Large Crude Carrier. Tankers with a
capacity between 200,000 and 320,000—dwt.
Voyage Charter
—A Charter under which a customer pays a transportation charge
for the movement of a specific cargo between two or more specified ports. The shipowner pays all voyage expenses, and all vessel expenses, unless the vessel to which the Charter relates has been time chartered in. The customer is liable for
Demurrage, if incurred.
Voyage Expenses
—Includes fuel, port charges, canal tolls, cargo handling operations and brokerage
commissions paid by the Company under Voyage Charters. These expenses are subtracted from shipping revenues to calculate Time Charter Equivalent revenues for Voyage Charters.
Worldscale
—The New Worldwide Tanker Nominal Freight Scale is a catalogue of theoretical freight rates expressed as USD per ton for most of the conceivable spot voyages in the tanker trade. The final
rate agreed will be determined as a percentage of the ‘Worldscale’ rate, based upon a guaranteed minimum quantity of cargo. This allows for charter parties to cover a wide range of possible voyage options without the need to calculate and
negotiate each one separately.
A-4
Euronav NV
PART II: INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 6. Indemnification of Directors and Officers
I.
Belgian Law
Under Belgian law, subject to certain
conditions, a company may undertake to indemnify its directors for liability that the directors might incur in the performance of their duties. Third-parties may also do so. In each case, the liability of the directors as such remains intact but the
company or a third-party agrees to cover the financial consequences of the liability incurred.
The granting of such indemnification is
subject to the following conditions and limitations.
|
|
(1)
|
It is generally accepted that a company cannot undertake to indemnify its own directors for any liability the directors might incur towards the company itself, as this would in
advance render the ‘actio mandati’ ineffective. A third-party on the other hand, such as a shareholder or a group company, can validly undertake to indemnify directors for liability they might incur towards the company in which they serve
as a director.
|
|
|
(2)
|
An indemnification commitment cannot cover liability as a result of fraud, wilful misconduct or intentional fault as this would go against public policy. Gross negligence,
however, can be effectively covered if it is expressly provided for.
|
|
|
(3)
|
An indemnification commitment cannot cover criminal penalties imposed on directors personally. This would again be contrary to public policy. However, an indemnification
commitment can cover the legal fees related to a criminal prosecution as well as the civil liability resulting from a criminal offence.
|
|
|
(4)
|
As a general rule, any undertaking to indemnify directors for liability they might incur must be in the corporate interest of the company granting the undertaking. When a company
undertakes to indemnify its own directors, the corporate interest test may be satisfied when the indemnification undertaking is considered necessary to attract or to keep competent directors.
|
III.
Indemnification Agreement
.
The Registrant has entered into an indemnification agreement with each of its directors. Pursuant to this agreement, the Company has agreed to
indemnify such directors for the financial consequences of directors’ liability claims in relation to pollution to the highest extent permitted by law. This indemnification includes, to the extent legally permitted, compensation and advancement
of all expenses in relation to any judicial procedure or dispute in which the director is or could become subject to a pollution liability claim within the framework of his responsibilities, compensation of all financial consequences including fines
and costs of such judicial procedure or dispute initiated by a third-party and that have to be borne by the director, and the indemnification of such director’s legal spouse to the extent he/she is sought solely in his/her capacity as a spouse
or because of his/her patrimonial interests in relation to the goods that are claimed as compensation for an alleged fault of a director.
Item 7. Recent Sales of Unregistered Securities
On January 10, 2014, we received gross proceeds of $50.0 million upon the issuance of 5,473,571 of our ordinary shares in a private offering in Belgium mainly to a group of qualified investors at
€6.70 per share (based on the USD/EUR exchange rate applied by the European Central Bank of EUR 1.00 per $1.3634 in effect on January 6, 2014). The ordinary shares were
II-1
sold in offshore transactions to non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended, and in the United States to “qualified institutional buyers” as
defined in, and in reliance on Rule 144A. The proceeds of the offering were used to partially finance the purchase price of the Maersk Acquisition Vessels.
On January 13, 2014, we issued 60 perpetual convertible preferred equity securities in a private offering in Belgium mainly to a group of qualified investors and to majority shareholders of ours for net
proceeds of $150.0 million, which are convertible into ordinary shares of us, at the holders’ option. On February 6, 2014, we issued 9,459,286 ordinary shares upon the conversion of 30 out of the 60 issued and outstanding perpetual
convertible preferred equity securities. The remaining 30 outstanding perpetual convertible preferred equity securities may be converted into ordinary shares at any time at the holders’ option at a price of $7.928715 per share. We have the
option to convert our perpetual convertible preferred equity securities if our share price reaches a certain level over a certain period of time and our ordinary shares have been admitted to listing on the New York Stock Exchange or the Nasdaq Stock
Exchange. In accordance with the terms of the perpetual convertible preferred equity securities, we expect to exercise this option and issue up to 9,459,286 ordinary shares for the contribution of the principal amount and, at our option, up to
2,837,785 ordinary shares for the payment of interest in shares over five years, totaling 12,297,071 shares, at the closing of this offering upon the conversion of the remaining 30 outstanding perpetual convertible preferred equity securities. These
securities were sold in offshore transactions to non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended, and in the United States to “qualified institutional buyers” as defined in, and in reliance on Rule
144A. The proceeds of this offering were used for general corporate purposes. The perpetual convertible preferred equity securities bear interest at 6% during the first 5 years, which is payable annually in arrears in cash or in shares at our
option.
On February 4, 2014, we issued $235.5 million in aggregate principal amount of seven-year redeemable unsecured bonds in an
underwritten offering in Belgium mainly to a group of qualified investors. The bonds were issued at 85% of their principal amount and bear interest at a rate of 5.95% per annum for the first year, payable semi-annually in arrears, which will
increase to 8.50% per annum for the second and third year and will further increase to 10.20% per annum from year four until maturity in 2021. We may redeem the bonds at any time at par. We may utilize a portion of the net proceeds of this
offering to redeem the bonds. The bonds were sold in offshore transactions to non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended, and in the United States to “qualified institutional buyers” as defined
in, and in reliance on Rule 144A. DNB Markets, a part of DNB Bank ASA, served as principal underwriter in this offering, for which it received customary fees. The proceeds of the bonds are expected to be used to partially finance the purchase price
of the Maersk Acquisition Vessels.
On February 24, 2014, we received gross proceeds of $300.0 million upon the issuance of
32,841,528 of our ordinary shares in a private offering in Belgium mainly to a group of qualified investors at €6.70 per share (based on the USD/EUR exchange rate applied by the European Central Bank of EUR 1.00 per $1.3634 in effect
on January 6, 2014). The ordinary shares were sold in offshore transactions to non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended, and in the United States to “qualified institutional buyers” as defined
in, and in reliance on Rule 144A. The proceeds of the offering were used to partially finance the purchase price of the Maersk Acquisition Vessels.
On July 14, 2014, we received gross proceeds of $125.0 million upon the issuance of 10,556,808 of our ordinary shares in an underwritten private offering in Belgium mainly to a
II-2
group of qualified investors at €8.70 per share (or $11.84 per share based on the USD/EUR exchange rate of EUR 1.00 per $1.3610). These securities were sold in offshore
transactions to non-U.S. persons pursuant to Regulation S under the Securities Act of 1933, as amended, and in the United States to “qualified institutional buyers” as defined in, and in reliance on Rule 144A. Petercam NV, DNB Markets and
Deutsche Bank AG served as the principal underwriters in this offering, for which they received customary fees. The proceeds of the offering are expected to be used to partially finance the purchase price of the four VLCC Acquisition Vessels.
Item 8. Exhibits and Financial Statement Schedules
|
|
|
|
|
|
|
Number
|
|
|
Description
|
|
|
1.1
|
|
|
Form of Underwriting Agreement*
|
|
|
|
|
|
3.1
|
|
|
Coordinated Articles of Association*
|
|
|
|
|
|
4.1
|
|
|
Form of Ordinary Share Certificate*
|
|
|
|
|
|
5.1
|
|
|
Form of Opinion of Argo Law as to the legality of the securities being registered
|
|
|
|
|
|
5.2
|
|
|
Form of Opinion of Argo Law as to the legality of the securities being registered
|
|
|
|
|
|
8.1
|
|
|
Form of Opinion of Seward & Kissel LLP with respect to certain U.S. tax matters
|
|
|
|
|
|
8.2
|
|
|
Form of Opinion of Argo Law with respect to certain Belgium tax matters
|
|
|
|
|
|
10.1
|
|
|
Euronav NV Stock Option Plan, dated December 16, 2013
|
|
|
|
|
|
10.2
|
|
|
$750.0 Million Secured Loan Facility, dated June 22, 2011
|
|
|
|
|
|
10.3
|
|
|
$300.0 Million Secured Loan Facility, dated April 3, 2009
|
|
|
|
|
|
10.4
|
|
|
$65.0 Million Secured Loan Facility, dated December 23, 2011
|
|
|
|
|
|
10.5
|
|
|
$500.0 Million Senior Secured Credit Facility, dated March 25, 2014
|
|
|
|
|
|
10.6
|
|
|
$50.0 Million FSO Guarantee Facility, dated July 24, 2009
|
|
|
|
|
|
10.7
|
|
|
Supplemental Letter to $50.0 Million FSO Guarantee Facility, dated September 23, 2010
|
|
|
|
|
|
10.8
|
|
|
$500.0 Million Secured Loan Facility (TI Africa and TI Asia), dated October 3, 2008
|
|
|
|
|
|
10.9
|
|
|
$135.0 Million Secured Loan Facility (Fontveille and Moneghetti), dated April 23, 2008
|
|
|
|
|
|
10.10
|
|
|
First Supplemental Agreement Relating to the $135.0 Million Secured Loan Facility (Fontveille and Moneghetti), dated June 29, 2012
|
|
|
|
|
|
10.11
|
|
|
Second Supplemental Agreement Relating to the $135.0 Million Secured Loan Facility (Fontveille and Moneghetti), dated June 5, 2013
|
|
|
|
|
|
10.12
|
|
|
$76.0 Million Secured Loan Facility (Fiorano), dated October 23, 2008
|
|
|
|
|
|
10.13
|
|
|
$67.5 Million Secured Loan Facility (Larvotto), dated August 29, 2008
|
|
|
|
|
|
10.14
|
|
|
Form of Registration Rights Agreement*
|
|
|
|
|
|
10.15
|
|
|
Framework Agreement in relation to the purchase of the Maersk Acquisition Vessels, dated January 3, 2014, by and among Maersk Tankers Singapore Pte. Ltd. and Euronav
NV
|
II-3
|
|
|
|
|
|
|
|
|
|
|
10.16
|
|
|
Addendum No. 1, to Framework Agreement in Relation to the purchase of the Maersk Acquisition Vessels, dated May 23, 2014, by and among Maersk Tankers Singapore Pte. Ltd, as sellers, and
Euronav NV, as buyers
|
|
|
|
|
|
10.17
|
|
|
Form of Memorandum of Agreement by and among Maersk Tankers Singapore Pte. Ltd., as seller, and Euronav NV, as buyer, in relation to the purchase of the Maersk Acquisition
Vessels
|
|
|
|
|
|
10.18
|
|
|
Framework Agreement in relation to the purchase of the VLCC Acquisition Vessels, dated July 7, 2014, by and among Maersk Tankers Singapore Pte. Ltd., and Euronav NV
|
|
|
|
|
|
10.19
|
|
|
Form of Memorandum of Agreement by and among Maersk Tankers Singapore Pte. Ltd., as seller, and Euronav NV, as buyer, in relation so the purchase of the VLCC Acquisition
Vessels
|
II-4
|
|
|
|
|
|
|
Number
|
|
|
Description
|
|
|
|
|
|
14.1
|
|
|
Code of Conduct
|
|
|
|
|
|
21.1
|
|
|
List of Subsidiaries
|
|
|
|
|
|
23.1
|
|
|
Consent of KPMG
|
|
|
|
|
|
23.2
|
|
|
Consent of Argo Law (included in Exhibit 5.1)
|
|
|
|
|
|
23.3
|
|
|
Consent of Seward & Kissel LLP (included in Exhibit 8.1)
|
|
|
|
|
|
23.5
|
|
|
Consent of Drewry
|
|
|
|
|
|
23.6
|
|
|
Consent of Energy Maritime Associates
|
|
|
|
|
|
24.1
|
|
|
Powers of Attorney (included in the signature page hereto)
|
|
*
|
To be filed by amendment.
|
Item 9. Undertakings
The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements
certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Antwerp, Belgium on the 8
th
day of September, 2014.
|
|
|
|
|
|
|
EURONAV NV
|
|
|
|
|
By:
|
|
/s/ Patrick Rodgers
|
|
|
|
Name:
|
|
Patrick Rodgers
|
|
|
|
Title:
|
|
Chief Executive Officer
|
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Gary J. Wolfe and Robert E. Lustrin or either of them, with full power to act alone, his or her true lawful
attorneys-in-fact and agents, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments or supplements to this registration statement,
whether pre-effective or post-effective, including any subsequent registration statement for the same offering which may be filed under Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing necessary to be done, as fully for all
intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the
capacities indicated on September 8, 2014.
|
|
|
|
|
|
|
|
|
Signature
|
|
|
|
|
|
Title
|
|
|
|
|
|
|
/s/ Patrick Rodgers
Patrick Rodgers
|
|
|
|
|
|
Chief Executive Officer (Principal Executive Officer), Director
|
|
|
|
|
|
|
/s/ Hugo De Stoop
Hugo De Stoop
|
|
|
|
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
/s/ Peter G. Livanos
Peter G. Livanos
|
|
|
|
|
|
Director, Chairman of the Board of Directors
|
|
|
|
|
|
|
/s/ Marc Saverys
Marc Saverys
|
|
|
|
|
|
Director, Vice Chairman of the Board of Directors
|
|
|
|
|
|
|
/s/ Ludwig Criel
Ludwig Criel
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
/s/ Alexandros Drouliscos
Alexandros Drouliscos
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
Signature
|
|
|
|
|
|
Title
|
|
|
|
|
|
|
/s/ Daniel R. Bradshaw
Daniel R. Bradshaw
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
/s/ William Thomson
William Thomson
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
/s/ Alice Wingfield Digby
Alice Wingfield Digby
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
/s/ John Michael Radziwill
John Michael Radziwill
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
/s/ Julian Metherell
Julian Metherell
|
|
|
|
|
|
Director
|
Authorized Representative
Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative of the Registrant in the United States, has signed this registration statement in the City
of Newark, State of Delaware, on September 8, 2014.
|
|
|
|
|
|
|
PUGLISI & ASSOCIATES
|
|
|
|
|
By:
|
|
/s/ Donald J. Puglisi
|
|
|
|
Name:
|
|
Donald J. Puglisi
|
|
|
|
Title:
|
|
Authorized Representative in the United States
|
Exhibit 5.1
ARGO Law
De Keyserlei
5/15
B-2018 Antwerpen
Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium
Ladies and Gentlemen:
We have acted as Belgian counsel to Euronav NV, a company incorporated under the laws of the Kingdom of Belgium (the “Company”), in
connection with the Company’s Registration Statement on Form F-1 (File No. ) (the “Registration Statement”) as filed publicly with the U.S. Securities and
Exchange Commission on , 2014, as thereafter amended or supplemented, with respect to the initial public offering (the “Offering”) of the Company’s ordinary
shares (the “Ordinary Shares”), no par value.
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of: (i) the Registration Statement; (ii) the prospectus of the Company (the “Prospectus”) included in the Registration Statement; and (iii) such corporate documents and records of the Company and such other
instruments, certificates and documents as we have deemed necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities to complete the execution of documents.
As to various questions of fact which are material to the opinions hereinafter expressed, we have relied upon statements or certificates of public officials, directors of the Company and others.
We have further assumed for the purposes of this opinion, without investigation, that (i) all documents contemplated by the Prospectus to
be executed in connection with the Offering have been duly authorized, executed and delivered by each of the parties thereto other than the Company, (ii) the terms of the Offering comply in all respects with the terms, conditions and
restrictions set forth in the Prospectus and all of the instruments, agreements and other documents relating thereto or executed in connection therewith, and (iii) all Ordinary Shares will be issued in compliance with applicable U.S. federal
and state securities and other laws (other than the laws of the Kingdom of Belgium in respect of which we are opining).
Based upon and
subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the opinions that under the laws of the Kingdom of Belgium, the Ordinary Shares have been duly authorized and when issued, sold and paid
for as contemplated in the Prospectus, the Ordinary Shares will be validly issued, fully paid for and non-assessable.
This opinion is limited to the law of the Kingdom of Belgium as in effect on the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and to each reference to us and the
discussions of advice provided by us under the headings “Legal Matters” in the Prospectus, without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder with respect to any part of the Registration Statement.
Very truly yours,
Exhibit 5.2
ARGO Law
De Keyserlei
5/15
B-2018 Antwerpen
Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium
Ladies and Gentlemen:
We have acted as Belgian counsel to Euronav NV, a company incorporated under the laws of the Kingdom of Belgium (the “Company”), in
connection with the Company’s Registration Statement on Form F-1 (File No. ) (the “Registration Statement”) as filed publicly with the U.S. Securities and
Exchange Commission on , 2014, as thereafter amended or supplemented, with respect to the initial public offering (the “Offering”) of the Company’s ordinary
shares (the “Ordinary Shares”), no par value, including a number of Ordinary Shares to be sold by the selling shareholders named therein (the “Selling Shareholder Shares”).
We have examined originals or copies, certified or otherwise identified to our satisfaction, of: (i) the Registration Statement;
(ii) the prospectus of the Company (the “Prospectus”) included in the Registration Statement; and (iii) such corporate documents and records of the Company and such other instruments, certificates and documents as we have deemed
necessary or appropriate as a basis for the opinions hereinafter expressed. In such examinations, we have assumed the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us
as copies or drafts of documents to be executed, the genuineness of all signatures and the legal competence or capacity of persons or entities to complete the execution of documents. As to various questions of fact which are material to the opinions
hereinafter expressed, we have relied upon statements or certificates of public officials, directors of the Company and others.
We have
further assumed for the purposes of this opinion, without investigation, that (i) all documents contemplated by the Prospectus to be executed in connection with the Offering have been duly authorized, executed and delivered by each of the
parties thereto other than the Company, (ii) the terms of the Offering comply in all respects with the terms, conditions and restrictions set forth in the Prospectus and all of the instruments, agreements and other documents relating thereto or
executed in connection therewith, and (iii) all Ordinary Shares will be issued in compliance with applicable U.S. federal and state securities and other laws (other than the laws of the Kingdom of Belgium in respect of which we are opining).
Based upon and subject to the foregoing, and having regard to such other legal considerations which we deem relevant, we are of the
opinions that under the laws of the Kingdom of Belgium, the Selling Shareholder Shares are validly issued, fully paid for and non-assessable.
This opinion is limited to the law of the Kingdom of Belgium as in effect on the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and to each reference to us and the
discussions of advice provided by us under the headings “Legal Matters” in the Prospectus, without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder with respect to any part of the Registration Statement.
Very truly yours,
Exhibit 8.1
Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium
Ladies and Gentlemen:
We have acted as United States counsel to Euronav NV (the “Company”) in connection with the Company’s Registration Statement on
Form F-1 (File No. 333- ) (the “Registration Statement”) as filed publicly with the U.S. Securities and Exchange Commission (the “Commission”) on
, 2014, as thereafter amended or supplemented, with respect to the initial public offering (the “Offering”) of the Company’s ordinary shares, no par value (the
“Ordinary Shares”).
In formulating our opinion as to these matters, we have examined such documents as we have deemed
appropriate, including the Registration Statement and the prospectus of the Company (the “Prospectus”) included in the Registration Statement. We have also obtained such additional information as we have deemed relevant and necessary from
representatives of the Company.
Capitalized terms not defined herein have the meanings ascribed to them in the Registration Statement.
Based on the facts as set forth in the Registration Statement and, in particular, on the representations, covenants, assumptions,
conditions and qualifications described under the captions “Risk Factors” and “Tax Considerations” therein, we hereby confirm that the opinions of Seward & Kissel LLP with respect to United States federal income tax
matters expressed in the Registration Statement under the captions “Tax Considerations – United States Federal Income Tax Considerations”, “Risk Factors – We may have to pay tax on Unites States source shipping income, or
taxes in other jurisdictions, which would reduce our earnings” and “Risk Factors – United States tax authorities could treat us as a ‘passive foreign investment company,’ which could have adverse United States federal income
tax consequences to United States holders” accurately state our views as to the tax matters discussed therein.
Our opinions and the
tax discussion as set forth in the Registration Statement are based on the current provisions of the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, published pronouncements of the Internal Revenue Service
which may be cited or used as precedents, and case law, any of which may be changed at any time with retroactive effect. No opinion is expressed on any matters other than those specifically referred to above by reference to the Registration
Statement.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
Exhibit 8.2
ARGO Law
De Keyserlei
5/15
B-2018 Antwerpen
Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium
Ladies and Gentlemen:
We have acted as Belgian counsel to Euronav NV, a company incorporated under the laws of the Kingdom of Belgium (the “Company”), in
connection with the Company’s Registration Statement on Form F-1 (File No. ) (the “Registration Statement”) as filed publicly with the U.S. Securities and
Exchange Commission on , 2014, as thereafter amended or supplemented, with respect to the initial public offering of the Company’s ordinary shares (the “Ordinary
Shares”), no par value.
In formulating our opinion as to these matters, we have examined such documents as we have deemed
appropriate, including the Registration Statement and the prospectus of the Company (the “Prospectus”) included in the Registration Statement. We also have obtained such additional information as we have deemed relevant and necessary
from representatives of the Company.
Based on the facts as set forth in the Registration Statement and, in particular, on the
representations, covenants, assumptions, conditions and qualifications described under the caption “Tax Considerations” therein, we hereby confirm that the opinions of Argo Law with respect to Belgian federal income tax matters expressed
in the Registration Statement under the caption “Tax Considerations – Belgian Tax Considerations” accurately state our views as to the tax matters discussed therein.
Our opinions and the tax discussion as set forth in the Registration Statement are based on the current provisions of the Belgian Income Tax
Code 1992 and the Belgian Various Duties and Taxes Code as presently in force, and as generally interpreted and applied by the Belgian courts and authorities on the same date. Our opinion may be affected by amendments to the tax law or to the
regulations thereunder or by subsequent judicial or administrative interpretations thereof, which might be enacted or applied with retroactive effect. No opinion is expressed on any matters other than those specifically referred to above by
reference to the Registration Statement.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and
to each reference to us and discussions of advice provided by us in the Prospectus. In giving such consent, we do not hereby admit that we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission promulgated thereunder with respect to any part of the Registration Statement.
Very truly
yours,
EXHIBIT 10.1
English translation – for information purposes only
16 December 2013
EURONAV
NV
STOCK OPTION PLAN
English translation – for information purposes only
|
|
|
|
|
|
|
“
Acceptance Notification
”
|
|
:
|
|
means the written notification substantially in the form as attached in
Annex A
to this Plan whereby the Beneficiary notifies the Company of his/her full or partial acceptance of the Stock Options in accordance with the
provisions set out in this Plan;
|
|
|
|
|
|
“
Affiliated Entity
”
|
|
:
|
|
means, in relation to any person or legal entity, any undertaking which relates to that person or legal entity as set out in Article 11 of the Belgian Companies Code;
|
|
|
|
|
|
“
Bad Leaver
”
|
|
:
|
|
means a person in respect of whom a Bad Leaver Event takes place;
|
|
|
|
|
|
“
Bad Leaver Event
”
|
|
:
|
|
means the termination of the Professional Relationship between a Stock Option Holder and a Group Company by a Group Company due to fraud or gross misconduct of the Stock Option Holder;
|
|
|
|
|
|
“
Beneficiary
”
|
|
:
|
|
means every individual who is a member of the executive committee of the Company at the date of this Plan;
|
|
|
|
|
|
“
Board of Directors
”
|
|
:
|
|
means the board of directors of the Company or any person or committee duly authorized by the board of directors;
|
|
|
|
|
|
“
Business Day
”
|
|
:
|
|
means a day, other than Saturday or Sunday, on which banks are open for business in Belgium;
|
|
|
|
|
|
“
Company
”
|
|
:
|
|
means Euronav NV, a company incorporated under the laws of Belgium, with registered office at De Gerlachekaai 20, 2000 Antwerp, Belgium and registered with the Register of Legal Entities under
number 0860.402.767;
|
|
|
|
|
|
“
Exercise Date
”
|
|
:
|
|
has the meaning as set out in Article 6.3.2 of this Plan;
|
|
|
|
|
|
“
Exercise Notification
”
|
|
:
|
|
means the written notification substantially in the form as attached in
Annex B
to this Plan, as may be amended by the Company, whereby the Stock Option Holder notifies the Company or any third party designated by the Company
of its desire to exercise the Stock Options;
|
|
|
|
|
|
“
Exercise Period
”
|
|
:
|
|
means the period during which the Stock Option Holder can exercise his/her Stock Options as set out in Article 6.2.1 of this Plan;
|
2
English translation – for information purposes only
|
|
|
|
|
|
|
|
|
|
|
“
Exercise Price
”
|
|
:
|
|
means the price in euro for which a Stock Option Holder can purchase during the Exercise Period a Share from the Company by exercising one (1) Stock Option, equal to EUR 5.7705 which is the lowest of (i) the average of the
closing stock price of the Share during the thirty calendar days preceding the date of Offer, or (ii) the closing stock price of the Share on the day preceding the date of Offer;
|
|
|
|
|
|
“
Good Leaver Event
”
|
|
:
|
|
means the termination of the Professional Relationship of a Stock Option Holder who is not a Bad Leaver;
|
|
|
|
|
|
“
Group
”
|
|
:
|
|
means the Company and any of its Affiliated Entities;
|
|
|
|
|
|
“
Group Company
”
|
|
:
|
|
means any company being part of the Group;
|
|
|
|
|
|
“
Leaver Instance
”
|
|
:
|
|
means each instance which in respect of a Stock Option Holder gives rise to the termination of its Professional Relationship with a Group Company either in the context of a Good Leaver Event or a Bad Leaver Event;
|
|
|
|
|
|
“
Offer
”
|
|
:
|
|
means the written notification pursuant to which the Company offers Stock Options to a Beneficiary in accordance with Article 3.2 of this Plan;
|
|
|
|
|
|
“
Plan
”
|
|
:
|
|
means this stock option plan of the Company, as may be amended from time to time;
|
|
|
|
|
|
“
Professional Relationship
”
|
|
:
|
|
means the employment contract between a Stock Option Holder and a Group Company, a Service Agreement between a Stock Option Holder and a Group Company or the mandate of a Stock Option Holder at a Group Company;
|
|
|
|
|
|
“
Secretary
”
|
|
:
|
|
means Ann Vleugels – HR Manager, the person appointed by the Board of Directors to receive the Acceptance Notifications and the Exercise Notifications;
|
|
|
|
|
|
“
Service Agreement
”
|
|
:
|
|
means each agreement pursuant to which services, such as among others management or consultancy services, are rendered by a self-employed individual or a legal entity for the benefit of a Group Company;
|
|
|
|
|
|
“
Shares
”
|
|
:
|
|
means all issued shares in the Company from time to time;
|
|
|
|
|
|
“
Stock Option
”
|
|
:
|
|
means the right of a Stock Option Holder to purchase from the Company one (1) Share at the Exercise Price in accordance with the terms and conditions of this Plan;
|
|
|
|
|
|
“
Stock option Holder
”
|
|
:
|
|
means the holder of a Stock Option;
|
|
|
|
|
|
“
Term
”
|
|
:
|
|
has the meaning as set out in Article 4.1 of this Plan;
|
3
English translation – for information purposes only
|
2
|
Object of the Stock Option Plan
|
|
2.1
|
Each Stock Option grants the Stock Option Holder the right to purchase one (1) Share from the Company upon exercise. The total number of Shares that may be purchased from the Company as a result of the exercise of
the Stock Options within the framework of this Plan, shall be equal to 1,750,000 Shares.
|
|
3
|
Offer of the Stock Options
|
|
3.1
|
Offer of Stock Options
|
|
|
3.1.1
|
The Board of Directors, determines fully discretionary the number of Stock Options offered to each Beneficiary under this Plan.
|
|
|
3.1.2
|
The Offer to a Beneficiary does not preclude that in the future an additional Offer of Stock Options can be made. An Offer does not, however, entail any right for a Beneficiary to additional Offers of Stock
Options in the future.
|
|
|
3.1.3
|
The Offer of Stock Options under this Plan does not give rise to an implied guarantee of continuous employment by the Group Companies.
|
The Company notifies the Beneficiary by means of a written
notification of the number of Stock Options offered to such Beneficiary and indicating the Exercise Price of such Stock Options (the “
Offer
”).
The Stock Options are offered to the Beneficiaries for no consideration.
|
3.4
|
Acceptance or refusal of the Stock Options
|
|
|
3.4.1
|
Any Beneficiary should accept all or part of its Stock Options by returning a duly completed and executed Acceptance Notification to the Secretary within sixty (60) calendar days after the date of the Offer
of the Stock Options to the Beneficiary, unless indicated otherwise in the Offer. If the Acceptance Notification is not received in due time, the Stock Options shall be deemed to have been refused by the Beneficiary and the rights of the concerned
Beneficiary with regard to the grant of Stock Options are automatically cancelled, the same is true for explicitly refused Stock Options. No financial compensation shall be granted to the Beneficiary for implicit or explicit refusal.
|
|
|
3.4.2
|
A Beneficiary has the possibility to accept only part of the Stock Options granted to him/her. To this effect, the Beneficiary should mention the exact number of accepted Stock Options in the Acceptance
Notification. If the Beneficiary accepts only part of the Stock Options granted to him/her, he/she shall be deemed to have refused the other Stock Options offered to him/her. In such case, no financial compensation shall be granted to the
Beneficiary for the refused Stock Options.
|
4
English translation – for information purposes only
|
|
3.4.3
|
Explicitly or implicitly refused Stock Options can still be granted to other or even the same Beneficiaries upon decision by the Board of Directors.
|
|
|
3.4.4
|
Through their acceptance by means of the Acceptance Notification the Stock Option Holders unconditionally accept all the provisions contained in the Plan.
|
|
|
3.4.5
|
In due course the Company will confirm the Beneficiary’s election to accept or to refuse Stock Options and the number of Stock Options accepted, if any.
|
|
4
|
General terms of the Stock Options
|
|
4.1
|
Term of the Stock Options
|
The Stock Options will have a term starting on the date of
the Offer and ending at the end of the day prior to the fifth (5
th
) anniversary date of the date of the Offer of the Stock Options (the “
Term
”).
|
4.2
|
Features of the Stock Options
|
|
|
4.2.1
|
Stock Options granted to Beneficiaries are strictly personal and not eligible for transfer of ownership title or any other form of transfer of (ownership) rights, except in event of decease.
|
|
|
4.2.2
|
Stock Options cannot be pledged or encumbered directly or indirectly in any way.
|
|
|
4.2.3
|
Stock Options that have been transferred, pledged or encumbered directly or indirectly in any way in violation of Article 4.2.1 and/or 4.2.2, shall lapse automatically without any financial compensation for the
Beneficiary or its transferee.
|
|
5
|
Vesting of the Stock Options
|
The Stock Options shall vest as follows:
|
|
5.1.1
|
a first tranche of 1/3 of the total number of Stock Options accepted by a Stock Option Holder vests as of the date on which the trading price of the Share is, at any moment in time, thirty (30) % higher than the
Exercise Price;
|
|
|
5.1.2
|
a second tranche of 1/3 of the total number of Stock Options accepted by a Stock Option Holder can be exercised as of the date on which the trading price of the Share is, at any moment in time, fifty (50) % higher
than the Exercise Price; and
|
|
|
5.1.3
|
a final tranche of 1/3 of the total number of Stock Options accepted by a Stock Option Holder can be exercised as of the date on which:
|
|
|
(i)
|
the Shares are admitted to listing on a regulated stock exchange in the United States of America (the ‘Listing Condition’); and
|
|
|
(ii)
|
the trading price of the Share is at any moment in time after the Listing Condition is met, hundred (100) % higher than the Exercise Price.
|
5
English translation – for information purposes only
|
6
|
Exercise of the Stock Options
|
A Stock Option Holder can only validly exercise a Stock Option, in
accordance with the procedure described in this Article 6, provided that such Stock Option has vested in accordance with Article 5 of this Plan.
|
|
6.2.1
|
As of the date a tranche of Stock Options has vested in accordance with Article 5, the vested Stock Options can be exercised until the end of the Term (the “Exercise Period”) subject to the following
limitations:
|
|
|
(i)
|
Unless decided otherwise by the Board of Directors, maximum 50% of the total number of accepted Stock Options can be exercised after the expiry of the lock-up period as requested by the underwriters of the US listing
unless in case the Listing Condition would not be met on 31 December 2014. In the latter case all accepted Stock Options of the first and the second tranche, if vested in accordance with Articles 5.1.1 and 5.1.2, shall be exercisable;
|
|
|
(ii)
|
Unless decided otherwise by the Board of Directors, the remaining fifty (50) % of the total number of accepted Stock Options can in any event only be exercised as of 31 December 2015;
|
|
|
(iii)
|
The Stock Options can only be exercised at any moment in time in accordance with the dealing code in effect within the Company at the time of the exercise.
|
|
|
6.2.2
|
The Stock Options that have not been exercised within the Exercise Period shall lapse automatically.
|
|
6.3
|
Exercise Notification and Exercise Date
|
|
|
6.3.1
|
Stock Options can be exercised in the Exercise Period by using a duly completed and executed Exercise Notification. Duly completed Exercise Notifications must be sent to the address indicated therein.
|
|
|
6.3.2
|
The date appearing on the Exercise Notification is the date on which the Stock Options are deemed to have been exercised (the “
Exercise Date
”).
|
|
6.4
|
Payment of the Exercise Price
|
|
|
6.4.1
|
Unless stated otherwise in the Exercise Notification, full payment of the relevant Exercise Price (as well as all related costs, taxed and duties, if any) must take place at the latest ten (10) Business Days
following the Exercise Date, in the manner indicated on the Exercise Notification.
|
|
|
6.4.2
|
If the Exercise Price is not received on the bank account indicated in the Exercise Notification within the term foreseen by Article 6.4.1, all rights pursuant to or related to the exercised Stock Options will
lapse irrevocably.
|
6
English translation – for information purposes only
|
7
|
Lapse of the Stock Options in a Leaver Instance
|
|
|
7.1.1
|
Upon the occurrence of a Good Leaver Event with respect to a Stock Option Holder, the Stock Options that have not vested in accordance with Article 5 shall lapse automatically unless the Board of Directors
would decide otherwise. No Group Company can be held liable for the potential loss incurred by a Stock Option Holder as a result of the lapsing of the Stock Options.
|
|
|
7.1.2
|
In the event the relevant Stock Option Holder holds Stock Options that have vested in accordance with Article 5 but have not yet been exercised, such Stock Options may still be exercised in accordance with
Article 6.3.
|
Upon the occurrence of a Bad Leaver Event with respect to a Stock
Option Holder, all Stock Options held by the relevant Stock Option Holder shall lapse automatically, irrespective of whether the Stock Options have vested in accordance with Article 5, unless the Board of Directors would decide otherwise. No
Group Company can be held liable for the potential loss incurred by a Stock Option Holder as a result of the lapsing of the Stock Options.
|
8
|
Nature and characteristics of the Shares
|
|
8.1
|
The Share acquired as a result of the exercise of a Stock Option shall have the same rights and benefits as attached to the other Shares of the Company and shall be subject to the articles of association of the
Company as applicable at the time of exercise.
|
|
8.2
|
The Shares acquired as a result of the exercise of a Stock Option shall be in dematerialised form.
|
|
8.3
|
The Shares are freely transferable.
|
|
9.1
|
Adjustment of the Stock Options
|
If an adjustment of the share capital would occur,
including a capital decrease as a result of a reimbursement to the shareholders, an incorporation of reserves in the capital with the issuance of new shares, the issuance of new shares, profit shares, convertible bonds, bonds with a subscription
right, a change of the statutory provisions with respect to the distribution of reserves and other profits and/or the distribution of liquidation bonuses or the distribution as a result of the dissolution of the Company, or a merger, contribution or
the transfer of shares as a consequence of a share exchange:
|
|
(i)
|
the number or the nominal amount of the Shares included in each Stock Option; and/or,
|
7
English translation – for information purposes only
can be adjusted, even retroactively, if and to the extent that this is deemed necessary by
the Board of Directors, as decided fully discretionary, in order to avoid a limitation of the benefits attached to the Stock Options.
The Board of Directors will notify the Stock Option Holders of each
adjustment as referred to in Article 9.1.
Each notification which should be given to the Beneficiary/Stock Option
Holder or each document which should be provided to the Beneficiary/Stock Option Holder with respect to this Plan, can be delivered at his/her home address as communicated to the Company or any other address which the Company reasonably seems
appropriate.
|
10.2
|
Decision of the Board of Directors
|
The decisions of the Board of Directors concerning
the interpretation of the Plan or concerning any dispute with respect to a Stock Option or with respect to any affair which relates to this Plan, will be final and decisive.
|
|
10.3.1
|
The Board of Directors can change the Plan and/or adjust the terms and conditions of the Stock Options if they believe that that is necessary or required taking into account, to be in accordance with, or for the
moderation of the relevant legal provisions applicable in other jurisdictions than Belgium, including, but not limited to, tax provisions and securities regulations and currency regulations, provided that the terms and conditions of the Stock
Options granted to such Beneficiaries/Stock Option Holders are no more advantageous than the terms and conditions granted to the other Beneficiaries/Stock Option Holders.
|
|
|
10.3.2
|
The Board of Directors will notify the Beneficiaries/Stock Option Holders as soon as possible of each change as referred to in Article 10.3.1 of this Plan.
|
|
|
10.4.1
|
The possible taxes, duties, parafiscal levies due by the Stock Option Holder as a result of the grant and/or exercise of the Stock Options and/or Shares, will be exclusively borne by the Stock Option Holder,
without the possibility to claim any compensation therefore from the Company.
|
8
English translation – for information purposes only
|
|
10.4.2
|
The Company and/or any Group Company are entitled to withhold any amount and conclude any agreement they deem necessary or useful in order to comply with any tax and/or social security obligation that results
from the grant and/or exercise of the Stock Options and/or delivery of the Shares in accordance with this Plan.
|
|
|
10.4.3
|
Without prejudice to Articles 10.4.1 and 10.4.2 of this Plan, all costs with respect to the implementation of this Plan will be borne by the Company.
|
|
10.5
|
Nature of the Stock Option Plan
|
Notwithstanding any provisions to the contrary included
in the Plan:
|
|
10.5.1
|
the granting of the Stock Options and of the Shares is not to form part of the rights held by the Stock Option Holder with respect to remuneration or benefits under his/her Professional Relationship with a Group
Company;
|
|
|
10.5.2
|
the Plan does not confer upon the Stock Option Holder any right to the continuation of his/her Professional Relationship or continued performance under a statutory position for any period and therefore does not
prevent any Group Company from terminating the Professional Relationship or statutory position in accordance with applicable regulations;
|
|
|
10.5.3
|
the granting of the Stock Options and of the Shares cannot be considered as a right acquired for the future.
|
If any provision in this document is held to be illegal, invalid or
unenforceable, in whole or in part, under any applicable law, that provision will be deemed not to form part of this document, and the legality, validity or enforceability of the remainder of this document will not be affected.
|
|
10.7.1
|
The Plan, all Stock Options and their implications are governed by Belgian Law.
|
|
|
10.7.2
|
The courts of Antwerp have exclusive jurisdiction.
|
9
English translation – for information purposes only
Annex A - Acceptance Notification
STOCK OPTIONS OFFERED BY EURONAV NV
ACCEPTANCE NOTIFICATION
MANDATORY RETURN
REGISTERED OR
HAND DELIVERY
[date no later than [insert 60th day after the date of the Offer]]
Euronav NV
F.a.o.
[ ]
De Gerlachekaai 20
2000 Antwerp
Belgium
Dear Sir,
Euronav NV Stock Option Plan
Further to the offer I received from Euronav NV on [insert date], I hereby inform you that I:
|
|
•
|
|
Accept stock options referred to in the offer; this acceptance shall be construed as my unconditional acceptance of all the provisions contained
in the Euronav NV Stock Option Plan;
|
|
|
•
|
|
Refuse stock options referred to in the offer;
|
|
|
•
|
|
Commit not to exercise stock options prior to 1 January 2017. If I, for whatever reason, would decide not to respect such commitment, I will
inform Euronav NV accordingly via the Exercise Notification.
|
|
|
|
Sincerely,
|
|
|
|
[signature of the beneficiary]
|
|
|
|
[name]
|
|
|
|
Confirmation of receipt in the event the notification was not returned by registered mail
|
10
English translation – for information purposes only
Annex B - Exercise Notification
EURONAV NV STOCK OPTION PLAN
EXERCISE NOTIFICATION STOCK OPTIONS
PLEASE WRITE IN CAPITAL LETTERS AND FILL IN ALL APPLICABLE BOXES
NAME:
ADDRESS:
|
|
2.
|
EXERCISE OF STOCK OPTIONS
|
I wish to exercise my stock options as follows:
|
|
|
|
|
|
|
|
|
Date of Offer:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Stock Options
:
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise Price per Stock Option :
|
|
EUR
|
|
|
|
|
|
|
|
|
|
|
Total Exercise Price:
|
|
EUR
|
|
|
|
|
I confirm I shall pay the total exercise price within ten (10) business days of the date of this exercise notification by
wire transfer to the bank account of Euronav NV.
Signature
Return by registered mail or hand delivery:
Euronav NV
F.a.o. HR Manager
De Gerlachekaai 20
2000 Antwerp
Belgium
11
EXHIBIT 10.2
DATED 22 JUNE 2011
EURONAV NV
as Borrower
NORDEA BANK NORGE ASA
DnB NOR BANK ASA
ABN
AMRO BANK N.V.
FORTIS BANK SA/NV
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
DANISH SHIP FINANCE (DANMARKS SKIBSKREDIT A/S)
FOKUS BANK (NORWEGIAN BRANCH OF DANSKE BANK A/S)
ING BELGIUM SA/NV
SKANDINAVISKA ENSKILDA BANKEN AB (publ)
as Lenders and Lead Arrangers
ITF INTERNATIONAL TRANSPORT FINANCE SUISSE AG
SCOTIABANK (IRELAND) LIMITED
as Lenders and Co-Arrangers
BANQUE LBLUX S.A.
KBC
BANK NV
DEXIA BANK BELGIUM SA/NV
as Lenders
THE BANKS AND
FINANCIAL INSTITUTIONS
listed in Schedule 2 as Swap Providers
NORDEA BANK NORGE ASA
DnB NOR BANK ASA
as
Bookrunners
NORDEA BANK NORGE ASA
as Agent and Security Trustee
LOAN
AGREEMENT
relating to a loan facility of $750,000,000
comprising a term loan facility of $500,000,000
and a revolving credit facility of $250,000,000
INDEX
|
|
|
|
|
|
|
|
|
1.
|
|
DEFINITIONS AND INTERPRETATION
|
|
|
2
|
|
|
|
|
|
|
2.
|
|
POSITION OF THE BANKS
|
|
|
20
|
|
|
|
|
|
|
3.
|
|
THE FACILITIES
|
|
|
21
|
|
|
|
|
|
|
4.
|
|
DRAWDOWN
|
|
|
23
|
|
|
|
|
|
|
5.
|
|
REPAYMENT
|
|
|
25
|
|
|
|
|
|
|
6.
|
|
PREPAYMENT AND CANCELLATION
|
|
|
26
|
|
|
|
|
|
|
7.
|
|
INTEREST
|
|
|
30
|
|
|
|
|
|
|
8.
|
|
PAYMENTS
|
|
|
33
|
|
|
|
|
|
|
9.
|
|
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
|
|
35
|
|
|
|
|
|
|
10.
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
37
|
|
|
|
|
|
|
11.
|
|
GENERAL UNDERTAKINGS
|
|
|
40
|
|
|
|
|
|
|
12.
|
|
INFORMATION UNDERTAKINGS
|
|
|
43
|
|
|
|
|
|
|
13.
|
|
FINANCIAL COVENANTS
|
|
|
44
|
|
|
|
|
|
|
14.
|
|
VESSEL UNDERTAKINGS - INSURANCE
|
|
|
46
|
|
|
|
|
|
|
15.
|
|
VESSEL UNDERTAKINGS - OPERATION AND MAINTENANCE
|
|
|
49
|
|
|
|
|
|
|
16.
|
|
VALUATIONS AND ASSET PROTECTION
|
|
|
55
|
|
|
|
|
|
|
17.
|
|
EVENTS OF DEFAULT
|
|
|
57
|
|
|
|
|
|
|
18.
|
|
FEES, EXPENSES AND INDEMNITIES
|
|
|
60
|
|
|
|
|
|
|
19.
|
|
THE AGENT
|
|
|
64
|
|
|
|
|
|
|
20.
|
|
THE SECURITY TRUSTEE
|
|
|
68
|
|
|
|
|
|
|
21.
|
|
RETIREMENT OR REPLACEMENT OF A SERVICE BANK
|
|
|
72
|
|
|
|
|
|
|
22.
|
|
LIMITS OF THE SERVICE BANKS’ OBLIGATIONS
|
|
|
73
|
|
|
|
|
|
|
23.
|
|
SHARING OF PAYMENTS
|
|
|
75
|
|
|
|
|
|
|
24.
|
|
CHANGES TO THE LENDERS
|
|
|
77
|
|
|
|
|
|
|
25.
|
|
CHANGES TO THE SWAP PROVIDERS
|
|
|
80
|
|
|
|
|
|
|
26.
|
|
SET-OFF
|
|
|
81
|
|
|
|
|
|
|
27.
|
|
MISCELLANEOUS
|
|
|
81
|
|
|
|
|
|
|
28.
|
|
NOTICES
|
|
|
82
|
|
|
|
|
|
|
29.
|
|
BANKS’ DUTIES OF CONFIDENTIALITY
|
|
|
84
|
|
|
|
|
|
|
30.
|
|
APPLICABLE LAW AND JURISDICTION
|
|
|
87
|
|
|
|
|
|
|
|
|
|
|
SCHEDULE 1
|
|
- LENDERS AND COMMITMENTS
|
|
|
89
|
|
|
|
|
|
|
SCHEDULE 2
|
|
- SWAP PROVIDERS
|
|
|
94
|
|
|
|
|
|
|
SCHEDULE 3
|
|
- THE VESSELS
|
|
|
97
|
|
|
|
|
|
|
SCHEDULE 4
|
|
- FORMS OF NOTICE OF DRAWDOWN
|
|
|
98
|
|
|
|
|
|
|
Part 1
|
|
- Notice of Drawdown for Initial Borrowing Date
|
|
|
98
|
|
|
|
|
|
|
Part 2
|
|
- Notice of Drawdown for Revolving Advances
|
|
|
100
|
|
|
|
|
|
|
SCHEDULE 5
|
|
- CONDITIONS PRECEDENT
|
|
|
101
|
|
|
|
|
|
|
SCHEDULE 6
|
|
- FORM OF TRANSFER CERTIFICATE
|
|
|
104
|
|
|
|
|
|
|
SCHEDULE 7
|
|
- FORM OF COMPLIANCE CERTIFICATE
|
|
|
108
|
|
|
|
|
|
|
SCHEDULE 8
|
|
- MANDATORY COSTS FORMULA
|
|
|
110
|
|
|
|
|
|
|
SCHEDULE 9
|
|
- DESIGNATION NOTICE
|
|
|
113
|
|
THIS AGREEMENT
is made on 22 June 2011
BETWEEN
|
(1)
|
EURONAV NV
, as Borrower;
|
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as Original Lenders;
|
|
(3)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 2, as Original Swap Providers;
|
|
(4)
|
NORDEA BANK NORGE ASA, DNB NOR BANK ASA, ABN AMRO BANK N.V., FORTIS BANK SA/NV, CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, DANISH SHIP FINANCE (DANMARKS SKIBSKREDIT A/S), FOKUS BANK (NORWEGIAN BRANCH OF DANSKE
BANK A/S), ING BELGIUM SA/NV
and
SKANDINAVISKA ENSKILDA BANKEN AB (publ)
, as Lead Arrangers;
|
|
(5)
|
ITF INTERNATIONAL TRANSPORT FINANCE SUISSE AG
and
SCOTIABANK (IRELAND) LIMITED
, as Co-Arrangers;
|
|
(6)
|
NORDEA BANK NORGE ASA
and
DnB NOR BANK ASA
, as Bookrunners;
|
|
(7)
|
NORDEA BANK NORGE ASA
, as Agent; and
|
|
(8)
|
NORDEA BANK NORGE ASA
, as Security Trustee.
|
WHEREAS
|
(A)
|
The Bookrunners and the Arrangers have arranged, and the Lenders have agreed to make available to the Borrower, a secured loan facility in the amount of $750,000,000 comprising of:
|
|
|
(i)
|
a term loan facility in the amount of $500,000,000; and
|
|
|
(ii)
|
a revolving credit facility in the amount of $250,000,000,
|
to be applied for the purpose of
refinancing the Existing Indebtedness and providing the Borrower and its subsidiaries with funds for general corporate and working capital purposes.
|
(B)
|
One or more of the Swap Providers may enter into swap transactions with the Borrower from time to time to hedge the Borrower’s floating interest rate exposure in relation to the Term Loan and the Revolving
Advances.
|
|
(C)
|
The Lenders and the Borrower have agreed with the Swap Providers that the Swap Providers on a subordinated basis will share in the security to be granted to the Security Trustee pursuant to this Agreement as set out in
this Agreement.
|
IT IS AGREED
as follows:
|
1.
|
DEFINITIONS AND INTERPRETATION
|
In this Agreement, including the Recitals, the following expressions shall
have the following meanings:
“
Account Security Deed
” means the first priority Norwegian law instrument of pledge in
respect of the Earnings Account to be executed by the Borrower in favour of the Security Trustee in the agreed form;
“
Advances
” means the Term Advance and each Revolving Advance;
“
Affected Lender
” and “
Affected Lenders
” each has the meaning given to it in the definition of “Market
Disruption Event” in this Clause 1.1;
“
Agent
” means Nordea Bank Norge ASA, a bank incorporated in Norway acting
through its office at Middelthunsgate 17, P.O. Box 1166 Sentrum, N0-0107 Oslo, Norway (or any successor to it appointed under Clause 21);
“
Agreed Form Certificate
” means the certificate dated on or about the date of this Agreement executed by the Borrower and the
Agent attaching the agreed forms of the Finance Documents to be executed after the date of this Agreement and any other relevant documents referred to in this Agreement;
“
Applicable Margin
” means 2.25% per annum;
“
Approved Flag State
” means, in relation to a Vessel, the flag state specified in Schedule 3 or such other jurisdiction as the
Security Trustee (as directed by the Majority Lenders) may approve in accordance with Clause 15.2;
“
Approved Shipbrokers
”
means ACM Shipping, Arrow Sale & Purchase (UK) Ltd., Bræmar Seascope Limited, Fearnleys, Galbraith, H. Clarkson & Co. Ltd., Maersk Broker, and R.S. Platou Shipbrokers A.S. or such other list of shipbrokers as may from time to
time be agreed in writing between the Borrower and the Majority Lenders for the purposes of Clause 16.1.2;
“
Arrangers
”
means the Lead Arrangers and the Co-Arrangers together;
“
Available Revolving Commitment
” means, in relation to a Lender
at any time, its Revolving Commitment minus its Revolving Contribution at that time, and “
Total Available Revolving Commitments
” means the aggregate of the Available Revolving Commitments of all the Lenders;
2
“
Availability Period
” means:
|
|
(a)
|
in relation to the Term Loan Facility, the period commencing on 15 March 2012 and ending on the earlier of:
|
|
|
(i)
|
30 April 2012 (or such later date as the Lenders may in their discretion agree); and
|
|
|
(ii)
|
the date on which the Total Term Commitments are reduced to zero by being fully cancelled and/or terminated;
|
|
|
(b)
|
in relation to the Revolving Credit Facility, the period commencing on 15 March 2012 and ending on the earlier of:
|
|
|
(i)
|
the Maturity Date (or such later date as the Lenders may in their discretion agree); and
|
|
|
(ii)
|
the date on which the Total Revolving Commitments are reduced to zero by being fully cancelled and/or terminated;
|
“
Bank
” means any of the Lenders, the Swap Providers, the Arrangers, the Bookrunners, the Agent and the Security Trustee;
“
Banking Day
” means a day (excluding Saturdays and Sundays) on which banks are open in London, Oslo and Brussels and, in
respect of a day on which a payment is required to be made in Dollars under a Finance Document, also in New York City;
“
Bookrunners
” means Nordea Bank Norge ASA and DnB NOR Bank ASA;
“
Borrower
” means Euronav NV, a company incorporated in Belgium with enterprise number 0860.402.767 whose registered office is
at de Gerlachekaai 20, 2000 Antwerpen, Belgium;
“
Break Costs
” means the amount (if any) by which:
|
|
(a)
|
the interest (excluding the Applicable Margin) which a Lender should have received for the period from the date of receipt of all or any part of the Term Loan or any Revolving Advance to the last day of the current
Interest Period in respect of the Term Loan or that Revolving Advance or the relevant part thereof (as the case may be), had the principal amount received been paid on the last day of that current Interest Period;
|
exceeds:
|
|
(b)
|
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the London interbank market for a period starting on the Banking
Day of receipt or recovery and ending on the last day of that current Interest Period;
|
“
Change of Control
”
means, in relation to the Borrower, if two or more persons acting in concert or any individual person other than Saverco or Tanklog:
|
|
(a)
|
acquires legally and/or beneficially, and either directly or indirectly, in excess of 50% of the issued share capital of the Borrower; or
|
|
|
(b)
|
has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent) of the Borrower;
|
3
“
Charged Property
” means any real or personal property, assets or rights
belonging to the Borrower, whether present or future, over which an Encumbrance has been or is intended to be created pursuant to any of the Finance Documents;
“
Charter Assignment
” means, in relation to a Vessel which is subject to a Long Term Charter, the first priority deed of
assignment of that Long Term Charter and any related Charter Guarantee to be executed by the Borrower in favour of the Security Trustee in accordance with Clause 11.8 in the agreed form;
“
Charter Guarantee
” means, in relation to a Vessel, any guarantee, bond, letter of credit or other instrument provided as
security for the obligations of the charterer under any Long Term Charter of that Vessel;
“
Classification Society
” means,
in relation to a Vessel, American Bureau of Shipping, Bureau Veritas, Det Norske Veritas, Germanischer Lloyd, Lloyds Register of Shipping, Nippon Kaiji Kyokai or such other classification society which is a member of the International Association of
Classification Societies as may be approved in writing by the Security Trustee (acting on the instructions of the Majority Lenders);
“
Co-Arrangers
” means ITF International Transport Finance Suisse AG and Scotiabank (Ireland) Limited;
“
Commitment
” means, in relation to a Lender, the aggregate of its Term Commitment and its Revolving Commitment, and
“
Total Commitments
” means the aggregate of the Commitments of all the Lenders;
“
Compliance Certificate
”
means a certificate signed by the chief financial officer of the Borrower substantially in the form of Schedule 7;
“
Compulsory
Acquisition
” means, in relation to a Vessel, requisition for title or other compulsory acquisition of that Vessel by any government or other competent authority, otherwise than by requisition for hire;
“
Confidential Information
” means all information relating to the Borrower, the Group, the Finance Documents or the Facilities
of which a Bank becomes aware in its capacity as, or for the purpose of becoming, a Bank or which is received by a Bank in relation to, or for the purpose of becoming a Bank under, the Finance Documents or the Facilities from either:
|
|
(a)
|
the Borrower or any of its advisers; or
|
|
|
(b)
|
another Bank, if the information was obtained by that Bank directly or indirectly from the Borrower or any of its advisers,
|
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording
information which contains or is derived or copied from such information but excludes information that:
|
|
(i)
|
is or becomes public information other than as a direct or indirect result of any breach by that Bank of Clause 29.1; or
|
4
|
|
(ii)
|
is identified in writing at the time of delivery as non-confidential by the Borrower or any of its advisers; or
|
|
|
(iii)
|
is known by that Bank before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Bank after that date, from a source which is, as far as
that Bank is aware, unconnected with the Group and which, in either case, as far as that Bank is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality;
|
“
Confidentiality Undertaking
” means a confidentiality undertaking substantially in the recommended form published from time to
time by the Loan Market Association or in any other form agreed between the Borrower and the Agent;
“
Confirmation
”, in
relation to any continuing Designated Transaction, has the meaning given to it in the relevant Master Agreement;
“
Contribution
” means, in relation to a Lender, the aggregate of its Term Contribution and its Revolving Contribution, and
“
Total Contributions
” means the aggregate of the Contributions of all the Lenders;
“
Default Rate
” means
the annual rate of interest determined in accordance with Clause 7.3;
“
Defaulting Lender
” means any Lender:
|
|
(a)
|
which has failed to make available the relevant proportion of its Commitment in respect of any Advance or has given notice to the Agent that it will not make such amount available by the relevant Drawdown Date in
accordance with Clause 4.3; or
|
|
|
(b)
|
which has rescinded or repudiated this Agreement; or
|
|
|
(c)
|
with respect to which an Insolvency Event has occurred and is continuing,
|
unless, in the case
of paragraph (a) above:
|
|
(i)
|
its failure to pay is caused by:
|
|
|
(A)
|
administrative or technical error; or
|
and payment is made within 5 Banking Days of its due date; or
|
|
(ii)
|
the Lender is disputing in good faith whether it is contractually obliged to make the relevant payment;
|
5
“
Designated Transaction
” means a transaction:
|
|
(a)
|
which is entered into by the Borrower with a Swap Provider pursuant to a Master Agreement;
|
|
|
(b)
|
whose purpose is the hedging of all or a part of the Borrower’s exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Term Loan and the Revolving Advances (or any part thereof);
|
|
|
(c)
|
which is for a period expiring no later than the Maturity Date; and
|
|
|
(d)
|
which is designated as a Designated Transaction at any time by notice in writing in the form set out in Schedule 9 from the Borrower and the relevant Swap Provider to the Agent;
|
“
Disruption Event
” means:
|
|
(a)
|
a material disruption to the payment or communications systems or to the financial markets which are required to operate in order for payments to be made (or other transactions to be carried out) in connection with the
transactions contemplated by the Finance Documents, which is not caused by, and is beyond the control of, any of the Parties; or
|
|
|
(b)
|
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing it, or any other Party from:
|
|
|
(i)
|
performing its payment obligations under the Finance Documents; or
|
|
|
(ii)
|
communicating with other Parties under the Finance Documents,
|
and which is not caused by, and
is beyond the control of, the Party whose operations are disrupted;
“
Dollars
” and “
$
” mean the lawful
currency for the time being of the United States of America;
“
Drawdown Date
” means, in relation to an Advance, the
Banking Day on which the Borrower specifies that it wishes that Advance to be made or (as the context requires) the date on which that Advance is actually made to the Borrower;
“
Earnings
” means, in relation to a Vessel:
|
|
(a)
|
all moneys whatsoever (and all claims for such moneys), present and future, which are earned or recoverable by, or become payable to or for the
account of, the Borrower arising (whether in contract, tort or otherwise howsoever), directly or indirectly, out of the ownership, use or operation of that Vessel, including (but not limited to) all freight, hire and passage moneys, compensation
payable in the event of requisition of that Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, damages for breach (or payments for variation or termination) of any
charterparty or other contract for employment of that Vessel, and all moneys (other than in respect of Insurances or
|
6
|
|
Requisition Compensation) arising from a Total Loss of that Vessel, together with the benefit of any guarantee, indemnity or other security which may at any time be given as security for the
payment of such moneys;
|
|
|
(b)
|
all moneys which are at any time payable under the Insurances of that Vessel in respect of loss of earnings; and
|
|
|
(c)
|
if and whenever that Vessel is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling
or sharing arrangement which is attributable to that Vessel;
|
“
Earnings Account
” means the Dollar
denominated account with account number NO3960170441527 held by the Borrower with the Agent;
“
Encumbrance
” means any
mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust arrangement or security interest or other encumbrance of any kind securing any obligation of any person or having the effect of conferring security or any
type of preferential arrangement (including, without limitation, title transfer and/or retention arrangements having a similar effect);
“
Environmental Approval
” means any permit, licence, approval, ruling, exemption or other authorisation required under
applicable Environmental Laws;
“
Environmental Claim
” means:
|
|
(a)
|
any claim by, or directive from, any applicable governmental, judicial or other regulatory authority alleging breach of, or non-compliance with, any Environmental Laws or Environmental Approvals or otherwise howsoever
relating to or arising out of an Environmental Incident; or
|
|
|
(b)
|
any claim by any other person howsoever relating to or arising out of an Environmental Incident,
|
(and, in each such case, “
claim
” shall mean a claim for damages, clean-up costs, compliance, remedial action or otherwise);
“
Environmental Incident
” means:
|
|
(a)
|
any release, discharge, disposal or emission of Material of Environmental Concern from a Relevant Ship; or
|
|
|
(b)
|
any incident in which Material of Environmental Concern is released, discharged, disposed of, or emitted by or from a ship other than a Relevant Ship and which involves collision between a Relevant Ship and such other
ship, or some other incident of navigation or operation, in either case where a Relevant Ship or the Borrower is actually or potentially at fault or otherwise liable (in whole or in part); or
|
|
|
(c)
|
any incident in which Material of Environmental Concern is released, discharged, disposed of, or emitted by or from a ship other than a Relevant Ship
and where the
|
7
|
|
Relevant Ship is actually or potentially liable to be arrested or attached as a result and/or where any of the Borrower is actually or potentially at fault or otherwise liable;
|
“
Environmental Laws
” means all national and international laws, ordinances, rules, regulations, rules of common law,
conventions and agreements applicable to any Relevant Ship and pertaining to pollution or protection of human health or the environment;
“
Event of Default
” means any of the events or circumstances listed in Clause 17.1;
“
Existing Indebtedness
” means, at any particular date, the aggregate principal amount of the Borrower’s indebtedness
outstanding on that date under the Existing Loan Agreement;
“
Existing Loan Agreement
” means the loan facility agreement
dated 13 April 2005, as amended, made between the Borrower and certain banks and financial institutions as lenders (for whom Nordea Bank Norge ASA acts as agent and security trustee) in relation to a loan facility originally in the amount of
$1,600,000,000;
“
Facilities
” means the Revolving Credit Facility and the Term Loan Facility;
“
Fair Market Value
” means, in relation to a Vessel, the value of that Vessel as most recently determined in accordance with
Clause 16;
“
Fee Letters
” means the fee letters made or to be made between the Agent and the Borrower as referred to in
Clause 18.1;
“
Finance Documents
” means this Agreement, the Fee Letters, the Mortgages, the General Assignments, the
Charter Assignments, the Account Security Deed and any and every other document (other than a Manager’s Undertaking) from time to time executed as security for, or to establish a subordination or priorities arrangement in relation to, all or
any of the obligations of any person to the Banks (or any of them) under this Agreement or any of the other documents referred to in this definition;
“
Financial Indebtedness
” means any indebtedness in respect of:
|
|
(b)
|
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
|
|
|
(c)
|
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
|
|
(d)
|
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with International Accounting Standard 17 issued by the International Accounting Standards Committee as in force
and applied on the date of this Agreement, be treated as a finance or capital lease;
|
|
|
(e)
|
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
|
8
|
|
(f)
|
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
|
|
|
(g)
|
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market
value shall be taken into account);
|
|
|
(h)
|
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
|
|
|
(i)
|
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above;
|
“
General Assignment
” means, in relation to a Vessel, the first priority deed of assignment of the Insurances, Earnings and
Requisition Compensation of that Vessel to be executed by the Borrower in favour of the Security Trustee in the agreed form;
“
Group
” means the Borrower and its subsidiaries for the time being and “
member of the Group
” means the
Borrower or any of its subsidiaries;
“
IFRS
” means international accounting standards within the meaning of the IAS
Regulation 1606/2002 to the extent applicable to the relevant financial statements;
“
Increased Cost
” means, in respect of
a Bank;
|
|
(a)
|
a reduction in the rate of return from the Term Loan and the Revolving Advances or on that Bank’s (or its affiliate’s) overall capital;
|
|
|
(b)
|
an additional or increased cost (including any loss, liability or cost suffered for or on account of tax); or
|
|
|
(c)
|
a reduction of any amount due and payable under any Finance Document,
|
which is incurred or
suffered by that Bank or any of its affiliates to the extent that it is attributable to that Bank having entered into its Commitment or funding or performing its obligations under this Agreement or any Finance Document;
“
Initial Borrowing Date
” means the Drawdown Date of the Term Advance;
“
Insolvency Event
” in relation to a Bank means that the Bank:
|
|
(a)
|
is dissolved (other than pursuant to a consolidation, amalgamation or merger);
|
|
|
(b)
|
becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
|
|
|
(c)
|
makes a general assignment, arrangement or composition with or for the benefit of its creditors;
|
9
|
|
(d)
|
institutes or has instituted against it, by a regulator, supervisor or similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation
or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for
its winding-up or liquidation by it or such regulator, supervisor or similar official;
|
|
|
(e)
|
has instituted against it a proceeding seeking judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is
presented for its winding up or liquidation and, in the case of any such proceeding or petition presented against it, that proceeding or petition is instituted or presented by a person or an entity not described in paragraph (d) above and:
|
|
|
(i)
|
results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
|
|
|
(ii)
|
is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
|
|
|
(f)
|
has a resolution passed for its winding-up, official management or liquidation (other than as a result of a consolidation, amalgamation or merger);
|
|
|
(g)
|
seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets;
|
|
|
(h)
|
has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all
its assets and that secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
|
|
|
(i)
|
causes or is subject to any event which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or
|
|
|
(j)
|
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence, in any of the foregoing acts;
|
“
Insurances
” means, in relation to a Vessel, all policies and contracts of insurance (including all entries of that Vessel in
a protection and indemnity association and a war risks association) which are from time to time taken out or entered into in respect of that Vessel or her Earnings or otherwise howsoever (as specified in greater detail in Clause 14) and all benefits
of such policies and contracts, including all claims of whatsoever nature and return of premiums;
“
Interest Period
” means
a Term Interest Period or a Revolving Interest Period;
10
“
Interest Rate
” means, in relation to the Term Loan and the Revolving Advances
(or any relevant part thereof, as the case may be), the annual rate of interest which is determined by the Agent in accordance with Clause 7.2;
“
Interest Tranche
” means, in relation to the Term Loan, each part of the Term Loan for which the Borrower has selected a
separate Interest Period pursuant to Clause 7.4.1;
“
ISM Code
” means The International Management Code for the Safe
Operation of Ships and for Pollution Prevention as adopted by the International Maritime Organisation as Resolutions A.741(18) and A.913(22) (as amended, supplemented or replaced from time to time);
“
ISPS Code
” means The International Ship and Port Facility Security Code as adopted by the International Maritime Organisation
(as amended, supplemented or replaced from time to time);
“
Lead Arrangers
” means Nordea Bank Norge ASA, DnB NOR Bank ASA,
ABN AMRO Bank N.V., Fortis Bank SA/NV, Credit Agricole Corporate and Investment Bank, Danish Ship Finance (Danmarks Skibskredit A/S), Fokus Bank (Norwegian Branch of Danske Bank A/S), ING Belgium SA/NV and Skandinaviska Enskilda Banken AB (publ);
“
Lender
” means:
|
|
(a)
|
any Original Lender; and
|
|
|
(b)
|
any bank, financial institution or other entity which has become a Party as Lender in accordance with Clause 24.1,
|
which in each case has not ceased to be a Party as Lender in accordance with the terms of this Agreement;
“
Lending Office
” means, in respect of a Lender, the office through which it will perform its obligations under this Agreement
being, in the case of an Original Lender, the office set out against its name in Schedule 1 and, in the case of each other Lender, the office specified in the relevant Transfer Certificate by which it becomes a Party (or such other office in respect
of any Lender as may be selected by it in accordance with Clause 24.11);
“
LIBOR
” means, in relation to an Interest Period
or any other relevant period:
|
|
(a)
|
the applicable Screen Rate; or
|
|
|
(b)
|
(if no Screen Rate is available for that period) the arithmetic mean of the rates (rounded upwards to four decimal places) quoted to the Reference Banks by leading banks in the London interbank market,
|
at or about 11:00 a.m. London time on the Quotation Day for the offering of deposits in Dollars and for a period comparable
to that period;
11
“
Loan Indebtedness
” means the aggregate of:
|
|
(a)
|
the Term Loan and interest accrued on the Term Loan;
|
|
|
(b)
|
all Revolving Advances and interest accrued on the Revolving Advances; and
|
|
|
(c)
|
all other sums of money whatsoever (other than in respect of the Master Agreement Liabilities) from time to time due or owing actually or contingently to the Banks (or any of them) under or pursuant to the Finance
Documents;
|
“
Long Term Charter
” means, in relation to a Vessel, any charter or other contract of employment
for that Vessel which is entered into by the Borrower for a term which exceeds, or which by virtue of any optional extensions might exceed, 24 months’ duration;
“
Major Casualty
” means, in relation to a Vessel, any casualty to that Vessel or incident (other than a Total Loss) in respect
of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $5,000,000 or the equivalent in any other currency;
“
Majority Lenders
” means:
|
|
(a)
|
before an Advance has been made, Lenders the aggregate of whose Commitments at any relevant time exceeds 66 2/3% of the Total Commitments at that time; and
|
|
|
(b)
|
after the first Advance has been made, Lenders the aggregate of whose Contributions at any relevant time exceeds 66 2/3% of the Total Contributions at that time;
|
“
Management Agreement
” means, in relation to a Vessel, the agreement for the time being in force between the Borrower and the
Manager with respect to the technical management of that Vessel by the Manager;
“
Manager
” means, in relation to a Vessel,
any company belonging to the Group that may be appointed as the technical manager of that Vessel or such other company as the Borrower may from time to time appoint as the technical manager of that Vessel with the prior consent of the Agent, such
consent not to be unreasonably withheld;
“
Manager’s Undertaking
” means, in relation to a Vessel, the undertaking to
be executed by the relevant Manager with respect to its management of that Vessel and the rights of the Banks under the Finance Documents in the agreed form;
“
Mandatory Cost
” means the percentage rate per annum calculated by the Agent in accordance with Schedule 8;
“
Market Disruption Event
” means, in relation to an Interest Period, if:
|
|
(a)
|
at or about noon on the Quotation Day for that Interest Period the Screen Rate is not available and none of the Reference Banks supplies a rate to the Agent to determine LIBOR for that Interest Period; or
|
|
|
(b)
|
before close of business in London on the Quotation Day for that Interest Period, the Agent receives notification in the form required by Clause 7.12
from a Lender or Lenders whose Contributions aggregate more than 50% of the Total Contributions
|
12
|
|
(or, before the Initial Borrowing Date, whose Commitments aggregate more than 50% of the Total Commitments) that the cost to it or them of obtaining matching deposits in the London interbank
market for that Interest Period would be in excess of LIBOR (such Lender or Lenders being an “
Affected Lender
” or the “
Affected Lenders
”, as the case may be);
|
“
Master Agreement
” means, in respect of a Swap Provider, the master agreement on the 1992 ISDA (Multicurrency Crossborder)
form or the 2002 ISDA (Multicurrency Crossborder) form (as the case may be) made or to be made by it with the Borrower and including, in each case, all Designated Transactions from time to time entered into by it, and all Confirmations from time to
time exchanged or deemed exchanged, under such master agreement;
“
Master Agreement Liabilities
” means, as at any relevant
date, the aggregate of all liabilities of the Borrower to the Swap Providers under or pursuant to the Master Agreements, whether actual or contingent, present or future;
“
Material Adverse Change
” or “
Material Adverse Effect
” means any occurrence, condition or circumstance
(i) subsequent to 31 December 2010 and (ii) not previously known to the Lenders or the Agent, which the Lenders determine has had, or could reasonably be expected to have, a material adverse change in or a material adverse effect on:
|
|
(a)
|
the rights or remedies available to the Banks under any Finance Document;
|
|
|
(b)
|
the ability of the Borrower or any other Obligor to perform and comply with its obligations under any Finance Document;
|
|
|
(c)
|
the validity, legality or enforceability of any Finance Document;
|
|
|
(d)
|
the validity, legality or enforceability of any Encumbrance expressed to be created pursuant to any Finance Document or the priority or ranking of that Encumbrance; or
|
|
|
(e)
|
the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or any other member of the Group;
|
“
Material of Environmental Concern
” means and includes chemicals, pollutants, contaminants, waste, toxic or hazardous
substances, oil, petroleum and oil and petroleum products and any other polluting substances, the release, discharge, disposal or emission of which into the environment is regulated, prohibited or penalised by or pursuant to any Environmental Law;
“
Maturity Date
” means the date falling on the 6
th
anniversary of the
date of this Agreement;
“
Mortgage
” means:
|
|
(a)
|
in relation to the Vessels whose Approved Flag State is Belgium, the first priority cross-collateralised Belgian law fleet mortgage over those Vessels to be executed by the Borrower in favour of the Security Trustee and
the Swap Providers in the agreed form for an amount equal to 125% of the aggregate Fair Market Value of those Vessels as assessed on or about the Initial Borrowing Date;
|
13
|
|
(b)
|
in relation to a Vessel whose Approved Flag State is France, the first priority cross-collateralised French law ship mortgage over that Vessel to be executed by the Borrower in favour of the Banks in the agreed form for
an amount equal to 125% of the Fair Market Value of that Vessel as assessed on or about the Initial Borrowing Date; and
|
|
|
(c)
|
in relation to a Vessel whose Approved Flag State is Greece, the first priority cross-collateralised Greek law ship mortgage over that Vessel to be executed by the Borrower in favour of the Banks in the agreed form;
|
“
Non-Consenting Lender
” means any Lender who does not consent to the terms of a waiver or amendment
requested by the Borrower which pursuant to Clause 19.14 or any other provision of the Finance Documents requires the consent of all the Lenders where other Lenders whose Contributions aggregate more than 66 2/3% of the Total Contributions (or,
before the Initial Borrowing Date, Lenders whose Commitments aggregate more than 66 2/3% of the Total Commitments) have consented to such waiver or amendment request;
“
Notice of Drawdown
” means a notice substantially in the form set out in part 1 of Schedule 4 (in respect of the Advances to
be drawn on the Initial Borrowing Date) or part 2 of Schedule 4 (in respect of any Revolving Advance to be drawn after the Initial Borrowing Date);
“
Obligor
” means the Borrower and any other member of the Group which is a party from time to time to any of the Finance
Documents;
“
Original Lenders
” means the banks and financial institutions listed in Schedule 1 acting through their
respective Lending Offices;
“
Original Swap Providers
” means the banks and financial institutions listed in Schedule 2
acting through their respective offices stated in Schedule 2;
“
Outstanding Indebtedness
” means the aggregate of the Loan
Indebtedness and the Master Agreement Liabilities;
“
Party
” means a party to this Agreement;
“
Permitted Encumbrance
” means:
|
|
(a)
|
any Encumbrance created by or pursuant to the Finance Documents;
|
|
|
(b)
|
any Encumbrance securing the Existing Indebtedness (but only up to the Initial Borrowing Date);
|
|
|
(c)
|
liens for unpaid master’s and crew’s wages;
|
|
|
(e)
|
liens by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a Vessel not prohibited by this Agreement;
|
14
|
|
(f)
|
liens for master’s disbursements in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Vessel, provided
such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps);
|
|
|
(g)
|
any Encumbrance created in favour of a plaintiff or defendant in any action of the course or tribunal before whom such action is brought as security for costs and expenses where the Borrower is prosecuting or defending
such proceedings or arbitration in good faith by appropriate steps provided such Encumbrance does not (and is not likely to) result in any sale, forfeiture or loss of a Vessel; and
|
|
|
(h)
|
Encumbrances arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have
been made;
|
“
Potential Event of Default
” means any event or circumstance specified in Clause 17 which would
(with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default;
“
Quotation Day
” means, in relation to any period for which an interest rate is to be determined, the day falling 2 Banking
Days before the first day of that period;
“
Reference Banks
” means, subject to Clause 7.11, Nordea Bank Norge ASA, DnB NOR
Bank ASA and Fortis Bank SA/NV or such other banks as may be appointed by the Agent in consultation with the Borrower;
“
Relevant
Ship
” means a Vessel and any other ship from time to time (whether before or after the date of this Agreement) owned by, or demise chartered to, the Borrower;
“
Repayment Date
” means a Term Repayment Date or a Revolving Repayment Date;
“
Representative
” means, any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian;
“
Requisition Compensation
” means, in relation to a Vessel, all moneys or other compensation payable by reason of a Compulsory
Acquisition of that Vessel;
“
Revolving Advance
” means the principal amount of each portion of the Total Revolving
Commitments drawn by the Borrower under this Agreement or (as the context requires) the principal amount of any proposed drawing under the Revolving Credit Facility as specified by the Borrower in a Notice of Drawdown;
“
Revolving Commitment
” means:
|
|
(a)
|
in relation to an Original Lender, the amount set opposite its name in the fourth column of Schedule 1 and the amount of any other Revolving Commitment transferred to it under this Agreement; and
|
|
|
(b)
|
in relation to any other Lender, the amount of any Revolving Commitment transferred to it under this Agreement,
|
15
to the extent not cancelled, reduced or transferred by it under this Agreement, and
“
Total Revolving Commitments
” means the aggregate of the Revolving Commitments of all the Lenders;
“
Revolving
Contribution
” means, in relation to a Lender, the part of the aggregate Revolving Advances which is owing to that Lender at any relevant time, and “
Total Revolving Contributions
” means the aggregate of the Revolving
Contributions of all the Lenders;
“
Revolving Credit Facility
” means the revolving credit facility in the sum of
$250,000,000 made available to the Borrower under this Agreement;
“
Revolving Interest Period
” means, in relation to a
Revolving Advance, the period determined in accordance with Clause 7.5;
“
Revolving Repayment Date
” means, in
relation to a Revolving Advance, the date on which that Revolving Advance is required to be repaid under Clause 5.2;
“
Saverco
” means Saverco NV, a company incorporated in Belgium with enterprise number 0427685965 whose registered office is at
de Gerlachekaai 20, 2000 Antwerpen, Belgium;
“
Screen Rate
” means, in respect of LIBOR for any period, the British
Bankers’ Association Interest Settlement Rate for Dollars for the relevant period, displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or
service displaying the appropriate rate after consultation with the Borrower;
“
Security Period
” means the period from the
date of this Agreement until the discharge of the security created by the Finance Documents by final and irrevocable repayment or payment in full of the Outstanding Indebtedness;
“
Security Trustee
” means Nordea Bank Norge ASA, a bank incorporated in Norway acting through its office at Middelthunsgate 17,
P.O. Box 1166 Sentrum, NO-0107 Oslo, Norway (or any successor to it appointed under Clause 21);
“
Service Bank
” means the
Agent or the Security Trustee;
“
Signing Date
” has the meaning given to it in Clause 3.2;
“
Swap Provider
” means:
|
|
(a)
|
any Original Swap Provider; and
|
|
|
(b)
|
any bank, financial institution or other entity which has become a Party as Swap Provider in accordance with Clause 25,
|
16
which in each case has not ceased to be a Party as Swap Provider in accordance with the terms of
this Agreement;
“
Tanklog
” means Tanklog Holdings Limited, a company incorporated in Cyprus with company number HE 161603
whose registered office is at 1 C. Pantelides Avenue, Nicosia 1010, Cyprus;
“
Term Advance
” means the principal amount of
the Total Term Commitments drawn by the Borrower under this Agreement or (as the context requires) the principal amount of any proposed drawing under the Term Loan Facility as specified by the Borrower in a Notice of Drawdown;
“
Term Commitment
” means:
|
|
(a)
|
in relation to an Original Lender, the amount set opposite its name in the third column of Schedule 1 and the amount of any other Term Commitment transferred to it under this Agreement; and
|
|
|
(b)
|
in relation to any other Lender, the amount of any Term Commitment transferred to it under this Agreement,
|
to the extent not cancelled, reduced or transferred by it under this Agreement, and “
Total Term Commitments
” means the
aggregate of the Term Commitments of all the Lenders;
“
Term Contribution
” means, in relation to a Lender, the part of the
Term Loan which is owing to that Lender at any relevant time, and “
Total Term Contributions
” means the aggregate of the Term Contributions of all the Lenders;
“
Term Interest Period
” means, in relation to the Term Loan or an Interest Tranche of it, the period determined in accordance
with Clause 7.4;
“
Term Loan
” means the principal aggregate amount of the Total Term Commitments advanced to the Borrower
and which is from time to time outstanding under this Agreement;
“
Term Loan Facility
” means the term loan facility in the
sum of $500,000,000 made available to the Borrower under this Agreement;
“
Term Repayment Date
” means a date on which a
repayment of the Term Loan is required to be made under Clause 5.1;
“
Total Loss
” means, in relation to a Vessel:
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of that Vessel; or
|
|
|
(b)
|
Compulsory Acquisition of that Vessel; or
|
|
|
(c)
|
capture, seizure, hijacking, theft, arrest, detention or confiscation of that Vessel by any person (not amounting to Compulsory Acquisition), unless that Vessel is released and restored to the Borrower or any relevant
charterer within 180 days after such capture, seizure, hijacking, theft, arrest, detention or confiscation;
|
17
“
Total Loss Date
” means, in relation to a Vessel, the date upon which a Total
Loss of that Vessel is deemed for the purposes of the Finance Documents to have occurred, being:
|
|
(a)
|
if it consists of an actual total loss, the actual date of loss or, if that is not known, the date when the Vessel was last heard of;
|
|
|
(b)
|
if it consists of a constructive total loss, the date notice of abandonment of the Vessel is given to her insurers (provided a claim for total loss is admitted by the insurers) or, if the insurers do not forthwith admit
such a claim, the date on which the total loss is subsequently admitted by the insurers to have occurred or (as the case may be) is subsequently adjudged by a competent court of law or arbitration panel to have occurred or, if earlier, the date
falling 180 days after notice of abandonment of the Vessel was given to the insurers;
|
|
|
(c)
|
if it consists of a compromised, agreed or arranged total loss, the date on which a binding agreement as to such compromised, agreed or arranged total is entered into by or on behalf of the Borrower with the
Vessel’s insurers;
|
|
|
(d)
|
if it consists of a Compulsory Acquisition of the Vessel, the date on which the requisition of title or other compulsory acquisition of the Vessel occurs; and
|
|
|
(e)
|
if it consists of capture, seizure, hijacking, theft, arrest, detention or confiscation of the Vessel by any person (not amounting to Compulsory Acquisition) and the Vessel is not released and restored to the Borrower
or any relevant charterer within 180 days, the date falling 180 days after the date on which the relevant capture, seizure, hijacking, theft, arrest, detention or confiscation occurred;
|
“
Total Loss Event
” means any event which constitutes a Total Loss or which, with the expiry of any relevant grace period,
would constitute a Total Loss;
“
Transfer Certificate
” means a transfer certificate in the form set out in Schedule 6 with
any modifications or amendments approved or required by the Agent;
“
Trust Property
” has the meaning given to it in Clause
20;
“
VAT
” means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature;
“
Vessels
” means the vessels specified in Schedule 3 (but, unless the context otherwise requires, shall not include any
such vessel which has been sold in accordance with this Agreement or which has become a Total Loss).
|
1.2
|
Construction of certain expressions
|
The following expressions shall be construed in the
following manner:
“
affiliate
” means, in relation to any person, a subsidiary of that person or a holding company of that
person or any other subsidiary of that holding company;
18
“
certified copy
” means, in respect of any document, a copy of it certified as a
true and complete and up to date copy of the original by a director or officer of the Borrower or by its lawyers or by another person acceptable to the Agent;
a “
guarantee
” includes an indemnity and a performance bond in each case relating to the obligations of another person and any
other obligation of any person to pay, purchase, provide funds for the payment of, indemnify against the consequences of default in the payment of, or otherwise be responsible for, any indebtedness of any other person;
“
person
” includes a corporate entity and any body of persons (including a partnership) whether corporate or unincorporate;
“
subsidiary
” and “
holding company
” have the meanings given to them by Section 1159 of the Companies
Act 2006 provided that a company shall be treated, for the purposes only of the membership requirement contained in subsections 1159(1)(b) and (c), as a member of another company even if its shares in that other company are registered in the name of
(a) another person (or its nominee), whether by way of security or in connection with the taking of security, or (b) its nominee;
“
taxes
” includes all present and future income, corporation and value-added taxes and all stamp and other taxes, duties,
levies, imposts, deductions, charges and withholdings whatsoever, together with interest on them and penalties with respect to them, if any, and any payments of principal, interest, charges, fees or other amounts made on or in respect of them, and
references to “
tax
” and “
taxation
” shall be construed accordingly.
|
1.3
|
General interpretation
|
In this Agreement:
|
|
1.3.1
|
unless the context otherwise requires, words in the singular include the plural and vice versa;
|
|
|
1.3.2
|
references to any document include that document as varied, supplemented or replaced from time to time;
|
|
|
1.3.3
|
references to any enactment include re-enactments, amendments and extensions of that enactment;
|
|
|
1.3.4
|
references to any person include that person’s successors and permitted assigns;
|
|
|
1.3.5
|
clause headings are for convenience of reference only and are not to be taken into account in construction;
|
|
|
1.3.6
|
unless otherwise specified, references to Clauses, Recitals and Schedules are respectively to Clauses of and Recitals and Schedules to this Agreement;
|
|
|
1.3.7
|
any words following the terms “
including
”, “
include
”, “
in particular
” or any similar expression shall be construed as illustrative and shall not limit the sense of the
words, description, definition, phrase or term preceding those terms;
|
19
|
|
1.3.8
|
references to a document being “
in the agreed form
” are to a document in the form attached to the Agreed Form Certificate (or, where that document is to be executed in a language other than English, in
the form of the English text attached to the Agreed Form Certificate as translated into that language) and include references to that form with such modifications as the Majority Lenders may approve or require;
|
|
|
1.3.9
|
references to a period of one or more “
months
” shall mean a period beginning in one calendar month and ending in the relevant calendar month on the day numerically corresponding to the day of the
calendar month in which that period started, provided that (a) if that period started on the last day in a calendar month, or if there is no such numerically corresponding day, that period shall end on the last Banking Day in the relevant
calendar month and (b) if such numerically corresponding day is not a Banking Day, that period shall end on the next following Banking Day in the same calendar month, or if there is no such Banking Day, that period shall end on the preceding
Banking Day (and “
month
” and “
monthly
” shall be construed accordingly).
|
A person who is not a Party may not enforce, or otherwise have the
benefit of, any provision of this Agreement under the Contracts (Rights of Third Parties) Act 1999.
|
2.1
|
Obligations of Banks several
|
The obligations of the Banks under the Finance Documents
and the Master Agreements are several and, accordingly:
|
|
2.1.1
|
no Bank shall be liable for the failure of any other Bank to perform its obligations under any Finance Document or Master Agreement; and
|
|
|
2.1.2
|
the failure of a Bank to perform any of its obligations under any Finance Document or Master Agreement shall not relieve any other Bank or the Borrower from any of their respective obligations under those documents.
|
|
2.2
|
Rights of Banks several
|
The rights and interests of each Bank under the Finance
Documents and the Master Agreements are several and, accordingly, notwithstanding any provision to the contrary in any Finance Document or Master Agreement:
|
|
2.2.1
|
the aggregate of the amounts outstanding at any time under the Finance Documents and/or the Master Agreements to each Bank shall be due as a separate and independent debt; and
|
|
|
2.2.2
|
each Bank shall have the right to sue for any amount due and payable to it from the Borrower or any other Obligor under the Finance Documents or any Master Agreement and it shall not be necessary for any other Bank to
be joined as an additional party in any proceedings to that end.
|
20
|
2.3
|
Restrictions on other proceedings by individual Banks
|
Except as provided in Clause
2.2.2, no Bank shall, except with the prior written consent of the Majority Lenders, bring any proceedings against the Borrower or any other Obligor in respect of any other claim (whether in contract, tort or otherwise) which that Bank may have
under or in connection with the Finance Documents and/or the Master Agreements. For the avoidance of doubt, this Clause 2.3 applies to any proceedings against the Borrower or any other Obligor to enforce any Encumbrance created in favour of the
Security Trustee by any Finance Document.
|
2.4
|
Swap Providers as mortgagees
|
If and to the extent that any Bank is a party to any of
the Mortgages in its capacity as Swap Provider in order to secure more effectively the Master Agreement Liabilities owing to it, it undertakes to act under that Mortgage in all respects in accordance with the instructions of the Security Trustee (as
directed by the Majority Lenders).
Subject to the provisions of this Agreement, the Lenders agree, on
and with effect from the Signing Date, to make the Total Commitment available to the Borrower.
For the purposes of this Agreement, the “
Signing Date
”
means the date of this Agreement or, if later, the date on which the Agent has received (a) payment of the fees and expenses specified in Clause 18 to the extent due and payable on or before the Signing Date and (b) the documents and
evidence described in part 1 of Schedule 5, in form and substance satisfactory to it, provided that on such date the Agent is satisfied that:
|
|
3.2.1
|
since 31 December 2010 no Material Adverse Change has occurred which is continuing;
|
|
|
3.2.2
|
the representations and warranties set out in Clause 10 would be true and not misleading if repeated on that date with reference to the circumstances then existing; and
|
|
|
3.2.3
|
no Event of Default or Potential Event of Default has occurred or will arise by reason of the granting of the Facilities to the Borrower or the performance by it of its obligations under this Agreement and the other
Finance Documents.
|
The Agent shall confirm to the other Parties in writing once the above conditions have been satisfied.
If and to the extent that the Total Commitments on the Signing Date exceed 65%
of the aggregate Fair Market Values of the Vessels on that date, the Total Commitments shall be cancelled pro rata on the Signing Date so that they then equal 65% of those aggregate Fair Market Values.
21
Subject to the provisions of this Agreement:
|
|
3.4.1
|
the Term Commitments will be available in one single drawing (being the “
Term Advance
”) on any Banking Day falling during the Availability Period for the Term Loan Facility;
|
|
|
3.4.2
|
the Revolving Commitments will be available for drawing in one or more separate amounts (each being a “
Revolving Advance
”) on any Banking Day falling during the Availability Period for the Revolving
Credit Facility provided that:
|
|
|
(a)
|
each Revolving Advance shall be not less than $5,000,000 and an integral multiple of $1,000,000;
|
|
|
(b)
|
no Revolving Advance shall exceed the Total Available Revolving Commitments on its Drawdown Date taking into account for this purpose any Revolving Advance to be repaid on such day and any other Revolving Advance which
is to be made which is the subject of a current Notice of Drawdown;
|
|
|
(c)
|
the number of Revolving Advances drawn and outstanding at any one time, when aggregated with the number of Interest Tranches for the Term Loan at that time, shall not exceed 10; and
|
|
|
(d)
|
no Revolving Advance may be drawn before the Initial Borrowing Date;
|
|
|
3.4.3
|
the Term Advance must be drawn on a Banking Day (being the “
Initial Borrowing Date
”) falling during the period from 15 March 2012 to 30 April 2012 (both dates inclusive) and applied in or
towards repayment in full on that date of the Existing Indebtedness;
|
|
|
3.4.4
|
if the Total Term Commitments are not drawn in full on the Initial Borrowing Date, the undrawn portion shall be automatically cancelled on that date;
|
|
|
3.4.5
|
if the Term Advance is insufficient to repay the Existing Indebtedness in full on the Initial Borrowing Date then, unless the Borrower repays the balance of that amount on that date in full from its other funds, it
shall draw one or more Revolving Advances on the Initial Borrowing Date and apply the proceeds in or towards repayment in full on that date of the balance of the Existing Indebtedness; and
|
|
|
3.4.6
|
if the Initial Borrowing Date does not occur on or before 30 April 2012 the Total Commitments shall be automatically cancelled.
|
22
The Borrower undertakes to apply the Advances exclusively for the purposes
referred to in Recital (A), provided that none of the Banks shall be bound to monitor or verify the application of the proceeds of any Advance.
|
3.6
|
Lenders’ participations
|
Subject to the provisions of this Agreement, each Lender
will:
|
|
3.6.1
|
participate in the Term Advance up to a principal amount not exceeding its Term Commitment in the proportion which its Term Commitment bears to the Total Term Commitments; and
|
|
|
3.6.2
|
participate in each Revolving Advance up to a principal amount not exceeding its Available Revolving Commitment in the proportion which its Available Revolving Commitment bears to the Total Available Revolving
Commitments.
|
|
3.7
|
No advance after expiry of Availability Period
|
No Lender will have any liability
whatsoever to make available the relevant proportion of its Commitment in relation to a Facility after the expiry date of the Availability Period relating to that Facility and any part of a Lender’s Commitment in respect of a Facility which has
not been advanced to the Borrower at close of business on that relevant expiry date shall be cancelled.
The Borrower may draw an Advance under a Facility subject to giving
the Agent a duly completed Notice of Drawdown not later than 10:00 a.m. London time 3 Banking Days before the proposed Drawdown Date of the Advance, which notice shall be irrevocable and will not be regarded as having been duly completed unless
(a) the proposed Drawdown Date is a Banking Day within the Availability Period of the Facility under which the Advance is to be drawn and (b) the proposed Interest Period for the Advance complies with Clause 7.4 or Clause 7.5 (as the case
may be).
|
4.2
|
Agent’s notification to Lenders
|
Upon receipt of a Notice of Drawdown given in
accordance with Clause 4.1, the Agent shall promptly notify each Lender of (a) the contents thereof and (b) the relevant proportion of the Advance or Advances to be funded by that Lender.
|
4.3
|
Availability of Lenders’ Commitments
|
Each Lender shall, subject to the provisions
of this Agreement, make available to the Agent on the Drawdown Date of an Advance the relevant proportion of its Commitment in respect of that Advance.
23
|
4.4
|
Conditions precedent – Advances drawn on Initial Borrowing Date
|
Notwithstanding
the giving of a Notice of Drawdown pursuant to Clause 4.1 in relation to the Term Advance and any Revolving Advance or Revolving Advances to be drawn on the Initial Borrowing Date, neither the Lenders nor the Agent shall be obliged to disburse any
funds in respect of those Advances, and the Borrower shall not be entitled to draw down those Advances, unless the following conditions precedent are satisfied:
|
|
4.4.1
|
the Agent has received payment of the fees and expenses specified in Clause 18 to the extent due and payable on or before the Initial Borrowing Date;
|
|
|
4.4.2
|
the Agent has received the documents and evidence described in parts 1 and 2 of Schedule 5, in form and substance satisfactory to it;
|
|
|
4.4.3
|
the Agent is satisfied that both at the date of the relevant Notice of Drawdown and at the Initial Borrowing Date:
|
|
|
(a)
|
the representations and warranties set out in Clause 10 and those of the Borrower or any other Obligor which are set out in any other Finance Document would be true and not misleading if repeated on each of those dates
with reference to the circumstances then existing;
|
|
|
(b)
|
none of the circumstances specified in Clauses 6.3, 6.5, 6.6, 7.13 or 18.7 has occurred and is continuing;
|
|
|
(c)
|
if the ratio set out in Clause 16.2 were tested immediately following the making of the relevant Advance or Advances by reference to the most recent valuations obtained in accordance with Clause 16.1, the Borrower would
not be obliged to provide additional security or prepay part of the Term Loan and/or the Revolving Advances under that Clause; and
|
|
|
(d)
|
no Event of Default or Potential Event of Default has occurred or will arise following the making of that Advance.
|
|
4.5
|
Conditions precedent – Advances drawn after Initial Borrowing Date
|
Notwithstanding
the giving of a Notice of Drawdown pursuant to Clause 4.1 in relation to a Revolving Advance to be drawn after the Initial Borrowing Date, neither the Lenders nor the Agent shall be obliged to disburse any funds in respect of that Advance, and the
Borrower shall not be entitled to draw down that Advance, unless the Agent is satisfied that both at the date of the relevant Notice of Drawdown and at the relevant Drawdown Date:
|
|
4.5.1
|
the representations and warranties set out in Clause 10 and those of the Borrower or any other Obligor which are set out in any other Finance Document would be true and not misleading if repeated on each of those dates
with reference to the circumstances then existing;
|
|
|
4.5.2
|
none of the circumstances specified in Clauses 6.3, 6.5, 6.6, 7.13 or 18.7 has occurred and is continuing;
|
24
|
|
4.5.3
|
if the ratio set out in Clause 16.2 were tested immediately following the making of the relevant Advance, the Borrower would not be obliged to provide additional security or prepay part of the Term Loan and/or the
Revolving Advances under that Clause; and
|
|
|
4.5.4
|
no Event of Default or Potential Event of Default has occurred or will arise following the making of that Advance.
|
|
4.6
|
Waiver of conditions precedent
|
If the Lenders in their absolute discretion make an
Advance notwithstanding that one or more of the conditions precedent specified above in relation to it remains unsatisfied on its Drawdown Date, the Borrower shall procure the satisfaction of such condition or conditions precedent within such period
as the Majority Lenders may in their absolute discretion agree in writing.
|
4.7
|
Application of proceeds of Advances
|
Subject to the provisions of this Agreement, the
Agent will pay to the Borrower on the Drawdown Date of an Advance the amounts which the Agent receives from the Lenders under Clause 4.3 in like funds as are received by the Agent from the Lenders by paying the same in accordance with the Notice of
Drawdown given by the Borrower. Such payment shall constitute the making of the relevant Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender accordingly, in an amount equal to that
Lender’s proportion of that Advance.
|
5.1
|
Repayment of Term Loan
|
Subject to the provisions of this Agreement, the Borrower shall
repay the Term Loan as follows:
|
|
5.1.1
|
the Term Loan shall be repaid in 11 repayment instalments of which the first 10 shall each be in the amount of $45,000,000 and the last of which shall be in the amount of $50,000,000 (provided that, if the Total Term
Commitments are not drawn in full, the amount of each such instalment shall be reduced pro rata to the amount actually advanced);
|
|
|
5.1.2
|
the first 10 repayment instalments shall be paid on the Banking Days falling at successive 6 monthly intervals from the Initial Borrowing Date and the final repayment instalment shall be paid on the Maturity Date.
|
|
5.2
|
Repayment of Revolving Advances
|
Subject to the provisions of this Agreement, the
Borrower shall repay each Revolving Advance as follows:
|
|
5.2.1
|
each Revolving Advance shall be repaid in full on the last day of its Interest Period; and
|
25
|
|
5.2.2
|
unless the Borrower notifies the Agent to the contrary not later than 11:00 a.m. London time 3 Banking Days prior to the Revolving Repayment Date applicable to a Revolving Advance, then, notwithstanding Clause 5.2.1,
where that Revolving Repayment Date is also a Drawdown Date in respect of another Revolving Advance, the Agent shall, on behalf of the Borrower, apply the Revolving Advance which would otherwise have been paid to the Borrower on that Revolving
Drawdown Date in or towards the discharge of the amount payable by the Borrower on that Revolving Repayment Date pursuant to Clause 5.2.1 (but without prejudice to the obligation of the Borrower to pay any balance due after application of such
amount).
|
On the Maturity Date the Borrower shall additionally pay to the Agent
all sums which are then accrued or owing to the Banks (or any of them) under this Agreement and the other Finance Documents.
|
6.
|
PREPAYMENT AND CANCELLATION
|
|
6.1
|
Voluntary prepayment and/or cancellation
|
The Borrower shall have the right upon giving
the Agent not less than 3 Banking Days’ prior written notice:
|
|
6.1.1
|
to prepay the Term Loan or any Revolving Advance, in whole or in part, on any Banking Day provided that any partial prepayment of the Term Loan or a Revolving Advance must be in the amount of $1,000,000 or a higher
integral multiple of $1,000,000;
|
|
|
6.1.2
|
to cancel the Total Term Commitments, in whole or in part, on any Banking Day provided that any cancellation of part of the Total Term Commitments must be in the amount of $1,000,000 or a higher integral multiple of
$1,000,000; and/or
|
|
|
6.1.3
|
to cancel the Total Revolving Commitments, in whole or in part, on any Banking Day in an amount not exceeding the amount of the Total Available Revolving Commitments on the date of cancellation, provided that any
cancellation of part of the Total Revolving Commitments must be in the amount of $1,000,000 or a higher integral multiple of $1,000,000.
|
The Agent shall promptly notify the Lenders of any notice which is received from the Borrower under this Clause 6.1.
|
6.2
|
Mandatory cancellation if conditions precedent to Signing Date not satisfied
|
If the
Signing Date does not occur on or before 29 July 2011 (or such later date as the Lenders may agree) the Commitments shall be cancelled upon the demand of the Agent (as directed by the Majority Lenders).
26
|
6.3
|
Mandatory prepayment and cancellation upon illegality
|
If by reason of the introduction,
imposition, variation or change of any law, regulation or regulatory requirement or by reason of any judgment, order or direction of any relevant court, tribunal or authority it becomes unlawful in any applicable jurisdiction for a Lender to perform
any of its obligations as contemplated by this Agreement or to fund or maintain its Commitment and/or Contribution (as the case may be) that Lender shall promptly notify the Agent upon becoming aware of that event, whereupon:
|
|
6.3.1
|
the Agent shall immediately notify the Borrower thereof;
|
|
|
6.3.2
|
the relevant Lender shall, following consultation with the Borrower, use all reasonable efforts to avoid the effects of such event and in particular shall consider, subject to obtaining any necessary consents,
transferring at par its rights and obligations under this Agreement to another legal entity approved by the Borrower not affected by such law, regulation, regulatory requirement, judgment, order or direction;
|
|
|
6.3.3
|
if the relevant Lender is unable, within 90 days following the date upon which it became aware of such event, or such shorter period permitted thereby, to avoid the effect thereof, or the Borrower fails to agree to any
proposal put forward by the relevant Lender to avoid the effects of such event, then the Agent shall, at the request and on behalf of the relevant Lender, give notice to the Borrower that on such date or on a future specified date, in either case
not being earlier than the last day of any applicable grace period permitted by law, the Commitment of that Lender (to the extent still undrawn) shall be cancelled and the Borrower shall be obliged to prepay that Lender’s Contribution (if any)
in full.
|
|
6.4
|
Mandatory prepayment and cancellation upon sale or Total Loss
|
The following provisions
shall apply if at any time on or after the date of this Agreement a Vessel is sold in accordance with Clause 15.2.4 or becomes a Total Loss:
|
|
6.4.1
|
if the sale or Total Loss occurs before an Advance has been made, the Relevant Portion of each of the Term Commitments and the Revolving Commitments shall be automatically cancelled on the date on which the sale of such
Vessel is completed or (as the case may be) on the Total Loss Date;
|
|
|
6.4.2
|
if the sale or Total Loss occurs after an Advance has been made:
|
|
|
(a)
|
the Borrower shall prepay the Relevant Portion of the Term Loan in respect of that Vessel on or before the Relevant Prepayment Date;
|
|
|
(b)
|
the Relevant Portion of each of the Revolving Commitments shall be automatically cancelled on the Relevant Prepayment Date; and
|
|
|
(c)
|
the Borrower shall prepay such part of the Revolving Advances on or before the Relevant Prepayment Date as shall ensure that, following the reduction of the Total Revolving Commitments under Clause 6.4.2(b), the
aggregate of the Revolving Advances does not exceed the amount of the Total Revolving Commitments as so reduced.
|
27
For the purposes of this Clause 6.4:
“
Relevant Prepayment Date
” means:
|
|
(a)
|
in relation to a Vessel which is sold, the date on which the sale of such Vessel is completed; and
|
|
|
(b)
|
in relation to a Vessel which becomes a Total Loss, the date which is the earlier of:
|
|
|
(i)
|
the date falling 90 days after the Total Loss Date; and
|
|
|
(ii)
|
the date upon which the insurance proceeds or Requisition Compensation in respect of the relevant Vessel are received by the Security Trustee pursuant to the relevant Finance Documents,
|
unless the Vessel was not insured at the time of the Total Loss in accordance with the Finance Documents or an insurer has refused to meet or
has disputed the claim for the Total Loss, in which case the Relevant Prepayment Date shall be the date falling 10 Banking Days after the date on which the Borrower receives a demand from the Agent (as directed by the Majority Lenders) for
prepayment of the relevant amount;
“
Relevant Portion
” means, as at any relevant date in respect of a Vessel which is sold
or lost, an amount calculated in accordance with the formula:
|
|
|
|
|
|
|
|
|
|
|
|
|
Relevant Portion
|
|
=
|
|
A x B
|
|
|
|
|
|
|
|
|
|
C
|
|
|
where:
|
|
|
|
|
|
|
A
|
|
=
|
|
the aggregate amount of the Term Loan (if drawn) or the Total Term Commitments (if undrawn), the Revolving Advances and the Total Available Revolving Commitments immediately prior to that date;
|
|
|
|
|
|
B
C
|
|
=
=
|
|
the Fair Market Value of the Vessel sold or lost immediately prior to that date; and
the aggregate Fair Market Values of all the Vessels (including the Vessel sold or lost)
immediately prior to that date.
|
|
6.5
|
Mandatory prepayment and cancellation upon a Change of Control
|
If a Change of Control
occurs without the prior consent of the Majority Lenders (such consent not to be unreasonably withheld or delayed), the Borrower shall prepay the Term Loan and the Revolving Advances in full on or before the date falling 60 days after the date of
the Change of Control and any undrawn Commitments shall be cancelled on the earlier of (a) the date on which such prepayment is made, (b) the date falling 60 days after the date of the Change of Control and (c) such other date as the
Borrower and the Majority Lenders may agree.
28
|
6.6
|
Mandatory prepayment and cancellation upon breach of financial covenants
|
If there is a
breach of the financial covenants set out in Clause 13.1, the Borrower shall prepay the Term Loan and the Revolving Advances in full (and any undrawn Commitments shall be cancelled) within 5 days after receipt of a written demand from the Agent (as
directed by the Majority Lenders) requiring it to do so.
|
6.7
|
Conditions of prepayment and cancellation
|
The following shall apply to any prepayment
under this Agreement:
|
|
6.7.1
|
each prepayment must be made together with all accrued interest on the amount prepaid and all other sums payable in respect of that amount under the provisions of this Agreement and, in the case of prepayment in full of
both the Term Loan and the Revolving Advances, shall be accompanied by payment of all other Outstanding Indebtedness;
|
|
|
6.7.2
|
unless otherwise specifically stated in this Agreement, any partial prepayment of the Term Loan shall be applied pro rata against the remaining repayment instalments specified in Clause 5.1;
|
|
|
6.7.3
|
where the Borrower is required to make a partial prepayment of the Revolving Advances and two or more Revolving Advances are then outstanding, the Borrower may specify to the Agent the Revolving Advance or Revolving
Advances against which it wishes the prepaid sum to be applied (but, in the absence of any such instruction from the Borrower before the relevant prepayment date, the Agent may select the Revolving Advance or Revolving Advances to be prepaid);
|
|
|
6.7.4
|
if the Total Revolving Commitments are reduced for any reason under this Agreement and the aggregate amount of the Revolving Advances would otherwise exceed the amount of the Total Revolving Commitments as so reduced,
the Borrower shall prepay such part of the Revolving Advances on or before the relevant reduction date as shall ensure that, following the reduction of the Total Revolving Commitments under this Agreement, the aggregate of the Revolving Advances
does not exceed the amount of the Total Revolving Commitments as so reduced;
|
|
|
6.7.5
|
any partial cancellation of the Total Term Commitments shall reduce those amounts pro rata;
|
|
|
6.7.6
|
any partial cancellation of the Total Revolving Commitments shall reduce those amounts pro rata;
|
|
|
6.7.7
|
any notice of prepayment or cancellation given by the Borrower shall be effective on receipt by the Agent and, once given, may not be withdrawn or amended without the consent of the Majority Lenders and, in the case of
a notice of prepayment, the Borrower shall be bound to make the relevant prepayment in accordance with it;
|
29
|
|
6.7.8
|
except as specifically provided in this Agreement, in the absence of an Event of Default and demand for repayment by the Agent, the Lenders shall not be obliged to accept any other prepayment of the whole or any part of
the Term Loan or a Revolving Advance;
|
|
|
6.7.9
|
any part of the Term Loan which is repaid or prepaid by the Borrower may not be reborrowed;
|
|
|
6.7.10
|
subject to the terms of this Agreement, any Revolving Advance (or part thereof) which is repaid or prepaid by the Borrower may be reborrowed;
|
|
|
6.7.11
|
no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated; and
|
|
|
6.7.12
|
any prepayment made on a day other than the last day of an Interest Period applicable to the whole amount prepaid shall be made together with any Break Costs.
|
Subject to the provisions of this Agreement, the Borrower shall pay
interest at the applicable Interest Rate on each Interest Tranche and each Revolving Advance in arrears on the last day of each Interest Period applicable to it, except in the case of an Interest Period longer than 3 months where interest shall be
paid every 3 months during that Interest Period and on the last day of that Interest Period.
Subject to Clauses 7.3 and 7.13, the Interest Rate applicable to each
Interest Tranche and each Revolving Advance for each Interest Period applicable to it will be the annual rate of interest determined by the Agent to be the aggregate of:
|
|
7.2.1
|
the Applicable Margin;
|
|
|
7.2.2
|
LIBOR for that Interest Period; and
|
|
|
7.2.3
|
the Mandatory Cost (if any) for that Interest Period.
|
If the Borrower fails to pay any amount payable by it under this Agreement
or any other Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which is 2% higher than the rate which would have been payable
if the overdue amount had, during the period of non-payment, constituted an Interest Tranche in that amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 7.3
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.
30
|
7.4
|
Term Interest Periods
|
The Borrower may, by giving notice in writing to the Agent not
later than 11:00 a.m. London time 3 Banking Days before the first day of each Term Interest Period, select the duration of that Term Interest Period (being a period of 1, 2, 3 or 6 months or such other period for which a Screen Rate is published as
the Borrower may select and all the Lenders may agree).
The following shall apply in determining the number and duration of the Term
Interest Periods:
|
|
7.4.1
|
subject to Clause 7.4.2, the Borrower may in its notice to the Agent:
|
|
|
(a)
|
elect to divide the Term Loan into two or more principal amounts (each being an “
Interest Tranche
”) each with a separate Interest Period for its relevant amount; or
|
|
|
(b)
|
in respect of any existing Interest Tranches whose Interest Periods expire on the same date, consolidate those Interest Tranches or otherwise select new Interest Tranches in the same aggregate amount but in different
proportions;
|
|
|
7.4.2
|
the number of Interest Tranches at any one time, when aggregated with the number of Revolving Advances drawn and outstanding at that time, shall not exceed 10;
|
|
|
7.4.3
|
for the purposes of Clause 3.4.2(c) and Clause 7.4.2 and any other relevant provisions of this Agreement, if the Borrower does not elect to divide the Term Loan into two or more Interest Tranches, there shall be deemed
to be a single Interest Tranche in the amount of the Term Loan;
|
|
|
7.4.4
|
the first Term Interest Period (or Term Interest Periods, if the Term Loan has been divided into two or more Interest Tranches on that date) shall commence on the Initial Borrowing Date and each subsequent Term Interest
Period for the Term Loan or any Interest Tranche shall commence on the last day of the immediately preceding Interest Period for it;
|
|
|
7.4.5
|
the Borrower shall make each selection under this Clause 7.4 in such manner as to ensure that, in the event that any Term Repayment Date falls within the Term Interest Period so selected, a separate Term Interest Period
is selected in respect of the part of the Term Loan due to be repaid under Clause 5 on that Term Repayment Date, the expiry of which period coincides with the relevant Term Repayment Date;
|
|
|
7.4.6
|
no Term Interest Period shall extend beyond the Maturity Date.
|
|
7.5
|
Revolving Interest Periods
|
There shall be a single Revolving Interest Period for each
Revolving Advance which shall be selected by the Borrower and notified to the Agent in the Notice of Drawdown for that Revolving Advance. Subject to Clause 7.6, each Revolving Interest Period shall commence
31
on the Drawdown Date of the relevant Revolving Advance and be for a period of 1, 2, 3 or 6 months (as selected by the Borrower) or such ether period for which a Screen Rate is published as the
Borrower may select and all the Lenders may agree, provided that no Revolving Interest Period shall extend beyond the Maturity Date.
|
7.6
|
Borrower’s failure to select Interest Period
|
In the absence of any selection by
the Borrower of the duration of an Interest Period, or if the Agent shall certify to the Borrower that matching funds are not available for an Interest Period of the duration selected by the Borrower, the duration of that Interest Period shall
(subject as provided in Clauses 7.4 and 7.7) be 3 months.
|
7.7
|
Adjustment for non-Banking Days
|
If an Interest Period would otherwise end on a day
which is not a Banking Day, that Interest Period will instead end on the next Banking Day in that calendar month (if there is one) or the preceding Banking Day (if there is not).
The Agent shall promptly notify the Borrower and the Lenders
of each determination under this Agreement of (a) the duration of an Interest Period and/or (b) a rate of interest.
|
7.9
|
Obligation of Reference Banks to quote
|
In circumstances where a quotation is required
from the Reference Banks, a Bank which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.
|
7.10
|
Absence of quotations from Reference Banks
|
Subject to Clause 7.13, if LIBOR is to be
determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11:00 a.m. London time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations provided to the remaining
Reference Bank or Reference Banks.
|
7.11
|
Replacement of Reference Bank
|
If any Reference Bank which is a Lender ceases to be a
Lender or has become an Affected Lender or, in the opinion of the Agent, is substantially unable to provide the Agent from time to time when required with the necessary quotations for the purpose of fixing a rate of interest under this Agreement,
then the Agent shall (after consultation with the Borrower) appoint another bank to be a Reference Bank in replacement of that Reference Bank.
|
7.12
|
Notice of Market Disruption Event by Affected Lenders
|
Any notification to the Agent by
an Affected Lender of a Market Disruption Event occurring under paragraph (b) of the definition of that term shall be in writing and accompanied by a certificate signed by an officer of that Affected Lender certifying the cost to that Affected
Lender of obtaining matching deposits in the London interbank market on the date of that certificate.
32
The Agent shall pass to the Borrower a copy of each certificate provided to it under this Clause
7.12 (and each Affected Lender consents to such disclosure).
If a Market Disruption Event occurs in relation to a Lender in
respect of any Interest Tranche or Revolving Advance for any Interest Period applicable to it, the rate of interest on that Lender’s share of that Interest Tranche or Revolving Advance for that Interest Period shall be the percentage rate per
annum which is the sum of:
|
|
7.13.2
|
the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the
cost to that Lender of funding its participation in that Interest Tranche or Revolving Advance from whatever source it may reasonably select; and
|
|
|
7.13.3
|
the Mandatory Cost, if any, applicable to that Lender’s participation in that Interest Tranche or Revolving Advance.
|
|
7.14
|
Alternative basis of interest or funding
|
If a Market Disruption Event occurs, and the
Agent or the Borrower so requires, the Agent, the Lenders or (as the case may be) the Affected Lender and the Borrower shall enter into negotiations (for a period of not more than 15 days) with a view to agreeing an alternative basis for determining
the rate of interest for the Term Loan and the Revolving Advances or, as the case may be, the Affected Lender’s Contribution. Any alternative basis so agreed shall, with the prior consent of the Borrower and the Lenders or (as the case may be)
the Affected Lender, be binding on those parties. In the absence of such agreement, the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, select the Interest Periods for the Term Loan and the Revolving
Advances and set a rate of interest for each such Interest Period in accordance with Clause 7.13 provided that the Borrower shall have the right, upon giving 3 Banking Days notice to the Agent, to:
|
|
7.14.1
|
prepay the whole of the Term Loan and the Revolving Advances; or
|
|
|
7.14.2
|
prepay the Contribution of any Affected Lender; or
|
|
|
7.14.3
|
exercise its rights under Clause 24.14 in respect of any Affected Lender.
|
|
8.1
|
Place, time and manner of payment
|
Unless otherwise specified by the Agent, all moneys
to be paid by the Lenders to the Agent or by the Borrower to any Bank under this Agreement and the other Finance Documents shall be
33
paid to the Agent in Dollars by not later than 10:00 a.m. London time on the due date and in same day funds to such account as the Agent may from time to time notify the Borrower. The Borrower
waives any right it may have in any jurisdiction to pay any such amount in a currency other than that in which it is expressed to be payable.
Except as otherwise specifically provided in this Agreement or any
other Finance Document, all moneys received or recovered by any Bank under the Finance Documents will, after discharging the cost (if any) incurred in collecting those moneys, be applied as follows:
|
|
8.2.1
|
first, in or towards payment of any unpaid fees, costs and expenses of the Banks under this Agreement;
|
|
|
8.2.2
|
secondly, in or towards payment of any accrued interest or fees due but unpaid under this Agreement;
|
|
|
8.2.3
|
thirdly, in or towards payment of any principal due but unpaid under this Agreement;
|
|
|
8.2.4
|
fourthly, in or towards payment of any other sum due but unpaid under this Agreement;
|
|
|
8.2.1
|
fifthly, in or towards payment pro rata between the Swap Providers of any Master Agreement Liabilities due but unpaid under the Master Agreements;
|
|
|
8.2.2
|
lastly, the surplus (if any) shall be paid to the Borrower or whomsoever else shall be entitled to it.
|
The provisions of this Clause 8.2 will override any appropriation made by the Borrower.
|
8.3
|
Availability of funds conditional upon receipt by Agent
|
The Agent shall not be obliged
to make available to any other Party any amount which it is due to receive for the account of that Party unless it is satisfied that it has unconditionally received the funds concerned.
Without prejudice to Clause 8.3, if the Agent makes an amount
available to the Borrower which has not (but should have) been made unconditionally available to the Agent by a Lender, the Borrower shall on demand refund that amount to the Agent.
Without prejudice to Clause 8.3, if the Agent makes an amount
available to a Bank which has not (but should have) been paid to the Agent by the Borrower, that Bank shall:
|
|
8.5.1
|
on demand refund that amount to the Agent; and
|
|
|
8.5.2
|
pay to the Agent on demand such further amount (as conclusively certified by the Agent) as shall indemnify the Agent against any cost, loss, liability or expense suffered or incurred by the Agent as a result of its
having made available such amount to that Bank before receiving it from the Borrower.
|
34
Any payment which is due to be made on a day that is not a Banking Day
shall be made on the next Banking Day in the same calendar month (if there is one) or the preceding Banking Day (if there is not).
|
8.7
|
Accrual of interest and periodic payments
|
All payments of interest and other payments
of an annual or periodic nature to be made by the Borrower shall accrue from day to day and be calculated on the basis of the actual number of days elapsed and a 360 day year.
The Agent and each other Bank will open and maintain on its books a
control account showing the amounts owing to the Banks (in the case of the Agent) or that Bank (in the case of each other Bank) from the Borrower and the amounts of all payments of principal, interest and other moneys falling due and received by
them or it, as the case may be. The Borrower’s obligation to repay the Term Loan and the Revolving Advances, to pay interest thereon and to pay all other sums due under this Agreement and the other Finance Documents shall be conclusively
evidenced (in the absence of manifest error) by the entries from time to time made in the control accounts opened and maintained under this Clause 8.8.
|
9.
|
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
|
9.1
|
No set-off or counterclaim
|
All payments to be made by the Borrower under this Agreement
and the other Finance Documents shall be made without set-off or counterclaim free and clear of, and without deduction for or on account of, any present or future taxes, unless the Borrower is compelled by law to make payment subject to any such
tax.
If the Borrower is compelled by law to make any tax deduction from any payment
due under this Agreement or any other Finance Document, the Borrower will (subject to Clause 24.12):
|
|
9.2.1
|
promptly notify the Agent upon becoming aware of that requirement;
|
|
|
9.2.2
|
pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
|
|
|
9.2.3
|
pay the Bank to which that payment is made such additional amount as is necessary to ensure that such Bank receives a net amount equal to the full amount which it would have received had that tax deduction not been
required to be made; and
|
|
|
9.2.4
|
as soon as reasonably practicable after making the relevant tax deduction, deliver to the Agent a copy of the receipt from the relevant taxation authority evidencing that the tax had been paid to that authority.
|
35
If, following any tax deduction as is referred to in Clause 9.2 from any
payment by the Borrower, the recipient of that payment shall receive or be granted a credit against or remission for any taxes payable by it, such recipient shall, subject to the Borrower having made any increased payment in accordance with Clause
9.2.3 and to the extent that such recipient can do so without prejudicing the retention of the amount of such credit or remission and without prejudice to the right of such recipient to obtain any other relief or allowance which may be available to
it, reimburse the Borrower with such amount as such recipient shall in its absolute discretion certify to be the proportion of such credit or remission as will leave it (after such reimbursement) in no worse position than it would have been in had
there been no such deduction or withholding from the payment to such recipient as aforesaid. Such reimbursement shall be made forthwith upon the recipient certifying that the amount of such credit or remission has been received by it. Nothing
contained in this Agreement shall oblige any Bank to rearrange its tax affairs or to disclose any information regarding its tax affairs and computations. Without prejudice to the generality of the foregoing, the Borrower shall not by virtue of this
Clause 9.3 be entitled to enquire about the tax affairs of any Bank.
Where the Borrower is or may be obliged to withhold tax from any
payment to a Bank under this Agreement or any other Finance Document and its obligation to withhold such tax may be eliminated or reduced under any applicable double taxation agreement or treaty, the relevant Bank will promptly comply with all
appropriate formalities required to be performed by it under such double taxation agreement or treaty (save as may depend on action being taken by a third party which has not been taken) so that it can receive the relevant payments from the Borrower
without deduction of such tax or with deduction at the reduced level permitted by such double taxation agreement or treaty.
All amounts expressed to be payable under a Finance Document by any party to a Bank
shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply made by any Bank to any party in connection with a Finance Document, that party shall pay to the Bank (in addition to and at the same time as paying any other
consideration for such supply) an amount equal to the amount of such VAT.
Where a Finance Document requires any party to reimburse a Bank
for any costs or expenses, that party shall also at the same time pay and indemnify such Bank against all VAT incurred by the Bank in respect of those costs or expenses to the extent that the Bank reasonably determines that it is not entitled to
credit or repayment of the VAT.
36
|
10.
|
REPRESENTATIONS AND WARRANTIES
|
|
10.1
|
Date of representations and warranties
|
The Borrower represents and warrants that the
following matters are true at the date of this Agreement.
|
10.2
|
Existence, listing, powers, compliance and solvency
|
The Borrower:
|
|
10.2.1
|
is a limited liability company duly incorporated and validly existing in goodstanding under the laws of, and has the centre of its main interests in, Belgium;
|
|
|
10.2.2
|
is listed on the First Market of Euronext Brussels;
|
|
|
10.2.3
|
has full power to own its property and assets and to carry on its business as it is now being conducted;
|
|
|
10.2.4
|
has complied with all statutory and other requirements relative to its business;
|
|
|
10.2.5
|
is solvent and not 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 it or all or any part of its assets.
|
|
10.3
|
Capacity and authorisation
|
The entry into and performance by the Borrower of this
Agreement, the Master Agreements and the other Finance Documents to which it is (or is to become) a party are within the corporate powers of the Borrower and have been duly authorised by all necessary corporate actions and approvals and no
limitation on its powers will be exceeded as a result of the borrowings made or other liabilities incurred under this Agreement. In entering into this Agreement, the Master Agreements and the other relevant Finance Documents the Borrower is acting
on its own account and not as agent or nominee of any person.
|
10.4
|
No contravention of laws or contractual restrictions
|
The entry into and performance by
the Borrower of this Agreement, the Master Agreements and the other Finance Documents to which it is (or is to become) a party do not and will not:
|
|
10.4.1
|
contravene in any respect the constitutional documents of the Borrower or any law, regulation or contractual restriction binding on the Borrower or any of its assets; or
|
|
|
10.4.2
|
result in the creation or imposition of any Encumbrance (other than a Permitted Encumbrance) on any of its assets in favour of any party.
|
|
10.5
|
Licences and approvals in force
|
All licences, authorisations, approvals and consents
necessary for the entry into, performance, validity, enforceability or admissibility in evidence of this Agreement, the Master Agreements and the other Finance Documents have been obtained and are in full force and effect and there has been no
breach of any condition or restriction imposed in this respect.
37
|
10.6
|
Validity and enforceability
|
When duly executed and delivered, and where applicable
registered, each of the Finance Documents and the Master Agreements will:
|
|
10.6.1
|
constitute the legal, valid and binding obligations of each Obligor which is a party thereto enforceable against such Obligor in accordance with its terms; and
|
|
|
10.6.2
|
(to the extent that by its terms it purports to do so) create a legal, valid and binding first priority Encumbrance in accordance with its terms over all the assets to which by its terms it relates,
|
except insofar as enforcement may be limited by any applicable laws relating to bankruptcy, insolvency, administration and similar laws
affecting creditors’ rights generally and by principles of equity.
|
10.7
|
No third party Encumbrances; title
|
At the time of execution of each Finance Document,
no third party will have any Encumbrance (other than a Permitted Encumbrance) on any asset over which an Encumbrance is to be created pursuant to that Finance Document and the Obligor entering into that Finance Document will be the sole and absolute
legal and beneficial owner of that asset.
|
10.8
|
No litigation current or pending
|
No litigation, arbitration, tax claim or
administrative proceeding involving the Borrower is current or pending or (to the knowledge of the Borrower) threatened or likely to commence or be taken, which would potentially have a Material Adverse Effect.
|
|
10.9.1
|
No Event of Default or Potential Event of Default is continuing or might reasonably be expected to result from the advance of the Total Commitments or any part thereof.
|
|
|
10.9.2
|
The Borrower is not in default under any other agreement where such default would have a Material Adverse Effect.
|
|
10.10
|
Truth of financial and other information
|
All factual information furnished in writing
to any Bank by or on behalf of the Borrower in connection with the negotiation and preparation of this Agreement and the other Finance Documents was (when given) true and correct in all material respects and there are no other facts or
considerations the omission of which would render any such information materially misleading.
38
|
10.11
|
No liability to deduction or withholding; no registration taxes
|
All payments to be made
by the Borrower under this Agreement, the Master Agreements and the other Finance Documents may be made free and clear of and without deduction or withholding for or on account of any taxes, and neither this Agreement nor any other Finance Document
is liable to any registration charge or any stamp, documentary or similar taxes imposed by any authority, including without limitation, in connection with its admissibility in evidence.
The Borrower has complied in all material respects with all relevant tax
laws and regulations applicable to it and its business.
|
10.13
|
Pari passu obligations
|
The payment obligations of the Borrower under this Agreement,
the Master Agreements and the other Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
|
10.14
|
Environmental matters
|
Except as may have been disclosed by the Borrower in writing to,
and acknowledged in writing by, the Agent:
|
|
10.14.1
|
the Borrower has complied with the provisions of all Environmental Laws;
|
|
|
10.14.2
|
the Borrower has obtained all Environmental Approvals and is in compliance with all Environmental Approvals;
|
|
|
10.14.3
|
the Borrower has not received notice of any Environmental Claim that alleges that it is not in compliance with any Environmental Law or any Environmental Approval;
|
|
|
10.14.4
|
there is no Environmental Claim pending or, to the best of the Borrower’s knowledge and belief (having made due enquiry), threatened against the Borrower or any Relevant Ship; and
|
|
|
10.14.5
|
no Environmental Incident which could or might give rise to any Environmental Claim has occurred.
|
|
10.15
|
No money laundering
|
In relation to the utilisation by the Borrower of the facility
granted to it under this Agreement, the performance and discharge of its obligations and liabilities under the Finance Documents to which it is a party, and the transactions and other arrangements effected or contemplated by the Finance Documents to
which it is a party, the Borrower confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat
“money laundering” (as defined in Article 1 of the Directive 2005/60/EC of the European Parliament and of the Council of the European Union of 26 October 2005).
39
|
11.1
|
Duration of undertakings
|
The undertakings in this Clause 11 shall remain in force from
the date of this Agreement to the end of the Security Period.
|
11.2
|
Maintenance of status; listing
|
The Borrower:
|
|
11.2.1
|
shall maintain its separate corporate existence as a limited liability company under the laws of Belgium;
|
|
|
11.2.2
|
shall not, without the prior consent of the Agent, change its name;
|
|
|
11.2.3
|
shall maintain its listing on the First Market of Euronext Brussels or another reputable international stock exchange;
|
|
|
11.2.4
|
shall not, without the prior consent of the Majority Lenders, change its place of incorporation or domicile or alter its legal status as a limited liability company.
|
The Borrower shall obtain and maintain in force, and promptly upon the
Agent’s request furnish certified copies to the Agent of, all licences, authorisations, approvals and consents, and do all other acts and things, which may from time to time be necessary or desirable for the continued due performance of its
obligations under the Finance Documents and the Master Agreements or which may be required for the validity, enforceability or admissibility in evidence of the Finance Documents and the Master Agreements.
|
11.4
|
Pari passu obligations
|
The Borrower shall ensure that its obligations under the Finance
Documents and the Master Agreements rank at least pari passu with all its other present, future and/or contingent unsecured and unsubordinated obligations.
The Borrower shall conduct its business in a proper and efficient
manner in compliance with its constitutional documents and all relevant applicable laws and regulations (including, without limitation, all relevant Environmental Laws) and notify the Agent immediately upon becoming aware of any breach of any such
law or regulation.
40
The Borrower shall pay all taxes, assessments and other governmental
charges as they fall due, except to the extent that it is contesting them in good faith by appropriate proceedings and has set aside adequate reserves for their payment if those proceedings fail.
The Borrower shall keep proper books of account in respect of its
business in accordance with IFRS consistently applied and, whenever so requested by the Agent, make them available for inspection by or on behalf of the Agent.
|
11.8
|
Execution of Charter Assignments
|
The Borrower undertakes to procure that, promptly
after the execution of a Long Term Charter, it will:
|
|
11.8.1
|
execute a Charter Assignment in favour of the Security Trustee in respect of that Long Term Charter (unless, despite the commercially reasonable efforts of the Borrower, that Long Term Charter can only be assigned with
the consent of the relevant charterer and the Borrower is unable to obtain the charterer’s consent to the assignment); and
|
|
|
11.8.2
|
subject to Clause 11.8.1, give notice of the Charter Assignment to the relevant charterer in the form required by the Charter Assignment and use its commercially reasonable efforts to obtain the charterer’s
acknowledgment thereto in the form required by the Charter Assignment).
|
The Borrower undertakes to procure that, with effect from the Initial
Borrowing Date and throughout the remainder of the Security Period, unless and until the Security Trustee shall otherwise direct in accordance with the Account Security Deed, all Earnings due to the Borrower in respect of the Vessels shall be paid
and credited to the Earnings Account.
Unless and until an Event of Default has occurred and is continuing (in which case such moneys shall
be applied in accordance with the Account Security Deed), the Borrower shall be entitled to withdraw any and all moneys from time to time credited to the Earnings Account.
|
11.10
|
Restriction on disposals
|
Except as contemplated by Clause 15.2.4 and any other relevant
provision of this Agreement, the Borrower shall not, without the prior consent of the Majority Lenders transfer, lease or otherwise dispose of all or a substantial part of its assets, whether by one transaction or a number of transactions, whether
related or not except in the usual course of its business and for fair market value.
41
|
11.11
|
Incurrence of Financial Indebtedness
|
The Borrower shall not, without the prior consent
of the Majority Lenders, incur any Financial Indebtedness or grant any guarantee in respect of Financial Indebtedness if, as a result of incurring that Financial Indebtedness or incurring the contingent liability under that guarantee (as assessed in
accordance with IFRS), an Event of Default would occur, or one or more of the financial covenants in respect of the Group set out in Clause 13.1 would be breached, on the date of such incurrence.
The Borrower shall not, without the prior consent of the Majority
Lenders, create or permit to exist any Encumbrance (other than a Permitted Encumbrance) over any Charged Property, whether present or future (provided that where any such Encumbrance arises in the ordinary course of business, the Borrower shall as
soon as practicably possible discharge it).
|
11.13
|
Restriction on dividends
|
The Borrower shall not declare or pay any dividend, or make
any distribution of any kind or character (whether in cash, property or securities), in respect of any class of the Borrower’s share capital to the holders thereof, or purchase or otherwise acquire any share capital of the Borrower, except as
follows:
|
|
11.13.1
|
payments of aggregate dividends on a semi-annual basis of up to 50% of its semiannual net income; or
|
|
|
11.13.2
|
payments of aggregate dividends exceeding 50% of its annual net income where such payments have been approved by the Majority Lenders
|
provided always that no dividend may be paid if:
|
|
(a)
|
an Event of Default or Potential Event of Default has occurred or will occur as a result of the payment of that dividend; or
|
|
|
(b)
|
one or more of the financial covenants in respect of the Group set out in Clause 13.1 has been breached or will be breached as a result of the payment of that dividend.
|
|
11.14
|
No mergers or demergers
|
The Borrower shall not, without the prior consent of the
Majority Lenders, consolidate, amalgamate or merge with any other entity or demerge or enter into any form of reconstruction or reorganisation or do anything analogous thereto which has or could reasonably be expected to have a Material Adverse
Effect.
|
11.15
|
No change to financial year
|
The Borrower shall not, without the prior consent of the
Majority Lenders, alter or extend its financial year for the purposes of the preparation of its accounts.
42
|
11.16
|
No change of business
|
The Borrower shall not, without the prior consent of the Majority
Lenders, make or permit to be made any substantial change to the general nature of its business from that permitted to be carried out under its articles of association as in force at the date of this Agreement.
|
11.17
|
Restriction on undertakings with affiliates
|
The Borrower shall not, without the prior
consent of the Majority Lenders, undertake any transaction with any person, company or other entity which is an affiliate of the Borrower (other than another member of the Group) unless such transaction is conducted at arm’s length on normal
commercial terms.
|
12.
|
INFORMATION UNDERTAKINGS
|
|
12.1
|
Duration of undertakings
|
The undertakings in this Clause 12 shall remain in force from
the date of this Agreement to the end of the Security Period.
|
12.2
|
Financial information
|
The Borrower shall, to the extent that the Agent is unable to
obtain copies from the Borrower’s website, provide to the Agent:
|
|
12.2.1
|
as soon as possible, but in no event later than 120 days after the end of each financial year of the Borrower, the audited consolidated accounts of the Group for that financial year, prepared in accordance with IFRS;
|
|
|
12.2.2
|
as soon as possible, but in no event later than 75 days after the end of each financial half-year of the Borrower, the consolidated accounts of the Group for that financial half-year, prepared in accordance with IFRS,
subjected to a limited audit and certified to their correctness by the chief financial officer of the Borrower;
|
|
|
12.2.3
|
as soon as possible, but in no event later than 60 days after the end of each quarter in each financial year of the Borrower, the Borrower’s press release which shall include its unaudited quarterly income
statement for that relevant quarter certified as to their correctness by the chief financial officer of the Borrower;
|
|
|
12.2.4
|
together with the audited consolidated accounts referred to in Clauses 12.2.1 and 12.2.2:
|
|
|
(a)
|
a Compliance Certificate evidencing that as at that date the Borrower is in compliance with all of the financial covenants in respect of the Group as set out in Clause 13.1 and that there is no security shortfall under
Clause 16.2 (or, if not, showing in either case the amount of any shortfall); and
|
|
|
(b)
|
copies of the valuations of the Vessels obtained by the Borrower in accordance with Clause 16.1 from any two Approved Shipbrokers not earlier than 30 days before the date of such Compliance Certificate;
|
43
|
|
12.2.5
|
as soon as possible, but in no event later than 120 days after the end of each financial year of the Borrower, a financial projection for the Borrower and the Group for the next 3 years in a format which is acceptable
to the Borrower;
|
|
|
12.2.6
|
promptly, such further information in the possession or control of the Borrower regarding the financial condition and operations of the Group as the Agent may reasonably request.
|
|
12.3
|
Notification of material litigation
|
The Borrower shall inform the Agent promptly of any
litigation, arbitration, tax claim or administrative proceeding instituted or (to its knowledge) threatened and of any other occurrence of which it becomes aware which has or could reasonably be expected to have a Material Adverse Effect.
|
12.4
|
Notification of default
|
The Borrower shall promptly after the happening of any Event of
Default or a Potential Event of Default, notify the Agent of that event and of the steps (if any) which are being taken to remedy it.
|
12.5
|
Inspection of books and records
|
The Borrower shall permit one or more representatives
of the Agent, at the request of the Agent, to have reasonable access to its books and records and to inspect the same during normal business hours at its offices upon reasonable prior written notice.
|
12.6
|
“Know your customer” checks
|
The Borrower shall provide the Agent with any
information requested by any Bank in order for that Bank to comply with any anti-money laundering or “know your customer” legislation, regulation or procedures applicable to it from time to time.
|
12.7
|
Provision of further information
|
The Borrower shall promptly provide the Agent with
such other financial and other information concerning itself and its affairs as the Agent may from time to time reasonably require.
The Borrower shall ensure that at all times during the Security Period:
|
|
13.1.1
|
Current Assets exceed Current Liabilities;
|
|
|
13.1.2
|
Free Liquid Assets are not less than the higher of:
|
|
|
(b)
|
5% of the Total Indebtedness;
|
44
|
|
13.1.3
|
the aggregate amount of cash is not less than $30,000,000; and
|
|
|
13.1.4
|
the ratio of Stockholders’ Equity to Total Assets is not less than 30%.
|
The Borrower shall notify the Agent in writing immediately upon
becoming aware of a breach of any of the financial covenants set out in Clause 13.1.
|
13.3
|
Definitions of financial terms
|
For the purposes of this Clause 13:
“
Available Facilities
” means, at any date of determination under this Agreement, the aggregate undrawn amount of any committed
loan or overdraft facilities available to the Borrower or any other member of the Group having a maturity of at least 6 months from that date of determination (including the Facilities provided under this Agreement);
“
Current Assets
” means, at any date of determination under this Agreement, the amount of the current assets of the Group
determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet and including any amounts available under committed credit lines having maturities of more than 12 months;
“
Current Liabilities
” means, at any date of determination under this Agreement, the amount of the current liabilities of
the Group determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet;
“
Free Liquid Assets
” means, at any date of determination under this Agreement, the aggregate amount of cash (which, for the
avoidance of doubt, shall include cash on debt reserve accounts or other accounts having the same effect), cash equivalents and Available Facilities of the Group determined on a consolidated basis in accordance with IFRS as in effect on date of this
Agreement and as shown in the Latest Balance Sheet but excluding any of those assets subject to an Encumbrance (other than an Encumbrance in favour of the Security Trustee pursuant to this Agreement) at any time;
“
Latest Balance Sheet
” means, at any date, the consolidated balance sheet of the Group most recently delivered to the Agent
pursuant to Clause 12.2 and/or most recently publicly available;
“
Stockholders’ Equity
” means, at any date of
determination under this Agreement, the amount of the capital and reserves of the Group determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet;
“
Total Assets
” means, at any date of determination under this Agreement, the amount of the total assets of the Group
determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet; and
45
“
Total Indebtedness
” means, at any date of determination under this Agreement,
the amount of long-term loans (including finance leases, bank loans and other long-term loans) and short-term loans of the Group determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in
the Latest Balance Sheet.
|
14.
|
VESSEL UNDERTAKINGS - INSURANCE
|
|
14.1
|
Duration of undertakings
|
The Borrower undertakes to the Security Trustee to comply with
the undertakings contained in this Clause 14 at all times from the Initial Borrowing Date until the end of the Security Period.
|
14.2
|
Obligatory Insurances
|
The Borrower undertakes in respect of the Vessels:
|
|
14.2.1
|
to effect and maintain sufficient insurances on and over each Vessel in respect of (a) hull and machinery, (ii) hull interest, (iii) freight interest, (iv) protection and indemnity (including oil
pollution risks for each Vessel) and (v) war risks (including piracy, terrorism and confiscation);
|
|
|
14.2.2
|
to effect such insurances on each Vessel in Dollars and upon such terms as shall from time to time be reviewed by the Security Trustee, but in any event for not less than:
|
|
|
(a)
|
in the case of hull, machinery and equipment, marine and war risks, on an agreed value basis for whichever is the greater of (i) the market value of the relevant Vessel and (ii) such amount which, when
aggregated with the corresponding insurances on the other Vessels, equals at least 125% of the aggregate amount of the Term Loan and the Revolving Advances, provided however that the amount of hull and machinery cover other than total loss only
cover shall be equal to at least 70% of the market value of the Vessel; and
|
|
|
(b)
|
in the case of protection and indemnity risks (including pollution risks) for the full value and tonnage of the relevant Vessel, for an aggregate amount equal to the highest level of cover from time to time available
under basic protection and indemnity club entry with a protection and indemnity association belonging to the International Group of Protection and Indemnity Associations;
|
|
|
14.2.3
|
to effect the Insurances through such brokers (the “
approved insurance brokers
”) and with such insurance companies, underwriters, war risks associations and/or protection and indemnity associations as
shall from time to time be approved in writing by the Security Trustee (which approval shall not be unreasonably withheld);
|
|
|
14.2.4
|
to notify the Security Trustee, at least 10 days before the relevant policies or contracts expire, of the relevant brokers and/or insurance companies, underwriters, war risks association and/or protection and indemnity
association through and with whom the Insurances for each Vessel are expected to be renewed;
|
46
|
|
14.2.5
|
to renew the Insurances before the relevant policies or contracts expire, and to procure that the approved insurance brokers or insurers with which the Insurances for a Vessel are effected shall promptly confirm such
renewal in writing to the Security Trustee and inform the Security Trustee of the terms and conditions thereof, as and when the same occurs;
|
|
|
14.2.6
|
punctually to pay all premiums, calls, contributions or other sums in respect of the Insurances and to produce all relevant receipts when so reasonably required by the Security Trustee;
|
|
|
14.2.7
|
to arrange for the execution of such guarantees as may from time to time be required by any protection and indemnity or war risks association (if applicable) for or for the continuance of a Vessel’s entry;
|
|
|
14.2.8
|
to procure that notice of assignment to the Security Trustee in respect of each Vessel signed by the Borrower is duly endorsed upon all slips, cover notes, policies, certificates of entry or other instruments of
insurance issued or to be issued in connection with the Insurances for that Vessel, together with a loss payable clause, in each case in such form as may be required by the Security Trustee, all in accordance with usual industry practice;
|
|
|
14.2.9
|
to procure that all such instruments of insurance referred to in Clause 14.2.8 as are effected through the approved insurance brokers shall be deposited with the approved insurance brokers, and that such brokers shall
furnish the Security Trustee with pro forma copies and a letter or letters of undertaking in such form as the Security Trustee may reasonably require having regard to the then current market practice;
|
|
|
14.2.10
|
to procure that the protection and indemnity association and/or war risks association (if applicable) in which each Vessel is entered shall furnish the Security Trustee with a certified copy of the certificate of entry
for the relevant Vessel and a letter or letters of undertaking in such form as may be required by the Security Trustee together with a certified copy of each certificate of financial responsibility for pollution by oil or other substances in
relation to the Vessel;
|
|
|
14.2.11
|
without prejudice to the generality of Clauses 14.2.9 and 14.2.10, if any of the Insurances form part of a fleet cover, to use its reasonable endeavours (having regard to then current market practice including the
practice prescribed by the Lloyds Insurance Brokers’ Committee and/or any other professional association of which the approved insurance brokers are members) to procure that the approved insurance brokers shall undertake to the Security Trustee
that they shall neither set off against any claim in respect of any Vessel any premiums or calls due in respect of any other vessel or in respect of other insurances nor cancel any of the Insurances by reason of non payment of premiums or calls due
in respect of any other vessel or in respect of other insurances;
|
47
|
|
14.2.12
|
to comply with all the requirements from time to time applicable to the Insurances, and not to make, do, consent or agree to any act or omission which would or might render any such instrument of insurance invalid,
void, voidable or unenforceable or subject to any material exclusion or qualification or which would render any sum payable under them repayable in whole or in part;
|
|
|
14.2.13
|
not to employ any Vessel, or suffer any Vessel to be employed, otherwise than in conformity with the terms of the said instruments of insurance (including any express or implied warranties they contain), without first
obtaining the insurers’ consent to such other employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe, or arranging for additional insurances;
|
|
|
14.2.14
|
to apply all sums received in respect of the Insurances in accordance with the Finance Documents for the purpose of making good the loss and repairing the damage in respect of which those sums have been received;
|
|
|
14.2.15
|
not to alter any of the terms of any of the instruments of insurance referred to in Clause 14.2.8 if, as a result of such alteration, the position of the Banks would be materially adversely affected;
|
|
|
14.2.16
|
not without the prior written consent of the Security Trustee (such consent not to be unreasonably withheld) to settle, compromise or abandon any claim under the Insurances in respect of any Vessel for a Total Loss or a
Major Casualty;
|
|
|
14.2.17
|
to do all things necessary and provide the Security Trustee with all relevant documents, evidence and information as the Security Trustee may require to enable the Security Trustee to collect or recover any moneys in
respect of the Insurances which are payable to the Security Trustee pursuant to the Finance Documents;
|
|
|
14.2.18
|
to provide the Security Trustee, upon its reasonable request, with copies of all communications of a material nature between the Borrower and the approved insurance brokers or (as the case may be) approved associations
relating to the Insurances of the Vessels in relation to:
|
|
|
(a)
|
any material condition, qualification or exclusion applicable to those Insurances;
|
|
|
(b)
|
any actual or potential suspension of any of those Insurances;
|
|
|
(c)
|
payment of premiums and calls and performance by the Borrower of its other material obligations in respect of those Insurances;
|
|
|
14.2.19
|
to make or procure that the managers of each Vessel shall make such quarterly voyage declarations as may be required from time to time in accordance with the Insurances, especially in order to maintain cover for trading
in and to the United States of America and the Exclusive Economic Zone (as defined in the United States of America Oil Pollution Act 1990) and shall on request supply the Security Trustee with copies thereof.
|
48
The Borrower undertakes to pay to the Security Trustee on demand all
reasonable premiums and other amounts reasonably payable by the Security Trustee in effecting and maintaining on behalf of the Security Trustee a mortgagee’s interest insurance policy and a mortgagee’s interest additional perils
(pollution) policy in respect of the Vessels in such amount and on such terms and conditions as the Security Trustee shall deem appropriate after consulting with the Borrower.
Notwithstanding the above, if at any time before the date on which the Security Trustee requires any insurances of the nature referred to in
this Clause 14.3 to be effected, the Borrower can demonstrate that a firm of approved insurance brokers is able to arrange those insurances upon the same terms, before that date, for a price lower than that for which any firm of insurance brokers
nominated by the Security Trustee is prepared to arrange those insurances, with a scope of coverage and with underwriters acceptable to the Security Trustee, the Security Trustee shall not unreasonably refuse to effect those insurances through that
firm of insurance brokers so nominated by the Borrower, but only if that firm of insurance brokers will enter into such agreements with the Security Trustee as it may require taking into account the identity of that firm of insurance brokers.
|
15.
|
VESSEL UNDERTAKINGS - OPERATION AND MAINTENANCE
|
|
15.1
|
Duration of undertakings
|
The Borrower undertakes to the Security Trustee to comply with
the undertakings contained in this Clause 15 at all times from the Initial Borrowing Date until the end of the Security Period, provided that at any time after a Total Loss Event has occurred and is continuing in relation to a Vessel the Borrower
shall not be obliged to perform any of its undertakings under this Clause 15 in respect of that Vessel to the extent that it would be impossible or impractical for it to do so.
|
15.2
|
Ownership and registration
|
The Borrower undertakes:
|
|
15.2.1
|
to keep each Vessel registered under the laws and flag of its Approved Flag State and not to do or suffer to be done anything by which that registration may be forfeited or imperilled;
|
|
|
15.2.2
|
not to change the port of registration of any Vessel without the prior written consent of the Security Trustee (such consent not to be unreasonably withheld);
|
|
|
15.2.3
|
to inform the Security Trustee in advance of any change to the name of any Vessel;
|
|
|
15.2.4
|
unless the Relevant Portion of the Term Loan and the Revolving Advances is prepaid in accordance with Clause 6.4 upon the completion of that sale, not to sell or agree to sell a Vessel or any share in a Vessel without
the prior written consent of the Security Trustee.
|
49
|
15.3
|
Classification, repair and surveys
|
The Borrower undertakes:
|
|
15.3.1
|
to procure that each Vessel is kept in a good and seaworthy state of repair, so as to maintain the highest class with its Classification Society free of overdue recommendations and conditions, and so as to comply with
the provisions of all laws and all other regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered at ports in its Approved Flag State;
|
|
|
15.3.2
|
to procure that each Vessel is submitted regularly to such periodical or other surveys as may be required for classification and regulatory purposes and, if so required by the Security Trustee, to procure that the
Security Trustee is supplied with copies of all survey reports and class and other certificates issued in this respect;
|
|
|
15.3.3
|
to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment shall be effected in accordance with the rules and requirements of the Classification Society in such manner (both as regards
workmanship and quality of materials) as not to diminish the value of any Vessel;
|
|
|
15.3.4
|
not to remove any material part of any Vessel, or any item of equipment installed on it, unless the part or item so removed is promptly replaced by a suitable part or item which (a) is in the same condition as or
better condition than the part or item removed, (b) is free from any Encumbrance (other than a Permitted Encumbrance) or right in favour of any person other than the Security Trustee and (c) becomes on installation on the relevant Vessel
the property of the Borrower and subject to the security constituted by the relevant Mortgage in respect of that Vessel, provided that the Borrower may install and remove equipment owned by a third party if the equipment can be removed without any
risk of damage to the relevant Vessel;
|
|
|
15.3.5
|
except as required by law or by the Classification Society, not without the prior written consent of the Security Trustee, to cause or permit to be made any substantial change in the structure, type or performance
characteristics of any Vessel which would materially and adversely affect the value of that Vessel.
|
The Borrower undertakes:
|
|
15.4.1
|
to procure that at all times each Vessel is managed only by its Manager on the terms of the relevant Management Agreement;
|
|
|
15.4.2
|
not, without the prior written consent of the Security Trustee (which shall not be unreasonably withheld or delayed), to amend the Management Agreement in respect of any Vessel in any material respect or to terminate or
suffer the termination of any such appointment or to appoint or suffer the appointment of any other managers for that Vessel; and
|
|
|
15.4.3
|
to procure that on or before the Initial Borrowing Date (or, if later, the date of its appointment) the relevant Manager executes and delivers to the Security Trustee a Manager’s Undertaking in respect of each
Vessel managed by it.
|
50
The Borrower undertakes:
|
|
15.5.1
|
not to employ any Vessel, or suffer any Vessel to be employed:
|
|
|
(a)
|
in any trade or business which is forbidden by the law of its Approved Flag State or of any country to which that Vessel may sail, or which is otherwise illicit;
|
|
|
(b)
|
in carrying illicit or prohibited goods, or in any manner whatsoever which may render her liable to condemnation in a Prize Court or to destruction, seizure or confiscation;
|
|
|
(c)
|
in the event of hostilities in any part of the world (whether war be declared or not), in carrying any contraband goods, nor to enter or trade to any zone which is declared a war zone by that Vessel’s war risks
insurers unless the Borrower has effected, at its own expense, special insurance cover for the Vessel in relation thereto;
|
|
|
15.5.2
|
fully to perform its own obligations under each Long Term Charter in respect of each Vessel;
|
|
|
15.5.3
|
not, without the prior written consent of the Security Trustee, to let or employ any Vessel on demise charter;
|
|
|
15.5.4
|
not to employ or permit any member of a Vessel’s crew to be employed in breach of the International Transport Worker’s Federation (ITF) rules and regulations.
|
|
15.6
|
Inspection; access to records
|
The Borrower undertakes to procure that the Security
Trustee or any representative of the Security Trustee is permitted:
|
|
15.6.1
|
without affecting the relevant Vessel’s daily operations, to board each Vessel at all reasonable times for the purpose of inspecting her condition or satisfying itself as to proposed or executed repairs, and to
afford all proper facilities for such inspections (which inspections shall be at the cost of the Borrower up to a maximum of one inspection per Vessel per calendar year, provided that following the occurrence of an Event of Default which is
continuing, all inspections shall be at the cost of the Borrower); and
|
|
|
15.6.2
|
at any time after the Borrower has failed to supply such information in accordance with Clause 15.7, with prior notice to the Borrower, to obtain information about each Vessel and her condition from her Classification
Society and the relevant regulatory authorities, to have access to the records of each Vessel maintained by her Classification Society and such authorities and otherwise to communicate direct with each of them as if the Security Trustee were the
owner of the relevant Vessel.
|
51
The Borrower undertakes:
|
|
15.7.1
|
as soon as practically possible to furnish the Security Trustee, when so reasonably required by it in writing, with a copy of the classification certificate issued by the relevant Classification Society for any Vessel,
all such reasonable information regarding any Vessel, her employment, position and engagements, particulars of all towages and salvages and copies of all charters and other contracts for her employment or otherwise howsoever concerning her and all
such material information as shall be or ought to be supplied to the insurers of any Vessel;
|
|
|
15.7.2
|
to notify the Security Trustee immediately upon its becoming aware of:
|
|
|
(a)
|
any accident to a Vessel or incident which is or is likely to be a Major Casualty;
|
|
|
(b)
|
any occurrence resulting in a Vessel becoming or being likely to become a Total Loss;
|
|
|
(c)
|
any requirement or recommendation made by any insurer or the relevant Classification Society, or by any competent authority, in respect of a Vessel which is not complied with within any time limit imposed by that
insurer, Classification Society or authority;
|
|
|
(d)
|
any arrest of a Vessel, or the exercise or purported exercise of any lien on a Vessel or her Earnings or any requisition of a Vessel for hire;
|
|
|
(e)
|
any hijacking or theft (or attempted hijacking or theft) of a Vessel;
|
|
|
(f)
|
any other matter, event or incident, actual or threatened, the effect of which will or may lead to the ISM Code or the ISPS Code not being complied with by the Borrower or the relevant Manager or otherwise in connection
with a Vessel.
|
|
15.8
|
Discharge of debts; avoidance of liens
|
The Borrower undertakes:
|
|
15.8.1
|
unless the same is being contested in good faith by the Borrower, as soon as practically possible to pay and discharge or secure all debts, damages and liabilities whatsoever which the Borrower shall have been called
upon to pay, discharge or secure and which have given, or may give, rise to maritime or possessory liens on or claims enforceable against any Vessel;
|
|
|
15.8.2
|
unless the same is being contested in good faith by the Borrower, in the event of arrest of a Vessel pursuant to legal process, or in the event of her
detention in
|
52
|
|
exercise or purported exercise of any such lien, to procure the release of the Vessel from such arrest or detention within 30 days (or such longer period as may be agreed by the Lenders) of
receiving notice of the same by providing bail or otherwise as the circumstances may require;
|
|
|
15.8.3
|
not without the previous consent in writing of the Security Trustee (as directed by the Majority Lenders) to create or suffer the creation of an Encumbrance (other than a Permitted Encumbrance) over or in respect of any
Vessel or any share in any Vessel;
|
|
|
15.8.4
|
not without the previous consent in writing of the Security Trustee (as directed by the Majority Lenders) to put or suffer any Vessel to be put into the possession of any person for the purpose of work being done upon
her in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless either:
|
|
|
(a)
|
the cost of that work is fully recoverable under the Insurances of the relevant Vessel; or
|
|
|
(b)
|
that person has first given to the Security Trustee in terms satisfactory to the Security Trustee a written undertaking not to exercise any lien on the Vessel or her Earnings for the cost of that work or otherwise; or
|
|
|
(c)
|
the Borrower has established to the reasonable satisfaction of the Security Trustee that it has sufficient funds to pay for the cost of that work.
|
|
15.9
|
Perfection of Mortgage
|
The Borrower undertakes in respect of each Vessel:
|
|
15.9.1
|
to place, and at all times and places to retain, a properly certified copy of the relevant Mortgage on board the Vessel with her papers, and to cause such certified copy and such papers to be exhibited to any and all
persons having business with the Vessel which might give rise to any lien on it other than liens for crew’s wages and salvage and to any representative of the Security Trustee and keep prominently displayed in the chart room and in the
Master’s cabin of the Vessel a framed notice in plain type, reading as follows (or in such other form as the Security Trustee may reasonably require having regard to the laws of the relevant Approved Flag State):
|
“NOTICE OF MORTGAGE
This Vessel is subject to a First Priority Mortgage in favour of Nordea Bank Norge ASA as agent and
trustee for and on behalf of itself and certain other banks and financial institutions. Under the terms of the said Mortgage neither the Borrower, any charterer, the Master of this Vessel nor any other person has any right, power or authority to
create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage”;
|
|
15.9.2
|
to comply with and satisfy all pertinent requirements and formalities to perfect and maintain the relevant Mortgage as a legal, valid and enforceable first priority mortgage over the Vessel.
|
53
|
15.10
|
Environmental undertakings
|
The Borrower undertakes:
|
|
15.10.1
|
to notify the Security Trustee immediately upon its becoming aware of the occurrence of:
|
|
|
(a)
|
any Environmental Claim against the Borrower or any Relevant Ship; or
|
|
|
(b)
|
any Environmental Incident which would potentially give rise to any Environmental Claim;
|
which, in either case, has affected or could affect the interests of the Banks in a materially adverse way, and to keep the Security Trustee
advised in writing on such regular basis and in such detail as the Security Trustee shall reasonably require of the nature of that Environmental Claim or Environmental Incident and the Borrower’s proposed and actual response thereto;
|
|
15.10.2
|
to comply with and procure that its affiliates comply with all Environmental Laws including, without limitation, requirements relating to manning and establishment of financial responsibility, and to obtain and comply
with, and procure that all such affiliates obtain and comply with, all Environmental Approvals;
|
|
|
15.10.3
|
to ensure that each Vessel is, at all times, equipped and accredited with any required trading documentation and/or authorisations necessary to legitimise the entry of the Vessel into the waters of any relevant
jurisdiction. Such trading documentation and authorisations shall include, amongst other things, valid certification under the International Convention on Civil Liability for Oil Pollution Damage (as amended) and the International Convention on
Civil Liability for Bunker Oil Pollution Damage, a valid US Coast Guard certificate of financial responsibility (water pollution), a valid certificate from any US state that requires a state equivalent of a certificate of financial responsibility, a
vessel classification certificate and any other credentials as might be, or may come to be, required. Copies of such trading documentation and/or authorisations shall be made available to the Security Trustee as and when requested.
|
|
15.11
|
ISM Code and ISPS Code
|
The Borrower undertakes to comply, and procure compliance by the
relevant Manager and any other operator of each Vessel, with:
|
|
15.11.1
|
all provisions of the ISM Code including, without limitation, obtaining and maintaining in force at all times a valid Document of Compliance in relation to the company responsible for the Vessel’s compliance with
the ISM Code under paragraph 1.1.2 of the ISM Code and a valid Safety Management Certificate in respect of the Vessel as required by the ISM Code; and
|
|
|
15.11.2
|
all provisions of the ISPS Code including, without limitation, obtaining and maintaining in force a valid International Ship Security Certificate in
respect of the Vessel as required by the ISPS Code, and ensuring that the Vessel’s security system
|
54
|
|
and its associated security equipment comply with the applicable requirements of Part A of the ISPS Code and of Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS), and that an approved
ship security plan is in place,
|
and to procure that certified copies of all such certificates and other documents are
provided promptly on demand to the Security Trustee.
|
16.
|
VALUATIONS AND ASSET PROTECTION
|
The Borrower shall arrange at its own expense for valuations of each Vessel
to be carried out on or about each date on which the Borrower is required to provide a Compliance Certificate to the Agent under Clause 12.2.4(a) (and at any other time that the Borrower deems appropriate) in order to determine her market value as
at each such date. Such valuations shall be prepared:
|
|
16.1.1
|
without a physical inspection of the Vessel (at the discretion of the Agent) in Dollars on the basis of a sale for prompt delivery, charter-free, at arm’s length between a willing seller and a willing buyer;
|
|
|
16.1.2
|
by any two Approved Shipbrokers as the Borrower may from time to time select;
|
and the Fair
Market Value of a Vessel shall be the mean average of those valuations, except that:
|
|
(a)
|
where a Vessel is subject to a Mortgage under which the amount recoverable is restricted to a registered maximum mortgage amount, the Fair Market Value of that Vessel shall be restricted to that mortgage amount if the
valuation otherwise determined under this Clause 16.1 would be higher; and
|
|
|
(b)
|
where a Vessel becomes a Total Loss but the proceeds of the Insurances in respect of that Total Loss have not yet been applied in accordance with Clause 6.4, that Vessel shall be deemed to have a Fair Market Value equal
to its insured value or, if lower, such amount as the Agent determines is reasonably expected to be received from the Vessel’s insurers in respect of the Total Loss.
|
Each such valuation shall be conclusive and binding on the Borrower and the Banks save in the case of manifest error.
|
16.2
|
Consequences of security shortfall
|
If the aggregate of (a) the Fair Market Values
of the Vessels determined pursuant to Clause 16.1 and (b) the market value of any additional security previously provided under this Clause 16 is at any time less than 125% of the aggregate of the Term Loan and the Revolving Advances, the
Borrower shall at its own discretion, as soon as possible but in any event not later than 30 days after a written demand by the Agent to make good that shortfall (as directed by the Majority Lenders), either:
|
|
16.2.1
|
provide additional security over cash deposits and/or such other assets and in such form as is acceptable to the Majority Lenders where such cash deposits and/or other assets have an aggregate market value (after
deducting the amount secured by any prior Encumbrances over such assets) at least equal to the shortfall; or
|
55
|
|
16.2.2
|
prepay such part of the Term Loan and/or the Revolving Advances (in the Borrower’s option) as will eliminate the shortfall in accordance with the relevant provisions of Clause 6.7; or
|
|
|
16.2.3
|
make good the shortfall by combining the provision of additional security under Clause 16.2.1 with a partial prepayment of the Term Loan and/or the Revolving Advances under Clause 16.2.2.
|
For the avoidance of doubt, any part of a Revolving Advance prepaid under this Clause 16.2 may be redrawn as long as the conditions precedents
to drawdown set out in Clause 4.5 are satisfied.
|
16.3
|
Valuation of additional security
|
The market value of any additional security provided
or to be provided under this Clause 16 shall be determined at the cost of the Borrower on such basis and by such independent valuers as the Borrower and the Agent may agree (or, in the absence of such agreement, on such basis and by such independent
valuers as shall reasonably be selected by the Agent), subject to the following:
|
|
16.3.1
|
the value of any cash collateral in Dollars will be valued at its principal amount; and
|
|
|
16.3.2
|
any additional vessel will be valued in accordance with Clause 16.1.
|
|
16.4
|
Agent’s right to obtain valuations after Event of Default
|
If an Event of Default
has occurred and is continuing, the Agent shall be entitled from time to time to obtain its own valuations of:
|
|
16.4.1
|
the Vessels or any additional vessel in accordance with Clause 16.1 from any two Approved Shipbrokers selected by the Agent; and/or
|
|
|
16.4.2
|
any other additional security in accordance with Clause 16.3 from such independent valuers as the Agent shall select,
|
and the Borrower shall reimburse the Agent on demand for the costs of each such valuation. The Borrower undertakes to provide, and shall
procure that the Borrower provides, such assistance as the Agent shall require in connection with all valuations obtained by the Agent in accordance with this Clause 16.4.
56
Each of the following events or circumstances is an Event of Default:
|
|
17.1.1
|
Non-payment
An Obligor does not pay on the due date any amount payable pursuant to the Finance Documents at the place and in the currency in which it is expressed to be payable or, in respect of moneys payable on
demand, (unless otherwise specifically provided) within 3 Banking Days from the date of demand, unless the non-payment:
|
|
|
(a)
|
is caused by technical or administrative error and is remedied within 3 Banking Days of the due date; or
|
|
|
(b)
|
is caused by a Disruption Event and is remedied within 3 Banking Days of the due date.
|
|
|
17.1.2
|
Insurances
Any Vessel is not, or ceases to be, insured in the relevant amount and on the relevant terms specified in Clause 14 or the Owner fails to comply with any of its other material (in the Agent’s
reasonable opinion) obligations in respect of the Insurances.
|
|
|
17.1.3
|
Other obligations
An Obligor does not comply with any provision of the Finance Documents other than those referred to in Clauses 17.1.1 and 17.1.2 provided that no Event of Default will occur under this Clause
17.1.3 if:
|
|
|
(a)
|
such failure to comply relates to a breach of the financial covenants set out in Clause 13.1 (in which case the mandatory prepayment provisions of Clause 6.6 shall apply but the breach shall not constitute an Event of
Default); or
|
|
|
(b)
|
such failure to comply is capable of remedy (in the Agent’s reasonable opinion) and is remedied within 30 days of the Agent giving notice to the Borrower or the Borrower becoming aware of the failure to comply,
whichever date occurs earlier.
|
|
|
17.1.4
|
Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of an Obligor under or in connection with any
Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
|
|
|
(a)
|
Any repayment of principal in respect of, or any payment of interest on, any Financial Indebtedness of an Obligor is not paid when due nor within any originally applicable grace period (unless the due date for payment
thereof is rescheduled with the agreement of the relevant creditor before the expiry of any such grace period); or
|
|
|
(b)
|
any Financial Indebtedness of an Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described); or
|
57
|
|
(c)
|
any commitment to an Obligor for any Financial Indebtedness is cancelled by a creditor of that Obligor by reason of an event of default (however described); or
|
|
|
(d)
|
any Financial Indebtedness of an Obligor becomes capable of being declared due and payable prior to its specified maturity or any commitment to an Obligor for any Financial Indebtedness becomes capable of being
cancelled in either case as a result of an event of default (however described) and the event giving rise to that event of default is not waived or remedied to the satisfaction of the relevant creditor within 30 days of its occurrence;
|
provided that no Event of Default will occur under this Clause 17.1.5 if the aggregate amount of Financial Indebtedness or
commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than $10,000,000 (or its equivalent in any other currency or currencies).
|
|
(a)
|
An Obligor is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with its
creditors generally or any class of creditors with a view to rescheduling any of its indebtedness; or
|
|
|
(b)
|
the value of the assets of an Obligor is less than its liabilities (taking into account contingent and prospective liabilities); or
|
|
|
(c)
|
a moratorium is declared in respect of any indebtedness of an Obligor.
|
|
|
17.1.7
|
Insolvency proceedings
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
|
|
|
(a)
|
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of an Obligor other than a
solvent liquidation or reorganisation of an Obligor other than the Borrower; or
|
|
|
(b)
|
a composition, compromise, assignment or arrangement with any class of creditors of an Obligor; or
|
|
|
(c)
|
the appointment of a liquidator (other than in respect of a solvent liquidation of an Obligor other than the Borrower), receiver, administrative receiver, administrator, compulsory manager or other similar officer in
respect of an Obligor or any of its assets; or
|
|
|
(d)
|
enforcement of any Encumbrance over any assets of an Obligor,
|
or any analogous procedure or
step is taken in any jurisdiction.
58
|
|
17.1.8
|
Creditors’ process
Any expropriation, attachment, sequestration, distress or execution by a creditor affects any asset or assets of an Obligor having an aggregate value of at least $10,000,000 and is not
discharged within 30 days (unless the same is capable of appeal and is being contested in good faith by the relevant Obligor, in which case, as long as the Obligor continues its appeal in good faith, it shall only be an Event of Default if such
appeal fails and such expropriation, attachment, sequestration, distress or execution is not discharged within 30 days of the date on which the Obligor’s final appeal is dismissed).
|
|
|
17.1.9
|
Security imperilled
Anything is done, suffered or omitted to be done or occurs which, in the reasonable opinion of the Majority Lenders, would in any way imperil the security created by the Finance Documents.
|
|
|
17.1.10
|
Change or cessation of business
The Borrower ceases, or threatens to cease, to carry on its business, or a material part of its properties or assets is seized or nationalised, appropriated or compulsorily
purchased by or under the authority of any government, and such cessation, disposal, seizure, nationalisation, appropriation or compulsory purchase, in the reasonable opinion of the Majority Lenders, does or would have a Material Adverse Effect.
|
|
|
17.1.11
|
Unlawfulness, impossibility or repudiation
It becomes impossible or unlawful for an Obligor to fulfil any of its obligations under the Finance Documents, or for any Bank to exercise any of the rights vested in it
by, or to enforce the security constituted by, the Finance Documents, or any of the Finance Documents for any reason becomes invalid or unenforceable or ceases to be in full force and effect or (save to the extent that it ranks behind a Permitted
Encumbrance arising by operation of law) loses its first priority ranking or an Obligor repudiates any of the Finance Documents.
|
|
|
17.1.12
|
Revocation or modification of authorisations
Any licence, approval, consent, authorisation or registration at any time necessary or desirable for the validity, enforceability or admissibility in evidence of the
Finance Documents, or for an Obligor to comply with its obligations under them, or in connection with the ownership or operation of any Vessel, is revoked, withheld or expires, or is modified in what the Majority Lenders reasonably consider a
material respect.
|
|
|
17.1.13
|
Breach of Environmental Law
The Borrower fails to comply with any Environmental Law or any Environmental Approval or any Relevant Ship is involved in any incident which gives rise to an Environmental Claim if, in
any such case, that non-compliance or incident or the consequences of it would, in the reasonable opinion of the Majority Lenders, have a Material Adverse Effect.
|
|
|
17.1.14
|
Material Adverse Change
There is any Material Adverse Change.
|
59
Upon the occurrence of an Event of Default and at any time whilst
it is still continuing, without prejudice to any of the rights and remedies of the Agent and/or the other Banks under any of the other Finance Documents or otherwise:
|
|
17.2.1
|
the Agent may, and shall if so requested by the Majority Lenders, take any one or more of the following actions:
|
|
|
(a)
|
by written notice to the Borrower declare the Total Commitments of the Lenders cancelled, whereupon they shall be cancelled;
|
|
|
(b)
|
by written notice to the Borrower demand the immediate repayment of the Term Loan and Revolving Advances, all interest accrued thereon and all other Outstanding Indebtedness, whereupon such amount shall become
immediately due and payable;
|
|
|
(c)
|
take steps to exercise the rights and remedies conferred upon the Agent and/or the other Banks by this Agreement and the other Finance Documents and exercisable on or after the occurrence of an Event of Default; and
|
|
|
17.2.2
|
the Security Trustee may, and shall if so requested by the Majority Lenders, take steps to enforce the security created by the Finance Documents and/or otherwise exercise the rights and remedies conferred on the
Security Trustee by this Agreement and the other Finance Documents or otherwise under any applicable law and exercisable on or after the occurrence of an Event of Default.
|
|
18.
|
FEES, EXPENSES AND INDEMNITIES
|
The Borrower shall pay to the Agent:
|
|
18.1.1
|
quarterly in arrears on 31 March, 30 June, 30 September and 31 December and on the Initial Borrowing Date (or, if earlier, the date on which the Total Commitments are cancelled in full) during the
period from the date of this Agreement until the Initial Borrowing Date (or such earlier date on which the Total Commitments are cancelled in full), for the account of the Lenders, a ticking fee computed at an annual rate equal to 35% of the
Applicable Margin on the aggregate of the Total Term Commitments and the Total Revolving Commitments, for distribution to the Lenders pro rata in accordance with their Commitments;
|
|
|
18.1.2
|
quarterly in arrears on 31 March, 30 June, 30 September and 31 December and on the Maturity Date (or, if earlier, the date on which the Total Commitments are cancelled in full) during the period from
the Initial Borrowing Date until the Maturity Date (or such earlier date on which the Total Commitments are cancelled in full), for the account of the Lenders, a commitment fee computed at an annual rate equal to 40% of the Applicable Margin on the
Total Available Revolving Commitments, for distribution to the Lenders pro rata in accordance with their Revolving Commitments; and
|
|
|
18.1.3
|
on the date of this Agreement or as otherwise agreed, such other fees in such amounts as has been agreed in writing between the Agent and the Borrower in one or more fee letters dated on or before the date of this
Agreement (each such fee to be for the account of the relevant Banks as specified in the fee letter applicable to it).
|
60
|
18.2
|
Indemnity against costs
|
The Borrower shall pay to the Agent on demand, and the Borrower
shall indemnify and keep each Bank indemnified against, all costs, charges, expenses, claims, liabilities, losses, duties and fees (including, but not limited to, legal fees and expenses on a full indemnity basis) and taxes thereon suffered or
reasonably incurred by that Bank:
|
|
18.2.1
|
in the negotiation, preparation, printing, execution and registration of this Agreement and the other Finance Documents;
|
|
|
18.2.2
|
in collating, monitoring and otherwise attending to the relevant conditions precedent to the Signing Date and to the Advances to be drawn on the Initial Borrowing Date;
|
|
|
18.2.3
|
in the enforcement or preservation or the attempted enforcement or preservation of any of the rights and powers of the Banks (or any of them) under this Agreement and the other Finance Documents or of the security
constituted by the Finance Documents;
|
|
|
18.2.4
|
in connection with any actual or proposed amendment of or supplement to this Agreement or any other Finance Document, or with any request to the Banks (or any of them) to grant any consent or waiver in respect of any
provision of this Agreement or any other Finance Document, whether or not it is given,
|
provided that the Borrower shall not
be liable to reimburse the costs of any legal advisers in respect of the matters referred to in Clauses 18.2.1 and 18.2.2 except the legal fees and disbursements of Holman Fenwick Willan LLP as counsel to the Agent and the fees and disbursements of
the legal counsel who are to render opinions in respect of any of the Finance Documents or to deal with the preparation and/or registration of any of the Mortgages or other Finance Documents on behalf of the Agent.
The Borrower shall promptly pay all stamp duty, registration and
other similar taxes payable on or by reference to any Finance Document and shall indemnify the Banks on the Agent’s written demand against any and all claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower
to pay any such duty or tax.
The Borrower shall indemnify each Bank on the Agent’s written demand
against any loss, liability or cost suffered for or on account of tax by that Bank in respect of a Finance Document under any laws in effect (and as interpreted, administered and applied) at the date of this Agreement, except that the indemnity
under this Clause 18.4 shall not apply:
|
|
18.4.1
|
with respect to any tax assessed on a Bank:
|
|
|
(a)
|
under the law of the jurisdiction in which that Bank is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Bank is treated as resident for tax purposes; or
|
|
|
(b)
|
under the law of the jurisdiction in which that Bank’s Lending Office is located in respect of amounts received or receivable in that jurisdiction,
|
61
if that tax is imposed on or calculated by reference to the overall net income received or
receivable (but not any sum deemed to be received or receivable) by that Bank; or
|
|
18.4.2
|
to the extent a loss, liability or cost is compensated for by a payment under Clause 9.2; or
|
|
|
18.4.3
|
to the extent that Clause 24.12 applies.
|
For the avoidance of doubt, any loss, liability or
cost suffered for or on account of tax by a Bank in respect of a Finance Document as a result of the introduction of, or any change in (or in the interpretation, administration or application of), any law or regulation after the date of this
Agreement, or the compliance with any law or regulation made after the date of this Agreement, shall be indemnified in accordance with the provisions of Clause 18.7 which shall apply thereto.
|
18.5
|
Break costs and other general indemnities
|
The Borrower shall pay to the Agent on
demand, and the Borrower shall indemnify each Bank against all Break Costs and any other actual losses, expenses or liabilities (as to the amount of which the Agent’s certificate shall be conclusive and binding upon the Borrower, except in case
of manifest error) suffered or reasonably incurred by that Bank in connection with or as a result of:
|
|
18.5.1
|
an Advance not being drawn for any reason in full on the Drawdown Date specified in the relevant Notice of Drawdown, other than as a result of a default by that Bank;
|
|
|
18.5.2
|
any repayment or prepayment of the whole or any part of the Term Loan or any Revolving Advance being made on any date other than the last day of an Interest Period applicable to it;
|
|
|
18.5.3
|
any default in payment by the Borrower of any sum due under this Agreement and/or the other Finance Documents on its due date; or
|
|
|
18.5.4
|
the occurrence or continuance of an Event of Default and/or a Potential Event of Default.
|
If any sum due from the Borrower under this Agreement or any other
Finance Documents (a “
Sum
”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “
First Currency
”) in which that Sum is payable into another currency (the
“
Second Currency
”) for the purpose of making or filing a claim or proof against the Borrower or obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, the Borrower shall as an
independent obligation, within 3 Banking Days of demand, indemnify each Bank to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (a) the rate of exchange
used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that Bank at the time of its receipt of that Sum.
62
If, as result of the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation after the date of this Agreement or the compliance with any law or regulation made after the date of this Agreement, any Bank suffers or incurs an Increased Cost, it shall
promptly notify the Agent upon becoming aware of that event, whereupon, subject to Clause 18.8 and Clause 24.12:
|
|
18.7.1
|
the Agent shall immediately notify the Borrower thereof;
|
|
|
18.7.2
|
the relevant Bank shall, following consultation with the Borrower, use all reasonable efforts within a period of 60 days from the date of the Agent’s notice under Clause 18.7.1(the “
Remedy Period
”)
to avoid the effects of such event and in particular shall consider, subject to obtaining any necessary consents, transferring at par its rights and obligations under this Agreement to another legal entity approved by the Borrower not affected by
such law or regulation;
|
|
|
18.7.3
|
if the relevant Bank, having used all reasonable efforts as required under Clause 18.7.2, is unable to avoid the effects of such event during the Remedy Period, the Borrower shall indemnify the relevant Bank against all
Increased Costs suffered or incurred by that Bank or any of its affiliates by paying to the Agent for the account of the relevant Bank within 3 Banking Days of a demand by the Agent the amount of such Increased Costs so suffered or incurred from
time to time as certified by that Bank to the Agent;
|
|
|
18.7.4
|
without prejudice to Clause 18.7.3, if the relevant Bank is a Lender, the Borrower shall have the right at any time (whether during or after the Remedy Period), upon giving 3 Banking Days notice to the Agent, to prepay
that Lender’s Contribution or, to the extent permitted thereunder, to exercise its rights under Clause 24.14 in respect of that Lender.
|
|
18.8
|
Exceptions to increased costs provisions
|
Clause 18.7 does not apply to the extent any
Increased Cost is:
|
|
18.8.1
|
compensated for by a payment under Clause 9.2 or Clause 18.4; or
|
|
|
18.8.2
|
compensated for by the payment of the Mandatory Cost; or
|
|
|
18.8.3
|
attributable to any tax assessed on a Bank:
|
|
|
(a)
|
under the law of the jurisdiction in which that Bank is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Bank is treated as resident for tax purposes; or
|
|
|
(b)
|
under the law of the jurisdiction in which that Bank’s Lending Office is located in respect of amounts received or receivable in that jurisdiction, if that tax is imposed on or calculated by reference to the
overall net income received or receivable (but not any sum deemed to be received or receivable) by that Bank; or
|
63
|
|
18.8.4
|
attributable to the wilful breach by that Bank or its affiliates of any law or regulation; or
|
|
|
18.8.5
|
attributable to the implementation or application of or compliance with the “
International Convergence of Capital Measurement and Capital Standards, a Revised Framework
” published by the Basel Committee
on Banking Supervision in June 2004 in the form existing on the date of this Agreement (“
Basel II
”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government,
regulator, Bank or any of its affiliates) but, for the avoidance of doubt, shall not include any amendment to Basel II taking account of or incorporating any measure from the Basel III Paper or any law or regulation implementing the Basel III Paper,
in each case irrespective of whether the Basel III Paper is introduced by way of a separate framework, by way of one or more amendments to Basel II or by way of incorporation into Basel II.
|
For the purposes of this Clause 18.8, “
Basel III Paper
” means any of the agreements reached on 26 July 2010 and
12 September 2010 by the Groups of Governors and Heads of Supervision of the Basel Committee on Banking Supervision, the paper “
The Basel Committee’s response to the financial crisis: report to the G20
” published by the
Basel Committee on Banking Supervision in October 2010, the documents “
Basel III: A global regulatory framework for more resilient banks and banking systems
” and “
Basel III: International framework for liquidity risk
measurement, standards and monitoring
” both published by that committee in December 2010 or any follow-up agreement or paper from that committee.
|
18.9
|
Survival of indemnities
|
The indemnities contained in this Agreement and the other
Finance Documents shall continue in full force and effect after the full and final discharge of the Outstanding Indebtedness with respect to matters arising prior to that discharge.
|
19.1
|
Appointment of Agent
|
Each Lender irrevocably appoints and authorises the Agent to act
as its agent under this Agreement and the other Finance Documents.
|
19.2
|
Agent’s powers and discretions
|
The Agent shall have such powers and discretions:
|
|
19.2.1
|
which are expressly delegated to the Agent by the terms of this Agreement and the other Finance Documents;
|
|
|
19.2.2
|
which the Majority Lenders consider appropriate and give to the Agent (generally or in a particular case) with the Agent’s consent; and
|
|
|
19.2.3
|
which the Agent considers to be reasonably incidental to the discharge and performance of any of its functions under this Agreement or any of the Finance Documents or otherwise appropriate in the context of those
functions, including the exercise of any powers given to it by the Majority Lenders.
|
64
The relationship between the Agent and each Lender is that of agent
and principal only. Nothing in this Agreement or the Finance Documents shall constitute the Agent a trustee or fiduciary for any Lender or any other person and no action taken by the Lenders pursuant hereto or thereto, shall be deemed to constitute
the Lenders a partnership, association, joint venture or other entity.
|
19.4
|
Agent’s responsibility to Borrower
|
In performing its functions and duties under
this Agreement and the other Finance Documents, the Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any responsibility, liability or obligation (whether fiduciary or otherwise) towards, or
relationship of agency or trust with or for, the Borrower except for liability in circumstances where it is not acting in good faith or lawfully or where it acts in breach of the provisions of this Agreement and/or any other Finance Document.
|
19.5
|
Matters within Agent’s authority
|
Subject to Clause 19.6 and the other provisions
of this Agreement and the other Finance Documents, the Agent is irrevocably authorised by the Lenders in their name and on their behalf (and shall, if so directed by written notice from the Majority Lenders after the Lenders shall have consulted for
a period of not less than 5 days, which direction shall be binding on all the Lenders):
|
|
19.5.1
|
to waive, modify, vary or otherwise amend or excuse performance of any provisions of this Agreement or any of the Finance Documents; and
|
|
|
19.5.2
|
to enforce or take or refrain from taking any other action or proceedings with regard to this Agreement or any of the Finance Documents,
|
|
19.6
|
Notification of proposed waivers and amendments
|
Except in cases where the Agent is of
the opinion that the Lenders would be prejudiced by any delay in the Agent enforcing or taking action, in which event the Agent may, but shall not be obliged to, enforce or take action without prior notification to the Lenders, the Agent shall be
obliged to notify the Lenders if it proposes to waive, modify, vary or otherwise amend or excuse performance of any provision of this Agreement or any of the Finance Documents or to enforce or take or refrain from taking any action under Clause 17.2
and the Agent shall not be entitled to proceed with that proposal unless the Majority Lenders shall give notice to the Agent agreeing to that proposal. The Agent shall be entitled to cancel that proposal if written notice pursuant to this Clause
19.6 is not received within 5 days of the Lenders being so notified by the Agent.
65
|
19.7
|
Agent to act in accordance with instructions of Majority Lenders
|
Subject to Clause
19.14 and any other provision of this Agreement and the other Finance Documents which expressly requires the Agent to act in accordance with the instructions of all the Lenders, the Agent agrees to act with respect to this Agreement and the other
Finance Documents in accordance with the written instructions of the Majority Lenders. Any such instructions given by the Majority Lenders shall be binding on all the Banks. In the absence of any instructions (and provided that it is not explicitly
required to obtain the consent of the Lenders or Majority Lenders pursuant to any relevant provision of this Agreement or the Finance Documents) the Agent shall be entitled (but not bound) to give or withhold its consent or approval in such manner
as it considers to be in the interests of all the Lenders without obtaining instructions from, or consulting with, all or any of the Lenders.
|
19.8
|
Agent not required to act
|
In no event shall the Agent be required to take any action
which exposes, or is likely to expose, the Agent to personal liability or which is contrary to the provisions of:
|
|
19.8.1
|
this Agreement or any of the Finance Documents; or
|
|
|
19.8.2
|
any law, regulation or directive.
|
|
19.9
|
Provision of copy documents to Lenders
|
The Agent shall furnish each Lender:
|
|
19.9.1
|
with copies of any documents received by it under Clause 11.2 (but the Agent shall not be obliged to review or check the accuracy or completeness thereof);
|
|
|
19.9.2
|
if requested by that Lender, with copies of all documents received by the Agent under Clause 4.4;
|
|
|
19.9.3
|
with details of any communication received from the Borrower or any other Obligor referring to this Agreement and which:
|
|
|
(a)
|
contains a request for a consent or waiver which, under the terms of this Agreement or any Finance Document, requires the consent of the Lenders or the Majority Lenders; or
|
|
|
(b)
|
states that an Event of Default or Potential Event of Default has occurred and is continuing; or
|
|
|
(c)
|
contains any other request or information which, in the reasonable opinion of the Agent, is of a material nature.
|
|
19.10
|
Provision of copy communications to Agent
|
Each Lender will, promptly after receipt or
despatch thereof, forward to the Agent a copy of any communication:
|
|
19.10.1
|
sent by that Lender to the Borrower or any other Obligor; or
|
|
|
19.10.2
|
received by that Lender from the Borrower or any other Obligor and, in each case, relating to this Agreement or any of the Finance Documents.
|
66
|
19.11
|
Distributions of sums received and deductions by Agent
|
The Agent shall (subject to
Clause 8.3) distribute promptly to each Lender its due proportion of all sums received by the Agent on behalf of the Lenders under this Agreement or any of the other Finance Documents, subject to the Agent’s right to deduct and withhold from
any such payment any amount which is then (or which will, upon demand by the Agent, become) due and payable to the Agent from that Lender.
|
19.12
|
Agent’s retention of fees and expenses
|
The Agent may retain for its own use and
benefit (and shall not be liable to account to any Lender for all or any part of) any sums received by it by way of fees (and not payable to any Lender) or by way of reimbursement of expenses incurred by it.
|
19.13
|
Waiver on instructions of Majority Lenders
|
Save in respect of:
|
|
19.13.1
|
any provision which may only be waived or amended with the consent of all the Lenders and/or the relevant Service Bank (as the case may be) as specified in Clause 19.14 or Clause 19.17;
|
|
|
19.13.2
|
any provision which is stated to be expressly for the benefit of a Bank other than the Lenders generally; and
|
|
|
19.13.3
|
any other matter which, under the terms of this Agreement or any other Finance Document, expressly requires the consent or approval of all the Lenders,
|
the provisions of this Agreement and any other Finance Document may be waived, and (subject to the written agreement of each of the other
parties thereto, other than the Banks) varied or amended, by the Agent acting on the written instructions of the Majority Lenders, in each case evidenced by an instrument in writing, and any such waiver, variation or amendment shall be binding upon
all the Banks.
|
19.14
|
Consent of Agent and all Lenders required
|
Nothing in Clause 19.13 shall authorise the
effecting, without the prior written consent of the Agent and all the Lenders, of:
|
|
19.14.1
|
any change in the Applicable Margin or in the definitions of “
Majority Lenders
” or “
Finance Documents
”;
|
|
|
19.14.2
|
any change in the date for, or alteration in the amount (or the basis of determining the amount) of, any payment of principal, interest or fees payable to all the Lenders generally;
|
|
|
19.14.3
|
any change in a Lender’s Commitment;
|
67
|
|
19.14.4
|
any extension of the Availability Period relating to a Facility;
|
|
|
19.14.5
|
any proposed substitution or replacement of the Borrower;
|
|
|
19.14.6
|
any change to Clauses 3, 4, 5, 6, 7, 8.2, 23 and 30;
|
|
|
19.14.7
|
any change to this Clause 19.14;
|
|
|
19.14.8
|
the release or material variation of any of the security created by or pursuant to the Finance Documents or any of them; or
|
|
|
19.14.9
|
any other matter in respect of which the terms of this Agreement or any of the Finance Documents expressly requires the agreement of all the Lenders.
|
|
19.15
|
Borrower’s reliance upon Agent
|
At all times throughout the Security Period the
Borrower shall be entitled to rely upon the advice of the Agent as to the giving of any approvals or consents or the exercise of any discretions by the Lenders or any other act of the Lenders as required by this Agreement and/or any other Finance
Document.
|
19.16
|
Lenders to be informed
|
The Agent shall, subject to Clause 19.6, at all times keep the
Lenders informed of each and every approval or consent given and each exercise of any such discretion and each performance of any such other act which the Agent may have performed on behalf of the Lenders as required by this Agreement or any of the
Finance Documents.
|
19.17
|
Consent of Service Bank required
|
Notwithstanding the provisions of Clauses 19.13 and
19.14, no provision of this Agreement or of any other of the Finance Documents which in any way relates to the rights, duties, functions, powers or responsibilities of a Service Bank may be amended, waived or suspended without the prior consent of
that Service Bank.
|
20.1
|
Trust Property defined
|
In this Agreement, “
Trust Property
” means:
|
|
20.1.1
|
all rights, title and interests that may be mortgaged, charged, pledged or assigned in favour of the Security Trustee under or by virtue of the Finance Documents;
|
|
|
20.1.2
|
all rights granted to, or held or exercisable by, the Security Trustee by virtue of this Agreement and the other Finance Documents;
|
|
|
20.1.3
|
all moneys and other assets, which are received or recovered by or on behalf of the Security Trustee under or by virtue of any of the foregoing rights, including as a result of the enforcement or exercise of any such
right; and
|
|
|
20.1.4
|
all moneys and other assets accrued in respect of or derived from any of the foregoing.
|
68
|
20.2
|
Duties of Security Trustee
|
The Security Trustee shall:
|
|
20.2.1
|
hold the Trust Property on trust for the Banks in accordance with provisions of this Agreement and the other Finance Documents; and
|
|
|
20.2.2
|
perform and exercise the rights and benefits vested in it and deal with the Trust Property in accordance with the provisions of this Agreement and the other Finance Documents.
|
|
20.3
|
Security Trustee’s responsibility to Obligors
|
The Security Trustee does not assume
and shall not be deemed to have assumed any responsibility, liability or obligation (whether fiduciary or otherwise) towards, or relationship of agency or trust with or for, the Borrower or any other Obligor in any circumstances whatsoever except
for liability in circumstances where it is not acting in good faith or lawfully or where it acts in breach of the provisions of this Agreement and/or any other Finance Document.
|
20.4
|
Security Trustee’s powers and discretions
|
The Security Trustee shall have such
powers and discretions:
|
|
20.4.1
|
which are expressly delegated to the Security Trustee by the terms of this Agreement and the other Finance Documents;
|
|
|
20.4.2
|
which the Majority Lenders (or, in respect of any powers or discretions which by their terms would otherwise have to be exercised by all the Lenders together) the Lenders consider appropriate and give to the Security
Trustee (generally or in a particular case) with the Security Trustee’s consent;
|
|
|
20.4.3
|
which the Security Trustee considers to be reasonably incidental and conducive to the discharge and performance of any of its functions under this Agreement or any of the Finance Documents or otherwise appropriate in
the context of those functions, including the exercise of any powers given to it by the Majority Lenders; and
|
|
|
20.4.4
|
which are conferred on a trustee by the Trustee Act 1925 and/or the Trustee Act 2000 and any other applicable law for the time being in force.
|
|
20.5
|
Security Trustee appointed by the Banks as representative for the purposes of the French law Mortgages
|
For the purpose of the Mortgages to be made over those Vessels whose Approved Flag State is France, each Bank appoints the Security Trustee
pursuant to article 2328-1 of the French Civil Code (
Code Civil
) to be its representative under and in connection with those Mortgages (in accordance with which, each of the Banks hereby designates the Security Trustee to
69
represent it for the creation, registration, administration and enforcement of all security interests in rem granted in its favour by the Borrower under such Mortgages to secure the Outstanding
Indebtedness).
|
20.6
|
Security Trustee to act in accordance with instructions of Majority Lenders
|
Subject to
the provisions of the Agreement and the other Finance Documents, the Security Trustee agrees to act with respect to this Agreement and the other Finance Documents in accordance with the written instructions of the Agent, or, if the Agent and the
Security Trustee are the same person, the Majority Lenders. Any such instructions given by the Majority Lenders shall be binding on all the Banks. In the absence of any instructions (and provided that it is not explicitly required to obtain the
consent of the Majority Lenders or any other Banks pursuant to any relevant provision of the Finance Documents) the Agent shall be entitled (but not bound) to give or withhold its consent or approval in such manner as it considers to be in the
interests of all the Banks without obtaining instructions from, or consulting with, all or any of the Banks.
|
20.7
|
Security Trustee not required to act
|
In no event shall the Security Trustee be required
to take any action which exposes, or is likely to expose, the Security Trustee to personal liability or which is contrary to the provisions of:
|
|
20.7.1
|
this Agreement or any of the Finance Documents; or
|
|
|
20.7.2
|
any law, regulation or directive.
|
|
20.8
|
Provision of copy documents to Banks
|
The Security Trustee shall furnish the Agent, or,
if the Agent and the Security Trustee are the same person, each Lender with copies of any documents received by it under or in connection with this Agreement or any Finance Documents which it considers to be of material importance to the Banks.
|
20.9
|
Transfer of moneys to Agent
|
The Security Trustee shall, except as expressly stated to
the contrary in this Agreement or any Finance Document, transfer any moneys forming part of the Trust Property to the Agent for application in accordance with the relevant provisions of this Agreement and the other Finance Documents, subject to the
Security Trustee’s right to deduct and withhold from any such payment any amount which is then (or which will, upon demand by the Security Trustee, become) due and payable to it, or to any receiver or agent appointed by it, under this Agreement
and the other Finance Documents.
|
20.10
|
Security Trustee’s retention of fees and expenses
|
The Security Trustee may retain
for its own use and benefit (and shall not be liable to account to any other Bank for all or any part of) any sums received by it by way of fees (and not payable to any other Bank) or by way of reimbursement of expenses incurred by it.
70
|
20.11
|
Release of security
|
At the end of the Security Period the Security Trustee shall,
following a request from the Borrower, release without any recourse, warranty or covenants for title whatsoever, all security granted to it pursuant to the Finance Documents then held by it, whereupon the Security Trustee shall be discharged from
all liabilities and obligations under this Agreement and the other Finance Documents. Any costs associated with the release of any security shall be for the cost of the Borrower.
The perpetuity period applicable to the trusts created by this Clause
20 is 125 years from the date of this Agreement.
|
|
20.13.1
|
Notwithstanding any other provision of this Agreement the Borrower irrevocably and unconditionally undertake to pay to the Security Trustee, as creditor in its own right and not as representative of the Banks, sums
equal to and in the currency of each amount payable by the Borrower to each of the Banks under or by virtue of this Agreement and the other Finance Documents as and when that amount falls due for payment thereunder or would have fallen due but for
any suspension of payment, moratorium, discharge by operation of law or analogous event.
|
|
|
20.13.2
|
The Security Trustee shall have its own independent right to demand payment of the amounts payable by the Borrower under this Clause 20.13, irrespective of any suspension, extinction or any other discharge for any
reason whatsoever (otherwise than by payment) of the Borrower’s obligation to pay those amounts to the Banks other than a discharge by virtue of payment which those Banks are entitled to retain.
|
|
|
20.13.3
|
Any amount due and payable by the Borrower to the Security Trustee under this Clause 20.13 shall be decreased to the extent that the Banks have received (and are able to retain) payment in full of the corresponding
amount under the other provisions of this Agreement and the other Finance Documents and any amount due and payable by the Borrower to the Banks under those provisions shall be decreased to the extent that the Security Trustee has received (and is
able to retain) payment in full of the corresponding amount under this Clause 20.13.
|
|
|
20.13.4
|
The rights of the Banks (other than the Security Trustee) to receive payment of amounts payable by the Borrower under this Agreement and the other Finance Documents are several and are separate and independent from, and
without prejudice to, the rights of the Security Trustee to receive payment under this Clause 20.13.
|
|
|
20.13.5
|
Any amounts received by the Security Trustee shall, to the extent permitted by the mandatory provisions of the applicable law, be applied in accordance with Clause 8.2.
|
71
|
21.
|
RETIREMENT OR REPLACEMENT OF A SERVICE BANK
|
|
21.1
|
Resignation of Service Bank
|
The following provisions apply where a Service Bank wishes
to resign from its role as such or, as the case may be, the Majority Lenders require it to resign from such role:
|
|
21.1.1
|
A Service Bank may at any time resign from its role under this Agreement and appoint one of its affiliates as its successor by giving the Obligors and the other Banks written notice to that effect
|
|
|
21.1.2
|
Alternatively, a Service Bank may at any time resign from its role under this Agreement by giving the Obligors and the other Banks not less than 30 days’ prior written notice to that effect. In such a case, the
Majority Lenders may, in consultation with the Borrower, appoint a successor. However, if no such successor is appointed within 30 days from the date of the Service Bank’s notice of resignation, that Service Bank may, in consultation with the
Borrower, appoint as its successor any reputable bank or financial institution with an office in Oslo, London or Paris.
|
|
|
21.1.3
|
With the prior written consent of the Borrower (such consent not to be unreasonably withheld), the Majority Lenders may, by notice in writing to a Service Bank, require it to resign from its role as such, in which case
that Service Bank shall promptly resign in accordance with Clause 21.1.2.
|
|
21.2
|
Effective time of change of Service Bank
|
Any appointment of a successor Service Bank
under this Clause 21 shall take effect upon:
|
|
21.2.1
|
the successor confirming in writing its agreement to be bound by the provisions of this Agreement, which confirmation shall be in such form as shall be approved by the Majority Lenders; and
|
|
|
21.2.2
|
notice thereof by the outgoing Service Bank and its successor (which notice, in the case of a new Agent, shall specify the bank in New York to which payments to the new Agent shall be made thereafter) being given to
each of the other Parties; and
|
|
|
21.2.3
|
in the case of a new Security Trustee, the outgoing Security Trustee having transferred to its successor all of its rights and obligations under the Finance Documents.
|
|
21.3
|
Consequence of change of Service Bank
|
Upon the appointment of a successor to any
Service Bank taking effect under Clause 21.2:
|
|
21.3.1
|
that successor shall become bound by all the obligations of that Service Bank and become entitled to all the rights, privileges, powers, authorities and discretions of that Service Bank under this Agreement and the
other Finance Documents;
|
72
|
|
21.3.2
|
the obligations of that Service Bank under this Agreement and the other Finance Documents shall terminate but without prejudice to any liabilities which that Service Bank may have incurred prior to that termination;
|
|
|
21.3.3
|
that Service Bank shall be discharged from any further liability or obligations under this Agreement and the other Finance Documents; and
|
|
|
21.3.4
|
the provisions of this Agreement and the other Finance Documents shall continue in effect for the benefit of that Service Bank in respect of any action taken or omitted to be taken by it or any event occurring before
the termination of its obligations pursuant to this Clause 21.
|
|
22.
|
LIMITS OF THE SERVICE BANKS’ OBLIGATIONS
|
Neither Service Bank shall be obliged to ascertain or enquire:
|
|
22.1.1
|
either initially or on a continuing basis, as to the credit or financial condition or affairs of the Borrower, any other Obligor or any other person;
|
|
|
22.1.2
|
as to the performance or observance by the Borrower or any other Obligor of any of the terms and conditions of this Agreement or the Finance Documents or any other agreement; or
|
|
|
22.1.3
|
whether any Event of Default or Potential Event of Default has occurred, and until it shall have actual knowledge or express notice to the contrary, the Agent shall be entitled to assume that no Event of Default or
Potential Event of Default has occurred.
|
|
22.2
|
Responsibilities excluded
|
Neither Service Bank and none of their respective officers,
employees or agents shall be responsible to any other Bank for:
|
|
22.2.1
|
any failure or delay in performance, or breach by the Borrower, of their obligations under any of the Finance Documents or any other agreement or any failure or delay in performance, or breach by any of the other
Obligors, of their respective obligations under any of the Finance Documents or any other agreement; or
|
|
|
22.2.2
|
any recitals, statements, representations or warranties in, or for the legality, validity, effectiveness, enforceability, admissibility in evidence or sufficiency of, any of the Finance Documents or any other agreement;
or
|
|
|
22.2.3
|
the legality, validity, effectiveness or enforceability of any of the security created, or purported to be created, pursuant to any of the Finance Documents.
|
73
|
22.3
|
Limitation of liability
|
|
|
22.3.1
|
Neither Service Bank and none of their respective officers, employees or agents shall be liable for any loss, damage or expense suffered or incurred by the Borrower or any other Bank or any other person in consequence
of any action taken or omitted to be taken by it under this Agreement or any of the Finance Documents or in connection herewith or therewith unless caused by its gross negligence or wilful misconduct.
|
|
|
22.3.2
|
Without prejudice to the provisions of Clause 22.3.1, none of the other Parties shall take any proceedings against any officer, employee or agent of a Service Bank in respect of any claim which it may have against that
Service Bank or in respect of any act or omission (including, without limitation, negligence or wilful misconduct) by that officer, employee or agent in relation to this Agreement or any of the Finance Documents.
|
|
22.4
|
Lenders’ representations and undertakings
|
Each Lender:
|
|
22.4.1
|
severally represents and warrants to the Service Banks that it has made its own independent investigation of the financial condition and affairs of the Borrower and the other Obligors in connection with the entry by it
into this Agreement and in such respect it has not relied on any information provided to it by either Service Bank; and
|
|
|
22.4.2
|
undertakes that it will continue to make its own independent appraisal of the creditworthiness of the Borrower and the other Obligors and will not rely on any information provided to it by either Service Bank.
|
|
22.5
|
Indemnification by Lenders of Service Banks
|
The Lenders agree (which agreement shall
survive payment of all sums due under this Agreement) to indemnify each Service Bank (to the extent not reimbursed by the Borrower) rateably, according to their respective Contributions (or, if no part of the Total Commitments has been advanced,
their respective Commitments) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against that Service Bank in performing its functions or duties under this Agreement or any of the Finance Documents, or in connection with any action taken or omitted to be taken by that Service Bank in enforcing or preserving or
attempting to enforce or preserve the rights of the Banks under this Agreement or any of the Finance Documents or any other documents or security.
|
22.6
|
Ratification by other Banks
|
If a Service Bank takes any action under or in relation to
this Agreement or any Finance Document but that action is not authorised by the terms of this Agreement or that Finance Document and has not otherwise been specifically approved by the other Banks, the other Banks ratify and agree to ratify each
such action provided that (a) it is lawful, (b) it has been taken in good faith for the purpose of preserving or protecting the rights of the Banks (or any
74
of them) and (c) having regard to all of the circumstances, it was reasonable for the Service Bank to take such action without first seeking to obtain the approval or authorisation of all of
the other Banks.
|
22.7
|
Service Banks’ rights
|
Each Service Bank may:
|
|
22.7.1
|
engage and pay for the advice and services of any lawyers, accountants or other experts whose advice or services may to that Service Bank seem necessary or desirable and that Service Bank shall be entitled to rely on
the advice and opinions of such lawyers, accountants and other experts and shall not be liable to any of the other parties hereto for any of the consequences of any such reliance;
|
|
|
22.7.2
|
perform all or any of its functions and duties under this Agreement and the other Finance Documents through employees or agents or any office or branch of that Service Bank from time to time selected by it and notified
to the other parties hereto;
|
|
|
22.7.3
|
rely on any communication or document believed by it to be genuine and correct and to have been communicated or signed by the person by whom it purports to be communicated or signed and shall not be liable to any of the
other parties hereto for any of the consequences of such reliance; and
|
|
|
22.7.4
|
without liability to account, make loans to, accept deposits from and generally engage in any kind of banking or trust business with the Borrower or the other Obligors as though that Service Bank was not a Service Bank.
|
|
22.8
|
Service Banks as Lenders
|
If it is also a Lender, each Service Bank shall have the same
rights and powers under this Agreement as any other Lender and may exercise those rights and powers as though it were not a Service Bank.
|
23.1
|
Relevant circumstances
|
This Clause 23 applies if any Lender (the “
Sharing
Lender
”) at any time receives or recovers (whether by way of voluntary or involuntary payment, by virtue of the exercise of its legal rights including but not limited to any right of set-off, counterclaim or otherwise howsoever) the whole
or any part of any amounts due to it from the Borrower under this Agreement or any of the Finance Documents otherwise than by distribution from the Agent in accordance with the terms of this Agreement.
|
23.2
|
Payment by Sharing Lender to Agent
|
Subject to Clauses 23.3 and 23.4:
|
|
23.2.1
|
the Sharing Lender shall immediately pay to the Agent the full amount or (as the case may be) an amount equal to the equivalent of the full amount so received or recovered;
|
75
|
|
23.2.2
|
as between the Borrower and the Sharing Lender, the Borrower shall remain or again become indebted to such Sharing Lender under this Agreement in the amount so paid as if it had not been so received or recovered; and
|
|
|
23.2.3
|
the Agent shall treat the amount so paid as if it were a payment by the Borrower on account of amounts due from the Borrower under this Agreement or any of the Finance Documents for distribution to the Sharing Lender
and such of the other Lenders in the proportions in which the Sharing Lender and the other Lenders would have been entitled to receive such amount had it been paid by the Borrower to the Agent under this Agreement or under such Finance Documents.
|
Any payment and adjustment made pursuant to Clause 23.2 shall be
subject to the condition that, if the amount (or any part thereof) so paid by the Sharing Lender to the Agent subsequently falls to be repaid by the Sharing Lender to the Borrower or any other person, then each of the Lenders who has received any
part thereof from the Agent shall repay the amount received by it to the Sharing Lender, together with such amount (if any) as is necessary to reimburse the Sharing Lender the appropriate portion of any interest it has been obliged to pay when
repaying such amount in accordance with this Clause 23.3, and the relevant adjustments pursuant to Clause 23.2 shall be cancelled.
A Sharing Lender which has commenced or joined in an action or
proceeding in any court to recover sums due to it under this Agreement or any of the Finance Documents, and pursuant to a judgment obtained in that action or proceeding or a settlement or compromise of that action or proceeding shall have received
any amount, shall not be required to share any proportion of that amount with a Lender which has the legal right to, but does not, join such action or proceeding or commence and diligently prosecute a separate action or proceeding to enforce its
rights under this Agreement or any of the Finance Documents in the same or another court.
Each Lender shall promptly give notice to the Agent of:
|
|
23.5.1
|
the institution by that Lender of a legal action or proceedings against the Borrower under this Agreement or any of the Finance Documents or in connection therewith; and
|
|
|
23.5.2
|
the receipt or recovery by that Lender of any amount due and payable by the Borrower under this Agreement or any of the Finance Documents which is received or recovered otherwise than through the Agent.
|
Upon receipt of any such notice the Agent will as soon as practicable pass on details of it to the other Banks.
76
|
24.
|
CHANGES TO THE LENDERS
|
|
24.1
|
Transfers by Lenders
|
Subject to obtaining the prior written consent of the Borrower and
the Agent (neither of which shall be unreasonably withheld or delayed) and to complying with the following provisions of this Clause 24, any Lender (the “
Transferor Lender
”) may transfer all or any of its rights and obligations in
its capacity as a Lender under this Agreement and the other Finance Documents to another bank or financial institution (the “
Transferee Lender
”), provided that the consent of the Borrower shall not be required if:
|
|
24.1.1
|
the transfer is made to an affiliate of the Transferor Lender; or
|
|
|
24.1.2
|
the transfer is made either (a) after an Event of Default has occurred and is continuing or (b) after a Potential Event of Default has occurred and is continuing in relation to any of the events specified in
Clause 17.1.1, Clause 17.1.6, Clause 17.1.7 or Clause 17.1.8.
|
Any transfer by a Lender of part only of its Commitment and/or
Contribution shall be in an amount of not less than $20,000,000 (unless the Agent otherwise agrees) and shall be for the same percentage of its Term Contribution, its Term Commitment, its Revolving Contribution and its Revolving Commitment.
|
24.3
|
Prohibition on debt buy-backs
|
Except with the prior consent of all of the other
Lenders, no Lender may transfer all or any of its rights and obligations under this Agreement and the other Finance Documents to the Borrower or any other member of the Group.
No assignment or transfer by a Lender of any of its rights or
obligations under this Agreement and the other Finance Documents shall be binding on, or effective in relation to, any other Party unless it is effected, evidenced and perfected by the delivery by the Transferor Lender to the Agent of a Transfer
Certificate executed by the Transferor Lender and the Transferee Lender.
However, if a Lender enters into any merger, de-merger or other
reorganisation as a result of which all its rights or obligations vest in another person (the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the
execution and delivery of a Transfer Certificate; and, upon service of the Agent’s notice or, if later, the date on which the relevant merger, de-merger or other reorganisation takes effect, the successor shall become a Lender with the same
Commitments and Contributions as were held by the predecessor Lender.
77
|
24.5
|
Signature of Transfer Certificate
|
The Agent shall as soon as practicable after receipt
by it of a Transfer Certificate signed by a Transferee Lender permitted under Clause 24.1, sign the Transfer Certificate on behalf of the Obligors, itself and each of the other Banks and give notice to the Obligors and the Banks of its receipt of
that Transfer Certificate (attaching a copy of it).
|
24.6
|
Authorisation of Agent to sign Transfer Certificate
|
Each of the other Parties
irrevocably authorises the Agent to sign any Transfer Certificate on its behalf.
|
24.7
|
Effective date of Transfer Certificate
|
A Transfer Certificate becomes effective on the
date, if any, specified in the Transfer Certificate as its effective date, provided always that it is signed by the Agent under Clause 24.5 on or before that date.
|
24.8
|
Effect of Transfer Certificate
|
A Transfer Certificate shall have effect in accordance
with the following:
|
|
24.8.1
|
to the extent that in that Transfer Certificate the Transferor Lender seeks to transfer its rights and/or its obligations under this Agreement and the other Finance Documents, each Obligor and the Transferor Lender
shall each be released from further obligations to the other under this Agreement and the other Finance Documents and their respective rights against each other shall be cancelled (such rights and obligations being referred to in this
Clause 24.8 as “
discharged rights and obligations
”);
|
|
|
24.8.2
|
each Obligor, the Transferee Lender and the other Banks shall each assume obligations towards each other and/or acquire rights against each other which differ from the discharged rights and obligations only insofar as
the Transferee Lender has assumed and/or acquired the same in place of the Transferor Lender; and
|
|
|
24.8.3
|
the Transferee Lender and the other Banks shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the Transferee Lender been an original party to this
Agreement as a Lender with the rights and/or obligations acquired or assumed by it as a result of that transfer.
|
The Transferee Lender shall pay to the Agent for its own account a
transfer fee of $3,500 on the date on which the transfer effected by the relevant Transfer Certificate becomes effective.
|
24.10
|
Sub-participation by Lenders
|
Any Lender may at any time without the consent of the
Borrower or any other Obligor sub-participate all or any of its rights and/or obligations under this Agreement and the other Finance Documents.
78
|
24.11
|
Change of Lending Office
|
Any Lender may at any time and from time to time change its
Lending Office by giving notice to the Agent and that change shall be effective on the later of (a) the date specified in that notice and (b) the date of receipt by the Agent of that notice from that Lender. The Agent shall promptly notify
the Obligors and the other Banks of any notice received by it pursuant to this Clause 24.11.
If:
|
|
24.12.1
|
a Lender transfers any of its rights and obligations under this Agreement and the other Finance Documents in accordance with Clause 24.1 or changes its Lending Office in accordance with Clause 24.11; and
|
|
|
24.12.2
|
as a result of circumstances existing at the date the transfer or change occurs, an Obligor would be obliged to make a payment to the Transferee Lender or Lender acting through its new Lending Office under Clause 9.2,
Clause 18.4 or Clause 18.7,
|
then the Transferee Lender or Lender acting through its new Lending Office is only entitled to
receive payment under those Clauses to the same extent as the Transferor Lender or Lender acting through its previous Lending Office would have been if the transfer or change had not occurred.
The Agent shall keep a register of all the Lenders for the time being with
details of their respective Commitments, Contributions and Lending Office and shall provide any other Party (at that Party’s expense) with a copy of the register on request.
|
24.14
|
Replacement of Lenders by Borrower
|
The Borrower may, at any time in respect of:
|
|
24.14.1
|
an Affected Lender whose costs of funds charged to the Borrower under Clause 7.13.2 are (in the Borrower’s reasonable opinion) materially higher than those of the other Lenders generally;
|
|
|
24.14.2
|
a Lender who makes a claim under Clause 18.4 or who imposes an Increased Cost on the Borrower under Clause 18.7;
|
|
|
24.14.3
|
a Defaulting Lender; or
|
|
|
24.14.4
|
a Non-Consenting Lender
|
by giving 10 Banking Days’ notice to the Agent and that Lender
(the “
Outgoing Lender
”) replace the Outgoing Lender by requiring it to (and the Outgoing Lender must) transfer in accordance with Clause 24.1 all (and not part only) of its rights and obligations under this Agreement to a Lender or
other bank, financial institution or other entity (a “
Replacement
79
Lender
”) selected by the Borrower and which is acceptable to the Agent (acting reasonably) for a purchase price in cash payable at the time of transfer equal to the outstanding
principal amount of the Outgoing Lender’s Contribution and all accrued interest, Break Costs and other amounts payable in relation to that Contribution under this Agreement and the other Finance Documents.
Any transfer of rights and obligations of an Outgoing Lender under this Clause is subject to the following conditions:
|
|
(a)
|
neither the Agent nor the Outgoing Lender will have any obligation to the Borrower to find a Replacement Lender;
|
|
|
(b)
|
the transfer must take place no later than 10 Banking Days after the Borrower’s notice referred to above; and
|
|
|
(c)
|
in no event will the Outgoing Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Outgoing Lender under this Agreement and the other Finance Documents.
|
|
25.
|
CHANGES TO THE SWAP PROVIDERS
|
|
25.1
|
Transfers by Swap Providers
|
Where a Swap Provider (a “
Transferor Swap
Provider
”) effects a transfer of all or any of its rights and obligations under its Master Agreement to any person (a “
Transferee Swap Provider
”) in accordance with the provisions of that Master Agreement, it shall also be
entitled to assign or transfer to the Transferee Swap Provider a commensurate proportion of its rights and obligations as a Swap Provider under this Agreement and the other Finance Documents, provided that:
|
|
(a)
|
no such rights and obligations may be assigned or transferred to a Transferee Swap Provider that is a member of the Group, except with the consent of all the Lenders and the other Swap Providers; and
|
|
|
(b)
|
no assignment or transfer by a Swap Provider of any of its rights or obligations under this Agreement and the other Finance Documents to a Transferee Swap Provider that is not already a Party to this Agreement in the
capacity of Swap Provider shall be binding on, or effective in relation to, any other Party unless the Transferee Swap Provider has confirmed in writing its agreement to be bound by the provisions of this Agreement insofar as they apply to the Swap
Providers, which confirmation shall be in such form as shall be approved by the Borrower, the Agent and the other Swap Providers.
|
Promptly after completion of any relevant transfer referred to in
Clause 25.1, the Transferor Swap Provider and the Transferee Swap Provider shall give notice in writing to the Agent notifying it of that transfer and, in the case of the Transferee Swap Provider (if it is not already a Swap Provider), advising of
its address for communications under Clause 28.
80
The Borrower undertakes to do or to procure all such acts and things
and to sign, execute and deliver or procure the signing, execution and delivery of all such instruments and documents as the Transferor Swap Provider and/or the Transferee Swap Provider may reasonably require for the purpose of perfecting any such
assignment or transfer as mentioned in Clause 25.1.
A Bank may, after the occurrence of an Event of Default which is continuing,
set off any matured obligation due from the Borrower under this Agreement or any Finance Document (to the extent beneficially owned by that Bank) against any matured obligation owed by that Bank to the Borrower, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
The provisions of Clause 23 shall apply in respect of any amount received or recovered by a Bank under this Clause 26.
|
27.1
|
No assignment by Borrower
|
The Borrower may not assign or transfer all or any of its
rights, benefits or obligations under this Agreement or any of the other Finance Documents.
Any Bank may at any time and from to time to time delegate any one or more
of its rights, powers and/or obligations under this Agreement and the other Finance Documents to any person (provided that such Bank shall remain fully responsible for the exercise or performance of any rights, powers and/or obligations delegated by
it).
Time is of the essence as regards every obligation of the Borrower
under this Agreement and the other Finance Documents.
|
27.4
|
Remedies and waivers
|
No failure to exercise, nor any delay in exercising, on the part
of any Bank, any right or remedy under this Agreement or any other Finance Document shall operate as a waiver of it, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise of it or the exercise of any
other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
81
|
27.5
|
Waivers and amendments to be in writing
|
Any waiver by any Bank of any provision of this
Agreement or any other Finance Document, and any consent or approval given by any Bank under or in respect of this Agreement or any other Finance Document, shall only be effective if given in writing and then only strictly for the purpose and upon
the terms for which it is given. Neither this Agreement nor any other Finance Document may be amended or varied orally but only by an instrument signed by each of the parties to it.
If at any time one or more of the provisions of this Agreement or any
other Finance Document is or becomes invalid, illegal or unenforceable in any respect under any law by which it may be governed or affected, the validity, legality and enforceability of the remaining provisions shall not be in any way affected or
impaired as a result.
This Agreement may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute but one and the same instrument.
|
27.8
|
Conclusiveness of Bank’s certificates
|
The certificate or determination of a Bank
of a rate or amount under this Agreement or any other Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates and is binding on the Borrower.
The Borrower shall, upon demand, and at its own expense, sign,
perfect, do, execute and register all such further assurances, documents, acts and things as the Agent may require for the purpose of more effectually accomplishing or perfecting the transaction or security contemplated by this Agreement and the
other Finance Documents.
|
28.1
|
Communications in writing; addresses
|
All communications (which expression includes any
notice, demand, request, consent or other communication) to be given by one Party to another under this Agreement shall be in writing and (unless delivered personally) shall be given by telefax or first class pre-paid post (airmail if sent
internationally) and be addressed:
|
|
28.1.1
|
in the case of the Agent and the Security Trustee to it at:
|
Loan Administration:
|
|
|
|
|
Middelthunsgate 17
P.O. Box 1166
Sentrum
NO-0107 Oslo
Norway
|
|
|
|
|
Telefax No:
|
|
+47 22 48 66 78
|
|
|
|
|
Attn:
|
|
International Loan Administration
|
82
|
|
|
|
|
Credit Matters:
|
|
|
|
Middelthunsgate 17
P.O. Box 1166
Sentrum
NO-0107 Oslo
Norway
|
|
|
|
|
Telefax No:
|
|
+47 22 48 66 68
|
|
|
|
|
Attn:
|
|
Shipping, Offshore & Oil Services
|
|
|
28.1.2
|
in the case of an Original Lender, Arranger or Bookrunner, to it at the address set out beneath its name in Schedule 1 and, in the case of any other Lender, to it at the address specified in the relevant Transfer
Certificate;
|
|
|
28.1.3
|
in the case of an Original Swap Provider, to it at the address set out beneath its name in Schedule 2 and, in the case of any other Swap Provider, to it at the address notified to the Agent pursuant to Clause 25.2;
|
|
|
28.1.4
|
in the case of the Borrower, to it at:
|
|
|
|
|
|
de Gerlachekaai 20
B-2000
Antwerp
Belgium
|
|
|
|
|
Telefax No:
|
|
+32 3 247 4409
|
|
|
|
|
Attn:
|
|
Chief Financial Officer
|
or to such other address and/or number as is notified by any Party to the others under this Agreement.
|
28.2
|
Communications via Agent
|
Notwithstanding any other provision of this Agreement or any
other Finance Document, all communications to be made under this Agreement and the other Finance Documents between the Borrower on the one hand and all or any of the Banks on the other hand shall be made solely through the Agent.
Where this Agreement or any other Finance Document provides for any matter to be determined by reference to the opinion of the Lenders or the
Majority Lenders or to be subject to the consent or request of the Lenders or the Majority Lenders or for any action to
83
be taken on the instructions of the Lenders or the Majority Lenders and the Agent gives notice to the Borrower that the Lenders or (as the case may be) the Majority Lenders have given or issued
such opinion, consent, request or instructions, the Borrower shall be entitled to rely on such notice whether or not this is in fact the case.
|
28.3
|
Deemed receipt of communications
|
Communications addressed as provided above shall be
deemed to have been duly given when despatched (in the case of telefax), when delivered (in the case of personal delivery), 2 days after posting (in the case of letters sent within the same country), or 5 days after posting (in the case of letters
sent internationally), provided that any communication to a Bank shall be effective only upon its actual receipt by that Bank and then only if it is expressly marked for the attention of the relevant department or officer named above (or any
substitute from time to time notified by that Bank). In each of the above cases any communication received on a non-working day or after business hours in the country of receipt shall be deemed to be given at the opening of business hours on the
next working day in that country.
|
28.4
|
Electronic communication
|
Any communication to be made between the Agent and a Lender
under or in connection with this Agreement or the other Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:
|
|
28.4.1
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
|
28.4.2
|
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
|
|
|
28.4.3
|
notify each other of any change to their address or any other such information supplied by them.
|
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case
of any electronic communication made by a Lender to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.
All communications, notices and documents to be given or delivered
pursuant to or otherwise in relation to this Agreement and the other Finance Documents shall be in the English language or be accompanied by a certified English translation.
|
29.
|
BANKS’ DUTIES OF CONFIDENTIALITY
|
|
29.1
|
Confidential Information
|
Each Bank agrees for the benefit of the Borrower and each
other Obligor to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent
84
permitted by the following provisions of this Clause 29, and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own
confidential information.
|
29.2
|
Disclosure of Confidential Information
|
Any Bank may disclose:
|
|
29.2.1
|
to any of its affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Bank shall consider appropriate if any
person to whom the Confidential Information is to be given pursuant to this Clause 29.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there
shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential
Information;
|
|
|
(a)
|
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person’s affiliates,
Representatives and professional advisers;
|
|
|
(b)
|
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by
reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s affiliates, Representatives and professional advisers;
|
|
|
(c)
|
appointed by any Bank or by a person to whom Clause 29.2.2(a) or 29.2.2(b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
|
|
|
(d)
|
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph Clause 29.2.2(a) or 29.2.2(b) above;
|
|
|
(e)
|
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock
exchange or pursuant to any applicable law or regulation;
|
|
|
(f)
|
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
|
85
|
|
(g)
|
who is a party to this Agreement; or
|
|
|
(h)
|
with the consent of the Borrower, (such consent not to be unreasonably withheld or delayed),
|
in each case, such Confidential Information as that Bank shall consider appropriate if:
|
|
(i)
|
in relation to paragraphs 29.2.2(a) and 29.2.2(b) above, the Borrower has consented (such consent not to be unreasonably withheld or delayed) to the disclosure and the person to whom the Confidential Information is to
be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality
of the Confidential Information;
|
|
|
(ii)
|
in relation to paragraph 29.2.2(c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality
Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
|
|
|
(iii)
|
in relation to paragraph 29.2.2(d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking and is informed that some or all of such Confidential Information
may be price-sensitive information;
|
|
|
(iv)
|
in relation to paragraphs 29.2.2(e) and 29.2.2(f) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be
price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Bank, it is not practicable so to do in the circumstances.
|
This Clause 29 constitutes the entire agreement between the parties in
relation to the obligations of the Banks under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
Each of the Banks acknowledges that some or all of the Confidential
Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Banks undertakes
not to use any Confidential Information for any unlawful purpose.
86
|
29.5
|
Notification of disclosure
|
Each of the Banks agrees (to the extent permitted by law and
regulation) to inform the Borrower:
|
|
29.5.1
|
of the circumstances of any disclosure of Confidential Information made pursuant to Clause 29.2.2(e) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of
its supervisory or regulatory function; and
|
|
|
29.5.2
|
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 29.
|
|
29.6
|
Continuing obligations
|
The obligations in this Clause 29 are continuing and, in
particular, shall survive and remain binding on each Bank for a period of 12 months from the earlier of:
|
|
29.6.1
|
the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
|
|
|
29.6.2
|
the date on which such Bank otherwise ceases to be a Bank.
|
|
30.
|
APPLICABLE LAW AND JURISDICTION
|
This Agreement (other than Clause 20.5) and any non-contractual
obligations arising out of or in connection with it shall be governed by and construed in accordance with English law. Clause 20.5 and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in
accordance with French law.
|
30.2
|
Submission to jurisdiction
|
The Borrower irrevocably agrees for the exclusive benefit of
the Banks that the English courts shall have jurisdiction in relation to any dispute and any suit, action or proceeding (referred to together in this Clause 30 as “
Proceedings
”) which may arise out of or in connection with this
Agreement and for such purposes irrevocably submits to the jurisdiction of those courts.
The Borrower irrevocably agrees:
|
|
30.3.1
|
that, for the purpose of Proceedings in England, any legal process may be served upon Euronav (UK) Agencies Limited whose registered office is presently at Moreau House,
3
rd
Floor, 116 Brompton Road, London SW3 1JJ and who, by this Agreement, are authorised to accept service on its behalf, which shall be deemed to be good service on the Borrower; and
|
|
|
30.3.2
|
that throughout the Security Period it will maintain a duly appointed process agent in England, duly notified to the Agent, and that failure by any such process agent to give notice to the Borrower of such service shall
not impair the validity of that service or of a judgment or order based on it.
|
87
Nothing in this Clause 30 shall affect the right of any Bank to serve
process in any manner permitted by law or limit the right of any Bank to take Proceedings against the Borrower in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of
Proceedings by any Bank in any other jurisdiction, whether concurrently or not.
The Borrower shall not commence any Proceedings in any
country other than England in relation to any matter arising out of or in connection with this Agreement and/or any of the other Finance Documents.
The Borrower irrevocably waives any objection which it may at any
time have on the grounds of inconvenient forum or otherwise to Proceedings being brought in any such court as is referred to in this Clause 30, and further irrevocably agrees that a judgment or order in any Proceedings brought in the English courts
shall be conclusive and binding upon it and may be enforced without review in the courts of any other jurisdiction.
The Borrower consents generally in respect of any Proceedings arising out of or
in connection with this Agreement to the giving of any relief or the issue of any process in connection with those Proceedings, including without limitation, the making, enforcement or execution against any property or assets whatsoever of any order
or judgment which may be made or given in those Proceedings.
IN WITNESS
of which the Parties have executed this Agreement the day and year first
before written.
88
SCHEDULE 1
LENDERS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
($)
|
|
|
Revolving
Commitment
($)
|
|
|
|
|
|
|
|
Nordea Bank Norge ASA
|
|
Middelthunsgate 17
P.O. Box 1166 Sentrum
NO-0107 Oslo Norway
Credit Matters:
Tel: +47 22 48 50 00
Fax: +47 22 48 66 68
Attn: Shipping, Offshore and Oil
Services
Administration Matters:
Tel: +47 22 48 50 00
Fax: +47 22 48 42 78
Attn: International Loan Administration
|
|
|
58,666,667
|
|
|
|
29,333,333
|
|
|
|
|
|
|
|
DnB NOR Bank ASA
|
|
20 St. Dunstan’s Hill
London
EC3R 8HY
England
Tel: +44 207 621 6046
Fax: +44 207 621 6931
Attn: Jon Matthews
|
|
|
58,666,667
|
|
|
|
29,333,333
|
|
|
|
|
|
|
|
ABN AMRO Bank N.V.
|
|
Gustav Mahlerlaan 10
1082PP Amsterdam
The Netherlands
Credit Matters:
Tel: +31 10 40 16 746
Fax: +31 10 40 15 323
Attn: Raymond Ko/Caspar van Overklift
Administration Matters:
Tel: +31 10 40 16 254
Fax: + 31 10 40 15 323
Attn: Pieter van Wijk/ Alper Sanliunal
|
|
|
39,000,000
|
|
|
|
19,500,000
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
($)
|
|
|
Revolving
Commitment
($)
|
|
|
|
|
|
|
|
Fortis Bank SA/NV
|
|
Montagne du Parc 3
1000 Brussels
Belgium
Credit Matters:
Tel: +33 1 58 16 76 36
Fax: +33 1 42 98 61 66
Attn: Karim Baz
Administration Matters:
Tel: +33 1 42 98 47 80
Fax: +33 1 42 98 43 55
Attn: Francois-Xavier Guillet
|
|
|
39,000,000
|
|
|
|
19,500,000
|
|
|
|
|
|
|
|
Credit Agricole Corporate and Investment Bank
|
|
9 quai du President Paul Doumer
92920 Paris
La Defense Cedex
France
Credit Matters:
Tel: +44 20 7214 5996/5993
Fax: +44 20 7214 6689
Attn: Dilhan Sebastian/Justin Lande
Administration Matters:
Tel: +33 1 41 89 12 49
Fax: +33 1 41 89 19 34
Attn: Sylvie Godet Couery
|
|
|
39,000,000
|
|
|
|
19,500,000
|
|
|
|
|
|
|
|
Danish Ship Finance (Danmarks Skibskredit A/S)
|
|
Sankt Annae Plads 3
1250 Copenhagen K
Denmark
Tel: +45 33 74 10 88
Fax: +45 33 33 96 66
Attn: Morten Muller
|
|
|
39,000,000
|
|
|
|
19,500,000
|
|
90
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
($)
|
|
|
Revolving
Commitment
($)
|
|
|
|
|
|
|
|
Fokus Bank (Norwegian Branch of Danske Bank A/S)
|
|
Stortingsgt. 6
N-0107 Oslo
Norway
Credit Matters:
Tel: +47 85 40 54 62
Fax: +47 85 40 79 90
Attn: Tore Bræin
Administration Matters:
Tel: +47 85 40 76 92
Fax: +47 85 40 79 69
Attn: Maria Reguilon Aune
|
|
|
39,000,000
|
|
|
|
19,500,000
|
|
|
|
|
|
|
|
ING Belgium SA/NV
|
|
Avenue Marnix 24
B - 1000 Brussels
Belgium
Credit Matters:
Tel: +31 20 563 5531
Fax: +31 30 565 82 10
Attn: B. Doets
Administration Matters:
Tel: +32 2 547 26 43/80 21
Fax: +32 2 547 26 65
Attn: Luc Houman/ Laurent Christiaens
|
|
|
39,000,000
|
|
|
|
19,500,000
|
|
|
|
|
|
|
|
Skandinaviska Enskilda Banken AB (publ)
|
|
Kungsträdgardsgatan 8
SE-106 40
Stockholm
Sweden
Credit Matters:
Tel: +47 22 82 70 21
Fax: +47 22 82 71 31
Attn: Egil Aarrestad
Administration Matters:
Tel: +46 8 763 8551
Fax: +46 8 611 0384
Attn: Structured Credits Operations
|
|
|
39,000,000
|
|
|
|
19,500,000
|
|
91
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
($)
|
|
|
Revolving
Commitment
($)
|
|
|
|
|
|
|
|
ITF International Transport Finance Suisse AG
|
|
Wasserwerkstrasse 12
CH-8006 Zurich
Switzerland
Credit Matters:
Tel: +41 44 3656 114
Fax: +41 44 3656 214
Attn: Alexander Schaffert
Administration Matters:
Tel: +41 44 3656 122
Fax: +41 44 3656 299
Attn: George Kyriakatos
|
|
|
29,333,333
|
|
|
|
14,666,667
|
|
|
|
|
|
|
|
Scotiabank (Ireland) Limited
|
|
I.F.S.C. House
4th Floor
Custom House Quay
Dublin 1
Ireland
Credit Matters:
Tel: +353 1 790 2056
Fax: +353 1 670 0 684
Attn: Clive Sinnamon
Administration Matters:
Tel: +353 1 790 2137
Fax: +353 1 670 0684
Attn: David Tuite
|
|
|
29,333,333
|
|
|
|
14,666,667
|
|
|
|
|
|
|
|
Banque LBLux S.A.
|
|
3, rue Jean Monnet
L-2180 Luxembourg
Credit Matters:
Tel: +352 424 34 3310/3309
Fax: +352 424 34 3399
Attn: Redwan Talbi/Steffen Kschischenk
Administration Matters:
Tel: +352 424 34 3223
Fax: +352 424 34 3397
Attn: Credit Administration
|
|
|
20,000,000
|
|
|
|
10,000,000
|
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
($)
|
|
|
Revolving
Commitment
($)
|
|
|
|
|
|
|
|
KBC Bank NV
|
|
Eiermarkt 20
B-2000 Antwerpen
Belgium
Credit Matters:
Tel: +32 3 202 90 81
Fax: +32 3 202 92 72
Attn: Erwin Caljon
Administration Matters:
Tel: +32 2 429 2658/4276
Fax: +32 2 429 3695
Attn: Annick De Bock/ Guido Lenaerts
|
|
|
20,000,000
|
|
|
|
10,000,000
|
|
|
|
|
|
|
|
Dexia Bank Belgium SA/NV
|
|
Boulevard Pachéco 44
1000 Brussels
PA07/02
Belgium
Tel: +32 2222 4353/1676
Fax: +32 2222 2311
Attn: Danny Feremans/ Emmanuel Falisse
Administration Matters:
Tel: +32 (0) 2222 7620/2069
Fax: +32 (0) 2222 7980
Attn: Nikolaas Poppe/Katrien De
Schepper
|
|
|
11,000,000
|
|
|
|
5,500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000,000
|
|
|
|
250,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93
SCHEDULE 2
SWAP PROVIDERS
|
|
|
|
|
Swap Provider
|
|
Office
|
|
|
|
|
Nordea Bank Finland plc
|
|
Aleksanterinkatu 36B
00100 Helsinki
Finland
Tel: +47 22 48 50 00
Fax: +47 22 48 66 68
Attn: Shipping, Offshore and Oil Services
|
|
|
|
|
DnB NOR Bank ASA
|
|
20 St. Dunstan’s Hill
London
EC3R 8HY
England
Tel: +44 20 7621 6046
Fax: +44 20 7621 6931
Attn: Jon Matthews
|
|
|
|
|
ABN AMRO Bank N.V.
|
|
Gustav Mahlerlaan 10
1082PP Amsterdam
The Netherlands
Tel: +31 10 40 16 746
Fax: +31 10 40 15 323
Attn: Raymond Ko/Caspar van Overklift
|
|
|
|
|
Danske Bank A/S
|
|
2-12 Holmens Kanal
DK 1092 Copenhagen K
Denmark
Tel. +47 85 40 54 62
Fax +47 85 40 79 90
Attn: Tore Thorlacius Bræin
|
|
|
|
|
ING Belgium sa/nv
|
|
ING Commercial Banking/Financial Markets
Avenue
Marnixlaan 24
B-1000 Brussels
Belgium
Tel. +32 2 557 15 71
Fax +32 2 557 19 72
Attn: Kurt
Lemaire
|
94
|
|
|
|
|
Swap Provider
|
|
Office
|
|
|
|
|
Skandinaviska Enskilda Banken AB (publ)
|
|
Filipstad Brygge 1
NO 0123 Oslo
Norway
Tel. + 47 22 82 72 11
Fax + 47 22 82 70 50
Attn.: Petter I. Andreassen
|
|
|
|
|
Banque LBLux S.A.
|
|
3, rue Jean Monnet
L-2180 Luxembourg
Credit Matters:
Tel: +352 424 34 3310/3309/3031
Fax: +352 424 34 3399
Attn: Redwan Talbi/ Steffen Kschischenk/Joel Loehr
Administration Matters:
Tel: +352 424 34 4213
Fax: +352 424 34 3299
Attn: Stefan Hameier
|
|
|
|
|
Dexia Bank Belgium SA/NV
|
|
Boulevard Pachéco 44
1000 Brussels
PA07/02
Belgium
Tel. +32 2 2222 4353
Fax. +32 2 2222 2311
Attn.: Danny Feremans
|
|
|
|
|
Credit Agricole Corporate and Investment Bank
|
|
9 quai du President Paul Doumer
92920 Paris La
Defense Cedex
France
Tel: +33 1 41 89 39 16
Fax: +33 1 41 89 64 09
Attn: Back-Office Derivative Products
|
95
|
|
|
|
|
Swap Provider
|
|
Office
|
|
|
|
|
Fortis Bank SA/NV
|
|
Montagne du Parc 3
1000 Brussels
Belgium
Tel: +32 2 228 14 03
Fax: +33 1 42 98 43 55
Attn: Evelina Hinovska
|
96
SCHEDULE 3
THE VESSELS
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel name
|
|
Type
|
|
Size (dwt)
|
|
Year built
|
|
Flag state
|
|
IMO No.
|
|
TI EUROPE
|
|
ULCC
|
|
441,655
|
|
2002
|
|
Belgium
|
|
9235268
|
|
TI HELLAS
|
|
VLCC
|
|
318,000
|
|
2005
|
|
Belgium
|
|
9290086
|
|
FLANDRE
|
|
VLCC
|
|
305,688
|
|
2004
|
|
France
|
|
9235256
|
|
TI TOPAZ
|
|
VLCC
|
|
319,470
|
|
2002
|
|
Belgium
|
|
9230907
|
|
ARTOIS
|
|
VLCC
|
|
298,330
|
|
2001
|
|
France
|
|
9230969
|
|
FAMENNE
|
|
VLCC
|
|
298,412
|
|
2001
|
|
France
|
|
9233272
|
|
ALGARVE
|
|
VLCC
|
|
298,969
|
|
1999
|
|
France
|
|
9179713
|
|
LUXEMBOURG
|
|
VLCC
|
|
299,150
|
|
1999
|
|
France
|
|
9171436
|
|
CAP LARA
|
|
Suezmax
|
|
159,000
|
|
2007
|
|
Greece
|
|
9330874
|
|
CAP VICTOR
|
|
Suezmax
|
|
159,000
|
|
2007
|
|
Greece
|
|
9321720
|
|
CAP GUILLAUME
|
|
Suezmax
|
|
159,000
|
|
2006
|
|
Greece
|
|
9321691
|
|
CAP CHARLES
|
|
Suezmax
|
|
159,000
|
|
2006
|
|
Greece
|
|
9321706
|
|
CAP PHILLIPPE
|
|
Suezmax
|
|
159,000
|
|
2006
|
|
Greece
|
|
9321718
|
|
CAP PIERRE
|
|
Suezmax
|
|
159,600
|
|
2004
|
|
Greece
|
|
9274446
|
|
FINESSE
|
|
Suezmax
|
|
150,709
|
|
2003
|
|
Greece
|
|
9236016
|
|
CAP LEON
|
|
Suezmax
|
|
159,600
|
|
2003
|
|
Greece
|
|
9274434
|
|
FILIKON
|
|
Suezmax
|
|
150,709
|
|
2002
|
|
Greece
|
|
9236004
|
|
CAP DIAMANT
|
|
Suezmax
|
|
164,000
|
|
2001
|
|
Greece
|
|
9229295
|
|
CAP ROMUALD
|
|
Suezmax
|
|
148,000
|
|
1998
|
|
Greece
|
|
9160229
|
|
CAP GEORGES
|
|
Suezmax
|
|
147,443
|
|
1998
|
|
Greece
|
|
9128283
|
|
CAP LAURENT
|
|
Suezmax
|
|
147,443
|
|
1998
|
|
Greece
|
|
9137648
|
|
CAP JEAN
|
|
Suezmax
|
|
146,440
|
|
1998
|
|
Greece
|
|
9158147
|
97
SCHEDULE 4
FORMS OF NOTICE OF DRAWDOWN
Part 1 – Notice of Drawdown for Initial Borrowing Date
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA
|
|
|
|
Middelthunsgate 17
P.O. Box 1166 Sentrum
NO-0107 Oslo
Norway
|
|
|
|
|
Attn.
|
|
International Loan Administration
|
Date: [
—
] 2012
Dear Sirs
$750,000,000 Senior Secured Term Loan and
Revolving Credit Agreement dated [
—
] 2011
We refer to the loan agreement dated [
—
] 2011 (the “
Loan Agreement
”) made between (1) ourselves as Borrower, (2) the banks and financial institutions listed in Schedule 1 thereto as Original Lenders, (3) the
banks and financial institutions listed in Schedule 2 thereto as Original Swap Providers, (4) yourselves, DnB NOR Bank ASA, ABN AMRO Bank N.V., Fortis Bank SA/NV, Credit Agricole Corporate and Investment Bank, Danish Ship Finance (Danmarks
Skibskredit A/S), Fokus Bank (Norwegian Branch of Danske Bank A/S), ING Belgium SA/NV and Skandinaviska Enskilda Banken AB (publ) as Lead Arrangers, (5) ITF International Transport Finance Suisse AG and Scotiabank (Ireland) Limited as
Co-Arrangers, (6) yourselves and DnB NOR Bank ASA as Bookrunners, (7) yourselves as Agent and (8) yourselves as Security Trustee providing for the making available to us of a term loan and revolving credit facility in the amount of
$750,000,000.
Expressions defined in the Loan Agreement shall have the same meanings when used in this letter.
Pursuant to Clause 4.1 of the Loan Agreement we give you notice that:
|
(a)
|
we wish to draw the Term Advance under the Term Loan Facility on [
—
] 2012 in the sum of $[
—
] to be divided into
[
specify
number
] Interest Tranches in the following amounts and that we select a first Interest Period for each Interest Tranche as follows:
|
|
|
|
|
|
|
|
Interest Tranche
|
|
|
First Interest Period
|
|
|
|
|
$
|
[
—
|
]
|
|
[
—
] month(s)
|
|
|
|
|
$
|
[
—
|
]
|
|
[
—
] month(s)
|
|
|
|
|
$
|
[
—
|
]
|
|
[
—
] month(s)
|
|
(b)
|
we wish to draw [
specify number
] Revolving Advances under the Revolving Credit Facility on [
—
] 2012 in the following amounts and that we select an Interest
Period for each Revolving Advance as follows:
|
|
|
|
|
|
|
|
Revolving Advance
|
|
|
Interest Period
|
|
|
|
|
$
|
[
—
|
]
|
|
[
—
] month(s)
|
|
|
|
|
$
|
[
—
|
]
|
|
[
—
] month(s)
|
|
|
|
|
$
|
[
—
|
]
|
|
[
—
] month(s)
|
98
We request and authorise you to apply the proceeds of the above Advances in repayment in full of the Existing
Indebtedness by crediting them to our loan account with you in respect of the Existing Loan Agreement.
Any surplus remaining after the Advances have been
applied in repaying the Existing Indebtedness should be credited to [
—
] under reference [
—
].
We confirm that:
|
1.
|
the representations and warranties made by us as set out in Clause 10 of the Loan Agreement are true and accurate on the date of this letter as if made on the same date as this letter;
|
|
2.
|
no Event of Default or Potential Event of Default has occurred and is continuing or will occur as a result of the proposed borrowing of the relevant Advances; and
|
|
3.
|
the financial covenants set out in Clause 13.1 of the Loan Agreement are complied with.
|
|
|
|
Yours faithfully
|
|
|
|
|
|
For and on behalf of
|
|
EURONAV NV
|
99
Part 2 – Notice of Drawdown for Revolving Advances
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA
|
|
|
|
Middelthunsgate 17
|
|
|
|
P.O. Box 1166 Sentrum
|
|
|
|
NO-0107 Oslo
|
|
|
|
Norway
|
|
|
|
|
Attn.
|
|
International Loan Administration
|
Date: [
—
]
201[
—
]
Dear Sirs
$750,000,000 Senior Secured Term Loan and Revolving Credit Agreement dated [
—
] 2011
We refer to the loan agreement dated [
—
] 2011 (the “
Loan Agreement
”) made
between (1) ourselves as Borrower, (2) the banks and financial institutions listed in Schedule 1 thereto as Original Lenders, (3) the banks and financial institutions listed in Schedule 2 thereto as Original Swap Providers,
(4) yourselves, DnB NOR Bank ASA, ABN AMRO Bank N.V., Fortis Bank SA/NV, Credit Agricole Corporate and Investment Bank, Danish Ship Finance (Danmarks Skibskredit A/S), Fokus Bank (Norwegian Branch of Danske Bank A/S), ING Belgium SA/NV and
Skandinaviska Enskilda Banken AB (publ) as Lead Arrangers, (5) ITF International Transport Finance Suisse AG and Scotiabank (Ireland) Limited as Co-Arrangers, (6) yourselves and DnB NOR Bank ASA as Bookrunners, (7) yourselves as Agent
and (8) yourselves as Security Trustee providing for the making available to us of a term loan and revolving credit facility in the amount of $750,000,000.
Expressions defined in the Loan Agreement shall have the same meanings when used in this letter.
Pursuant to Clause 4.1 of the Loan Agreement we give you notice that we wish to draw a Revolving Advance under the Revolving Credit Facility on [
—
] 201[
—
] in the amount of $[
—
] and that we select an Interest Period of [
—
] month(s) for that Revolving Advance.
The proceeds of such Revolving Advance should be credited to [
—
] under reference [
—
].
We confirm that:
|
1.
|
the representations and warranties made by us as set out in Clause 10 of the Loan Agreement are true and accurate on the date of this letter as if made on the same date as this letter;
|
|
2.
|
no Event of Default or Potential Event of Default has occurred and is continuing or will occur as a result of the proposed borrowing of the relevant Advances; and
|
|
3.
|
the financial covenants set out in Clause 13.1 of the Loan Agreement are complied with.
|
|
|
|
Yours faithfully
|
|
|
|
|
|
For and on behalf of
|
|
EURONAV NV
|
100
SCHEDULE 5
CONDITIONS PRECEDENT
Part 1 –
Documents and evidence to be received on or before the Signing Date
|
1.
|
In respect of the Borrower:
|
|
|
1.1
|
certified copies of its certificate of incorporation and constitutional documents;
|
|
|
1.2
|
to the extent only that such resolutions are required in connection with any legal opinion mentioned below, certified copies of resolutions duly passed by the board of directors of the Borrower evidencing their approval
of the transactions contemplated by the Finance Documents and authorising the execution of them by the Borrower;
|
|
|
1.3
|
an original certificate, signed by the secretary or a director of the Borrower, stating:
|
|
|
1.3.1
|
its officers and directors;
|
|
|
1.3.2
|
that no licences, authorisations, approvals or consents are required by it in connection with the execution, delivery, performance, validity and enforceability of the Finance Documents to which it is (or is to become) a
party or, if any such licences, authorisations, approvals or consents are required by it, attaching certified copies of them; and
|
|
|
1.4
|
the original or a certified copy of any power of attorney issued by it in favour of any person or persons executing this Agreement, the Fee Letters and/or the Agreed Form Certificate on its behalf.
|
|
2.
|
Originals of the following Finance Documents and related documents:
|
|
|
2.1
|
this Agreement executed by the Borrower;
|
|
|
2.2
|
the Fee Letters executed by the Borrower; and
|
|
|
2.3
|
the Agreed Form Certificate executed by the Borrower.
|
|
3.
|
Satisfactory valuation reports for each Vessel received from any two of the Approved Shipbrokers.
|
|
4.
|
Legal opinions in respect of this Agreement satisfactory to the Lenders:
|
|
|
4.1
|
on Belgian law from Fransen; and
|
|
|
4.2
|
on English law from Holman Fenwick Willan LLP.
|
|
5.
|
Confirmation from the agents in England nominated by the Borrower in this Agreement for the acceptance of service of process, that they consent to such nomination.
|
|
6.
|
Such certificates and documents as any Bank may reasonably require in order to comply with any anti-money laundering or “know your customer” legislation, regulation or procedures applicable to it.
|
101
Part 2 – Documents and evidence to be received on or before the Initial Borrowing Date
|
1.
|
In respect of the documents delivered by the Borrower to the Agent pursuant to part 1 of this Schedule 5, such updating documents as the Agent may require.
|
|
2.
|
Originals of the following Finance Documents:
|
|
|
2.1
|
the Mortgage in respect of each Vessel executed by the Borrower;
|
|
|
2.2
|
the General Assignment in respect of each Vessel executed by the Borrower;
|
|
|
2.3
|
a Charter Assignment executed by the Borrower in respect of each Vessel which, on the Initial Borrowing Date, is subject to a Long Term Charter;
|
|
|
2.4
|
the Account Security Deed executed by the Borrower; and
|
|
|
2.5
|
all notices, acknowledgements, instruments and other documents as are required to be delivered to the Agent on or before the Initial Borrowing Date under the terms of the above Finance Documents, each duly executed
(where appropriate) by the relevant parties.
|
|
3.
|
Evidence that the Mortgage for each Vessel has been registered or is capable of immediate registration with first priority against the relevant Vessel at the appropriate ship registry.
|
|
4.
|
Evidence that the relevant Vessel is registered in the sole name of the Borrower under the laws and flag of its Approved Flag State free from all Encumbrances except for the Mortgage on it.
|
|
5.
|
An original certificate, signed by the secretary or a director of the Borrower, stating that no Long Term Charter has been entered into by it in respect of the Vessels or, if it has, attaching a certified true copy of
each Long Term Charter and any related Charter Guarantee.
|
|
6.
|
A certificate of class maintained in respect of each Vessel confirming that each Vessel is classed with the highest class applicable to vessels of her age, type and specifications with its Classification Society free of
overdue recommendations and conditions.
|
|
7.
|
Evidence that each Vessel is insured in the manner required by the Finance Documents, that letters of undertaking will be issued in the manner required by the Finance Documents and that all other requirements of the
Finance Documents in respect of the Insurances of the Vessels and the noting of the Security Trustee’s interest thereon have been complied with.
|
|
8.
|
A favourable opinion on the Insurances of the Vessels satisfactory to the Lenders from BankAssure Insurance Services Limited or such other insurance advisers as the Agent may appoint.
|
102
|
9.
|
The following documents relating to the management of each Vessel:
|
|
|
9.1
|
a certified copy of the Management Agreement; and
|
|
|
9.2
|
an original of the Manager’s Undertaking.
|
|
10.
|
The following documents relating to the safety and security of each Vessel:
|
|
|
10.1
|
a copy of the Document of Compliance in relation to the company responsible for the relevant Vessel’s compliance with the ISM Code under paragraph 1.1.2 of the ISM Code;
|
|
|
10.2
|
a copy of the relevant Vessel’s Safety Management Certificate as required by the ISM Code;
|
|
|
10.3
|
a copy of the relevant Vessel’s International Ship Safety Certificate as required by the ISPS Code.
|
|
11.
|
Evidence that the Earnings Account has been duly opened by the Borrower with the Agent.
|
|
12.
|
Evidence that before (or simultaneously with) drawdown of the first Advance:
|
|
|
12.1
|
the whole of the Existing Indebtedness will be repaid;
|
|
|
12.2
|
all undrawn and available commitments under the Existing Loan Agreement will be finally and irrevocably cancelled; and
|
|
|
12.3
|
all of the Encumbrances securing the Existing Indebtedness will be finally and unconditionally released and discharged.
|
|
13.
|
Legal opinions satisfactory to the Lenders:
|
|
|
13.1
|
on Belgian law from Fransen;
|
|
|
13.2
|
on Greek law from Theo V. Sioufas & Co.;
|
|
|
13.3
|
on French law from Holman Fenwick Willan LLP;
|
|
|
13.4
|
on English law from Holman Fenwick Willan LLP;
|
|
|
13.5
|
on Norwegian law from BA-HR;
|
|
|
13.6
|
on the laws of any other relevant jurisdiction from such firm in that jurisdiction as the Agent may appoint,
|
or, in respect of any one or more of such legal opinions, confirmation satisfactory to the Agent that the opinion in question will be issued in
form and substance acceptable to it within such period after the Initial Borrowing Date as is acceptable to it.
|
14.
|
Confirmation from the agents in England nominated by the Borrower in the General Assignments and the Charter Assignments (if any) for the acceptance of service of process, that they consent to such nomination.
|
103
SCHEDULE 6
FORM OF TRANSFER CERTIFICATE
TRANSFER CERTIFICATE
The
Transferor Lender and the Transferee Lender accept exclusive responsibility for ensuring that this Transfer Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA as agent on its own behalf and for and on behalf of the Obligors and Banks defined in the Agreement referred to below:
|
|
1.
|
This Transfer Certificate relates to a $750,000,000 loan agreement (the “
Loan Agreement
”) dated [
—
] 2011 and made between (1) Euronav NV as
borrower (the “
Borrower
”), (2) the banks and financial institutions defined therein as lenders (the “
Lenders
”), (3) the banks and financial institutions defined therein as swap providers (the “
Swap
Providers
”), (4) Nordea Bank Norge ASA, DnB NOR Bank ASA, ABN AMRO Bank N.V., Fortis Bank SA/NV, Credit Agricole Corporate and Investment Bank, Danish Ship Finance (Danmarks Skibskredit A/S), Fokus Bank (Norwegian Branch of Danske Bank
A/S), ING Belgium SA/NV and Skandinaviska Enskilda Banken AB (publ) as lead arrangers, (5) ITF International Transport Finance Suisse AG and Scotiabank (Ireland) Limited as co-arrangers, (6) Nordea Bank Norge ASA and DnB NOR Bank ASA as
bookrunners, (7) Nordea Bank Norge ASA as agent and (8) Nordea Bank Norge ASA as security trustee (as the same may from time to time be amended or varied).
|
|
2.
|
Terms defined in the Loan Agreement shall, unless otherwise defined herein, have the same meanings when used in this Transfer Certificate.
|
|
3.
|
In this Transfer Certificate:
|
“
Relevant Party
” means each Obligor and each
Bank (other than the Transferor Lender and the Transferee Lender);
“
Transferor Lender
” means [
full name
] of
[
lending office
]; and
“
Transferee Lender
” means [
full name
] of [
lending office
].
|
4.
|
The Transferor Lender as beneficial owner hereby transfers to the Transferee Lender absolutely in accordance with Clause 24 of the Loan Agreement all its rights and benefit (present, future or contingent) under the Loan
Agreement and the other Finance Documents to the extent of [
—
]% of its Term Contribution and [
—
]% of its Revolving Contribution, which
percentages represent $[
—
] and $[
—
] respectively.
|
|
5.
|
By virtue of this Transfer Certificate and Clause 24 of the Loan Agreement the Transferor Lender is discharged [entirely from its Term Commitment and its Revolving Commitment which amount to $[
—
] and $[
—
] respectively][from [
—
]% of its Term Commitment and [
—
]% of its Revolving Commitment, which percentages represent $[
—
] and $[
—
] respectively] and the
Transferee lender acquires a Term Commitment and a Revolving Commitment of $[
—
] and $[
—
] respectively.
|
104
|
6.
|
The Transferee Lender hereby requests the Agent and the other Banks to accept the executed copies of this Transfer Certificate as being delivered pursuant to and for the purposes of Clause 24 of the Loan Agreement so as
to take effect in accordance with the terms thereof on [
—
] 210[
—
].
|
|
7.
|
The Transferee Lender:
|
|
|
7.1
|
confirms that it has received copies of the Loan Agreement and the other Finance Documents together with such other documents and information as it has required in connection with the transaction contemplated thereby;
|
|
|
7.2
|
confirms that it has not relied and will not hereafter rely on the Transferor Lender or any other Bank to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of
the Loan Agreement, any of the other Finance Documents or any such other documents or information;
|
|
|
7.3
|
agrees that it has not relied and will not rely on the Transferor Lender or any other Bank to assess 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 Loan Agreement or any of the other Finance Documents (save as otherwise expressly provided therein);
|
|
|
7.4
|
warrants to the Transferor Lender and each Relevant Party that it has power and authority to become a party to the Loan Agreement and has taken all necessary action to authorise execution of this Transfer Certificate
and to obtain all necessary approvals and consents to the assumption of its obligations under the Loan Agreement and the other Finance Documents;
|
|
|
7.5
|
if not already a Lender, appoints the Agent to act as its agent as provided in the Loan Agreement and the other Finance Documents and agrees to be bound by the terms thereof; and
|
|
|
7.6
|
confirms the accuracy of the administrative details set out in the Schedule to this Transfer Certificate.
|
|
8.
|
The Transferor Lender:
|
|
|
8.1
|
warrants to the Transferee Lender and each Relevant Party that it has full power to enter into this Transfer Certificate and has taken all corporate action necessary to authorise it to do so; and
|
|
|
8.2
|
undertakes with the Transferee Lender that it will, at its own expense, execute any documents which the Transferee Lender reasonably requests for perfecting in any relevant jurisdiction the Transferee Lender’s
title under this Transfer Certificate or for a similar purpose.
|
105
|
9.
|
The Transferee Lender hereby undertakes with the Transferor Lender and each Relevant Party that it will perform all those obligations which by the terms of the Loan Agreement will be assumed by it after this Transfer
Certificate takes effect.
|
|
10.
|
If this Transfer Certificate takes effect during an Interest Period, the Agent shall make all payments which would have become due to the Transferor Lender under the Loan Agreement during that Interest Period if no such
transfer had been effected to the Transferor Lender and the Transferee Lender according to the percentages of the Transferor Lender’s Contributions and Commitments transferred and retained pursuant to Clauses 4 and 5 of this Transfer
Certificate, and the Transferor Lender and the Transferee Lender shall be responsible for paying to each other pro rata all amounts (if any) due to them from each other for that Interest Period. On and from the commencement of the immediately
succeeding Interest Period, the Agent shall make all payments due under the Loan Agreement for the account of the Transferor Lender to the Transferor Lender and shall make all payments due under the Loan Agreement for the account of the Transferee
Lender to the Transferee Lender. This provision is for administrative convenience only and shall not affect the rights of the Transferor Lender and the Transferee Lender under the Loan Agreement.
|
|
11.
|
Neither the Transferor Lender nor any other Bank:
|
|
|
11.1
|
makes any representation or warranty nor assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Loan Agreement or any of the other Finance Documents or any
other document relating thereto;
|
|
|
11.2
|
assumes any responsibility for the financial condition of the Borrower or any other party to the Loan Agreement or any of the other Finance Documents or any other document relating thereto or for the performance and
observance thereof by (save as otherwise expressly provided therein) and any and all such conditions and warranties, whether expressed or implied by law or otherwise, are hereby excluded (except as aforesaid).
|
|
12.
|
The Transferor Lender and the Transferee Lender undertake that they will on demand fully indemnify the Agent and the Security Trustee in respect of any claim, proceeding, liability or expense which relates to or results
from this Transfer Certificate or any matter connected with or arising out of it unless caused by the Agent’s or Security Trustee’s gross negligence or wilful misconduct, as the case may be.
|
|
13.
|
The agreements and undertaking of the Transferee Lender in this Transfer Certificate are given to and for the benefit of and made with each of the Relevant Parties.
|
|
14.
|
This Transfer Certificate shall be governed by, and construed in accordance with, English law.
|
WARNING:
This Transfer Certificate may not operate to transfer the Transferor Lender’s interest in all of the security created by the Finance Documents (for example, the Mortgages on any Greek flagged Vessels) and the Transferee Lender should check that
all deeds of assignment and other documents necessary to transfer such security to it are signed by the Transferor Lender and, where appropriate, registered.
106
|
|
|
Transferor Lender
|
|
By: [
—
]
|
|
|
|
Dated: [
—
]
|
|
|
|
Transferee Lender
|
|
By: [
—
]
|
|
|
|
Dated: [
—
]
|
|
|
|
Agent
(for and on behalf of itself and for every other Relevant Party)
|
|
By: [
—
]
|
|
|
|
Dated: [
—
]
|
Schedule
Administrative Details of Transferee Lender
Name of Transferee Lender:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Fax:
Account for Payments:
107
SCHEDULE 7
FORM OF COMPLIANCE CERTIFICATE
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA
Middelthunsgate 17
P.O. Box 1166 Sentrum
NO-0107 Oslo
Norway
|
|
|
|
|
Attn.
|
|
International Loan Administration
|
Date: [
—
]
201[
—
]
Dear Sirs
Compliance Certificate - $750,000,000 Loan Agreement
We
refer to the loan agreement dated [
—
] 2011 (the “
Loan Agreement
”) made between (1) ourselves as Borrower, (2) the banks and financial institutions listed in Schedule 1
thereto as Original Lenders, (3) the banks and financial institutions listed in Schedule 2 thereto as Original Swap Providers, (4) yourselves, DnB NOR Bank ASA, ABN AMRO Bank N.V., Fortis Bank SA/NV, Credit Agricole Corporate and
Investment Bank, Danish Ship Finance (Danmarks Skibskredit A/S), Fokus Bank (Norwegian Branch of Danske Bank A/S), ING Belgium SA/NV and Skandinaviska Enskilda Banken AB (publ) as Lead Arrangers, (5) ITF International Transport Finance Suisse
AG and Scotiabank (Ireland) Limited as Co-Arrangers, (6) yourselves and DnB NOR Bank ASA as Bookrunners, (7) yourselves as Agent and (8) yourselves as Security Trustee providing for the making available to us of a term loan and
revolving credit facility in the amount of $750,000,000.
Expressions defined in the Loan Agreement shall have the same meanings when used in this
certificate.
I, the Chief Financial Officer of the Borrower, hereby certify that:
|
1.
|
Attached to this certificate are the latest audited consolidated accounts of the Group for the financial [year][half-year] ending on [
—
] 201[
—
] (the “
Accounts
”).
|
|
2.
|
Set out below are the respective amounts, in Dollars, of the Current Assets, Current Liabilities, Free Liquid Assets (including the respective amounts of cash, cash equivalents and Available Facilities),
Stockholders’ Equity, Total Assets and Total Indebtedness of the Group as at [
—
] 201[
—
]:
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
$
|
[
|
—
]
|
|
|
|
|
Current Liabilities
|
|
$
|
[
|
—
]
|
|
|
|
|
Free Liquid Assets
|
|
$
|
[
|
—
]
|
|
|
|
|
Cash
|
|
$
|
[
|
—
]
|
|
|
|
|
Cash equivalents
|
|
$
|
[
|
—
]
|
|
|
|
|
Available Facilities
|
|
$
|
[
|
—
]
|
|
|
|
|
Stockholders’ Equity
|
|
$
|
[
|
—
]
|
|
|
|
|
Total Assets
|
|
$
|
[
|
—
]
|
|
|
|
|
Total Indebtedness
|
|
$
|
[
|
—
]
|
108
|
3.
|
Accordingly, as at the date of this certificate the financial covenants set out in Clause 13.1 of the Loan Agreement [are] [are not] complied with, in that as at [
—
]
201[
—
]:
|
|
|
3.1
|
Current Assets exceed Current Liabilities by $[
—
];
|
|
|
3.2
|
Free Liquid Assets are $[
—
];
|
|
|
3.3
|
the aggregate amount of cash is $[
—
];
|
|
|
3.4
|
the ratio of Stockholders’ Equity to Total Assets is [
—
] per cent;
|
[or, as the case may be, specify in what respect any of the financial covenants are not complied with.]
|
4.
|
As at [
—
] 201[
—
] no Event of Default has occurred and is continuing.
|
[or, specify/identify any Event of Default]
The Borrower is in compliance with Clause 16.1 of the Loan Agreement.
[If not, specify this and what is proposed as regards Clause 16.2]
The aggregate Fair Market Values of the Vessels as at [
—
]
201[
—
] is $[
—
] based on a Fair Market Value for each Vessel as at that as follows:
|
|
|
|
|
|
|
|
|
|
|
Name of Vessel
|
|
Name of first
shipbroker providing
valuation
|
|
Name of second
shipbroker providing
valuation
|
|
Average market value
|
|
|
|
|
|
|
|
[
—
]
|
|
[
—
]
|
|
[
—
]
|
|
$
|
[
—
|
]
|
|
|
|
|
|
|
[
—
]
|
|
[
—
]
|
|
[
—
]
|
|
$
|
[
—
|
]
|
|
|
|
|
|
|
[
—
]
|
|
[
—
]
|
|
[
—
]
|
|
$
|
[
—
|
]
|
|
|
|
Yours faithfully
|
|
|
|
|
|
Chief Financial Officer
|
|
EURONAV NV
|
109
SCHEDULE 8
MANDATORY COSTS FORMULA
|
1.
|
The Mandatory Cost is an addition to the interest rate to compensate 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.
|
|
2.
|
On the first day of each Interest Period (or as soon as possible after it) the Agent shall calculate, as a percentage rate per annum, 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 Term Loan and
Revolving Advances) and will be expressed as a percentage rate per annum.
|
|
3.
|
The Additional Cost Rate for any Lender lending from a Lending Office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its
notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in the Term Loan and Revolving Advances made from that Lending Office) of complying with the minimum reserve
requirements of the European Central Bank in respect of loans made from that Lending Office.
|
|
4.
|
The Additional Cost Rate for any Lender lending from a Lending 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 designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to
paragraph 7 below and expressed in pounds per £1,000,000.
|
|
5.
|
For the purposes of this Schedule:
|
|
|
5.1
|
“
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;
|
|
|
5.2
|
“
Fees 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;
|
110
|
|
5.3
|
“
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 Fees Rules but taking
into account any applicable discount rate);
|
|
|
5.4
|
“
Participating Member State
” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to
European Monetary Union; and
|
|
|
5.5
|
“
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 Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference 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 Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank
for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
|
7.
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:
|
|
|
7.1
|
the jurisdiction of its Lending Office; and
|
|
|
7.2
|
any other information that the Agent may reasonably require for such purpose.
|
Each Lender
shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.
|
8.
|
The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender
notifies the Agent to the contrary, each Lender’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 Lending Office in the same jurisdiction
as its Lending 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 Lender and shall be entitled to assume that the information provided by any
Lender or Reference 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 Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender [and
each Reference Bank] pursuant to paragraphs 3, 6 and 7 above.
|
111
|
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 Lender 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 Lenders, 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 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.
|
112
SCHEDULE 9
DESIGNATION NOTICE
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA
|
|
|
|
Middelthunsgate 17
|
|
|
|
P.O. Box 1166 Sentrum
|
|
|
|
NO-0107 Oslo
|
|
|
|
Norway
|
|
|
|
|
Attn.
|
|
International Loan Administration
|
Date: [
—
]
201[
—
]
Dear Sirs
$750,000,000 Senior Secured Term Loan and Revolving Credit Agreement dated [
—
] 2011
We refer to:
|
1.
|
the loan agreement dated [
—
] 2011 (the “
Loan Agreement
”) made between (1) ourselves as Borrower, (2) the banks and financial institutions
listed in Schedule 1 thereto as Original Lenders, (3) the banks and financial institutions listed in Schedule 2 thereto as Original Swap Providers, (4) yourselves, DnB NOR Bank ASA, ABN AMRO Bank N.V., Fortis Bank SA/NV, Credit Agricole
Corporate and Investment Bank, Danish Ship Finance (Danmarks Skibskredit A/S), Fokus Bank (Norwegian Branch of Danske Bank A/S), ING Belgium SA/NV and Skandinaviska Enskilda Banken AB (publ) as Lead Arrangers, (5) ITF International Transport
Finance Suisse AG and Scotiabank (Ireland) Limited as Co-Arrangers, (6) yourselves and DnB NOR Bank ASA as Bookrunners, (7) yourselves as Agent and (8) yourselves as Security Trustee providing for the making available to us of a term
loan and revolving credit facility in the amount of $750,000,000;
|
|
2.
|
the master agreement dated as of [
—
] made between Euronav NV and [
—
] (the “
Master Agreement
”); and
|
|
3.
|
a confirmation delivered pursuant to the said Master Agreement dated [
—
] and addressed by [
—
] to Euronav NV (the
“
Confirmation
”).
|
In accordance with the terms of the Loan Agreement, we hereby give you notice of the Confirmation and
hereby confirm that the transaction evidenced by it will be designated as a “Designated Transaction” for the purposes of the Loan Agreement and the Finance Documents.
|
|
|
|
|
|
|
Yours faithfully
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for and on behalf of
|
|
|
|
for and on behalf of
|
|
EURONAV NV
|
|
|
|
[SWAP PROVIDER]
|
113
EXECUTION PAGES
|
|
|
|
|
|
|
|
|
|
|
THE BORROWER
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
)
|
|
|
|
|
|
by
|
|
THOMAS WILLAN
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
EURONAV NV
|
|
)
|
|
|
|
|
|
|
|
|
|
|
THE BANKS
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
|
|
|
|
as Original Lender, Lead Arranger,
|
|
)
|
|
|
|
|
|
Bookrunner, Agent and Security Trustee
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
DnB NOR BANK ASA
as Original Lender,
|
|
)
|
|
|
|
|
|
Original Swap Provider, Lead Arranger and
|
|
)
|
|
|
|
|
|
Bookrunner
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
ABN AMRO BANK N.V.
as Original
|
|
)
|
|
|
|
|
|
Lender, Original Swap Provider and Lead
|
|
)
|
|
|
|
|
|
Arranger
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
FORTIS BANK SA/NV
as Original Lender,
|
|
)
|
|
|
|
|
|
Original Swap Provider and Lead Arranger
|
|
)
|
|
|
|
|
114
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
CREDIT AGRICOLE CORPORATE
|
|
)
|
|
|
|
|
|
AND INVESTMENT BANK
as Original
|
|
)
|
|
|
|
|
|
Lender, Original Swap Provider and
|
|
)
|
|
|
|
|
|
Lead Arranger
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
DANISH SHIP FINANCE (DANMARKS
|
|
)
|
|
|
|
|
|
SKIBSKREDIT A/S)
as Original Lender
|
|
)
|
|
|
|
|
|
and Lead Arranger
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
FOKUS BANK (NORWEGIAN BRANCH
|
|
)
|
|
|
|
|
|
OF DANSKE BANK A/S)
as Original
|
|
)
|
|
|
|
|
|
Lender and Lead Arranger
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
ING BELGIUM SA/NV
as Original Lender,
|
|
)
|
|
|
|
|
|
Original Swap Provider and Lead Arranger
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
SKANDINAVISKA ENSKILDA BANKEN
|
|
)
|
|
|
|
|
|
AB (publ)
as Original Lender, Original
|
|
)
|
|
|
|
|
|
Swap Provider and Lead Arranger
|
|
)
|
|
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
ITF INTERNATIONAL TRANSPORT
|
|
)
|
|
|
|
|
|
FINANCE SUISSE AG
as Original Lender
|
|
)
|
|
|
|
|
|
and Co-Arranger)
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
SCOTIABANK (IRELAND) LIMITED
|
|
)
|
|
|
|
|
|
as Original Lender and Co-Arranger)
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
BANQUE LBLUX S.A.
as Original
|
|
)
|
|
|
|
|
|
Lender and Original Swap Provider
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
KBC BANK NV
as Original Lender
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
DEXIA BANK BELGIUM SA/NV
as
|
|
)
|
|
|
|
|
|
Original Lender and Original Swap Provider
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
NORDEA BANK FINLAND PLC
|
|
)
|
|
|
|
|
|
as Original Swap Provider
|
|
)
|
|
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
|
|
|
|
|
|
by
|
|
Katherine Noble
|
|
)
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
)
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
|
|
DANSKE BANK A/S
as Original Swap
|
|
)
|
|
|
|
|
|
Provider
|
|
)
|
|
|
|
|
117
EXHIBIT 10.3
Date 3 April 2009
EURONAV NV
as Borrower
- and -
THE BANKS AND
FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
- and -
NORDEA BANK NORGE ASA
CALYON
SOCIÉTÉ GÉNÉRALE
BANK OF AMERICA, NATIONAL ASSOCIATION
SCOTIABANK (HONG KONG) LIMITED
as Lead Arrangers
- and -
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
DEXIA BANK BELGIUM NV
DNB NOR BANK ASA
FORTIS
BANK
ETHIAS BANK
as Co-Arrangers
- and -
NORDEA BANK NORGE ASA
CALYON
SOCIÉTÉ GÉNÉRALE
as Bookrunners
- and -
NORDEA BANK NORGE ASA
as
Agent and as Security Trustee
LOAN AGREEMENT
relating to a
loan facility of US$300,000,000 comprising:
(i) a term loan facility of US$214,000,000; and
(ii) a newbuilding facility of US$86,000,000
Watson, Farley & Williams
London
INDEX
|
|
|
|
|
|
|
|
|
Clause
|
|
|
|
Page
|
|
|
|
|
|
|
1
|
|
INTERPRETATION
|
|
|
1
|
|
|
|
|
|
|
2
|
|
FACILITY
|
|
|
15
|
|
|
|
|
|
|
3
|
|
POSITION OF THE LENDERS AND SWAP BANKS
|
|
|
16
|
|
|
|
|
|
|
4
|
|
DRAWDOWN
|
|
|
17
|
|
|
|
|
|
|
5
|
|
INTEREST
|
|
|
18
|
|
|
|
|
|
|
6
|
|
INTEREST PERIODS
|
|
|
20
|
|
|
|
|
|
|
7
|
|
DEFAULT INTEREST
|
|
|
21
|
|
|
|
|
|
|
8
|
|
REPAYMENT AND PREPAYMENT
|
|
|
22
|
|
|
|
|
|
|
9
|
|
CONDITIONS PRECEDENT
|
|
|
25
|
|
|
|
|
|
|
10
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
25
|
|
|
|
|
|
|
11
|
|
GENERAL UNDERTAKINGS
|
|
|
27
|
|
|
|
|
|
|
12
|
|
CORPORATE UNDERTAKINGS
|
|
|
30
|
|
|
|
|
|
|
13
|
|
INSURANCE
|
|
|
32
|
|
|
|
|
|
|
14
|
|
SHIP COVENANTS
|
|
|
35
|
|
|
|
|
|
|
15
|
|
SECURITY COVER
|
|
|
38
|
|
|
|
|
|
|
16
|
|
PAYMENTS AND CALCULATIONS
|
|
|
39
|
|
|
|
|
|
|
17
|
|
APPLICATION OF RECEIPTS
|
|
|
41
|
|
|
|
|
|
|
18
|
|
APPLICATION OF EARNINGS
|
|
|
42
|
|
|
|
|
|
|
19
|
|
EVENTS OF DEFAULT
|
|
|
42
|
|
|
|
|
|
|
20
|
|
FEES AND EXPENSES
|
|
|
46
|
|
|
|
|
|
|
21
|
|
INDEMNITIES
|
|
|
47
|
|
|
|
|
|
|
22
|
|
NO SET-OFF OR TAX DEDUCTION
|
|
|
48
|
|
|
|
|
|
|
23
|
|
ILLEGALITY, ETC
|
|
|
50
|
|
|
|
|
|
|
24
|
|
INCREASED COSTS
|
|
|
50
|
|
|
|
|
|
|
25
|
|
SET-OFF
|
|
|
52
|
|
|
|
|
|
|
26
|
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
VARIATIONS AND WAIVERS
|
|
|
56
|
|
|
|
|
|
|
28
|
|
NOTICES
|
|
|
57
|
|
|
|
|
|
|
29
|
|
SUPPLEMENTAL
|
|
|
58
|
|
|
|
|
|
|
30
|
|
LAW AND JURISDICTION
|
|
|
59
|
|
|
|
|
|
SCHEDULE 1 LENDERS AND COMMITMENTS
|
|
|
61
|
|
|
|
|
|
SCHEDULE 2 MAXIMUM ADVANCES
|
|
|
64
|
|
|
|
|
|
SCHEDULE 3 DRAWDOWN NOTICE
|
|
|
65
|
|
|
|
|
|
SCHEDULE 4 CONDITION PRECEDENT DOCUMENTS
|
|
|
66
|
|
|
|
|
|
SCHEDULE 5 TRANSFER CERTIFICATE
|
|
|
70
|
|
|
|
|
|
SCHEDULE 6 DETAILS OF SHIPS
|
|
|
74
|
|
|
|
|
|
SCHEDULE 7 DESIGNATION NOTICE
|
|
|
75
|
|
|
|
|
|
SCHEDULE 8 MANDATORY COST FORMULA
|
|
|
76
|
|
|
|
|
|
SCHEDULE 9 FORM OF CERTIFICATE OF COMPLIANCE
|
|
|
78
|
|
|
|
|
|
EXECUTION PAGES
|
|
|
80
|
|
THIS AGREEMENT
is made on 3 April 2009
BETWEEN
|
(1)
|
EURONAV NV
, as
Borrower
;
|
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as
Lenders
;
|
|
(3)
|
NORDEA BANK NORGE ASA, CALYON, SOCIÉTÉ GÉNÉRALE, BANK OF AMERICA, NATIONAL ASSOCIATION
and
SCOTIABANK (HONG KONG) LIMITED
as
Lead Arrangers
;
|
|
(4)
|
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), DEXIA BANK BELGIUM NV, DNB NOR BANK ASA, FORTIS BANK
and
ETHIAS BANK
,
as
Co-Arrangers
;
|
|
(5)
|
NORDEA BANK NORGE ASA
, as
Agent
; and
|
|
(6)
|
NORDEA BANK NORGE ASA
, as
Security Trustee
.
|
BACKGROUND
|
(A)
|
The Lenders have agreed to make available to the Borrower a loan facility of $300,000,000 comprising:
|
|
|
(i)
|
a Term Loan Facility of $214,000,000 for general corporate and working capital purposes and to pay fees and expenses in relation to the Facility; and
|
|
|
(ii)
|
a Newbuilding Facility of $86,000,000 for general corporate and working capital purposes.
|
|
(B)
|
The Swap Banks may agree to enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower’s exposure under this Agreement to interest rate fluctuations.
|
|
(C)
|
The Lenders and the Swap Banks have agreed to share in the security to be granted to the Security Trustee pursuant to this Agreement on the terms described herein.
|
IT IS AGREED
as follows:
|
1.1
|
Definitions.
Subject to Clause 1.5, in this Agreement:
|
“
Account Security
Deed
” means a deed creating security in respect of the Earnings Account to be executed by the Borrower in favour of the Security Trustee in the Agreed Form;
“
Advance
” means the Term Advance and each Newbuilding Advance;
“
Affected Lender
” has the meaning given in Clause 5.7;
“
Agency and Trust Deed
” means the agency and trust deed dated the same date as this Agreement and entered into between the
same parties as are parties to this Agreement;
“
Agent
” means Nordea Bank Norge ASA, acting in such capacity through its
office at Middelthunsgate 17, P.O. Box 1166, Sentrum, 0107 Oslo, Norway, or any successor of it appointed under clause 5 of the Agency and Trust Deed;
“
Agent
” means Nordea Bank Norge ASA, acting in such capacity through its office
at Middelthunsgate 17, P.O. Box 1166, Sentrum, 0107 Oslo, Norway, or any successor of it appointed under clause 5 of the Agency and Trust Deed;
“
Agreed Form
” means in relation to any document, that document in a form agreed in writing by the Agent (acting on the
instructions of the Lenders), or if otherwise approved in accordance with any other approval procedure specified in the relevant provision of any Finance Document;
“
Approved Flag
” means Belgian flag, French flag, Greek flag or any other flag acceptable to the Agent (with the authorisation
of the Majority Lenders);
“
Approved Manager
” means, in relation to the technical management of each Ship, Euronav
Shipmanagement SAS of de Gerlachekaai 20, B-2000 Antwerp, Belgium or any wholly owned subsidiary of the Borrower or, in each case, any other company which the Agent may, with the authorisation of the Majority Lenders, approve from time to time as
the technical manager of that Ship;
“
Approved Shipbroker
” means Arrow Sale & Purchase (UK) Limited, H.
Clarkson & Co. Ltd., R S Platou Shipbrokers A.S., Braemar Seascope Limited, Maersk Broker K/S and ACM Shipping or such other independent sale and purchase shipbrokers which the Agent has approved or selected (with the authorisation of the
Majority Lenders);
“
Arrangers
” means, together, the Lead Arrangers and the Co-Arrangers;
“
Available Newbuilding Commitment
” means, in relation to a Lender and at any time, its Newbuilding Commitment less its
Newbuilding Contribution at that time (and “
Total Available Newbuilding Commitments
” means the aggregate of the Available Newbuilding Commitments of all the Lenders);
“
Available Term Commitment
” means, in relation to a Lender and at any time, its Term Commitment less its Term Contribution at
that time (and “
Total Available Term Commitments
” means the aggregate of the Available Term Commitments of all the Lenders);
“
Availability Period
” means:
|
|
(a)
|
in the case of the Term Loan Facility, a period commencing on the date of this Agreement and ending on:
|
|
|
(i)
|
the date falling 2 months after the date of this Agreement (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrower); or
|
|
|
(ii)
|
if earlier, the date on which the Total Term Commitments are fully borrowed, cancelled or terminated; and
|
|
|
(b)
|
in the case of the Newbuilding Facility, a period commencing on the date of this Agreement and ending on:
|
|
|
(i)
|
the Newbuilding Termination Date (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrower); or
|
|
|
(ii)
|
if earlier, the date on which the Total Newbuilding Commitments are fully borrowed, cancelled or terminated;
|
“
Borrower
” means Euronav NV, a company incorporated in Belgium whose registered office is at de Gerlachekaai 20, B-2000
Antwerp, Belgium;
2
“
Borrower’s Group
” means the Borrower and each of its subsidiaries;
“
Business Day
” means a day on which banks are open in Brussels, London, Oslo, Paris and Hong Kong and, in respect of a day on
which a payment is required to be made under a Finance Document, also in New York City;
“
Builder
” means Samsung Heavy
Industries Co., Ltd., a company incorporated in Korea whose registered office is at 11th Floor, KIPS Center, 647-9, Yeoksam-Dong, Kangnam-Gu, Seoul, Korea;
“
Change of Control
” means, in relation to the Borrower, if 2 or more persons acting in concert or any individual person other
than Saverco:
|
|
(a)
|
acquires legally and/or beneficially, and either directly or indirectly, in excess of 50 per cent, of the issued share capital of the Borrower; or
|
|
|
(b)
|
has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent) of the Borrower;
|
“
Co-Arrangers
” means, together, Skandinaviska Enskilda Banken AB (publ), Dexia Bank Belgium SA/NV, DnB NOR Bank ASA, Fortis
Bank, UK Branch and Ethias Bank;
“
Commitment
” means, in relation to a Lender, the aggregate of its Term Commitment and
its Newbuilding Commitment (and “
Total Commitments
” means the aggregate of the Commitments of all the Lenders);
“
Confirmation
” and “
Early Termination Date
”, in relation to any continuing Designated Transaction, have the
meaning given in the relevant Master Agreement;
“
Contractual Currency
” has the meaning given in Clause 21.4;
“
Contribution
” means, in relation to a Lender, the aggregate of its Term Contribution and its Newbuilding Contribution;
“
Creditor Party
” means the Agent, the Security Trustee, the Arrangers, any Lender or any Swap Bank, whether as at the date of
this Agreement or at any later time;
“
Designated Transaction
” means a Transaction which fulfils the following
requirements:
|
|
(a)
|
it is entered into by the Borrower pursuant to a Master Agreement with a Swap Bank;
|
|
|
(b)
|
its purpose is the hedging of the Borrower’s exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Facility (or any part thereof) for a period expiring no later than the Maturity
Date; and
|
|
|
(c)
|
it is designated by the Borrower and/or by the relevant Swap Bank, by delivery by the Borrower and/or that Swap Bank to the Agent of a notice of designation in the form set out in Schedule 7, as a Designated Transaction
for the purposes of the Finance Documents;
|
“
Dollars
” and “
$
” means the lawful currency for
the time being of the United States of America;
“
Drawdown Date
” means the Term Drawdown Date or a Newbuilding Drawdown
Date;
3
“
Drawdown Notice
” means a notice in the form set out in Schedule 3 (or in any
other form which the Agent approves or reasonably requires);
“
Earnings
” means, in relation to a Ship, all moneys
whatsoever which are now, or later become, payable (actually or contingently) to the Borrower and which arise out of the use or operation of that Ship, including (but not limited to):
|
|
(a)
|
all freight, hire and passage moneys, compensation payable to the Borrower in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for
breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;
|
|
|
(b)
|
all moneys which are at any time payable under Insurances in respect of loss of earnings; and
|
|
|
(c)
|
if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or
sharing arrangement which is attributable to that Ship;
|
“
Earnings Account
” means an account in the name of
the Borrower with the Agent in Oslo designated “6017.04.41527 - Earnings Account”, or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is agreed by the Agent
and the Borrower as the Earnings Account for the purposes of this Agreement;
“
Environmental Claim
” means:
|
|
(a)
|
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
|
|
|
(b)
|
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
and “
claim
” means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar
to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;
“
Environmental Incident
” means:
|
|
(a)
|
any release of Environmentally Sensitive Material from a Ship; or
|
|
|
(b)
|
any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and which involves a collision between a Ship and such other vessel or some other incident of navigation or operation,
in either case, in connection with which a Ship is actually or is reasonably likely to be arrested, attached, detained or injuncted and/or a Ship and/or the Borrower and/or any operator or manager of a Ship is at fault or allegedly at fault or is
reasonably likely to be subject to any legal or administrative action; or
|
|
|
(c)
|
any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or reasonably likely to be arrested and/or where the Borrower and/or
any operator or manager of a Ship is at fault or allegedly at fault or is reasonably likely to be subject to any legal or administrative action;
|
4
“
Environmental Law
” means any law relating to pollution or protection of the
environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;
“
Environmentally Sensitive Material
” means oil, oil products and any other substance (including any chemical, gas or other
hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;
“
Event of
Default
” means any of the events or circumstances described in Clause 19.1;
“
Facility
” means, together, the Term
Loan Facility and the Newbuilding Facility;
“
Fair Market Value
” means, in relation to a Ship, a valuation of its market
price as determined in accordance with Clause 15.3;
“
Finance Documents
” means:
|
|
(b)
|
the Agency and Trust Deed;
|
|
|
(c)
|
the Account Security Deed;
|
|
|
(e)
|
the General Security Deeds;
|
|
|
(f)
|
the Time Charter Security Deeds, and
|
|
|
(g)
|
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in
relation to, any amount payable to the Lenders and/or the Swap Banks under this Agreement or any of the other documents referred to in this definition;
|
“
Financial Indebtedness
” means, in relation to a person (the “
debtor
”), a liability of the debtor:
|
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
|
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
|
|
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
|
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to
the other person;
|
5
“
General Security Deed
” means, in relation to each Ship, a deed executed or to
be executed by the Borrower in favour of the Security Trustee creating security in respect of the Earnings, the Insurances and any Requisition Compensation relating to that Ship in the Agreed Form;
“
IFRS
” means International Financial Reporting Standards in effect from time to time;
“
Insurances
” means, in relation to a Ship:
|
|
(a)
|
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, its Earnings or otherwise in relation to it;
and
|
|
|
(b)
|
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;
|
“
Interest Period
” means a Term Interest Period or a Newbuilding Interest Period;
“
Interest Tranche
” means each part of the Term Loan or of the Newbuilding Loan (as the case may be) for which the Borrower has
selected a separate Interest Period pursuant to Clause 6;
“
ISM Code
” means the International Safety Management Code
(including the guidelines on its implementation) as adopted by the International Maritime Organisation Assembly, as the same may be amended or supplemented from time to time (and the terms “
safety management system
”, “
Safety
Management Certificate
” and “
Document of Compliance
” have the same meanings as are given to them in the ISM Code);
“
ISPS Code
” means the International Ship and Port Facility Security Code as adopted by the International Maritime Organisation
(“
IMO
”) as the same may be amended or supplemented from time to time;
“
ISSC
” means a valid and current
International Ship Security Certificate issued under the ISPS Code;
“
Lead-Arrangers
” means, together, Nordea Bank Norge
ASA, Calyon, Société Générale, Bank of America, National Association and Scotiabank (Hong Kong) Limited;
“
Lender
” means a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or
through another branch notified to the Borrower under Clause 26.14) or its transferee, successor or assign;
“
LIBOR
”
means, for an Interest Period:
|
|
(a)
|
the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on Reuters Page Libor 01 at or about 11.00
a.m. (London time) on the Quotation Date for that Interest Period (and, for the purposes of this Agreement, “
Reuters Page Libor 01
” means the display designated as “Page Libor 01” on the Reuters Service or such other page
as may replace Page Libor 01 on that service for the purpose of displaying rates comparable to that rate); or
|
|
|
(b)
|
if no rate is quoted on Reuters Page Libor 01, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one-sixteenth of one per cent.) of the rates per annum
notified to the Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank’s request at or about 11.00 a.m. (London time) on
the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it;
|
6
“
Major Casualty
” means, in relation to a Ship, any casualty to that Ship in
respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $5,000,000 or the equivalent in any other currency;
“
Majority Lenders
” means:
|
|
(a)
|
before any Advance has been made, Lenders the aggregate of whose Commitments total at least 66 2/3 per cent. of the Total Commitments; and
|
|
|
(b)
|
after the first Advance has been made, Lenders the aggregate of whose Contributions total at least 66 2/3 per cent. of the Total Contributions;
|
“
Mandatory Cost
” means the percentage rate per annum calculated by the Agent in accordance with Schedule 8;
“
Margin
” means 2.50 per cent, per annum;
“
Maturity Date
” means the date falling 60 months after the date of this Agreement;
“
Master Agreement
” means each master agreement (on the 1992 or 2002 (as the case may be) ISDA (Multicurrency-Crossborder)
form) in an agreed form to be made between the Borrower and a Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under such master agreement;
“
Mortgage
” means, in relation to each Ship, a first priority cross collateralised mortgage over that Ship executed or to be
executed by the Borrower in favour of the Security Trustee in the case of a Ship registered on Belgian flag and in favour of all the Lenders and, if applicable, also the Swap Banks, in the case of a Ship registered on French or Greek flag, in each
case in the Agreed Form;
“
Negotiation Period
” has the meaning given in Clause 5.10;
“
Newbuildings
” means the 2 newbuildings listed as Ship 5 and Ship 6 in Schedule 6 which are to be acquired by the Borrower
pursuant to the Shipbuilding Contract for that Newbuilding and shall be registered on an Approved Flag;
“
Newbuilding
Advance
” means the principal amount of each borrowing of a portion of the Newbuilding Facility under this Agreement;
“
Newbuilding Advance Drawdown Amount
” means, in relation to the Newbuilding Advance in respect of each Newbuilding, the amount
listed in the fourth column of Schedule 2 for that Newbuilding;
“
Newbuilding Commitment
” means, in relation to a Lender,
the amount set opposite its name in the fourth column of Schedule 1, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement
(and “
Total Newbuilding Commitments
” means the aggregate of the Newbuilding Commitments of all the Lenders);
“
Newbuilding Contribution
” means, in relation to a Lender, the part of the Newbuilding Loan which is owing to that Lender;
7
“
Newbuilding Drawdown Date
” means, in relation to a Newbuilding Advance, the
date requested by the Borrower for that Newbuilding Advance to be made, or (as the context requires) the date on which that Newbuilding Advance is actually made;
“
Newbuilding Interest Period
” means a period determined in accordance with Clause 6.2;
“
Newbuilding Facility
” means the Newbuilding loan facility of $86,000,000 as that amount may be reduced by borrowing,
cancellation or termination under this Agreement;
“
Newbuilding Loan
” means the principal amount of the Total Newbuilding
Commitments borrowed by the Borrower under this Agreement which is for the time being outstanding under this Agreement;
“
Newbuilding Repayment Date
” means a date on which a repayment of the Newbuilding Loan is required to be made under Clause 8;
“
Newbuilding Termination Date
” means the date falling 12 months after the date of this Agreement;
“
Notifying Lender
” has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;
“
Owned Ships
” means the 4 ships listed as Ship 1 to 4 (inclusive) in Schedule 6 which are owned by the Borrower at the date of
this Agreement and registered in the ownership of the Borrower on the flag indicated in relation to that Ship in Schedule 6;
“
Payment Currency
” has the meaning given in Clause 21.4;
“
Permitted Security Interests
” means:
|
|
(a)
|
Security Interests created by the Finance Documents;
|
|
|
(b)
|
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
|
|
(d)
|
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;
|
|
|
(e)
|
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship,
provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps);
|
|
|
(f)
|
any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the Borrower is prosecuting or
defending such proceedings or arbitration in good faith by appropriate steps provided such Security Interest does not (and is not likely to) result in any sale, forfeiture or loss of a Ship; and
|
|
|
(g)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves
have been made;
|
8
“
Pertinent Document
” means:
|
|
(a)
|
any Finance Document;
|
|
|
(b)
|
any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;
|
|
|
(c)
|
any other document contemplated by or referred to in any Finance Document; and
|
|
|
(d)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
|
“
Pertinent Jurisdiction
”, in relation to a company, means:
|
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
|
|
(c)
|
a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;
|
|
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or a permanent place of
business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);
|
“
Pertinent Matter
” means:
|
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
|
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
|
and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or
on or at any time after that signing;
“
Pool Agreement
” means, in relation to each Ship, any pool agreement which the
Borrower or any of its subsidiaries may enter into or have entered into and which that Ship is subject to;
“
Potential Event of
Default
” means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;
9
“
Quotation Date
” means, in relation to any Interest Period (or any other period
for which an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such
rate is to be determined for delivery on the first day of that Interest Period or other period;
“
Reference Banks
” means,
subject to Clause 26.16, Nordea Bank Norge ASA, Calyon and Société Générale;
“
Relevant
Person
” has the meaning given in Clause 19.9;
“
Requisition Compensation
” includes all compensation or other
moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;
“
Saverco
” means Saverco NV, a company incorporated in Belgium whose registered office is at de Gerlachekaai 20, B-2000
Antwerp, Belgium;
“
Secured Liabilities
” means all liabilities which the Borrower, the Security Parties or any of them
have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any Designated Transactions or any judgment relating to any Finance Document or any Designated Transactions; and for this purpose,
there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any
country;
“
Security Interest
” means:
|
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
|
|
(b)
|
the security rights of a plaintiff under an action
in rem
; and
|
|
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a
security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
|
“
Security Party
” means any person (except a Creditor Party) who, as a surety or mortgagor, as a party to any subordination or
priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of “Finance Documents”;
“
Security Period
” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies
the Borrower, the Security Parties and the other Creditor Parties that:
|
|
(a)
|
all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents and the Master Agreements have been paid; and
|
|
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document or any Master Agreement;
|
10
|
|
(c)
|
neither any Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 or any other provision of this Agreement or another Finance Document or a Master Agreement; and
|
|
|
(d)
|
the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document or a Master Agreement would be set aside, or would have
to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or a Master Agreement or any asset covered (or previously
covered) by a Security Interest created by a Finance Document;
|
“
Security Trustee
” means Nordea Bank Norge
ASA, acting in such capacity through its office at Middelthuns gate 17, P.O. Box 1166, Sentrum, 0107 Oslo, Norway, or any successor of it appointed under clause 5 of the Agency and Trust Deed;
“
Servicing Bank
” means the Agent or the Security Trustee;
“
Ship
” means each of the Owned Ships and the Newbuildings and “
Ship 1
”, “
Ship 2
”,
“
Ship 3
”, “
Ship 4
”, “
Ship 5
” and “
Ship 6
” mean the ships listed as such ships in Schedule 6;
“
Shipbuilding Contract
” means, in the case of each Newbuilding, the shipbuilding contract dated 23 October 2006 made
between the Builder and the Borrower for the construction of that Newbuilding by the Builder and its purchase by the Borrower as supplemented and amended from time to time;
“
Swap Bank
” means any Lender, or any parent, subsidiary or associated company of a Lender (as the case may be), which enters
into a Master Agreement and a Designated Transaction with the Borrower;
“
Swap Counterparty
” means, at any relevant time
and in relation to a continuing Designated Transaction, the Swap Bank which is a party to that Designated Transaction;
“
Term
Advance
” means the principal amount of the borrowing of the Term Loan Facility under this Agreement;
“
Term Advance
Drawdown Amount
” means, in relation to the Term Advance in respect of each Owned Ship, the amount listed in the third column of Schedule 2 for that Ship;
“
Term Commitment
” means, in relation to a Lender, the amount set opposite its name in the third column of Schedule 1, or, as
the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “
Total Term Commitments
” means the aggregate of the Term
Commitments of all the Lenders);
“
Term Contribution
” means, in relation to a Lender, the part of the Term Loan which is
owing to that Lender;
“
Term Drawdown Date
” means the date requested by the Borrower for the Term Advance to be made, or
(as the context requires) the date on which the Term Advance is actually made;
“
Term Interest Period
” means a period
determined in accordance with Clause 6.1;
11
“
Term Loan
” means the principal amount of the Total Term Commitments borrowed by
the Borrower under this Agreement which is for the time being outstanding under this Agreement;
“
Term Loan Facility
”
means the term loan facility of $214,000,000 as that amount may be reduced by borrowing, cancellation or termination under this Agreement;
“
Term Repayment Date
” means a date on which a repayment of the Term Loan is required to be made under Clause 8;
“
Time Charterer
” means:
|
|
(a)
|
in the case of the Ship 1, BP Shipping Limited, a company incorporated in England whose registered office is at Chertsery Road, Sunbury Upon Thames, Middlesex, TW16 7BP;
|
|
|
(b)
|
in the case of the Ship 2, Ship 5 or Ship 6 (being whichever ship is the substitute ship under this charter) Ultramar Ltd., a company incorporated in Quebec whose registered office is at 2200 McGill College, Montreal
(Quebec), H3A 3L3;
|
|
|
(c)
|
in the case of the Ship 3, Chartering & Shipping Services SA, a company incorporated in Switzerland acting through its office at World Trade Centre, P.O. Box 532, 1215, Geneva 15 Aeroport, Switzerland; and
|
|
|
(d)
|
in the case of the Ship 4, Chartering & Shipping Services SA, a company incorporated in Switzerland whose registered office is at World Trade Centre, P.O. Box 532,1215, Geneva 15 Aeroport, Switzerland;
|
“
Time Charters
” means each of the following time charters, as amended, entered into between the Borrower
and the relevant Time Charterer:
|
|
(a)
|
the time charter dated 18 December 2007 in relation to Ship 1;
|
|
|
(b)
|
the time charter dated 1 July 2008 in relation to Ship 2, Ship 5 or Ship 6 (being whichever ship is the substitute ship under this charter);
|
|
|
(c)
|
the time charter dated 29 January 2008 in relation to Ship 3; and
|
|
|
(d)
|
the time charter dated 29 January 2008 in relation to Ship 4;
|
“
Time Charter
Security Deed
” means, in relation to each Time Charter, a deed executed or to be executed by the Borrower in favour of the Security Trustee creating security in respect of that Time Charter in the Agreed Form;
“
Total Loss
” means, in relation to a Ship:
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of that Ship;
|
|
|
(b)
|
any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an
extension) unless it is within 1 month redelivered to the Borrower’s full control;
|
|
|
(c)
|
any condemnation of that Ship by any tribunal or by any person claiming to be a tribunal; and
|
|
|
(d)
|
any arrest, capture, seizure or detention of that Ship (including piracy or theft) unless it is within 90 days redelivered to the Borrower’s full control;
|
12
“
Total Loss Date
” means, in relation to a Ship:
|
|
(a)
|
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
|
|
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:
|
|
|
(i)
|
the date on which a notice of abandonment is given to the insurers; and
|
|
|
(ii)
|
the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with that Ship’s insurers in which the insurers agree to treat that Ship as a total loss; and
|
|
|
(c)
|
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;
|
“
Transaction
” has the meaning given in each Master Agreement;
“
Transfer Certificate
” has the meaning given in Clause 26.2; and
“
Trust Property
” has the meaning given in clause 3.1 of the Agency and Trust Deed.
|
1.2
|
Construction of certain terms.
In this Agreement:
|
“
administration
notice
” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in
connection with, the appointment of an administrator;
“
approved
” means, for the purposes of Clause 13, approved in
writing by the Agent acting with the authorisation of the Majority Lenders (which authorisation shall not be unreasonably withheld);
“
asset
” includes every kind of property, asset, interest or right, including any present, future or contingent right to any
revenues or other payment;
“
company
” includes any partnership, joint venture and unincorporated association;
“
consent
” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and
legalisation;
“
contingent liability
” means a liability which is not certain to arise and/or the amount of which remains
unascertained;
“
document
” includes a deed; also a letter or fax;
“
excess risks
” means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;
“
expense
” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value
added or other tax;
13
“
law
” includes any order or decree, any form of delegated legislation, any
treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
“
legal or administrative action
” means any legal proceeding or arbitration and any administrative or regulatory action or
investigation;
“
liability
” includes every kind of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“
months
” shall be construed in accordance with Clause 1.3;
“
obligatory insurances
” means, in relation to a Ship, all insurances effected, or which the Borrower is obliged to effect,
under Clause 13 or any other provision of this Agreement or another Finance Document;
“
parent company
” has the meaning
given in Clause 1.4;
“
person
” includes any company; any state, political sub-division of a state and local or municipal
authority; and any international organisation;
“
policy
”, in relation to any insurance, includes a slip, cover note,
certificate of entry or other document evidencing the contract of insurance or its terms;
“
protection and indemnity
risks
” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not
recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (01/11/02 or 01/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/1995 or 1/10/83) or the Institute
Amended Running Down Clause (1/10/71) or any equivalent provision;
“
regulation
” includes any regulation, rule,
official directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
“
subsidiary
” has the meaning given in Clause 1.4;
“
tax
” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any
political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and
“
war risks
” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or
1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
|
1.3
|
Meaning of “month”.
A period of 1 or more “
months
” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started
(“
the numerically corresponding day
”), but:
|
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding
the numerically corresponding day; or
|
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;
|
14
and “
month
” and “
monthly
” shall be construed accordingly.
|
1.4
|
Meaning of “subsidiary”.
A company (S) is a subsidiary of another company (P) if:
|
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
|
|
(b)
|
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
|
|
(c)
|
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
|
(d)
|
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;
|
and any company of which S is a subsidiary is a parent company of S.
|
1.5
|
General Interpretation.
In this Agreement:
|
|
(a)
|
references in Clause 1.1 to a Finance Document or any other document being in an “agreed form” are to the form agreed between the Agent (acting with the authorisation of each of the other Creditor Parties) and
the Borrower;
|
|
(b)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
|
(c)
|
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
|
|
(d)
|
words denoting the singular number shall include the plural and vice versa; and
|
|
(e)
|
Clauses 1.1 to 1.5 apply unless the contrary intention appears.
|
|
1.6
|
Headings.
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
|
|
2.1
|
Amount of facility.
Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrower:
|
|
(a)
|
a Term Loan Facility in an amount of $214,000,000; and
|
|
(b)
|
a Newbuilding Facility in an amount of $86,000,000.
|
|
2.2
|
Lenders’ participations.
Subject to the other provisions of this Agreement, each Lender shall:
|
|
(a)
|
participate in the Term Advance in the proportion which, as at the Term Drawdown Date, its Term Commitment bears to the Total Term Commitments; and
|
|
(b)
|
participate in each Newbuilding Advance in the proportion which, as at the relevant Newbuilding Drawdown Date, its Newbuilding Commitment bears to the Total Newbuilding Commitments.
|
15
|
2.3
|
Purpose of Advances.
The Borrower undertakes with each Creditor Party to use each Term Advance and each Newbuilding Advance only for the respective purposes stated in the preamble to this Agreement.
|
|
3
|
POSITION OF THE LENDERS AND SWAP BANKS
|
|
3.1
|
Interests of Lenders several.
The rights of the Lenders and of the Swap Banks under this Agreement are several.
|
|
3.2
|
Individual right of action.
Each Lender and each Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement or under a Master Agreement without
joining the Agent, the Security Trustee, any Arranger, any other Lender or any other Swap Bank as additional parties in the proceedings.
|
|
3.3
|
Proceedings requiring Majority Lender consent.
Except as provided in Clause 3.2, no Lender and no Swap Bank may commence proceedings against the Borrower or any Security Party in connection with a Finance
Document or a Master Agreement without the prior consent of the Majority Lenders.
|
|
3.4
|
Obligations several.
The obligations of the Lenders under this Agreement and of the Swap Banks under the Master Agreement to which each is a party are several; and a failure of a Lender to perform its obligations
under this Agreement or a failure of a Swap Bank to perform its obligations under the Master Agreement to which it is a party shall not result in:
|
|
(a)
|
the obligations of the other Lenders or the other Swap Banks being increased; nor
|
|
(b)
|
the Borrower, any Security Party, any other Lender or any other Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document or a Master Agreement;
|
and in no circumstances shall a Lender or a Swap Bank have any responsibility for a failure of another Lender or another Swap Bank to perform
its obligations under this Agreement or the Master Agreement to which it is a party.
|
3.5
|
Swap Banks
.
Each Lender agrees that a Lender, or any parent, subsidiary or associated company of a Lender (as the case may be), shall be a Swap Bank under this Agreement and the other Finance Documents if,
and with effect from the date, it enters into a Master Agreement and a Designated Transaction with the Borrower.
|
|
3.6
|
Security Trustee as joint and several creditor.
|
|
(a)
|
The Borrower and each of the Creditor Parties agrees that the Security Trustee shall be the joint creditor (“
hoofdelijke schuldeiser
”) together with each other Creditor Party of each liability and
obligation of the Borrower towards any Creditor Party under any Finance Document, and that accordingly the Security Trustee will have its own independent right to demand performance by the Borrower of those liabilities and obligations. However, any
discharge of any liability or obligation of the Borrower to one of the Security Trustee or another Creditor Party shall, to the same extent, discharge the corresponding liability or obligation owing to the other.
|
|
(b)
|
Without limiting or affecting the Security Trustee’s rights against the Borrower (whether under this paragraph or under any other provision of
the Finance Documents), the
|
16
|
|
Security Trustee agrees with each other Creditor Party (on a several and separate basis) that, subject as set out in the next sentence, it will not exercise its rights as a joint creditor with a
Creditor Party except with the consent of the relevant Creditor Party. However, for the avoidance of doubt, nothing in the previous sentence shall in any way limit the Security Trustee’s right to act in the protection or preservation of rights
under or to enforce any Finance Document (or to do any act reasonably incidental to any of the foregoing).
|
|
(c)
|
Subject to the provisions of this Clause 3.6, the Security Trustee holds any security created by a Finance Document in its name and the Security Trustee shall have full and unrestricted title to and authority in respect
of that security, subject always to the terms of the Finance Documents.
|
|
4.1
|
Request for Advance.
Subject to the following conditions, the Borrower may request that the Term Advance or a Newbuilding Advance be made by ensuring that the Agent receives a completed Drawdown Notice not later
than 11.00 a.m. (London time) 3 Business Days prior to the intended Drawdown Date.
|
|
4.2
|
Availability.
The conditions referred to in Clause 4.1 are that:
|
|
(a)
|
in the case of the Term Advance:
|
|
|
(i)
|
the Term Drawdown Date has to be a Business Day during the Availability Period for the Term Loan Facility;
|
|
|
(ii)
|
the Term Advance shall be drawn down in 1 Advance;
|
|
|
(iii)
|
the aggregate amount of the Term Advance shall not exceed the lesser of (i) 65 per cent of the aggregate of the Fair Market Value of the Owned Ships on the Term Drawdown Date and (ii) the aggregate of the
Term Advance Drawdown Amount for the Owned Ships; and
|
|
|
(iv)
|
the aggregate amount of the Term Advance shall not exceed the Total Term Commitments;
|
|
(b)
|
in the case of a Newbuilding Advance:
|
|
|
(i)
|
a Newbuilding Drawdown Date has to be a Business Day during the Availability Period for the Newbuilding Facility and shall not be later than the date on which that Newbuilding is delivered to the Borrower under the
relevant Shipbuilding Contract;
|
|
|
(ii)
|
there shall be only 1 Advance for each Newbuilding;
|
|
|
(iii)
|
a Newbuilding Advance shall not exceed the lesser of (i) 65 per cent of the Fair Market Value of the Newbuilding on the relevant Newbuilding Drawdown Date and (ii) the Newbuilding Advance Drawdown Amount
for that Newbuilding; and
|
|
|
(iv)
|
the aggregate amount of the Newbuilding Advances shall not exceed the Total Newbuilding Commitments.
|
|
4.3
|
Notification to Lenders of receipt of a Drawdown Notice.
The Agent shall within 1 Business Day of receiving the Drawdown notice promptly notify the Lenders that it has received a Drawdown Notice and shall inform
each Lender of:
|
|
(a)
|
the amount and nature of the Advance (whether it is a Term Advance or a Newbuilding Advance (as the case may be)) and the Drawdown Date;
|
17
|
(b)
|
the amount of that Lender’s participation in the relevant Advance; and
|
|
(c)
|
the duration of the first Interest Period for the relevant Advance.
|
|
4.4
|
Drawdown Notice irrevocable.
A Drawdown Notice must be signed by a duly authorised person on behalf of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Agent,
acting with the authorisation of the Majority Lenders.
|
|
4.5
|
Lenders to make available Contributions.
Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrower the
amount due from that Lender on that Drawdown Date under Clause 2.2.
|
|
4.6
|
Disbursement of Advances.
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5; and that
payment to the Borrower shall be made:
|
|
(a)
|
to the account which the Borrower specifies in the Drawdown Notice; and
|
|
(b)
|
in the like funds as the Agent received the payments from the Lenders.
|
|
4.7
|
Disbursement of Advances to third party.
A payment by the Agent under Clause 4.6 shall constitute the making of the relevant Advance and the Borrower shall thereupon become indebted, as principal and direct
obligor, to each Lender in an amount equal to that Lender’s Term Contribution or that Lender’s Newbuilding Contribution as the case may be.
|
|
5.1
|
Payment of normal interest.
|
|
(a)
|
subject to the provisions of this Agreement, interest on the Term Advance in respect of each Term Interest Period applicable to it shall be paid by the Borrower on the last day of that Term Interest Period;
|
|
(b)
|
subject to the provisions of this Agreement, interest on a Newbuilding Advance in respect of each Newbuilding Interest Period applicable to it shall be paid by the Borrower on the last day of that Newbuilding Interest
Period.
|
|
5.2
|
Normal rate of interest.
Subject to the provisions of this Agreement, the rate of interest on the Term Advance and each Newbuilding Advance (as the case may be) in respect of an Interest Period applicable to it
shall be the aggregate of the Margin, the Mandatory Cost (if any) and LIBOR for that Interest Period.
|
|
5.3
|
Payment of accrued interest.
In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.
|
|
5.4
|
Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrower and each Lender of:
|
|
(a)
|
each rate of interest; and
|
|
(b)
|
the duration of each Interest Period;
|
18
as soon as reasonably practicable after each is determined.
|
5.5
|
Obligation of Reference Banks to quote.
A Lender which is a Reference Bank shall use all reasonable efforts to supply any quotation required of it for the purposes of fixing a rate of interest under this
Agreement.
|
|
5.6
|
Absence of quotations by Reference Banks.
If any Reference Bank fails to supply a quotation when required, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other
Reference Bank or Banks; but if less than 2 of the Reference Banks provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.
|
|
5.7
|
Market disruption.
The following provisions of this Clause 5 apply if:
|
|
(a)
|
no rate is quoted on Reuters Page Libor 01 and less than 2 of the Reference Banks, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR; or
|
|
(b)
|
at least 1 Business Day before the start of an Interest Period:
|
|
|
(i)
|
in the case of the Term Advance, Lenders having Term Contributions together amounting to more than 50 per cent. of the Term Advance (or, if the Term Advance has not been made, Term Commitments amounting to more
than 50 per cent. of the Total Term Commitments);
|
|
|
(ii)
|
in the case of a Newbuilding Advance, Lenders having Newbuilding Contributions together amounting to more than 50 per cent, of the Newbuilding Advance (or, if a Newbuilding Advance has not been made, Newbuilding
Commitments amounting to more than 50 per cent. of the Total Newbuilding Commitments),
|
notify the Agent that LIBOR
fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Term Contributions or Newbuilding Contributions as the case may be (or any part of them) during the Interest Period in the London Interbank Market
at or about 11.00 a.m. (London time) on the Quotation Date for the Interest Period; or
|
(c)
|
at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the “
Affected Lender
”) that for any reason it is unable to obtain Dollars in the London Interbank
Market in order to fund its Term Contribution or Newbuilding Contribution as the case may be (or any part of it) during that Interest Period.
|
|
5.8
|
Notification of market disruption.
The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.7 which have caused its notice to be given.
|
|
5.9
|
Suspension of drawdown.
If the Agent’s notice under Clause 5.8 is served before the Term Advance or that Newbuilding Advance (as the case may be) is to be made:
|
|
(a)
|
in a case falling within Clauses 5.7(a) or (b), the Lenders’ obligations to make the Term Advance or that Newbuilding Advance, as the case may be;
|
|
(b)
|
in a case falling within Clause 5.7(c), the Affected Lender’s obligation to participate in the Term Advance or that Newbuilding Advance, as the case may be;
|
shall be suspended while the circumstances referred to in the Agent’s notice continue.
19
|
5.10
|
Negotiation of alternative rate of interest.
If the Agent’s notice under Clause 5.8 is served after the Term Advance or a Newbuilding Advance (as the case may be) has been made, the Borrower, the Agent and
the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within the 15 days after the date on which the Agent serves its notice under Clause 5.8 (the “
Negotiation Period
”), an alternative
interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Term Contribution or Newbuilding Contribution (as the case may be) during the relevant
Term Interest Period or the Newbuilding Interest Period concerned.
|
|
5.11
|
Application of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
|
5.12
|
Alternative rate of interest in absence of agreement.
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of
the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the
Affected Lender in Dollars or in any available currency of their or its Term Contribution or Newbuilding Contribution (as the case may be) plus the Margin and the Mandatory Cost (if any); and the procedure provided for by this Clause 5.12 shall be
repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
|
|
5.13
|
Notice of prepayment.
If the Borrower does not agree with an interest rate set by the Agent under Clause 5.12, the Borrower may give the Agent not less than 15 Business Days’ notice of its intention to
prepay the relevant Advance at the end of the interest period set by the Agent.
|
|
5.14
|
Prepayment.
A notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower’s notice of intended prepayment; and
on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the relevant Advance, together with accrued interest thereon at the applicable rate (including the Mandatory Cost) plus the
Margin.
|
|
5.15
|
Application of prepayment.
The provisions of Clause 8 shall apply in relation to the prepayment.
|
|
6.1
|
Term Interest Periods.
The first Term Interest Period applicable to the Term Advance or any Interest Tranche of it shall commence on the Term Drawdown Date and each subsequent Term Interest Period applicable to
the Term Advance or any Interest Tranche of it shall commence on the expiry of the preceding applicable Term Interest Period; and, subject to Clauses 6.3, 6.4 and 6.6, each Term Interest Period shall be:
|
|
(a)
|
3 or 6 months as notified by the Borrower to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of that Term Interest Period; or
|
|
(b)
|
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
|
|
(c)
|
such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.
|
20
|
6.2
|
Newbuilding Interest Periods.
The first Newbuilding Interest Period applicable to a Newbuilding Advance or any Interest Tranche of it shall commence on the applicable Newbuilding Drawdown Date and each subsequent
Newbuilding Interest Period applicable to the Newbuilding Advance or any Interest Tranche of it shall commence on the expiry of the preceding applicable Newbuilding Interest Period; and, subject to Clauses 6.3, 6.5 and 6.6, each Newbuilding Interest
Period shall be:
|
|
(a)
|
3 or 6 months as notified by the Borrower to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of that Newbuilding Interest Period; or
|
|
(b)
|
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
|
|
(c)
|
such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.
|
|
6.3
|
Limit on number of Interest Periods.
The Borrower shall select Interest Periods under this Clause 6 so that there are no more than 6 Interest Periods of different lengths current at any time.
|
|
6.4
|
Duration of Term Interest Periods for repayment instalments.
In respect of an amount due to be repaid under Clause 8.1 on a particular Term Repayment Date, a Term Interest Period shall end on that Term Repayment
Date.
|
|
6.5
|
Duration of Newbuilding Interest Period for repayment instalments.
In respect of an amount due to be repaid under Clause 8.2 on a particular Newbuilding Repayment Date, a Newbuilding Interest Period shall end on
that Newbuilding Repayment Date.
|
|
6.6
|
Non-availability of matching deposits for Interest Period selected.
If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00
a.m. (London time) on the second Business Day before the commencement of that Interest Period that it is not satisfied that deposits in Dollars for a period equal to that Interest Period will be available to it in the London Interbank Market when
that Interest Period commences, that Interest Period shall be of 3 months.
|
|
7.1
|
Payment of default interest on overdue amounts.
The Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which
the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
|
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
|
(c)
|
if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.
|
|
7.2
|
Default rate of interest.
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by
the Agent to be 2 per cent. above:
|
|
(a)
|
in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or
|
|
(b)
|
in the case of any other overdue amount, the rate set out at Clause 7.3(b).
|
21
|
7.3
|
Calculation of default rate of interest.
The rates referred to in Clause 7.2 are:
|
|
(a)
|
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);
|
|
(b)
|
the aggregate of the Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
|
|
(ii)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time
determine.
|
|
7.4
|
Notification of interest periods and default rates.
The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the
Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent’s notification.
|
|
7.5
|
Payment of accrued default interest.
Subject to the other provisions of this Agreement, any interest under this Clause shall be immediately due and payable; and the payment shall be made to the Agent for the
account of the Creditor Party to which the overdue amount is due.
|
|
7.6
|
Compounding of default interest.
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
|
7.7
|
Application to Master Agreements.
For the avoidance of doubt, this Clause 7 does not apply to any amount payable under a Master Agreement in respect of any continuing Designated Transaction as to which section
2(e) (Default Interest; Other Amounts) of that Master Agreement shall apply.
|
|
8
|
REPAYMENT AND PREPAYMENT
|
|
8.1
|
Repayment of Term Loan.
The Borrower shall repay the Term Loan as follows:
|
|
(a)
|
by consecutive quarterly instalments each in an amount equal to one-sixtieth of the amount of the Term Loan made available to the Borrower on the Term Drawdown Date; and
|
|
(b)
|
the first instalment shall be repaid on the date falling 3 months after the date of this Agreement.
|
|
8.2
|
Repayment of Newbuilding Loan.
The Borrower shall repay each Newbuilding Advance as follows:
|
|
(a)
|
by consecutive quarterly instalments, each in an amount equal to one-sixtieth of the amount of the Newbuilding Advance made available to the Borrower on the relevant Newbuilding Drawdown Date; and
|
|
(b)
|
the first instalment shall be repaid on the date falling 3 months after the Newbuilding Drawdown Date for that Newbuilding Advance.
|
22
The Agent shall provide the Borrower and the Lenders with a repayment schedule for the Term Loan
and each Newbuilding Advance on the Drawdown Date of the relevant Advance listing the amount of each of the instalments for the Term Loan and that Newbuilding Advance.
|
8.3
|
Maturity Date.
On the Maturity Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
|
|
8.4
|
Voluntary prepayment.
Subject to the following conditions in Clauses 8.5, 8.6 and 8.7, the Borrower may prepay, without penalty but subject to any payment required under Clause 8.10, the whole or any part of the
Term Loan or the Newbuilding Loan.
|
|
8.5
|
Conditions for voluntary prepayment.
The conditions referred to in Clause 8.4 are that:
|
|
(a)
|
a partial prepayment shall be $1,000,000 or a higher integral multiple of $1,000,000;
|
|
(b)
|
the Agent has received from the Borrower at least 5 Business Days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
|
|
(c)
|
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any
requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.
|
|
8.6
|
Effect of notice of prepayment.
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the
prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.
|
|
8.7
|
Notification of notice of prepayment.
The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the
Borrower under Clause 8.5(c).
|
|
8.8
|
Mandatory prepayment and cancellation on sale or Total Loss.
The Borrower shall be obliged to prepay the relevant proportion of the aggregate outstanding amount of the Term Loan and the Newbuilding Loan:
|
|
(a)
|
if a Ship which is subject to a Mortgage is sold, on the date on which the sale is completed by delivery of the Ship to the buyer; or
|
|
(b)
|
if a Ship which is subject to a Mortgage becomes a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating
to such Total Loss,
|
and in this Clause 8.8, “
relevant proportion
” means a fraction of which the numerator
is the Fair Market Value of the Ship (determined as at the date of the most recent appraisal and not more than 3 months prior to the date of the sale or Total Loss) which is to be sold or (as the case may be) the subject of Total Loss and the
denominator is the aggregate of the most recently determined Fair Market Value of the Ships (determined on the same basis) mortgaged pursuant to this Agreement immediately prior to the sale or Total Loss.
23
The prepayment shall be applied pro rata to the Term Loan and the Newbuilding Loan then
outstanding and then pro rata towards the remaining instalments under the Term Loan and the Newbuilding Loan.
This Clause 8.8 is without
prejudice to the provisions of Clause 15.1.
|
8.9
|
Mandatory prepayment and cancellation on Change of Control.
If there is a Change of Control, the Borrower shall be obliged to prepay the Term Loan and the Newbuilding Loan and the Term Commitments and Newbuilding
Commitments shall terminate not later than 60 days following the occurrence of the Change of Control unless the Agent has approved the Change of Control (acting with the authorisation of the Majority Lenders, which authorisation shall not to be
unreasonably withheld or delayed).
|
|
8.10
|
Amounts payable on prepayment.
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an applicable Term Interest Period or Newbuilding Interest Period (as the case may be) together with any sums payable under Clause 21.1(b) and 21.2 but without premium or penalty.
|
|
8.11
|
Application of partial prepayment of Term Loan and Newbuilding Loan.
Each partial voluntary prepayment of the Term Loan and the Newbuilding Loan shall be applied pro rata to the instalments specified in Clause
8.2 (in the case of the Term Loan) and Clause 8.2 (in the case of the Newbuilding Loan).
|
|
8.12
|
Reborrowing.
No amount of the Term Loan or the Newbuilding Loan prepaid may be reborrowed.
|
|
8.13
|
Voluntary cancellation of Term Commitments or Newbuilding Commitments.
Subject to the following conditions, the Borrower may, without penalty, cancel the whole or any part of the Total Available Term Commitments
or Total Available Newbuilding Commitments.
|
|
8.14
|
Conditions for cancellation of Term Commitments or Newbuilding Commitments.
The conditions referred to in Clause 8.13 are that:
|
|
(a)
|
a partial cancellation shall be $1,000,000 or a higher integral multiple of $1,000,000; and
|
|
(b)
|
the Agent has received from the Borrower at least 3 Business Days’ prior written notice specifying the amount of the Total Available Term Commitments or Total Available Newbuilding Commitments to be cancelled and
the date on which the cancellation is to take effect.
|
|
8.15
|
Effect of notice of cancellation.
The service of a cancellation notice given under Clause 8.14 shall cause the amount of the Total Term Commitments or Total Newbuilding Commitments (as the case may be)
specified in the notice to be permanently cancelled and any partial cancellation shall be applied against the Term Commitment or the Newbuilding Commitment (as the case may be) of each Lender pro rata.
|
|
8.16
|
Unwinding of Designated Transactions.
On or prior to any repayment or prepayment of the Facility under this Clause 8 or any other provision of this Agreement, the Borrower shall at its sole discretion have
the right to wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and
will not in the future (taking into account the scheduled amortisation) exceed the amount of the aggregate of the Term Loan as reducing from time to time thereafter pursuant to Clause 8.1 and the Newbuilding Loan as reducing from time to time
thereafter pursuant to Clause 8.2.
|
24
|
9.1
|
Documents, fees and no default.
Each Lender’s obligation to contribute to an Advance is subject to the following conditions precedent:
|
|
(a)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the documents described in Part A of Schedule 4 in form and substance satisfactory to the Agent and its lawyers;
|
|
(b)
|
that, on or before the date of this Agreement, the Agent receives all fees pursuant to the fee letter or letters separately agreed between the Borrower and the Agent;
|
|
(c)
|
that, on or before the Term Drawdown Date, the Agent receives the documents described in Part B of Schedule 4 in form and substance satisfactory to the Agent and its lawyers;
|
|
(d)
|
that, on or before each Newbuilding Drawdown Date, the Agent receives the documents described in Part C of Schedule 4 in form and substance satisfactory to the Agent and its lawyers;
|
|
(e)
|
that both at the date of each Drawdown Notice and at each Drawdown Date:
|
|
|
(i)
|
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the relevant Advance;
|
|
|
(ii)
|
the representations and warranties in Clause 10 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with
reference to the circumstances then existing; and
|
|
|
(iii)
|
none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and
|
|
(f)
|
that, if the ratio set out in Clause 15.1 were applied immediately following the making of the relevant Advance, the Borrower would not be obliged to provide additional security or prepay part of the Facility under that
Clause; and
|
|
(g)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the
Majority Lenders, request by notice to the Borrower prior to the relevant Drawdown Date.
|
|
9.2
|
Waiver of conditions precedent.
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure
that those conditions are satisfied within 5 Business days after the relevant Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
|
|
10
|
REPRESENTATIONS AND WARRANTIES
|
|
10.1
|
General.
The Borrower represents and warrants to each Creditor Party as follows.
|
|
10.2
|
Status.
The Borrower is duly incorporated and validly existing under the laws of, and has the centre of its main interests in, Belgium.
|
|
10.3
|
Corporate power.
The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
|
|
(a)
|
to execute each Shipbuilding Contract and to acquire and to pay for Ship 5 and Ship 6 under the relevant Shipbuilding Contract;
|
25
|
(b)
|
to execute the Finance Documents to which the Borrower is a party and the Master Agreements; and
|
|
(c)
|
to borrow under this Agreement, to enter into Designated Transaction under the Master Agreements and to make all the payments contemplated by, and to comply with, those Finance Documents and the Master Agreements.
|
|
10.4
|
Consents in force.
All the consents referred to in Clause 10.3 remain in force and nothing has occurred which makes any of them liable to revocation.
|
|
10.5
|
Legal validity; effective Security Interests.
The Finance Documents to which the Borrower is a party and the Master Agreements, do now or, as the case may be, will, upon execution and delivery (and, where
applicable, registration as provided for in the Finance Documents):
|
|
(a)
|
constitute the Borrower’s legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms;
|
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate;
|
subject to any relevant insolvency laws affecting creditors’ rights generally and to general equity principles.
|
10.6
|
No third party Security Interests.
Without limiting the generality of Clause 10.5, at the time of the execution and delivery of each Finance Document:
|
|
(a)
|
the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
|
|
(b)
|
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms,
relates.
|
|
10.7
|
No conflicts.
The execution by the Borrower of each Finance Document to which it is a party and the Master Agreements, and the borrowing by the Borrower of the Term Loan Facility and the Newbuilding Facility, and
its compliance with each Finance Document and each Master Agreement to which it is a party will not involve or lead to a contravention of:
|
|
(a)
|
any law or regulation; or
|
|
(b)
|
the constitutional documents of the Borrower; or
|
|
(c)
|
any contractual or other obligation or restriction which is binding on the Borrower or any of its subsidiaries or any of their respective assets.
|
|
10.8
|
No default.
No Event of Default or Potential Event of Default has occurred and is continuing.
|
|
10.9
|
Information.
All information which has been provided in writing by or on behalf of the Borrower or any Security Party to the Arrangers or any other Creditor Party in connection with any Finance Document satisfied
the requirements of Clause 11.4; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.6; and there has been no material adverse change in the property, assets, nature of assets, operations,
liabilities or condition (financial or otherwise) of the Borrower or its subsidiaries since 31 December 2007.
|
26
|
10.10
|
No litigation.
No litigation, arbitration or administrative proceedings (including, but not limited to, investigative proceedings) involving the Borrower has been commenced or taken or, to the Borrower’s
knowledge, is likely to be commenced or taken which, in any case, would be likely to have a material adverse effect on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or its
subsidiaries or on the ability of the Borrower to perform its obligations under the Finance Documents.
|
|
10.11
|
Compliance with certain undertakings.
At the date of this Agreement, the Borrower is in compliance with Clauses 11.2 and 11.13.
|
|
10.12
|
Taxes paid.
The Borrower has paid all taxes applicable to, or imposed on or in relation to, the Borrower and its business.
|
|
10.13
|
No money laundering.
Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower of the Term Loan Facility and the Newbuilding Facility, the performance and discharge of its
obligations and liabilities under the Finance Documents, and the transactions and other arrangements effected or contemplated by the Finance Documents to which it is a party, the Borrower confirms that it is acting for its own account and that the
foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the
Council of the European Communities).
|
|
10.14
|
ISM Code and ISPS Code compliance.
All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Approved Manager and the Ships have been, or will be, complied with at the time of the
Drawdown Date relating to each Ship.
|
|
10.15
|
Validity and completeness of Shipbuilding Contracts.
Each Shipbuilding Contract constitutes valid, binding and enforceable obligations of the Builder and the Borrower respectively in accordance with its terms;
and:
|
|
(a)
|
the copy of each Shipbuilding Contract delivered to the Agent before the date of this Agreement is a true and complete copy of the relevant Shipbuilding Contract; and
|
|
(b)
|
no amendments or additions to either Shipbuilding Contract have been agreed nor has the Borrower or the Builder waived any of their respective rights under either Shipbuilding Contract.
|
|
11.1
|
General.
The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the
Majority Lenders, otherwise permit.
|
|
11.2
|
Title; negative pledge.
The Borrower shall hold the legal title to, and own the entire beneficial interest in each Ship, its Earnings and Insurances, free from all Security Interests and other interests and
rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests; and
|
|
11.3
|
Disposal of assets.
The Borrower will not transfer, lease or otherwise dispose of all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except in
the usual course of its business and for fair market value payable in cash on completion of such transaction.
|
27
|
11.4
|
Information provided to be accurate.
All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not
misleading and will not omit any material fact or consideration.
|
|
11.5
|
Provision of financial statements.
The Borrower will send to the Agent:
|
|
(a)
|
as soon as possible, but in no event later than 120 days after the end of each financial year of the Borrower, the audited consolidated accounts of the Borrower’s Group and audited individual accounts of the
Borrower;
|
|
(b)
|
as soon as possible, but in no event later than 60 days after the end of each financial half- year of the Borrower, the unaudited consolidated balance sheet of the Borrower’s Group and the unaudited individual
balance sheet of the Borrower certified as to its correctness by the chief financial officer of the Borrower;
|
|
(c)
|
as soon as possible, but in no event later than 60 days after the end of each financial quarter of the Borrower, unaudited consolidated income statements of the Borrower’s Group and unaudited individual income
statements of the Borrower certified as to their correctness by the chief financial officer of the Borrower;
|
|
(d)
|
as soon as possible, but not later than 120 days after the end of each financial year of the Borrower, a financial projection for the Borrower’s Group for the next 5 years in a format which is acceptable to the
Agent; and
|
|
(e)
|
concurrently with the annual audited consolidated accounts and with each balance sheet referred to in paragraphs (a) and (b), a compliance certificate signed by the chief financial officer of the Borrower in the
form attached as Schedule 9 (or in any other format which the Agent may approve) evidencing compliance with the financial undertakings in Clause 12.5 and also listing the Fair Market Value of each of the Ships which is subject to a Mortgage at that
time.
|
|
11.6
|
Form of financial statements.
The audited accounts delivered under Clause 11.5 will:
|
|
(a)
|
be prepared in accordance with all applicable laws and IFRS consistently applied;
|
|
(b)
|
give a true and fair view of the state of affairs of the Borrower’s Group (or the Borrower, as the case may be) at the date of those accounts and of profit for the period to which those accounts relate;
|
|
(c)
|
fully disclose or provide for all significant liabilities of the Borrower’s Group (or the Borrower, as the case may be); and
|
|
(d)
|
be provided in English.
|
|
11.7
|
Provision of further information.
The Borrower will, as soon as practicable after receiving a request from the Agent, provide the Agent with such additional financial information in relation to the
Borrower’s Group which may be reasonably requested by the Agent or any Lender through the Agent.
|
|
11.8
|
Creditor notices.
The Borrower will send the Agent, at the same time as they are despatched, copies of all material communications which are despatched to all of the Borrower’s shareholders or creditors or
to the whole of any class of them
Provided that
providing copies of such communications to the Agent shall be subject to the Borrower complying with any confidentiality requirements and not being in breach of any regulations or laws by
providing such communications to the Agent.
|
28
|
11.9
|
Consents.
The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
|
|
(a)
|
for the Borrower to perform its obligations under any Finance Document to which it is a party and any Master Agreement;
|
|
(b)
|
for the validity or enforceability of any Finance Document to which it is a party and any Master Agreement;
|
and the Borrower will comply with the terms of all such consents.
|
11.10
|
Maintenance of Security Interests.
The Borrower will:
|
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document to which it is a party validly creates the obligations and the Security Interests which it purports to create; and
|
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document to which it is a party with any court or authority in all Pertinent Jurisdictions, pay any
stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document to which it is a party, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or
desirable for any Finance Document to which it is a party to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
|
11.11
|
Notification of litigation.
The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Security Party or any Ship as soon as such action is instituted or it
becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.
|
|
11.12
|
Principal place of business.
The Borrower will notify the Agent if it has a place of business in any jurisdiction which would require a Finance Document to which it is a party to be registered, filed or recorded
with any court or authority in that jurisdiction or if the centre of its main interests changes.
|
|
11.13
|
Notification of default.
The Borrower will notify the Agent as soon as the Borrower becomes aware of:
|
|
(a)
|
the occurrence of an Event of Default or Potential Event of Default; or
|
|
(b)
|
any matter which indicates that an Event of Default or Potential Event of Default may have occurred,
|
and will keep the Agent fully up-to-date with all developments.
|
11.14
|
Access to books and records.
The Borrower shall permit one or more representatives of the Agent, at the request of the Agent, to have reasonable access to its books and records and to inspect the same during
normal business hours at its offices upon reasonable prior written notice.
|
|
11.15
|
Money laundering.
Promptly upon the Agent’s request the Borrower will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent in order for each
Creditor Party to carry out and be satisfied with the results of all necessary “know your client” or other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity
of any parties to the Finance Documents (other than Creditor Parties) and their directors and officers.
|
29
|
11.16
|
Notification of flag.
The Borrower shall advise the Agent on which Approved Flag it will register each Newbuilding not later than 30 Business Days before the relevant Drawdown Date.
|
|
11.17
|
Charter assignments.
If the Borrower enters into any time or consecutive voyage charter in respect of any Ship which exceeds, or which by virtue of any operating extensions may exceed 24 months, the Borrower
shall execute in favour of the Security Trustee an assignment of that charter in such form as the Agent may reasonably require.
|
|
11.18
|
Ship 2, 5 or 6 Time Charter.
The Borrower shall provide the Agent with evidence that Ship 2, Ship 5 or Ship 6 is operating under the Time Charter for that Ship and shall execute and deliver to the Agent a Time
Charter Security Deed for that Ship on the earlier of (a) the date on which the said Ship commences operating under the Time Charter and (b) 16 July 2010.
|
|
11.19
|
Master Agreements.
The Borrower shall execute and deliver to the Agent an amendment or addendum to any Mortgage (or, if applicable, a second priority mortgage) or any other Finance Document (in such form as the
Agent shall require) on the Borrower entering into a Master Agreement or a Transaction so as to serve the liabilities under that Master Agreement or Transaction if the Agent advises the Borrower that this is required so as to secure the liabilities
under that Master Agreement or Transaction.
|
|
12
|
CORPORATE UNDERTAKINGS
|
|
12.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of
the Majority Lenders, otherwise permit.
|
|
12.2
|
Maintenance of status.
The Borrower will maintain its separate corporate existence under the laws of, and the centre of its main interests in, Belgium and shall maintain its listing on the First Market of
Euronext Brussels.
|
|
12.3
|
No change of business.
The Borrower will not change its principal activity from its current industrial sector at the date of this Agreement (being maritime transport and shipowning) or operate outside the scope
of its Articles of Association.
|
|
12.4
|
No merger etc.
The Borrower will not, and will procure that none of its subsidiaries will, enter into any form of merger, sub-division, amalgamation or other reorganisation which may, in the opinion of the
Majority Lenders, have an adverse effect on the financial position of the Borrower.
|
|
12.5
|
Financial Covenants.
The Borrower will ensure that the consolidated financial position of the Borrower’s Group shall at all times during the Security Period be such that:
|
|
(a)
|
Current Assets exceed Current Liabilities;
|
|
(b)
|
Free Liquid Assets are not less than the higher of:
|
|
|
(ii)
|
$30,000,000 when excluding amounts available under any credit lines; and
|
|
|
(iii)
|
3 per cent. of Total Indebtedness; and
|
|
(c)
|
the ratio of Stockholders’ Equity to Total Assets is not less than:
|
30
In this Clause 12.5:
“
Current Assets
” means, at any date of determination under this Agreement, the amount of the current assets of the
Borrower’s Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet and including any amounts available under committed credit lines having maturities of more than 12 months;
“
Current Liabilities
” means, at any date of determination under this Agreement, the amount of the current liabilities of the
Borrower’s Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
“
Free
Liquid Assets
” means, at any date of determination under this Agreement, the aggregate amount of cash and cash equivalents of the Borrower’s Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest
Balance Sheet but excluding any of those assets subject to a Security Interest (other than a Security Interest in favour of the Security Trustee pursuant to this Agreement) at any time and, for the avoidance of doubt, “cash and cash
equivalents” include any amounts available under committed credit lines having maturities of more than 6 months;
“
Latest
Balance Sheet
” means, at any date, the consolidated balance sheet of the Borrower’s Group most recently delivered to the Agent pursuant to Clause 11.5 and/or most recently made publicly available;
“
Stockholders’ Equity
” means, at any date of determination under this Agreement, the amount of the capital and reserves
of the Borrower’s Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
“
Total Assets
” means, at any date of determination under this Agreement, the amount of the total assets of the Borrower’s
Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet; and
“
Total
Indebtedness
” means, at any date of determination under this Agreement, the amount of long-term loans (including finance leases, banks loans and other long-term loans) and short-term loans of the Borrower’s Group determined on a
consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet.
|
12.6
|
Change of accounting period.
The Borrower shall not change its fiscal year end date.
|
|
12.7
|
Restrictions on dividends.
The Borrower shall not pay any dividend or make any other form of distribution or effect any form of redemption or return of share capital
Provided that
the Borrower may pay a
dividend or make a distribution subject to the following conditions:
|
|
(a)
|
the dividend or distribution shall not exceed 50 per cent of the net income of the Borrower earned in that book year (as defined in the Borrower’s Articles of Association) or part thereof to which that
dividend relates to unless the Majority Lenders agree to a dividend or distribution in excess of the said 50 per cent (such agreement not to be unreasonably withheld or delayed); and
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the payment of such dividend or distribution; and
|
|
(c)
|
the payment of such dividend or distribution would not cause any breach of any of the financial covenants set out in Clause 12.5.
|
31
|
13.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the provisions of this Clause 13 at all times during the Security Period (in the case of each Ship after the Drawdown Date applicable
to it) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
|
13.2
|
Maintenance of obligatory insurances.
The Borrower shall keep each Ship insured at the expense of the Borrower against:
|
|
(a)
|
fire and usual marine risks and war risks; and
|
|
(b)
|
protection and indemnity risks (including pollution risks), on “full entry terms”.
|
|
13.3
|
Terms of obligatory insurances.
The Borrower shall effect such insurances in respect of each Ship:
|
|
(b)
|
in the case of fire and usual marine risks and war risks (including coverage for war protection and indemnity with a separate limit for the same amounts insured under war hull), in an amount on an agreed value basis at
least the greater of (i) when aggregated with such insurances on the other Ships which are subject to a Mortgage, 125 per cent. of the aggregate of the Term Loan and the Newbuilding Loan and (ii) the Fair Market Value of that Ship;
|
|
(c)
|
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry with a protection and indemnity
association belonging to the International Group of Protection and Indemnity Associations;
|
|
(d)
|
in relation to protection and indemnity risks in respect of the Ship’s full tonnage;
|
|
(e)
|
on approved terms; and
|
|
(f)
|
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
|
|
13.4
|
Further protections for the Creditor Parties.
In addition to the terms set out in Clause 13.3, the Borrower shall procure that the obligatory insurances shall:
|
|
(a)
|
in relation to the obligatory insurances for fire and usual marine risks and war risks, whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its
rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee or Lenders thereby being liable to pay (but having the right to pay) premiums, calls
or other assessments in respect of such insurance;
|
|
(b)
|
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
|
|
(c)
|
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
|
32
|
(d)
|
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
|
|
(e)
|
provide that the Security Trustee may make proof of loss if the Borrower fails to do so.
|
|
13.5
|
Renewals.
The Borrower shall ensure that:
|
|
(a)
|
before the expiry of any obligatory insurance, that obligatory insurance is renewed; and
|
|
(b)
|
promptly after each such renewal, there is provided to the Security Trustee details of the terms and conditions on which such obligatory insurances have been renewed.
|
If there is a change in the insurers and/or markets through whom the obligatory insurances are placed the Borrower shall procure that the
Security Trustee is notified within a reasonable time of the names of the insurers and/or markets employed for the purposes of the renewal of the obligatory insurance and of the amounts in which they are renewed.
|
13.6
|
Letters of undertaking.
In relation to all obligatory insurances effected from time to time under Clause 13.2, the Borrower shall ensure that all brokers and any protection and indemnity or war risks associations
in which any Ship is entered, in each case being approved by the Security Trustee, provide the Security Trustee with letters of undertaking:
|
|
(a)
|
in the case of a broker, in a form standard in the insurance market in which such broker operates or any professional association of which that approved broker is a member;
|
|
(b)
|
in the case of a protection and indemnity or war risks association, in its standard form.
|
If
any of the obligatory insurances referred to in Clause 13.2(a) and/or (b) form part of a fleet cover, the Borrower will procure that any letter of undertaking referred to in paragraph (a) of this Clause 13.6 is amended to provide that the
relevant brokers shall undertake to the Security Trustee that they shall neither set-off against any claims in respect of the relevant Ship any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances,
nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances.
|
13.7
|
Copies of certificates of entry.
The Borrower shall ensure that any protection and indemnity and/or war risks associations in which each Ship is entered provides the Security Trustee with a certified copy of the
certificate of entry for that Ship.
|
|
13.8
|
Deposit of original policies.
The Borrower shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
|
13.9
|
Payment of premiums.
The Borrower shall ensure that (taking account of any applicable grace periods) all premiums, calls or contributions or other sums of money from time to time due in respect of any obligatory
insurances are paid in full and produce all relevant receipts when so required by the Security Trustee.
|
|
13.10
|
Guarantees.
The Borrower shall arrange for the execution and delivery of all guarantees and indemnities as may from time to time be required by any Ship’s P&I Club or war risks association.
|
33
|
13.11
|
Compliance with terms of insurances.
The Borrower shall not do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance in relation to any
Ship invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
|
|
(a)
|
the Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and ensure that the obligatory insurances are not made subject to any
exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
|
(b)
|
the Borrower shall not make any changes relating to the classification or classification society, which must be a member of the IACS society, or manager or operator of any Ship approved by the underwriters of the
obligatory insurances;
|
|
(c)
|
the Borrower shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which any Ship it is entered to
maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
|
|
(d)
|
the Borrower shall not employ any Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and
complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
|
13.12
|
Alteration to terms of insurances.
The Borrower will procure that:
|
|
(a)
|
no adverse alteration is made to any obligatory insurance (which alteration is, in the reasonable opinion of the Security Trustee, likely to materially adversely affect the Lenders) without the prior written consent of
the Security Trustee; and
|
|
(b)
|
all the steps under its control are taken to seek to avoid the occurrence of any act or omission which would enable cancellation of any obligatory insurance or render any obligatory insurance invalid, void or
unenforceable or render any sum paid out under any obligatory insurance repayable in whole or in part.
|
|
13.13
|
Settlement of claims.
The Borrower shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all
documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
|
13.14
|
Provision of information.
The Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person)
reasonably requests for the purpose of:
|
|
(a)
|
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
|
(b)
|
effecting or renewing any such insurances as are referred to in Clause 13.15 or dealing with or considering any matters relating to any such insurances;
|
and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses reasonably incurred by
or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
34
|
13.15
|
Mortgagee’s interest and additional perils insurances.
The Agent for the benefit of the Security Trustee, or the Security Trustee itself shall effect, maintain and renew a mortgagee’s interest
additional perils insurance and a mortgagee’s interest marine insurance in such amounts, on such terms reasonably available in the market, through such insurers and generally in such manner as the Security Trustee may from time to time consider
appropriate and the Borrower shall upon demand fully indemnify the Agent or the Security Trustee (as the case may be) in respect of all reasonable premiums and other reasonable expenses which are incurred in connection with or with a view to
effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.
|
Notwithstanding the above, if at any time the Agent or Security Trustee proposes to effect any insurances of the nature referred to in this
Clause, it shall first notify the Borrower of the insurance which it proposes to effect, the terms on which it requires it to be effected and the date from which it requires it to be so effected. If, before the date on which the Agent or Security
Trustee (as the case may be) requires that insurance to be effected, the Borrower can demonstrate to the Agent or Security Trustee (as the case may be) that a firm of insurance brokers with a reputation acceptable to the Agent or the Security
Trustee (as the case may be) is able to arrange that insurance upon the same terms, before that date, for a price lower than that for which any firm of insurance brokers nominated by the Agent or Security Trustee is prepared to arrange that
insurance and with underwriters acceptable to the Agent or Security Trustee (as the case may be), and if that firm of insurance brokers will enter into such agreements with the Agent or Security Trustee (as the case may be) as it may require taking
into account the identity of that firm of insurance brokers, the Agent or Security Trustee (as the case may be) shall not unreasonably refuse to effect that insurance through that firm of insurance brokers so nominated by the Borrower.
|
14.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the provisions of this Clause 14 at all times during the Security Period (in the case of each Ship after the Drawdown Date applicable
to it) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit (such permission not to be unreasonably withheld in the case of Clause 14.2 and 14.12).
|
|
14.2
|
Ship’s name and registration.
The Borrower shall keep each Ship registered in its name on the flag indicated in Schedule 6 (where applicable) or otherwise on an Approved Flag; shall not do or allow to be
done anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or country of registry of any Ship. If a Ship transfers from an Approved Flag to another Approved Flag, the Borrower shall provide
the Lenders with replacement security at the time of such transfer so that the Lenders have the same security on that Ship.
|
|
14.3
|
Repair and classification.
The Borrower shall keep each Ship in a good and safe condition and state of repair:
|
|
(a)
|
consistent with first-class ship ownership and management practice;
|
|
(b)
|
so as to maintain that Ship’s class free of overdue recommendations and conditions affecting that Ship’s class with a classification society which has been approved by the Agent; and
|
|
(c)
|
so as to comply with all laws and regulations applicable to vessels registered in Belgium or any other applicable flag state or to vessels trading to any jurisdiction to which that Ship may trade from time to time,
including but not limited to the ISM Code and the ISPS Code.
|
35
|
14.4
|
Modification.
The Borrower shall not make any modification or repairs to, or replacement of, any Ship or equipment installed on it which would or might materially and adversely alter the structure, type or
performance characteristics of any Ship or reduce its value.
|
|
14.5
|
Removal of parts.
The Borrower shall not remove any material part of any Ship, or any item of equipment installed on any Ship, except in the normal course of maintenance and repair, unless the part or item so
removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security interest or any right in favour of any person other than the Security Trustee and
becomes on installation on the Ship the property of the Borrower and subject to the security constituted by the relevant Mortgage
Provided tha
t
the Borrower may install equipment owned by a third party if the equipment can be removed
without any risk of damage to the Ship concerned.
|
|
14.6
|
Surveys.
The Borrower shall submit each Ship regularly to such periodical or other surveys which may be required for that Ship’s classification purposes and shall comply with all conditions and
recommendations affecting that Ship’s class of the relevant classification society in accordance with their terms unless waived.
|
|
14.7
|
Inspection.
The Borrower shall permit the Agent (by surveyors or other persons appointed by it for that purpose, at the Borrower’s expense once per year) to board any Ship at all reasonable times to inspect
its condition (without interfering with that Ship’s operation) or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
|
|
14.8
|
Prevention of and release from arrest.
The Borrower shall promptly discharge:
|
|
(a)
|
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against any Ship, its Earnings or the Insurances in relation to that Ship;
|
|
(b)
|
all taxes, dues and other amounts charged in respect of any Ship, its Earnings or the Insurances in relation to that Ship; and
|
|
(c)
|
all other outgoings whatsoever in respect of any Ship, its Earnings or the Insurances in relation to that Ship;
|
and, forthwith upon receiving notice of the arrest of any Ship, or of its detention in exercise or purported exercise of any lien or claim, the
Borrower shall procure its release by providing bail or otherwise as the circumstances may require.
|
14.9
|
Compliance with laws etc.
The Borrower shall:
|
|
(a)
|
comply, or procure compliance, with the ISM Code, the ISPS Code (including an SMC and ISSC for each Ship), all Environmental Laws and all other laws or regulations relating to each Ship, its ownership, operation and
management or to the business of the Borrower; and
|
|
(b)
|
not employ any Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code or the ISPS Code.
|
|
14.10
|
Provision of information.
The Borrower shall promptly provide the Agent with any information which it requests regarding:
|
|
(a)
|
any Ship, its employment, position and engagements;
|
|
(b)
|
the Earnings and payments and amounts due to any Ship’s master and crew;
|
36
|
(c)
|
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of any Ship and any payments made in respect of any Ship;
|
|
(d)
|
any towages and salvages;
|
|
(e)
|
the Borrower’s, the Approved Managers’ or any Ship’s compliance with the ISM Code and/or the ISPS Code,
|
and, upon the Agent’s request, provide copies of any current charter relating to any Ship and of any current charter guarantee and copies
of any Ship’s Safety Management Certificate.
|
14.11
|
Notification of certain events.
The Borrower shall immediately notify the Agent by fax, confirmed forthwith by letter, of:
|
|
(a)
|
any casualty which is or is likely to be or to become a Major Casualty;
|
|
(b)
|
any occurrence as a result of which any Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
|
(c)
|
any overdue requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;
|
|
(d)
|
any arrest or detention of a Ship, any exercise of any lien on any Ship or its Earnings or any requisition of a Ship for hire;
|
|
(e)
|
any intended dry docking of a Ship other than a routine dry docking;
|
|
(f)
|
any Environmental Claim made against the Borrower or in connection with a Ship, or any Environmental Incident;
|
|
(g)
|
any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, an Approved Manager or otherwise in connection with a Ship;
|
|
(h)
|
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with or
|
and the Borrower shall keep the Agent advised in writing on a regular basis and in such detail as the Agent shall require of the
Borrower’s, the Approved Manager’s or any other person’s response to any of those events or matters.
|
14.12
|
Restrictions on chartering, appointment of managers etc.
The Borrower shall not:
|
|
(a)
|
let any Ship on demise charter for any period;
|
|
(b)
|
enter into any charter in relation to any Ship under which more than 2 months’ hire (or the equivalent) is payable in advance;
|
|
(c)
|
charter any Ship otherwise than on bona fide arm’s length terms at the time when that Ship is fixed;
|
|
(d)
|
appoint a manager of any Ship other than the Approved Managers or agree to any alteration to the terms of an Approved Manager’s appointment; or
|
37
|
(e)
|
put any Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless either:
|
|
|
(i)
|
that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason; or
|
|
|
(ii)
|
the cost of such work is covered by insurances; or
|
|
|
(iii)
|
the Borrower establishes to the reasonable satisfaction of the Agent that it has sufficient funds to pay for the cost of such work.
|
|
14.13
|
Notice of Mortgage.
The Borrower shall keep each Mortgage registered against the relevant Ship as a valid first priority mortgage, carry on board each Ship a certified copy of the relevant Mortgage and place and
maintain in a conspicuous place in the navigation room and the Master’s cabin of each Ship a framed printed notice stating that that Ship is mortgaged by the Borrower to the Security Trustee.
|
|
14.14
|
Sharing of Earnings.
Except for the Time Charters, the Borrower will not enter into any agreement or arrangement for the sharing of any Earnings other than pursuant to a Pool Agreement which has been approved by
the Agent (with the authorisation of the Majority Lenders) such approval not to be unreasonably withheld or delayed.
|
|
15.1
|
Minimum required security cover.
Clause 15.2 applies if the Agent notifies the Borrower that:
|
|
(a)
|
the aggregate of the Fair Market Values (determined as provided in Clause 15.3) of each Ship subject to a Mortgage; plus
|
|
(b)
|
the net realisable value of any additional security previously provided under this Clause 15;
|
is below 125 per cent. of the aggregate of the Term Loan and the Newbuilding Loan.
|
15.2
|
Provision of additional security; prepayment.
If the Agent serves a notice on the Borrower under Clause 15.1, the Borrower shall, within 1 month after the date on which the Agent’s notice is served, either:
|
|
(a)
|
provide, or ensure that a third party provides, additional security which, in the opinion of the Lenders, has a net realisable value at least equal to the shortfall and is documented in such terms as the Agent may, with
the authorisation of the Majority Lenders, approve or require; or
|
|
(b)
|
prepay, on a pro rata basis, such part (at least) of the Term Loan and the Newbuilding Loan which will eliminate the shortfall.
|
|
15.3
|
Valuation of Ships.
The Fair Market Value of a Ship at any date is that shown by the average of 2 valuations each prepared:
|
|
(a)
|
as at a date not more than 14 Business Days previously;
|
|
(b)
|
by an Approved Shipbroker;
|
|
(c)
|
with or without physical inspection of that Ship (as the Agent may require);
|
|
(d)
|
on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment;
|
|
(e)
|
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
|
38
The Borrower shall provide (at its own cost) the valuations of each Ship which are required to
determine its Fair Market Value pursuant to this Clause 15.3 at least once in every 6 month period throughout the Security Period and, after the occurrence of an Event of Default which is continuing, whenever requested by the Agent.
|
15.4
|
Value of additional vessel security.
The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by a
valuation complying with the requirements of Clause 15.3.
|
|
15.5
|
Valuations binding.
Any valuation under Clause 15.2, 15.3 or 15.4 shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Majority Lenders make of any additional security
which does not consist of or include a Security Interest.
|
|
15.6
|
Provision of information.
The Borrower shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or the shipbroker or expert may
reasonably request for the purposes of its valuation.
|
|
15.7
|
Payment of valuation expenses.
Without prejudice to the generality of the Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the Agent the amount of the fees and
expenses of any shipbroker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
|
|
15.8
|
Application of prepayment.
Clauses 8.7, 8.10, 8.11 and 8.12 shall apply in relation to any prepayment pursuant to Clause 15.2(b).
|
|
16
|
PAYMENTS AND CALCULATIONS
|
|
16.1
|
Currency and method of payments.
All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
|
(a)
|
by not later than 11.00 a.m. (New York City time) on the due date;
|
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time
for the settlement of international transactions of the type contemplated by this Agreement);
|
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to such account with such bank as the Agent may from time to time notify to the Borrower and the other Creditor
Parties; and
|
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.
|
|
16.2
|
Payment on non-Business Day.
If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
|
39
and interest shall be payable during any extension under paragraph (a) at the rate payable
on the original due date.
|
16.3
|
Basis for calculation of periodic payments.
All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be
calculated on the basis of the actual number of days elapsed and a 360 day year.
|
|
16.4
|
Distribution of payments to Creditor Parties.
Subject to Clauses 16.5, 16.6 and 16.7:
|
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security
Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
|
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.
|
|
16.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that
amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
|
|
16.6
|
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender
any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
|
|
16.7
|
Refund to Agent of monies not received.
If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the
Lender concerned shall, on demand:
|
|
(a)
|
refund the sum in full to the Agent; and
|
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before
receiving it.
|
|
16.8
|
Agent may assume receipt.
Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the
sum which it made available.
|
|
16.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those
amounts made by the Borrower and any Security Party.
|
|
16.10
|
Agent’s memorandum account.
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the
Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
|
|
16.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie
evidence that that amount is owing to that Creditor Party.
|
40
|
17
|
APPLICATION OF RECEIPTS
|
|
17.1
|
Normal order of application.
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
|
(a)
|
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
|
|
(b)
|
SECONDLY: in or towards satisfaction of any amounts then due and payable under the Finance Documents (or any of them) in such order of application and/or such proportions as the Agent, acting with the authorisation of
the Majority Lenders, may specify by notice to the Borrower, the Security Parties and the other Creditor Parties, provided that all Lenders approval (and approval of the Borrower) shall be required for any change to the priority as between the
Lenders and the Swap Banks;
|
|
(c)
|
THIRDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in
its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(b);
|
|
(d)
|
FOURTHLY: in or towards satisfaction pro rata of any amount then due and payable under any Master Agreement which relates to a Designated Transaction;
|
|
(e)
|
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Master Agreement which relates to a Designated Transactions but which the Agent, by notice to the Borrower, the Security Parties
and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(d); and
|
|
(f)
|
SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
|
|
17.2
|
Variation of order of application.
The Agent may, with the authorisation of the Majority Lenders, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of
application from that set out in Clause 17.1 (other than sub-clause (a)) either as regards a specified sum or sums or as regards sums in a specified category or categories and provided that all Lenders approval (and approval of the Borrower) shall
be required for any change to the priority as between the Lenders and the Swap Banks.
|
|
17.3
|
Notice of variation of order of application.
The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the
future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
|
|
17.4
|
Appropriation rights overridden.
This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any
Security Party.
|
41
|
18
|
APPLICATION OF EARNINGS
|
|
18.1
|
Earnings.
The Borrower undertakes with each Creditor Party to ensure that throughout the Security Period (and subject only to the provisions of the General Security Deeds) all the Earnings of each Ship are paid
to the Earnings Account
Provided that
the Earnings shall be available to the Borrower unless an Event of Default or Potential Event of Default has occurred and is continuing.
|
|
18.2
|
Location of account.
The Borrower shall promptly:
|
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Earnings Account; and
|
|
(b)
|
execute any documents which the Agent reasonably specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the
Earnings Account.
|
|
19.1
|
Events of Default.
An Event of Default occurs if:
|
|
(a)
|
the Borrower or any Security Party fails to pay when due or, if payable on demand, on such demand, any sum payable under a Finance Document or under any document relating to a Finance Document, provided that such
failure shall not be an Event of Default if the failure to pay is due to a technical or administrative error and the payment is received within 3 Business Days of the due date or within 3 Business Days of the demand, as applicable; or
|
|
(b)
|
any breach occurs of Clause 9.2, 11.2, 11.3, 11.18, 12.2, 12.3, 12.4, 12.5 or 15.1; or
|
|
(c)
|
(subject to any applicable grace period in the relevant Finance Documents) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs
(a) or (b)) if, in the opinion of the Majority Lenders, such default is capable of remedy, and such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
|
|
(d)
|
any representation, warranty or statement made by, or by an officer of, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is
untrue or misleading in any material respect when it is made; or
|
|
(e)
|
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person in respect of $10,000,000 or more or, as regards Financial Indebtedness arising under different documents or transactions, an
aggregate amount of $10,000,000 or more (or the equivalent in another currency):
|
|
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or
|
|
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or
|
|
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event;
or
|
42
|
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of
a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default;
or
|
|
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
|
(f)
|
any of the following occurs in relation to a Relevant Person:
|
|
|
(i)
|
a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
|
|
(ii)
|
a Relevant Person fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction or any assets of a Relevant Person are subject to any
form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $10,000,000 or more or the equivalent in another currency; or
|
|
|
(iii)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person or any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
|
(iv)
|
a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or an administration notice is given or filed in relation to a
Relevant Person, or a winding up or administration order is made in relation to a Relevant Person, or the members or directors of a Relevant Person pass a resolution to the effect that it should be wound up, placed in administration or cease to
carry on business, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the
Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
|
|
|
(v)
|
a petition is presented in any Pertinent Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Relevant Person unless the petition is being contested in good faith and
on substantial grounds and is dismissed or withdrawn within 30 days of the presentation of the petition; or
|
|
|
(vi)
|
a Relevant Person petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or
a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or
|
|
|
(vii)
|
any meeting of the members or directors of a Relevant Person is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or
(vi); or
|
|
|
(viii)
|
in a Pertinent Jurisdiction other than England, any event occurs or any procedure is commenced which, in the opinion of the Majority Lenders, is similar to any of the foregoing; or
|
43
|
(g)
|
the Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or
|
|
(h)
|
it becomes unlawful in any Pertinent Jurisdiction or impossible:
|
|
|
(i)
|
for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
|
|
|
(ii)
|
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
|
(i)
|
any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or
becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
|
|
(j)
|
any Event of Default (as defined in Section 14 of a Master Agreement) occurs and is continuing;
|
|
(k)
|
any event or circumstance occurs which the Majority Lenders determine has, or could reasonably be expected to have, a material adverse effect:
|
|
|
(i)
|
on the ability of the Borrower to perform its obligations under the Finance Documents; or
|
|
|
(ii)
|
on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or its subsidiaries.
|
|
19.2
|
Actions following an Event of Default.
On, or at any time after, the occurrence of an Event of Default:
|
|
(a)
|
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
|
|
(i)
|
serve on the Borrower a notice stating that the Term Commitments, the Newbuilding Commitments and all other obligations of each Lender to the Borrower under this Agreement are terminated; and/or
|
|
|
(ii)
|
serve on the Borrower a notice stating that the Term Loan, the Newbuilding Loan all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on
demand; and/or
|
|
|
(iii)
|
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders and/or the Swap Counterparties are entitled to take under any Finance
Document or any applicable law; and/or
|
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice
served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.
|
|
19.3
|
Termination of Commitments.
On the service of a notice under Clause 19.2(a)(i), the Term Commitments, the Newbuilding Commitments and all other obligations of each Lender to the Borrower under this Agreement
shall terminate.
|
44
|
19.4
|
Acceleration of Facility.
On the service of a notice under Clause 19.2(a)(ii), the Term Loan, the Newbuilding Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security
Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
|
|
19.5
|
Multiple notices; action without notice.
The Agent may serve notices under Clauses 19.2(a)(i) and (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to
in Clause 19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
|
|
19.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrower
under Clause 19.2; but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any
Security Party with any form of claim or defence.
|
|
19.7
|
Creditor Party rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders Swap Counterparties under a Finance Document, a Master Agreement
or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.
|
|
19.8
|
Exclusion of Creditor Party liability.
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:
|
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the
value of such an asset;
|
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses
shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.
In no event shall any Creditor Party be liable on any theory of liability for any special, indirect, consequential or punitive damages and the
Borrower hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favour.
|
19.9
|
Relevant Persons.
In this Clause 19 a “
Relevant Person
” means the Borrower, a Security Party or any other member of the Borrower’s Group, but excluding any company which is dormant and the
value of whose gross assets is $50,000 or less.
|
|
19.10
|
Interpretation.
In Clause 19.1(e) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination
event in a finance lease; and in Clause 19.1(f) “
petition
” includes an application.
|
|
19.11
|
Position of Swap Counterparties.
Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed
to be taken under or pursuant to the foregoing provisions of this Clause 19, to have any regard to the requirements of a Swap Counterparty except to the extent that such Swap Counterparty is also a Lender. In
|
45
|
|
addition, the Swap Banks agree that if an Event of Default or a Potential Event of Default occurs and is continuing any payments due to the Swap Banks on an unwinding of the Master Agreements
shall not be paid until the Newbuilding Loan and the Term Loan have first been repaid.
|
|
20.1
|
Fees.
The Borrower shall pay to the Agent:
|
|
(a)
|
on the date of this Agreement or as otherwise agreed, the fees in amounts previously agreed in writing between the Agent and the Borrower; and
|
|
(b)
|
quarterly in arrears on each of 31 March, 30 June, 30 September and 31 December and on the end of the Availability Period for the Term Loan Facility or the Newbuilding Facility (as the case may be)
during the period from the date of this Agreement to the end of such Availability Period, for the account of the Lenders, a commitment fee at the rate of 40 per cent of the Margin per annum on the aggregate of (i) the Total Available Term
Commitments and (ii) the Total Available Newbuilding Commitments, for distribution among the Lenders pro rata to their Commitments.
|
|
20.2
|
Costs of negotiation, preparation etc.
The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation,
execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
|
|
20.3
|
Costs of variations, amendments, enforcement etc.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor
Party in connection with:
|
|
(a)
|
any amendment or supplement to a Finance Document or any proposal for such an amendment to be made;
|
|
(b)
|
any consent or waiver by the Lenders, the Swap Banks, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
|
|
(c)
|
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; or
|
|
(d)
|
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
There shall be recoverable under paragraph (d) the Ml amount of all legal expenses, whether or not such as would be allowed under rules of
court or any taxation or other procedure carried out under such rules.
|
20.4
|
Documentary taxes.
The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims,
expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.
|
|
20.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
46
|
21.1
|
Indemnities regarding borrowing and repayment of Term Loan and Newbuilding Loan.
The Borrower shall fully indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in
respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in
connection with:
|
|
(a)
|
a Term Advance or a Newbuilding Advance not being borrowed on the date specified in the relevant Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
|
|
(b)
|
the receipt or recovery of all or any part of the Term Loan or the Newbuilding Loan or an overdue sum otherwise than on the last day of the applicable Term Interest Period, the applicable Newbuilding Interest Period or
other relevant period;
|
|
(c)
|
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the
Borrower on the amount concerned under Clause 7);
|
|
(d)
|
the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Term Loan and the Newbuilding Loan under Clause 19;
|
and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or
payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
|
21.2
|
Breakage costs.
Without limiting its generality, Clause 21.1 covers any claim, liability, expense or loss incurred by a Lender in liquidating or employing deposits from third parties acquired or arranged to fund
or maintain all or any part of its Term Contribution and/or its Newbuilding Contribution and/or any overdue amount (or an aggregate amount which includes its Term Contribution, its Newbuilding Contribution or any overdue amount).
|
|
21.3
|
Miscellaneous indemnities.
The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought
against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance
Document; or
|
|
(b)
|
any other Pertinent Matter;
|
other than claims, expenses, liabilities and losses which are
shown to have been caused by the gross negligence, dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.
Without prejudice to its generality, this Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under
or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.
|
21.4
|
Currency indemnity.
If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or
judgment relating to a
|
47
|
|
Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into another currency (the
“
Payment Currency
”) for the purpose of:
|
|
(a)
|
making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
|
(c)
|
enforcing any such order or judgment;
|
the Borrower shall indemnify the Creditor Party
concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
In this Clause 21.4, the “
available rate of exchange
” means the rate at which the Creditor Party concerned is able at the
opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Clause 21.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and
which shall not be merged in any judgment or order relating to those other liabilities.
|
21.5
|
Application to Master Agreements
.
For the avoidance of doubt, Clause 21.4 does not apply in respect of sums due from the Borrower to a Swap Counterparty under or in connection with a Master Agreement as to
which sums the provisions of section 8 (Contractual Currency) of that Master Agreement shall apply.
|
|
21.6
|
Certification of amounts
.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
|
21.7
|
Sums deemed due to a Lender.
For the purposes of this Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
|
22
|
NO SET-OFF OR TAX DEDUCTION
|
|
22.1
|
No deductions.
All amounts due from the Borrower under a Finance Document shall be paid:
|
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
|
(b)
|
free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.
|
|
22.2
|
Grossing-up for taxes.
Subject as provided in Clause 26.17, if the Borrower is required by law to make a tax deduction from any payment:
|
|
(a)
|
the Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
|
(b)
|
the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
|
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would otherwise have received.
|
48
|
22.3
|
Evidence of payment of taxes.
Promptly, and in any event within 1 month after making any tax deduction, the Borrower shall deliver to the Agent for the Creditor Party entitled to the payment an original receipt
(or certified copy thereof) satisfactory to that Creditor Party evidencing that the tax had been paid to the appropriate taxation authority and the Agent shall promptly forward such receipt to the Creditor Party entitled to the payment.
|
|
22.4
|
Tax credit.
A Creditor Party which has obtained (and has derived full use and benefit, on an affiliated group basis from) a repayment or credit in respect of tax on account of which the Borrower has made an
increased payment under Clause 22.2 shall pay to the Borrower a sum equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from the Borrower in respect of which the Borrower made the increased
payment
Provided that
:
|
|
(a)
|
the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
|
|
(b)
|
nothing in this Clause 22.4 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to
make any such claim within any particular time;
|
|
(c)
|
nothing in this Clause 22.4 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrower had not been required to make a tax deduction from a
payment;
|
|
(d)
|
any allocation or determination made by a Creditor Party under or in connection with this Clause 22.4 shall be conclusive and binding on the Borrower and the other Creditor Parties;
|
|
(e)
|
nothing in this Clause 22.4 shall oblige any Creditor Party to disclose to any information relating to its affairs (tax or otherwise) or those of its ultimate payment company (or any subsidiary thereof) or any
computations in respect of tax; and
|
|
(f)
|
the Creditor Party’s tax affairs for its tax year in respect of which such credit or repayment was obtained have been finally settled.
|
|
22.5
|
Exclusion of tax on overall net income.
In this Clause 22 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s
overall net income.
|
|
(a)
|
All amounts expressed to be payable under a Finance Document by any party to a Creditor Party shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply made by any Creditor Part to any part in
connection with a Finance Document, that party shall pay to the Creditor Party (in additional to and at the same time as paying the consideration) an amount equal to the amount of the VAT.
|
|
(b)
|
Where a Finance Document requires any party to reimburse a Creditor Party for any costs or expenses, that party shall also at the same time pay and indemnify the Creditor Party against all VAT incurred by the Creditor
Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that it is not entitled to credit or repayment of the VAT.
|
|
22.7
|
Application to Master Agreements.
For the avoidance of doubt, Clause 22 does not apply in respect of sums due from the Borrower to a Swap Counterparty under or in connection with a Master Agreement as to which
sums the provisions of section 2(d) (Deduction or Withholding for Tax) of that Master Agreement shall apply.
|
49
|
23.1
|
Illegality.
This Clause 23 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
|
(b)
|
contrary to, or inconsistent with, any regulation,
|
for the Notifying Lender to maintain or
give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
|
23.2
|
Notification of illegality.
The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the
Notifying Lender.
|
|
23.3
|
Prepayment; termination of Term Commitment and Newbuilding Commitment.
On the Agent notifying the Borrower under Clause 23.2, the Notifying Lender’s Term Commitment and Newbuilding Commitment shall
terminate; and thereupon or, if later, on the date specified in the Notifying Lender’s notice under Clause 23.1 as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender’s Term
Contribution and Newbuilding Contribution in accordance with Clause 8.
|
|
23.4
|
Mitigation.
If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, the Notifying Lender shall use
reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or might:
|
|
(a)
|
have an adverse effect on its business, operations or financial condition; or
|
|
(b)
|
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c)
|
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
|
24.1
|
Increased costs.
This Clause 24 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to
the application to payments under this Agreement of a tax on the Lender’s overall net income); or
|
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement, the Notifying Lender (or a parent company of it) has incurred or will incur an “
increased cost
”.
|
50
|
24.2
|
Meaning of “increased cost”.
In this Clause 24, “
increased cost
” means, in relation to a Notifying Lender:
|
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its Term
Commitment, Newbuilding Commitment, Term Contribution or Newbuilding Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Term Contribution, Newbuilding Contribution or other unpaid sums;
|
|
(b)
|
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
|
|
(c)
|
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Term Contribution or Newbuilding Contribution
or (as the case may require) the proportion of that cost attributable to its Term Contribution or Newbuilding Contribution; or
|
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an
item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or an item arising directly out of the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a
Revised Framework” published by the Basel Committee on Banking Supervision in June 2004, in the form existing on the date of this Agreement (“
Basel II
”) or any other law or regulation which implements Basel II (whether such
implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates).
For the purposes of
this Clause 24.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
|
24.3
|
Notification to Borrower of claim for increased costs.
The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.
|
|
24.4
|
Payment of increased costs.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the
Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
|
|
24.5
|
Notice of prepayment.
If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrower may give the Agent not less than 15 Business Days’
notice of its intention to prepay the Notifying Lender’s Term Contribution and Newbuilding Contribution or to procure a Transferee lender.
|
51
|
24.6
|
Prepayment; termination of Term Commitment and Newbuilding Commitment.
A notice of prepayment under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower’s
notice of intended prepayment; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Term Commitment and the Newbuilding Commitment of the Notifying Lender shall be cancelled; and
|
|
(b)
|
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender’s Term Contribution and Newbuilding Contribution, together with accrued
interest thereon at the applicable rate (including the Mandatory Cost (if any)) plus the applicable Margin.
|
|
24.7
|
Application of prepayment.
Clauses 8.7, 8.10, 8.11 and 8.12 shall apply in relation to the prepayment.
|
|
25.1
|
Application of credit balances.
Each Creditor Party may, at any time after the occurrence of an Event of Default which is continuing, without prior notice:
|
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum
then due from the Borrower to that Creditor Party under any of the Finance Documents; and
|
|
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of the Borrower;
|
|
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars;
|
|
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
|
25.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
|
|
25.3
|
Sums deemed due to a Lender.
For the purposes of this Clause 25, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum
due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
|
|
25.4
|
No Security Interest.
This Clause 25 gives the Creditor Parties a contractual right of set-off only and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.
|
|
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
26.1
|
Transfer by Borrower.
The Borrower may not, without the consent of the Agent given on the instructions of all the Lenders, transfer any of its rights, liabilities or obligations under any Finance Document.
|
|
26.2
|
Transfer by a Lender.
Subject to Clause 26.4, a Lender (the “
Transferor Lender
”) may, at its own cost, with the prior written consent of the Borrower (not to be unreasonably withheld or delayed)
or without the consent of the Borrower if an Event of Default or a Potential Event of Default has occurred and is continuing, cause:
|
|
(a)
|
its rights in respect of all or pro rata parts of its Term Contribution and its Newbuilding Contribution; or
|
52
|
(b)
|
its obligations in respect of all or pro rata parts of its Term Commitment and its Newbuilding Commitment; or
|
|
(c)
|
a combination of (a) and (b);
|
to be (in the case of its rights) transferred to, or (in
the case of its obligations) assumed by, another bank or financial institution (a “
Transferee Lender
”) by delivering to the Agent a completed certificate in the form set out in Schedule 5 with any modifications approved or required
by the Agent (a “
Transfer Certificate
”) executed by the Transferor Lender and the Transferee Lender Provided that a Lender may make such transfer to any wholly owned subsidiary of it, to its parent company or to another subsidiary
of its parent company without the consent of the Borrower and the fee referred to in Clause 26.11 shall not apply in relation to any such transfer.
Without prejudice to the foregoing, any such transfer by a Lender shall be subject to the following further conditions:
|
|
(i)
|
the amount of the Contribution and/or Commitment of the Lender which is to be transferred shall not be less than $20,000,000 unless the Agent agrees otherwise;
|
|
|
(ii)
|
the Agent shall approve the transfer (such approval not to be unreasonably withheld); and
|
|
|
(iii)
|
payment of the fee in accordance with Clause 26.11.
|
However any rights and obligations of the
Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Deed.
|
26.3
|
Transfer Certificate, delivery and notification.
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate
may be defective):
|
|
(a)
|
sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee, each of the other Lenders and each of the Swap Banks;
|
|
(b)
|
on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
|
|
(c)
|
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b).
|
|
26.4
|
Effective Date of Transfer Certificate.
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date
Provided that
it is signed by the Agent
under Clause 26.3 on or before that date.
|
|
26.5
|
No transfer without Transfer Certificate.
No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party,
the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
|
|
26.6
|
Lender re-organisation; waiver of Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other reorganisation as a
result of which all its rights or obligations vest in another person (the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and
delivery of a Transfer Certificate; and, upon service of the Agent’s notice,
|
53
|
|
the successor shall become a Lender with the same Term Commitment, Newbuilding Commitment, Term Contribution or Newbuilding Contribution as were held by the predecessor Lender.
|
|
26.7
|
Effect of Transfer Certificate.
A Transfer Certificate takes effect in accordance with English law as follows:
|
|
(a)
|
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee
Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;
|
|
(b)
|
the Transferor Lender’s Term Commitment and Newbuilding Commitment are each discharged to the extent specified in the Transfer Certificate;
|
|
(c)
|
the Transferee Lender becomes a Lender with a Term Contribution and a Newbuilding Contribution and with a Term Commitment and Newbuilding Commitment of the amounts specified in the Transfer Certificate;
|
|
(d)
|
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and
the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
|
|
(e)
|
any part of the Term Facility or the Newbuilding Facility which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would
have ranked had it been advanced by the transferor, assuming that any defects in the transferor’s title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;
|
|
(f)
|
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under
Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
|
(g)
|
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled
to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
|
The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any
other kind of cross-claim.
|
26.8
|
Maintenance of register of Lenders.
During the Security Period the Agent shall maintain a register in which it shall record the name, Term Commitment, Newbuilding Commitment, Term Contribution, Newbuilding
Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the
register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days prior notice.
|
54
|
26.9
|
Reliance on register of Lenders.
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Term Commitment,
Newbuilding Commitment, Term Contribution and Newbuilding Contribution and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance
Documents.
|
|
26.10
|
Authorisation of Agent to sign Transfer Certificates.
The Borrower, the Security Trustees, each Lender and each Swap Bank irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
|
|
26.11
|
Registration fee.
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,500 from the Transferor Lender or (at the Agent’s option) the Transferee Lender.
|
|
26.12
|
Sub-participation; subrogation assignment.
A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to,
the Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who
has become subrogated to them.
|
|
26.13
|
Disclosure of information.
A Lender may disclose to a potential Transferee Lender or sub-participant any information which that Lender has received in relation to the Borrower, any Security Party or their affairs
under or in connection with any Finance Document, unless the information is clearly of a confidential nature. Without prejudice to the foregoing, a Lender may disclose any financial information delivered by the Borrower hereunder and such other
information in relation to the Borrower and its subsidiaries which it may obtain pursuant to this Agreement to authorities in any other countries where that Lender, its subsidiaries, branches and representative officers or any other entity of that
Lender are represented:
|
|
(a)
|
where such authority has requested information from the relevant entity of that Lender; and
|
|
(b)
|
such disclosure is required by law, regulation or administrative order in order for that Lender to meet its legal requirements relating to reduction and/or prevention of money laundering, terrorism or corruption.
|
|
26.14
|
Change of lending office.
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
|
|
(a)
|
the date on which the Agent receives the notice; and
|
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
|
26.15
|
Notification.
On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through
the lending office of which the Agent last had notice.
|
|
26.16
|
Replacement of Reference Bank.
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrower, the Agent and the
Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment
comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
|
55
|
26.17
|
Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office.
If:
|
|
(a)
|
a Lender assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 26.2 or changes its lending office; and
|
|
(b)
|
as a result of circumstances existing at the date the assignment, transfer or change occurs the Borrower would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under
Clause 21.1 in respect of any tax, Clause 22 or Clause 24,
|
then the Transferee Lender or the Lender acting through its new
lending office is only entitled to receive payment under those Clauses to the same extent as the Transferor Lender or the Lender acting through its previous lending office would have been if the assignment, transfer or change had not occurred.
|
27
|
VARIATIONS AND WAIVERS
|
|
27.1
|
Variations, waivers etc. by Majority Lenders.
Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or
remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if
the document relates to a Finance Document to which a Security Party is party, by that Security Party.
|
|
27.2
|
Variations, waivers etc. requiring agreement of all Lenders.
However, as regards the following, Clause 27.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the
words “by or on behalf of every Lender”:
|
|
(a)
|
a change in the Margin or in the definition of LIBOR;
|
|
(b)
|
a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;
|
|
(c)
|
a change to the Total Commitments;
|
|
(d)
|
a change to the definition of “Majority Lenders” or “Finance Documents”;
|
|
(e)
|
a change to the preamble or to Clause 2, 3, 4, 5.1, 17, 18 or 30;
|
|
(f)
|
a change to this Clause 27;
|
|
(g)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
|
(h)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required.
|
|
27.3
|
Exclusion of other or implied variations.
Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
|
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
56
|
(b)
|
an Event of Default; or
|
|
(c)
|
a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law;
|
and there shall
not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
|
28.1
|
General.
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax and references in the Finance Documents to written notices, notices in
writing and notices signed by particular persons shall be construed accordingly.
|
|
28.2
|
Addresses for communications.
A notice shall be sent:
|
|
|
|
|
|
(a) to the Borrower:
|
|
de Gerlachekaai 20
|
|
|
|
B-2000 Antwerp
|
|
|
|
Belgium
|
|
|
|
|
|
|
Fax No: 32 3 247 4409
|
|
|
|
Attn: Finance Director
|
|
|
|
|
(b) to a Lender:
|
|
At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.
|
|
|
|
|
(c) to a Swap Bank
|
|
At the address below its name in Schedule 2
|
|
|
|
|
(d) to the Agent and the Security Trustee:
|
|
Middelthuns gate 17
|
|
|
P.O. Box 1166, Sentrum
|
|
|
|
0107 Oslo
|
|
|
|
Norway
|
|
|
|
|
|
|
Loan administration matters:
|
|
|
|
Fax No: (47) 22 48 42 78
|
|
|
|
Attn: International Loans Administration
|
|
|
|
|
|
|
Credit matters:
|
|
|
|
Fax No: (47) 22 48 66 68
|
|
|
|
Attn: Shipping, Offshore and Oil Services
|
or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or
the Security Trustee, the Borrower, the Lenders, the Swap Banks and the Security Parties.
|
28.3
|
Effective date of notices.
Subject to Clauses 28.4 and 28.5:
|
|
(a)
|
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;
|
|
(b)
|
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
|
57
|
28.4
|
Service outside business hours.
However, if under Clause 28.3 a notice would be deemed to be served:
|
|
(a)
|
on a day which is not a business day in the place of receipt; or
|
|
(b)
|
on such a business day, but after 5 p.m. local time;
|
the notice shall (subject to Clause 28.5)
be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
|
28.5
|
Illegible notices.
Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has
been received in a form which is illegible in a material respect.
|
|
28.6
|
Valid notices.
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if:
|
|
(a)
|
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
|
|
(b)
|
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
|
|
28.7
|
Electronic communication.
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and
the relevant Lender:
|
|
(a)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
(b)
|
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
|
|
(c)
|
notify each other of any change to their respective addresses or any other such information supplied to them.
|
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and, in the
case of any electronic communication made by a Lender to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
|
28.8
|
English language.
Any notice under or in connection with a Finance Document shall be in English.
|
|
28.9
|
Meaning of “notice”.
In this Clause 28, “
notice
” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
|
|
29.1
|
Rights cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to each Creditor Party are:
|
58
|
(b)
|
may be exercised as often as appears expedient; and
|
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
|
29.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions
of that Finance Document or of the provisions of any other Finance Document.
|
|
29.3
|
Counterparts.
A Finance Document may be executed in any number of counterparts.
|
|
29.4
|
Third Party rights.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
|
30.1
|
English law.
This Agreement (other than Clause 3.6) and any non contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law. Clause 3.6
shall be governed by, and construed in accordance with, Belgian law.
|
|
30.2
|
Exclusive English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any Dispute.
|
|
30.3
|
Choice of forum for the exclusive benefit of the Creditor Parties.
Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
|
(a)
|
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
|
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.
|
30.4
|
Process agent.
The Borrower irrevocably appoints Euronav (UK) Agencies Ltd at its registered office for the time being, presently at Moreau House, 3rd Floor, 116 Brompton Road, London SW3 1JJ, to act as its agent
to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.
|
|
30.5
|
Creditor Party rights unaffected.
Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with
regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
59
|
30.6
|
Meaning of “proceedings”.
In this Clause 30, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure and a
“
Dispute
” means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any noncontractual obligation arising out of or in
connection with this Agreement.
|
THIS AGREEMENT
has been entered into on the date stated at the beginning of this Agreement.
60
SCHEDULE 1
LENDERS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
(US$)
|
|
|
Newbuilding
Commitment
(US$)
|
|
|
Total
Commitment
(US$)
|
|
|
|
|
|
|
|
|
Nordea Bank Norge ASA
|
|
Middelthuns gate 17
|
|
|
39,233,334
|
|
|
|
15,766,666
|
|
|
|
55,000,000
|
|
|
|
|
P.O. Box 1166, Sentrum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0107 Oslo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Norway
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +47 22 48 50 00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +47 22 48 66 68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Shipping, Offshore and Oil Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: (47) 22 48 50 00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: (47) 22 48 42 78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: International Loan Administration
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calyon
|
|
9 quai du President Paul Doumer
|
|
|
39,233,333
|
|
|
|
15,766,667
|
|
|
|
55,000,000
|
|
|
|
|
92920 Paris La Defense Cedex
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +44 (0) 207 214 5996/5993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +44 (0) 207 214 6689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Dilhan Sebastian/Justin Lande
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +33 1 41 89 12 49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +33 1 41 89 19 34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Sylvie Godet Couery
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Société Générale
|
|
29 Boulevard Haussmann
|
|
|
39,233,333
|
|
|
|
15,766,667
|
|
|
|
55,000,000
|
|
|
|
|
75009 Paris
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +33 1 42 13 76 24/+33 1 42 13 06 94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +33 1 46 92 46 22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Camille Barthelemy/Claire Philippon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +33 1 42 14 35 83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +33 1 46 92 46 08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Ginette Richard
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank of America, National Association
|
|
555 California Street, 4th Floor
|
|
|
21,400,000
|
|
|
|
8,600,000
|
|
|
|
30,000,000
|
|
|
|
San Francisco, CA 94014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +44 (0) 207 174 6322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +44 (0) 207 174 6474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Roy Poland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +415 765 1803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +415 765 7373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Anita Garfagnoli
|
|
|
|
|
|
|
|
|
|
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
(US$)
|
|
|
Newbuilding
Commitment
(US$)
|
|
|
Total
Commitment
(US$)
|
|
|
|
|
|
|
|
|
|
|
25th Floor
|
|
|
21,400,000
|
|
|
|
8,600,000
|
|
|
|
30,000,000
|
|
|
Scotiabank (Hong Kong) Limited
|
|
United Centre
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95 Queensway
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hong Kong
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit and Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +(852) 2529 5511
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +(852) 2527 2527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Mr Osbert Ho
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Skandinaviska Enskilda Banken AB (publ)
|
|
Kungsträdgardsgatan 8
|
|
|
17,833,333
|
|
|
|
7,166,667
|
|
|
|
25,000,000
|
|
|
|
SE-106 40 Stockholm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sweden
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +44 (0) 207 246 4303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +44 (0) 207 236 5144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Egil Aarrestad
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +468 763 8553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +468 611 0384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Lars Hansson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dexia Bank Belgium NV
|
|
Boulevard Pacheco 44
|
|
|
14,266,667
|
|
|
|
5,733,333
|
|
|
|
20,000,000
|
|
|
|
|
1000 Brussels G1 04/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belgium
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +32 (0) 2222 4353/+32 (0) 2222 1676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +32 (0) 2222 2311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Danny Feremans/Emanuel Falisse
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +32 (0) 2222 7620/+32 (0) 2222 2069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +32 (0) 2222 7980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Nikolaas Poppe/Katrien De Schepper
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DnB Nor Bank ASA
|
|
20 St. Dunstans Hill
|
|
|
10,700,000
|
|
|
|
4,300,000
|
|
|
|
15,000,000
|
|
|
|
|
London EC3R 8HY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
England
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +44 (0) 207 621 6046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +44 (0) 207 621 6931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Jon Matthews
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +44 (0) 207 621 6067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +44 (0) 207 420 3330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Renato Mariano
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fortis Bank, a sociéte anonyme incorporated in Belgian, acting through its UK Branch
|
|
5 Aldermanbury Square
|
|
|
8,916,667
|
|
|
|
3,583,333
|
|
|
|
12,500,000
|
|
|
|
London EC2V 7HR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
England
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +44 (0) 203 296 8476/8706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +44 (0) 203 296 8889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Paul Barnes/Thomas Bashford
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +44 (0) 203 296 8782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +44 (0) 202 296 8101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: James Everitt
|
|
|
|
|
|
|
|
|
|
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Term
Commitment
(US$)
|
|
|
Newbuilding
Commitment
(US$)
|
|
|
Total
Commitment
(US$)
|
|
|
|
|
|
|
|
|
Ethias Bank
|
|
Avenue de l’Astronomié, 19,
|
|
|
1,783,333
|
|
|
|
716,667
|
|
|
|
2,500,000
|
|
|
|
|
1210 Brussels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Belgium
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +33 2 210 9642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +33 2 210 9640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Jadoul Xavier
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +33 2 229 6014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fax: +33 2 229 9640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attn: Gudelj Véronique
|
|
|
|
|
|
|
|
|
|
|
|
|
63
SCHEDULE 2
MAXIMUM ADVANCES
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship
|
|
Ship Name
|
|
Term Advance
Drawdown Amount
(US$)
|
|
|
Newbuilding Advance
Drawdown Amount
(US$)
|
|
|
“
Ship 1
”
|
|
CAP FELIX
|
|
|
43,000,000
|
|
|
|
|
|
|
“
Ship 2
”
|
|
CAP THEODORA
|
|
|
43,000,000
|
|
|
|
|
|
|
“
Ship 3
”
|
|
OLYMPIA
|
|
|
64,000,000
|
|
|
|
|
|
|
“
Ship 4
”
|
|
ANTARCTICA
|
|
|
64,000,000
|
|
|
|
|
|
|
“
Ship 5
”
|
|
SAMSUNG
HULL NO 1743
(TBN FELICITY)
|
|
|
|
|
|
|
43,000,000
|
|
|
“
Ship 6
”
|
|
SAMSUNG
HULL NO 1744
|
|
|
|
|
|
|
43,000,000
|
|
64
SCHEDULE 3
DRAWDOWN NOTICE
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA
|
|
|
|
Middelthuns gate 17
|
|
|
|
P.O. Box 1166, Sentrum
|
|
|
|
0107 Oslo
|
|
|
|
Norway
|
|
|
|
|
Attn:
|
|
Loans Administration
|
[
—
]
DRAWDOWN NOTICE
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated [
—
] 2009 and made between ourselves, as Borrower, the Lenders referred to therein, the
Lead Arrangers and Co-Arrangers referred to therein and yourselves as Agent and Security Trustee in connection with a loan facility of US$300,000,000 comprising a Term Loan Facility of US$214,000,000 and a Newbuilding Facility of US$86,000,000.
Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
|
2
|
We request to borrow an Advance under the [Term Loan Facility] [Newbuilding Facility] as follows:
|
|
(b)
|
Drawdown Date: [
—
];
|
|
(c)
|
Duration of the [first] Interest Period shall be [
—
] months;
|
|
(d)
|
Payment instructions: account of [
—
] and numbered [
—
] with [
—
]
of [
—
].
|
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing;
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Advance.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders,
|
|
|
|
[Name of Signatory]
|
|
|
|
|
|
for and on behalf of
|
|
EURONAV NV
|
65
SCHEDULE 4
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents
referred to in Clause 9.1(a).
|
1
|
A duly executed original of this Agreement, the Agency and Trust Deed and the Accounts Security Deed.
|
|
2
|
Copies of the certificate of incorporation and constitutional documents of the Borrower.
|
|
3
|
Copies of resolutions of the directors of the Borrower authorising the execution of the relevant Mortgages to the extent that these are required in connection with the registration of any of the Mortgages.
|
|
4
|
The original of any power of attorney under which any Finance Document is to be executed on behalf of the Borrower.
|
|
5
|
Copies of all consents which the Borrower requires to enter into, or make any payment under, any Finance Document.
|
|
6
|
Copies of the Shipbuilding Contracts and of all documents signed or issued by the Borrower (or the Builder) under or in connection thereto.
|
|
7
|
Copies of the Time Charters (including any addenda thereto).
|
|
8
|
Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment.
|
|
9
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Belgium, Norway and such other relevant jurisdictions as the Agent may require.
|
66
PART B
The following are the documents referred to in Clause 9.1(c).
|
1
|
A duly executed original of the Mortgage, the General Security Deed and the Time Charter Security Deed (
Provided that
the Time Charter Security Deed shall not include Ship 2) in relation to the Owned Ships (and
of each document required to be delivered by its terms).
|
|
2
|
Documentary evidence that each Owned Ship (other than Ship 2 in the case of paragraph (f)):
|
|
(a)
|
is definitively and permanently registered in the name of the Borrower under the Approved Flag;
|
|
(b)
|
is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
|
|
(c)
|
maintains class acceptable to the Agent free of all overdue recommendations and conditions of the relevant classification society;
|
|
(d)
|
the Mortgage in relation to the Owned Ship has been duly registered against that Owned Ship as valid first priority ship mortgage in accordance with the laws of the Approved Flag of that Ship;
|
|
(e)
|
it is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and
|
|
(f)
|
it has been delivered to and accepted by the Time Charterer under the Time Charter applicable to it and continues to operate under the Time Charter applicable to it.
|
|
3
|
Documents establishing that each Owned Ship will, as from the Term Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
|
|
(a)
|
a letter of undertaking executed by the Approved Manager in favour of the Agent in the terms required by the Agent agreeing certain matters in relation to the management of that Ship and subordinating the rights of the
Approved Managers against that Ship and the Borrower to the rights of the Creditor Parties under the Finance Documents; and
|
|
(b)
|
copies of the Approved Manager’s Document of Compliance and of that Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires)
and the ISSC.
|
|
4
|
Two valuations of the each Owned Ship addressed to the Agent, stated to be for the purposes of this Agreement and dated no earlier than 2 months before the relevant Drawdown Date, from 2 Approved Shipbrokers.
|
|
5
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Belgium, Greece, France and such other relevant jurisdictions as the Agent may require.
|
|
6
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Owned Ships as the Agent may require.
|
|
7
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
67
PART C
The following are the documents referred to in Clause 9.1(d). The “
Newbuilding
” means the particular Newbuilding to which the Advance
relates.
|
1
|
A duly executed original of the Mortgage, the General Security Deed and, if applicable, any charter assignment required pursuant to Clause 11.17 in relation to the Newbuilding (and of each document required to be
delivered by its terms).
|
|
2
|
Documentary evidence that:
|
|
(a)
|
the Newbuilding has been unconditionally delivered by the Builder to, and accepted by, the Borrower, and the full purchase price payable to the Builder (in addition to the part to be financed by the Newbuilding
Facility) has been duly paid;
|
|
(b)
|
the Newbuilding is definitively and permanently registered in the name of the Borrower under an Approved Flag;
|
|
(c)
|
the Newbuilding is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
|
|
(d)
|
the Newbuilding maintains class acceptable to the Agent free of all overdue recommendations and conditions of the relevant classification society;
|
|
(e)
|
the Mortgage in relation to the Newbuilding has been duly registered against the Newbuilding as a valid first priority ship mortgage in accordance with the laws of the flag of that Newbuilding; and
|
|
(f)
|
the Newbuilding is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
|
|
3
|
Documents establishing that the Newbuilding will, as from the relevant Newbuilding Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
|
|
(a)
|
a letter of undertaking executed by the Approved Manager in favour of the Agent in the terms required by the Agent agreeing certain matters in relation to the management of the Newbuilding and subordinating the rights
of the Approved Managers against the Newbuilding and the Borrower to the rights of the Creditor Parties under the Finance Documents; and
|
|
(b)
|
copies of the Approved Manager’s Document of Compliance and of the Newbuilding’s Safety Management Certificate (together with any other details of the applicable safety management system which the Agent
requires) and the ISSC.
|
|
4
|
2 valuations of the Newbuilding, addressed to the Agent, stated to be for the purposes of this Agreement and dated not earlier than 2 weeks before the relevant Newbuilding Drawdown Date, from 2 Approved Shipbrokers.
|
|
5
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Belgian and, if different, the jurisdiction of the Approved Flag on which the relevant Newbuilding is registered and
such other relevant jurisdictions as the Agent may require.
|
|
6
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Newbuilding as the Agent may require.
|
68
|
7
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
Each of the documents specified in paragraphs 2, 3, 5 and 6 of Part A and every other copy document delivered under this Schedule shall be
certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower.
69
SCHEDULE 5
TRANSFER CERTIFICATE
The Transferor
and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
|
To:
|
[Name of Agent] for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee, each Lender and each Arranger, as defined in the Loan Agreement referred to below.
|
|
1
|
This Certificate relates to a loan agreement (the “
Loan Agreement
”) dated [
—
] 2009 and made between (1) Euronav NV (the
“
Borrower
”), (2) the banks and financial institutions named therein as Lenders, (3) the banks and financial institutions named therein as Lead Arrangers, (4) the banks and financial institutions named therein as
Co-Arrangers, (5) Nordea Bank Norge ASA as Agent and (6) Nordea Bank Norge ASA as Security Trustee for a loan facility of US$300,000,000 comprising a term loan facility of US$214,000,000 and a newbuilding facility of US$86,000,000.
|
|
2
|
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
|
“
Relevant Parties
” means the Agent, the Borrower, each Security Party, the Security Trustee, each Lead Arranger and each
Lender and each Swap Bank;
“
Transferor
” means [full name] of [lending office]; and
“
Transferee
” means [full name] of [lending office].
|
3
|
The effective date of this Certificate is [
—
]
Provided that
this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
|
|
4
|
The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document
in relation to [
—
] per cent. of its Term Contribution and [
—
] per cent, of its Newbuilding Contribution, which percentages represent $[
—
], $[
—
] and $[
—
] respectively.
|
|
5
|
By virtue of this Transfer Certificate and Clause 26 of the Loan Agreement, the Transferor is discharged [entirely from its Term Commitment and Newbuilding Commitment which amount to $[
—
], $[
—
] and $[
—
] respectively] [from [
—
] per
cent. of its Term Commitment and [
—
] per cent. of its Newbuilding Commitment, which percentages represent $[
—
], $[
—
] and $[
—
] respectively] and the Transferee acquires a Term Commitment and a Newbuilding Commitment of
$[
—
], $[
—
] and $[
—
] respectively.
|
|
6
|
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 26 of the Loan Agreement provides
will become binding on it upon this Certificate taking effect.
|
70
|
7
|
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in
accordance with Clause 26 of the Loan Agreement.
|
|
(a)
|
warrants to the Transferee and each Relevant Party that:
|
|
|
(i)
|
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are required in connection with this transaction; and
|
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferor;
|
|
(b)
|
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and
|
|
(c)
|
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under
this Certificate or for a similar purpose.
|
|
(a)
|
confirms that it has received a copy of the Loan Agreement and each other Finance Document;
|
|
(b)
|
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee, any Arranger, any Lender or any Swap Bank in the event that:
|
|
|
(i)
|
any of the Finance Documents prove to be invalid or ineffective,
|
|
|
(ii)
|
the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;
|
|
|
(iii)
|
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or Security Party
under the Finance Documents;
|
|
(c)
|
agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee, any Arranger, any Lender or any Swap Bank in the event that this Certificate proves to be invalid or ineffective;
|
|
(d)
|
warrants to the Transferor and each Relevant Party that:
|
|
|
(i)
|
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and
|
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferee; and
|
|
(e)
|
confirms the accuracy of the administrative details set out below regarding the Transferee.
|
|
10
|
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the
Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which
|
71
|
|
they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable
negligence or dishonesty of the Agent’s or the Security Trustee’s own officers or employees.
|
|
11
|
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim,
proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the
full amount demanded by it.
|
|
|
|
|
|
|
|
[Name of Transferor]
|
|
|
|
[Name of Transferee]
|
|
|
|
|
|
By:
|
|
|
|
By:
|
|
|
|
|
|
Date:
|
|
|
|
Date:
|
|
|
|
|
|
Agent
|
|
|
|
|
|
|
|
|
|
Signed for itself and for and on behalf of itself as Agent and for every other Relevant Party
|
|
|
|
|
|
|
|
|
|
[Name of Agent]
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Date:
|
|
|
|
|
72
Administrative Details of Transferee
Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Telex:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Telex:
Fax:
Account for payments:
|
|
|
|
|
Note:
|
|
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor’s interest in the security constituted by the Finance Documents in the Transferor’s or Transferee’s
jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
|
73
SCHEDULE 6
DETAILS OF SHIPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship
|
|
Owner
|
|
Ship name
|
|
Flag
|
|
Year
built
|
|
Size
(dwt)
|
|
Type
|
|
|
|
|
|
|
|
|
|
1
|
|
Borrower
|
|
“CAP FELIX”
|
|
Belgian
|
|
2008
|
|
158,764
|
|
Suezmax
Tanker
|
|
|
|
|
|
|
|
|
|
2
|
|
Borrower
|
|
“CAP THEODORA”
|
|
Greek
|
|
2008
|
|
158,800
|
|
Suezmax
Tanker
|
|
|
|
|
|
|
|
|
|
3
|
|
Borrower
|
|
“OLYMPIA”
|
|
French
|
|
2008
|
|
315,981
|
|
VLCC
|
|
|
|
|
|
|
|
|
|
4
|
|
Borrower
|
|
“ANTARCTICA”
|
|
French
|
|
2009
|
|
315,981
|
|
VLCC
|
|
|
|
|
|
|
|
|
|
5
|
|
Borrower
|
|
SAMSUNG HULL NO 1743 (TBN
“FELICITY”)
|
|
an Approved Flag
|
|
2009
|
|
159,000
|
|
Suezmax
Tanker
|
|
|
|
|
|
|
|
|
|
6
|
|
Borrower
|
|
SAMSUNG HULL
NO 1744
|
|
an Approved Flag
|
|
2009
|
|
159,000
|
|
Suezmax
Tanker
|
74
SCHEDULE 7
DESIGNATION NOTICE
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA
|
|
|
|
Middelthuns gate 17
|
|
|
|
P.O. Box 1166, Sentrum
|
|
|
|
0107 Oslo
|
|
|
|
Norway
|
[date]
Dear Sirs
Loan Agreement dated [
—
] 2009 made between (i) Euronav NV as Borrower, (ii) the Lenders as referred to therein, (iii) the Lead Arrangers and the Co-Arrangers as referred to therein and
(iv) yourselves as Agent and Security Trustee for a loan facility of up to US$300,000,000 (the “Loan Agreement”)
We refer to:
|
2.
|
the Master Agreement dated as of [
—
] made between Euronav NV and [
—
]; and
|
|
3.
|
a Confirmation delivered pursuant to the said Master Agreement dated [
—
] and addressed by [
—
] to Euronav NV.
|
In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the
Transaction evidenced by it will be designated as a “Designated Transaction” for the purposes of the Loan Agreement and the Finance Documents.
Yours faithfully
|
|
|
|
|
|
|
|
|
|
|
|
|
for and on behalf of
|
|
|
|
for and on behalf of
|
|
EURONAV NV
|
|
|
|
[SWAP BANK]
|
75
SCHEDULE 8
MANDATORY COST FORMULA
|
1
|
The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or 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 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 relevant Advance) and will be
expressed as a percentage rate per annum.
|
|
3
|
The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its
notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European
Central Bank in respect of loans made from that lending office.
|
|
4
|
The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
E x
0.01
|
|
per cent. per annum
|
|
|
|
|
|
300
|
|
|
|
|
|
|
|
Where:
|
|
|
|
|
|
|
|
|
|
|
E
|
|
is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to
paragraph 6 below and expressed in pounds per £1,000,000.
|
|
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)
|
“
Fees 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;
|
|
(c)
|
“
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 Fees Rules but taking
into account any applicable discount rate);
|
|
(d)
|
“
Participating Member State
” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to
European Monetary Union; and
|
|
(e)
|
“
Tariff Base
” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
76
|
6
|
If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference 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 Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank
for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
|
7
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:
|
|
(a)
|
the jurisdiction of its lending office; and
|
|
(b)
|
any other information that the Agent may reasonably require for such purpose.
|
Each Lender
shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.
|
8
|
The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender
notifies the Agent to the contrary, each Lender’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 lending office in the same jurisdiction
as its lending 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 Lender and shall be entitled to assume that the information provided by any
Lender or Reference 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 Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and
each Reference 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 Lender 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 Borrowers and the Lenders, 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 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.
|
77
SCHEDULE 9
FORM OF CERTIFICATE OF COMPLIANCE
|
|
|
|
|
To:
|
|
Nordea Bank Norge ASA
|
|
|
|
Middelthuns gate 17
|
|
|
|
P.O. Box 1166, Sentrum
|
|
|
|
0107 Oslo
|
|
|
|
Norway
|
|
|
|
|
From:
|
|
Euronav NV
|
OFFICER’S CERTIFICATE
This Certificate is rendered pursuant to clause 11.5(e) of the loan agreement dated [
—
] 2009 (the
“
Loan Agreement
”) and entered into between (i) ourselves, Euronav NV, as Borrower, (ii) the banks and financial institutions listed in Schedule 1 therein as Lenders, (iii) the banks and financial institutions defined
therein as Lead Arrangers, (iv) the banks and finance ail institutions defined therein as Co-Arrangers, (v) Nordea Bank Norge ASA as Agent and (vi) Nordea Bank Norge ASA as Security Trustee, relating to a loan facility of
US$300,000,000 comprising a term loan facility of US$214,000,000 and a newbuilding facility of US$86,000,000. Words and expressions defined in the Loan Agreement shall have the same meanings when used herein.
I, the Chief Financial Officer of the Borrower, hereby certify that:
|
1
|
Attached to this Certificate [are][is] the latest [audited consolidated accounts of the Borrower’s Group and audited individual accounts of the Borrower for the financial year ending on [
—
]] [unaudited consolidated balance sheet of the Borrower’s Group and the unaudited individual balance sheet of the Borrower in relation to the [first] [second] [third] [fourth] quarter of the
financial year ending on [
—
]] (the “
Accounts
”).
|
|
2
|
Set out below are the respective amounts, in US Dollars, of the Current Assets, Current Liabilities, Free Liquid Assets, Stockholders’ Equity, Total Assets and Total Indebtedness of the Borrower’s Group as at
[
—
]:
|
|
|
|
|
|
|
|
|
|
US Dollars
|
|
|
|
|
|
Current Assets
|
|
|
[
|
—
]
|
|
|
|
|
Current Liabilities
|
|
|
[
|
—
]
|
|
|
|
|
Free Liquid Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
[
|
—
]
|
|
|
|
|
Stockholders’ Equity
|
|
|
[
|
—
]
|
|
|
|
|
Total Assets
|
|
|
[
|
—
]
|
|
|
|
|
Total Indebtedness
|
|
|
[
|
—
]
|
|
3
|
Accordingly, as at the date of this Certificate the financial covenants set out in Clause 12.5 of the Loan Agreement [are] [are not] complied with, in that as at [
—
]:
|
|
(a)
|
Current Assets exceed Current Liabilities by US$[
—
];
|
78
|
(b)
|
Free Liquid Assets are US$[
—
] and US$[
—
] when excluding amounts available under any credit lines.
|
3 per cent. of Total Indebtedness is US$[
—
]; and
|
(c)
|
the ratio of Stockholders’ Equity to Total Assets is [
—
] per cent.;
|
[or, as the case may be, specify in what respect any of the financial covenants are not complied with.]
|
4
|
As at [
—
] no Event of Default has occurred and is continuing.
|
[
or, specify/identify any Event of Default
]
The Borrower is in compliance with Clause 15.1 of the Loan Agreement.
[
If not, specify this and what is proposed as regards Clause 15.2
]
The Fair Market Value of the Ships which are subject to a Mortgage is as follows as at [
date
]:
|
|
|
|
|
|
|
|
|
Name of Ship
|
|
Name of first shipbroker
providing valuation
|
|
Name of second shipbroker
providing valuation
|
|
Average market value
|
|
|
|
|
|
|
[
—
]
|
|
[
—
]
|
|
[
—
]
|
|
[
—
]
|
|
|
|
|
|
Chief financial officer
|
|
EURONAV NV
|
79
EXECUTION PAGES
BORROWER
80
EXECUTION PAGES
BORROWER
81
82
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
SIMON PETCH
|
|
|
|
)
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
ETHIAS BANK
|
|
|
|
)
|
|
|
in its capacity as a Lender
|
|
|
|
)
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
Simon Petch
|
|
|
Sarah Phillips
|
|
|
|
|
|
Attorney-in-Fact
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
LEAD ARRANGERS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
SIMON PETCH
|
|
|
|
)
|
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
|
in its capacity as a Lead Arranger
|
|
)
|
|
|
|
Simon Petch
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
Attorney-in-Fact
|
|
|
Sarah Phillips
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
SIGNED
by
|
|
London EC2A 2HB
|
|
)
|
|
|
|
SIMON PETCH
|
|
|
|
)
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
CALYON
|
|
|
|
)
|
|
|
in its capacity as a Lead Arranger
|
|
)
|
|
|
|
Simon Petch
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
Attorney-in-Fact
|
|
|
Sarah Phillips
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
SIGNED
by
|
|
London EC2A 2HB
|
|
)
|
|
|
|
SIMON PETCH
|
|
|
|
)
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
SOCIÉTÉ GÉNÉRALE
|
|
|
|
)
|
|
|
in its capacity as a Lead Arranger
|
|
)
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
Simon Petch
|
|
|
Sarah Phillips
|
|
|
|
|
|
Attorney-in-Fact
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
SIGNED
by
|
|
London EC2A 2HB
|
|
)
|
|
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
|
|
|
BANK OF AMERICA,
|
|
|
|
)
|
|
|
|
|
|
NATIONAL ASSOCIATION
|
|
)
|
|
|
|
|
|
in its capacity as a Lead Arranger
|
|
)
|
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
83
84
85
86
EXHIBIT 10.4
DATED 23 December 2011
EURONAV N.V.
as Borrower
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 2
as Swap
Providers
DNB BANK ASA
SKANDINAVISKA ENSKILDA BANKEN AB (publ)
as Mandated Lead Arrangers
and
DNB BANK ASA
as
Bookrunner, Agent and Security Trustee
LOAN AGREEMENT
relating to
a loan facility of up to $65,000,000
in respect of Hull No. 1894 at
Samsung Heavy Industries Co., Ltd.
INDEX
|
|
|
|
|
|
|
|
|
1.
|
|
DEFINITIONS AND INTERPRETATION
|
|
|
2
|
|
|
|
|
|
|
2.
|
|
POSITION OF THE BANKS
|
|
|
20
|
|
|
|
|
|
|
3.
|
|
THE LOAN
|
|
|
21
|
|
|
|
|
|
|
4.
|
|
DRAWDOWN
|
|
|
21
|
|
|
|
|
|
|
5.
|
|
REPAYMENT
|
|
|
23
|
|
|
|
|
|
|
6.
|
|
PREPAYMENT AND CANCELLATION
|
|
|
23
|
|
|
|
|
|
|
7.
|
|
SWAP TRANSACTIONS
|
|
|
26
|
|
|
|
|
|
|
8.
|
|
INTEREST
|
|
|
27
|
|
|
|
|
|
|
9.
|
|
PAYMENTS
|
|
|
30
|
|
|
|
|
|
|
10.
|
|
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
|
|
32
|
|
|
|
|
|
|
11.
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
33
|
|
|
|
|
|
|
12.
|
|
GENERAL UNDERTAKINGS
|
|
|
36
|
|
|
|
|
|
|
13.
|
|
INFORMATION UNDERTAKINGS
|
|
|
39
|
|
|
|
|
|
|
14.
|
|
FINANCIAL COVENANTS
|
|
|
41
|
|
|
|
|
|
|
15.
|
|
VESSEL UNDERTAKINGS - INSURANCE
|
|
|
42
|
|
|
|
|
|
|
16.
|
|
VESSEL UNDERTAKINGS - OPERATION AND MAINTENANCE
|
|
|
46
|
|
|
|
|
|
|
17.
|
|
VALUATIONS AND ASSET PROTECTION
|
|
|
51
|
|
|
|
|
|
|
18.
|
|
EVENTS OF DEFAULT
|
|
|
53
|
|
|
|
|
|
|
19.
|
|
FEES, EXPENSES AND INDEMNITIES
|
|
|
57
|
|
|
|
|
|
|
20.
|
|
THE AGENT
|
|
|
62
|
|
|
|
|
|
|
21.
|
|
THE SECURITY TRUSTEE
|
|
|
66
|
|
|
|
|
|
|
22.
|
|
RETIREMENT OR REPLACEMENT OF A SERVICE BANK
|
|
|
69
|
|
|
|
|
|
|
23.
|
|
LIMITS OF THE SERVICE BANKS’ OBLIGATIONS
|
|
|
70
|
|
|
|
|
|
|
24.
|
|
SHARING OF PAYMENTS
|
|
|
73
|
|
|
|
|
|
|
25.
|
|
CHANGES TO THE LENDERS
|
|
|
74
|
|
|
|
|
|
|
26.
|
|
SET-OFF
|
|
|
77
|
|
|
|
|
|
|
27.
|
|
MISCELLANEOUS
|
|
|
78
|
|
|
|
|
|
|
28.
|
|
NOTICES
|
|
|
79
|
|
|
|
|
|
|
29.
|
|
BANKS’ DUTIES OF CONFIDENTIALITY
|
|
|
81
|
|
|
|
|
|
|
30.
|
|
APPLICABLE LAW AND JURISDICTION
|
|
|
84
|
|
|
|
|
|
SCHEDULE 1 - LENDERS AND COMMITMENTS
|
|
|
86
|
|
|
|
|
|
SCHEDULE 2 - SWAP PROVIDERS AND SWAP PROVIDER PERCENTAGES
|
|
|
87
|
|
|
|
|
|
SCHEDULE 3 - FORM OF NOTICE OF DRAWDOWN
|
|
|
88
|
|
|
|
|
|
SCHEDULE 4 - CONDITIONS PRECEDENT
|
|
|
89
|
|
|
|
|
|
SCHEDULE 5 - FORM OF TRANSFER CERTIFICATE
|
|
|
92
|
|
|
|
|
|
SCHEDULE 6 - FORM OF COMPLIANCE CERTIFICATE
|
|
|
96
|
|
|
|
|
|
SCHEDULE 7 - MANDATORY COSTS FORMULA
|
|
|
98
|
|
THIS AGREEMENT
is made on 23 December 2011
BETWEEN
|
(1)
|
EURONAV N.V.
, a company incorporated in Belgium with enterprise number 0860.402.767 whose registered office is at de Gerlachekaai 20, 2000 Antwerpen, Belgium (the “
Borrower
”);
|
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1 acting through their respective Lending Offices in their capacity as lenders (the “
Original Lenders
”);
|
|
(3)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 2 acting through their respective offices stated in Schedule 2 in their capacity as swap providers (the “
Original Swap Providers
”);
|
|
(4)
|
DNB BANK ASA
, a bank incorporated in Norway acting through its office at 20 St. Dunstan’s Hill, London EC3R 8HY, and
SKANDINAVISKA ENSKILDA BANKEN AB
(publ)
, a bank incorporated in Sweden
acting through its office at Kungstradgardsgatan 8, SE-106 40 Stockholm, Sweden, in their capacity as mandated lead arrangers (the “
Mandated Lead Arrangers
”) and, in the case of DNB Bank ASA only, also in its capacity as bookrunner
(the “
Bookrunner
”);
|
|
(5)
|
DNB BANK ASA
, a bank incorporated in Norway acting through its office at 20 St. Dunstan’s Hill, London EC3R 8HY in its capacity as agent for the Lenders (the “
Agent
”); and
|
|
(6)
|
DNB BANK ASA
, a bank incorporated in Norway acting through its office at 20 St. Dunstan’s Hill, London EC3R 8HY in its capacity as security trustee for the Banks (the “
Security Trustee
”).
|
WHEREAS
|
(A)
|
The Bookrunner and the Mandated Lead Arrangers have arranged, and the Lenders have agreed to make available to the Borrower, a secured term loan facility in an amount not exceeding the lower of (i) $65,000,000 and
(ii) 70% of the Fair Market Value of the Vessel as at the Delivery Date for the purpose of assisting the Borrower to refinance its acquisition of the Vessel pursuant to the Building Contract.
|
|
(B)
|
The Swap Providers may enter into swap transactions with the Borrower from time to time to hedge the Borrower’s floating interest rate exposure in relation to the Loan.
|
|
(C)
|
The Lenders and the Borrower have agreed with the Swap Providers that the Swap Providers will share in the security to be granted to the Security Trustee pursuant to this Agreement on a pari passu basis as set out in
this Agreement.
|
IT IS AGREED
as follows:
|
1.
|
DEFINITIONS AND INTERPRETATION
|
In this Agreement, including the Recitals, the following expressions shall
have the following meanings:
“
Account Security Deed
” means the first priority English law deed of charge in respect of
the Earnings Account to be executed by the Borrower in favour of the Security Trustee in the agreed form;
“
Affected
Lender
” and “
Affected Lenders
” each has the meaning given to it in the definition of “Market Disruption Event” in this Clause 1.1;
“
Agency Fee Letter
” means the fee letter agreement dated on or about the date of this Agreement made between the Agent and the
Borrower in respect of the agency fee payable under Clause 19.4;
“
Agreed Form Certificate
” means the certificate dated on
or after the date of this Agreement executed by the Borrower and the Agent attaching the agreed forms of the Finance Documents to be executed after the date of this Agreement and any other relevant documents referred to in this Agreement;
“
Applicable Margin
” means 2.95% per annum;
“
Approved Flag State
” means the jurisdiction under whose laws and flag the Vessel is registered being Belgium, France, Greece,
the Marshall Islands or such other jurisdiction as the Security Trustee (as directed by the Lenders) may approve in accordance with Clause 16.2;
“
Approved Shipbrokers
” means ACM Shipping Limited, Arrow Sale & Purchase (UK) Ltd., Braemar Seascope Limited,
Fearnleys A.S., Galbraith’s Limited, H. Clarkson & Co. Ltd., Maersk Broker K/S, and R.S. Platou Shipbrokers A.S. or such other list of shipbrokers as may from time to time be agreed in writing between the Borrower and the Majority
Lenders for the purposes of Clause 17.1.2;
“
Arrangement Fee Letter
” means the fee letter agreement dated on or about the
date of this Agreement made between the Agent and the Borrower in respect of the arrangement fee payable under Clause 19.2;
“
Availability Period
” means the period commencing on the date of this Agreement and ending on the earlier of
(a) 31 January 2013 (or such later date as the Lenders may in their discretion agree), (b) the dated falling 15 days after the Delivery Date and (c) the date on which the Lenders’ obligation to advance the Loan is cancelled;
“
Bank
” means any of the Lenders, the Swap Providers, the Mandated Lead Arrangers, the Bookrunner, the Agent and the
Security Trustee;
2
“
Banking Day
” means a day (excluding Saturdays and Sundays) on which banks are
open in London, Stockholm, Antwerp and New York City;
“
Break Costs
” means the amount (if any) by which:
|
|
(a)
|
the interest (excluding the Applicable Margin) which a Lender should have received for the period from the date of receipt of all or any part of the Loan to the last day of the current Interest Period, had the principal
amount received been paid on the last day of that Interest Period;
|
exceeds:
|
|
(b)
|
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the London interbank market for a period starting on the Banking
Day of receipt or recovery and ending on the last day of the current Interest Period;
|
“
Builder
” means
Samsung Heavy Industries Co., Ltd., a company incorporated in the Republic of Korea whose registered office is at Samsung Life Insurance Seocho Tower, 1321-15, Seocho-Dong, Seocho-Gu, Seoul, Korea;
“
Building Contract
” means the shipbuilding contract dated 23 July 2008 made between the Builder and the Borrower pursuant
to which the Builder has agreed to construct the Vessel and sell it to the Borrower;
“
Change of Control
” means, in
relation to the Borrower, if two or more persons acting in concert or any individual person other than Saverco or Tanklog:
|
|
(a)
|
acquires legally and/or beneficially, and either directly or indirectly, in excess of 50% of the issued share capital of the Borrower; or
|
|
|
(b)
|
has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent) of the Borrower;
|
“
Charged Property
” means any real or personal property, assets or rights belonging to the Borrower, whether present or future,
over which an Encumbrance has been or is intended to be created pursuant to any of the Finance Documents;
“
Charter
Assignment
” means, in relation to a Long Term Charter, the first priority deed of assignment of that Long Term Charter and any related Charter Guarantee to be executed by the Borrower in favour of the Security Trustee in accordance with
Clause 12.8 in the agreed form;
“
Charter Guarantee
” means any guarantee, bond, letter of credit or other instrument
provided as security for the obligations of the charterer under any Long Term Charter;
“
Classification Society
” means
American Bureau of Shipping, Bureau Veritas, Det Norske Veritas, Germanischer Lloyd, Lloyds Register of Shipping, Nippon Kaiji Kyokai or such other classification society which is a member of the International Association of Classification Societies
as may be approved in writing by the Security Trustee (acting on the instructions of the Majority Lenders);
3
“
Commercial Management Agreement
” means the agreement for the time being in
force between the Borrower and the Commercial Manager with respect to the commercial management of the Vessel by the Commercial Manager;
“
Commercial Manager
” means any company belonging to the Group that may be appointed as the commercial manager of the Vessel or
such other company as the Borrower may from time to time appoint as the commercial manager of the Vessel with the prior consent of the Agent (such consent not to be unreasonably withheld);
“
Commitment
” means:
|
|
(a)
|
in relation to an Original Lender, the amount set opposite its name in Schedule 1 and the amount of any other Commitment transferred to it under this Agreement; and
|
|
|
(b)
|
in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,
|
to the extent not cancelled, reduced or transferred by it under this Agreement, and “
Total Commitments
” means the aggregate of
the Commitments of all the Lenders;
“
Compliance Certificate
” means a certificate signed by the chief financial officer of
the Borrower substantially in the form of Schedule 6;
“
Compulsory Acquisition
” means requisition for title or other
compulsory acquisition of the Vessel by any government or other competent authority, otherwise than by requisition for hire;
“
Confidential Information
” means all information relating to the Borrower, the Group, the Finance Documents or the Loan of
which a Bank becomes aware in its capacity as, or for the purpose of becoming, a Bank or which is received by a Bank in relation to, or for the purpose of becoming a Bank under, the Finance Documents or the Loan from either:
|
|
(a)
|
the Borrower or any of its advisers; or
|
|
|
(b)
|
another Bank, if the information was obtained by that Bank directly or indirectly from the Borrower or any of its advisers,
|
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording
information which contains or is derived or copied from such information but excludes information that:
|
|
(i)
|
is or becomes public information other than as a direct or indirect result of any breach by that Bank of Clause 29.1; or
|
|
|
(ii)
|
is identified in writing at the time of delivery as non-confidential by the Borrower or any of its advisers; or
|
4
|
|
(iii)
|
is known by that Bank before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Bank after that date, from a source which is, as far as
that Bank is aware, unconnected with the Group and which, in either case, as far as that Bank is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality;
|
“
Confidentiality Undertaking
” means a confidentiality undertaking substantially in the recommended form published from time to
time by the Loan Market Association or in any other form agreed between the Borrower and the Agent;
“
Confirmation
”, in
relation to any continuing Designated Transaction, has the meaning given to it in the relevant Master Agreement;
“
Contribution
” means, in relation to a Lender in respect of the Loan or any other amount, the part of the Loan or such other
amount which is owing to that Lender at any relevant time, and “
Total Contributions
” means the aggregate of the Contributions of all the Lenders;
“
Default Rate
” means the annual rate of interest determined in accordance with Clause 8.3;
“
Defaulting Lender
” means any Lender:
|
|
(a)
|
which has failed to make available the relevant proportion of its Commitment or has given notice to the Agent that it will not make such amount available by the Drawdown Date in accordance with Clause 4.3; or
|
|
|
(b)
|
which has rescinded or repudiated this Agreement; or
|
|
|
(c)
|
with respect to which an Insolvency Event has occurred and is continuing,
|
unless, in the case
of paragraph (a) above:
|
|
(i)
|
its failure to pay is caused by:
|
|
|
(A)
|
administrative or technical error; or
|
|
|
|
and payment is made within 5 Banking Days of its due date; or
|
|
|
(ii)
|
the Lender is disputing in good faith whether it is contractually obliged to make the relevant payment;
|
“
Deferred Payment
” means the deferred payment amount of up to $30,000,000 from time to time as deferred in accordance with the
Deferred Payment Agreement;
“
Deferred Payment Agreement
” means the agreement made or to be made between (1) the
Borrower and (2) the Builder setting out the terms and conditions on which the Deferred Payment is to be made to the Builder, such agreement to provide for the Deferred Payment to be repaid in one amount on the date falling 3 years after the
Delivery Date with interest payable annually at a rate of 5.5% per annum and otherwise to be in such form as the Lenders may approve;
5
“
Deferred Payment Security Documents
” means the documents to be executed by the
Borrower in favour of the Builder as security for repayment of the Deferred Payment comprising a second priority mortgage on the Vessel, a second priority assignment of the Insurances and Requisition Compensation of the Vessel and such other
documents as the Lenders may in their discretion agree, each such document to be in such form as the Lenders may approve;
“
Delivery Date
” means the date on which the Vessel is actually delivered by the Builder to, and duly accepted by, the Borrower
pursuant to the Building Contract;
“
Designated Transaction
” means a transaction:
|
|
(a)
|
which is entered into by the Borrower with a Swap Provider pursuant to a Master Agreement;
|
|
|
(b)
|
whose purpose is the hedging of all or a part of the Borrower’s exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof);
|
|
|
(c)
|
which is for a period expiring no later than the Final Maturity Date; and
|
|
|
(d)
|
which is designated as a Designated Transaction by notice in writing from the Borrower and the relevant Swap Provider to the Agent in accordance with Clause 7.1;
|
“
Disruption Event
” means:
|
|
(a)
|
a material disruption to the payment or communications systems or to the financial markets which are required to operate in order for payments to be made (or other transactions to be carried out) in connection with the
transactions contemplated by the Finance Documents, which is not caused by, and is beyond the control of, any of the Parties; or
|
|
|
(b)
|
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing it, or any other Party from:
|
|
|
(i)
|
performing its payment obligations under the Finance Documents; or
|
|
|
(ii)
|
communicating with other Parties under the Finance Documents,
|
and which is not caused by, and
is beyond the control of, the Party whose operations are disrupted;
“
Document of Compliance
” has the meaning given to it
in paragraph 1.1.5 of the ISM Code;
“
Dollars
” and “
$
” mean the lawful currency for the time being of the
United States of America;
6
“
Drawdown Date
” means the Banking Day on which the Borrower specifies that it
wishes the Loan to be advanced or (as the context requires) the date on which the Loan is actually advanced to the Borrower;
“
Earnings
” means:
|
|
(a)
|
all moneys whatsoever (and all claims for such moneys), present and future, which are earned or recoverable by, or become payable to or for the account of, the Borrower arising (whether in contract, tort or otherwise
howsoever), directly or indirectly, out of the ownership, use or operation of the Vessel, including (but not limited to) all freight, hire and passage moneys, compensation payable in the event of requisition of the Vessel for hire, remuneration for
salvage and towage services, demurrage and detention moneys, contributions in general average, damages for breach (or payments for variation or termination) of any charterparty or other contract for employment of the Vessel, and all moneys (other
than in respect of Insurances or Requisition Compensation) arising from a Total Loss of the Vessel, together with the benefit of any guarantee, indemnity or other security which may at any time be given as security for the payment of such moneys;
|
|
|
(b)
|
all moneys which are at any time payable under the Insurances in respect of loss of earnings; and
|
|
|
(c)
|
if and whenever the Vessel is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling
or sharing arrangement which is attributable to the Vessel;
|
“
Earnings Account
” means the Dollar denominated
account designated “Euronav N.V. - Hull 1894 - Earnings Account” with account number 62827013 held by the Borrower with the Agent;
“
Encumbrance
” means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust
arrangement or security interest or other encumbrance of any kind securing any obligation of any person or having the effect of conferring security or any type of preferential arrangement (including, without limitation, title transfer and/or
retention arrangements having a similar effect);
“
Environmental Approval
” means any permit, licence, approval, ruling,
exemption or other authorisation required under applicable Environmental Laws;
“
Environmental Claim
” means:
|
|
(a)
|
any claim by, or directive from, any applicable governmental, judicial or other regulatory authority alleging breach of, or non-compliance with, any Environmental Laws or Environmental Approvals or otherwise howsoever
relating to or arising out of an Environmental Incident; or
|
|
|
(b)
|
any claim by any other person howsoever relating to or arising out of an Environmental Incident,
|
7
(and, in each such case, “
claim
” shall mean a claim for damages, clean-up costs,
compliance, remedial action or otherwise);
“
Environmental Incident
” means:
|
|
(a)
|
any release, discharge, disposal or emission of Material of Environmental Concern from a Relevant Ship; or
|
|
|
(b)
|
any incident in which Material of Environmental Concern is released, discharged, disposed of, or emitted by or from a ship other than a Relevant Ship and which involves collision between a Relevant Ship and such other
ship, or some other incident of navigation or operation, in either case where a Relevant Ship or the Borrower is actually or potentially at fault or otherwise liable (in whole or in part); or
|
|
|
(c)
|
any incident in which Material of Environmental Concern is released, discharged, disposed of, or emitted by or from a ship other than a Relevant Ship and where the Relevant Ship is actually or potentially liable to be
arrested or attached as a result and/or where the Borrower is actually or potentially at fault or otherwise liable;
|
“
Environmental Laws
” means all national and international laws, ordinances, rules, regulations, rules of common law,
conventions and agreements applicable to any Relevant Ship and pertaining to pollution or protection of human health or the environment;
“
Event of Default
” means any of the events or circumstances listed in Clause 18.1;
“
Fair Market Value
” means the value of the Vessel as most recently determined in accordance with Clause 17;
“
Fee Letters
” means the Agency Fee Letter, the Arrangement Fee Letter and the Structuring Fee Letter;
“
Final Maturity Date
” means the date on which the final Repayment Instalment falls due (being not later than 31 January
2018);
“
Finance Documents
” means this Agreement, the Fee Letters, the Mortgage, the General Assignment, each Charter
Assignment (if any), the Account Security Deed, the Master Agreement Security Deed, the Intercreditor Agreement and any and every other document (other than a Manager’s Undertaking) from time to time executed as security for, or to establish a
subordination or priorities arrangement in relation to, all or any of the obligations of any person to the Banks (or any of them) under this Agreement or any of the other documents referred to in this definition;
“
Financial Indebtedness
” means any indebtedness in respect of:
8
|
|
(b)
|
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
|
|
|
(c)
|
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
|
|
|
(d)
|
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with International Accounting Standard 17 issued by the International Accounting Standards Committee as in force
and applied on the date of this Agreement, be treated as a finance or capital lease;
|
|
|
(e)
|
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
|
|
|
(f)
|
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;
|
|
|
(g)
|
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market
value shall be taken into account);
|
|
|
(h)
|
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and
|
|
|
(i)
|
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above;
|
“
General Assignment
” means the first priority deed of assignment of the Insurances, Earnings and Requisition Compensation of
the Vessel to be executed by the Borrower in favour of the Security Trustee in the agreed form;
“
Group
” means the
Borrower and its subsidiaries for the time being and “
member of the Group
” means the Borrower or any of its subsidiaries;
“
IFRS
” means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to
the relevant financial statements;
“
Increased Cost
” means, in respect of a Bank;
|
|
(a)
|
a reduction in the rate of return from the Loan or on that Bank’s (or its affiliate’s) overall capital;
|
|
|
(b)
|
an additional or increased cost (including any loss, liability or cost suffered for or on account of tax); or
|
|
|
(c)
|
a reduction of any amount due and payable under any Finance Document, which is incurred or suffered by that Bank or any of its affiliates to the extent that it is attributable to that Bank having entered into its
Commitment or funding or performing its obligations under this Agreement or any Finance Document;
|
9
“
Insolvency Event
” in relation to a Bank means that the Bank:
|
|
(a)
|
is dissolved (other than pursuant to a consolidation, amalgamation or merger);
|
|
|
(b)
|
becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
|
|
|
(c)
|
makes a general assignment, arrangement or composition with or for the benefit of its creditors;
|
|
|
(d)
|
institutes or has instituted against it, by a regulator, supervisor or similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation
or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is. presented for
its winding-up or liquidation by it or such regulator, supervisor or similar official;
|
|
|
(e)
|
has instituted against it a proceeding seeking judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is
presented for its winding up or liquidation and, in the case of any such proceeding or petition presented against it, that proceeding or petition is instituted or presented by a person or an entity not described in paragraph (d) above and:
|
|
|
(i)
|
results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
|
|
|
(ii)
|
is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
|
|
|
(f)
|
has a resolution passed for its winding-up, official management or liquidation (other than as a result of a consolidation, amalgamation or merger);
|
|
|
(g)
|
seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets;
|
|
|
(h)
|
has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all
its assets and that secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
|
10
|
|
(i)
|
causes or is subject to any event which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or
|
|
|
(j)
|
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence, in any of the foregoing acts;
|
“
Insurances
” means all policies and contracts of insurance (including all entries of the Vessel in a protection and indemnity
association and a war risks association) which are from time to time taken out or entered into in respect of the Vessel or her Earnings or otherwise howsoever (as specified in greater detail in Clause 15) and all benefits of such policies and
contracts, including all claims of whatsoever nature and return of premiums;
“
Intercreditor Agreement
” means the
intercreditor agreement made or to be made between (1) the Borrower, (2) the Security Trustee and (3) the Builder setting out the terms on which the Deferred Payment Security Documents are subordinated to the Finance Documents, such
agreement to be in such form as the Lenders may approve or require;
“
Interest Date
” means a date upon which interest is
due and payable in accordance with Clause 8.1;
“
Interest Period
” means each period determined in accordance with Clause
8.2 or pursuant to Clause 8.11, as the case may be;
“
Interest Rate
” means the annual rate of interest which is determined
by the Agent in accordance with Clause 8.2;
“
International Ship Security Certificate
” has the meaning given to it in the
ISPS Code;
“
ISM Code
” means The International Management Code for the Safe Operation of Ships and for Pollution
Prevention as adopted by the International Maritime Organisation as Resolutions A.741(18) and A.913(22) (as amended, supplemented or replaced from time to time);
“
ISPS Code
” means The International Ship and Port Facility Security Code as adopted by the International Maritime Organisation
(as amended, supplemented or replaced from time to time);
“
Lender
” means:
|
|
(a)
|
any Original Lender; and
|
|
|
(b)
|
any bank, financial institution or other entity which has become a Party as Lender in accordance with Clause 25.1,
|
which in each case has not ceased to be a Party as Lender in accordance with the terms of this Agreement;
11
“
Lending Office
” means, in respect of a Lender, the office through which it will
perform its obligations under this Agreement being, in the case of an Original Lender, the office set out against its name in Schedule 1 and, in the case of each other Lender, the office specified in the relevant Transfer Certificate by which it
becomes a Party (or such other office in respect of any Lender as may be selected by it in accordance with Clause 25.11);
“
LIBOR
” means, in relation to an Interest Period or any other relevant period:
|
|
(a)
|
the applicable Screen Rate; or
|
|
|
(b)
|
(if no Screen Rate is available for that period) the arithmetic mean of the rates (rounded upwards to four decimal places) quoted to the Reference Banks by leading banks in the London interbank market,
|
at or about 11:00 a.m. London time on the Quotation Day for the offering of deposits in Dollars and for a period comparable
to that period;
“
Loan
” means the sum of up to $65,000,000 to be advanced by the Lenders to the Borrower under this
Agreement and, as the context may require, means the principal amount from time to time outstanding under this Agreement;
“
Loan
Indebtedness
” means the aggregate of the Loan, all interest accrued on the Loan and all other sums of money whatsoever (other than in respect of the Master Agreement Liabilities) from time to time due or owing actually or contingently to
the Banks (or any of them) under or pursuant to the Finance Documents;
“
Long Term Charter
” means any charter or other
contract of employment for the Vessel which is entered into by the Borrower for a term which exceeds, or which by virtue of any optional extensions might exceed, 24 months’ duration;
“
Major Casualty
” means any casualty to the Vessel or incident (other than a Total Loss) in respect of which the claim or the
aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $5,000,000 or the equivalent in any other currency;
“
Majority Lenders
” means:
|
|
(a)
|
before the Loan has been drawn, Lenders the aggregate of whose Commitments at any relevant time exceeds 66
2
⁄
3
% of the Total
Commitments at that time; and
|
|
|
(b)
|
after the Loan has been drawn, Lenders the aggregate of whose Contributions at any relevant time exceeds 66
2
⁄
3
% of the Total
Contributions at that time;
|
“
Management Agreements
” means the Commercial Management Agreement and the
Technical Management Agreement;
“
Managers
” means the Commercial Manager and the Technical Manager;
12
“
Manager’s Undertaking
” means the undertaking to be executed by each
Manager with respect to its commercial and/or technical management of the Vessel and the rights of the Banks under the Finance Documents in the agreed form;
“
Mandatory Cost
” means the percentage rate per annum calculated by the Agent in respect of each Lender in accordance with
Schedule 7;
“
Market Disruption Event
” means, in relation to an Interest Period, if:
|
|
(a)
|
at or about noon on the Quotation Day for that Interest Period the Screen Rate is not available and none of the Reference Banks supplies a rate to the Agent to determine LIBOR for that Interest Period; or
|
|
|
(b)
|
before close of business in London on the Quotation Day for that Interest Period, the Agent receives notification in the form required by Clause 8.9 from a Lender or Lenders whose Contributions aggregate more than 66
2
⁄
3
% of the Total Contributions (or, if the Loan has not been drawn, whose Commitments aggregate more than 66
2
⁄
3
% of the Total Commitments) that the cost to it or them of obtaining matching deposits for that Interest Period in the London interbank market or such other
source as it may reasonably select would be in excess of LIBOR (such Lender or Lenders being an “
Affected Lender
” or the “
Affected Lenders
”, as the case may be);
|
“
Master Agreements
” means:
|
|
(a)
|
the master agreement (on the 1992 ISDA (Multicurrency Crossborder) form) and schedule made or to be made between the Borrower and DNB Bank ASA as an Original Swap Provider; and
|
|
|
(b)
|
the master agreement (on the 1992 ISDA (Multicurrency Crossborder) form) and schedule made or to be made between the Borrower and Skandinaviska Enskilda Banken AB (publ) as an Original Swap Provider,
|
including, in each case, all Designated Transactions from time to time entered into, and all Confirmations from time to time exchanged or
deemed exchanged, under such master agreement;
“
Master Agreement Security Deed
” means the first priority deed of
assignment and charge in respect of the Borrower’s rights under the Master Agreements to be executed by the Borrower in favour of the Security Trustee in the agreed form;
“
Master Agreement Liabilities
” means, as at any relevant date, the aggregate of all liabilities of the Borrower to the Swap
Providers under or pursuant to the Master Agreements, whether actual or contingent, present or future;
“
Material Adverse
Change
” or “
Material Adverse Effect
” means any occurrence, condition or circumstance (i) subsequent to 30 June 2010 and (ii) not previously known to the Lenders or the Agent, which the Lenders determine has
had, or could reasonably be expected to have, a material adverse change in or a material adverse effect on:
|
|
(a)
|
the rights or remedies available to the Banks under any Finance Document;
|
13
|
|
(b)
|
the ability of the Borrower or any other Obligor to perform and comply with its obligations under any Finance Document;
|
|
|
(c)
|
the validity, legality or enforceability of any Finance Document;
|
|
|
(d)
|
the validity, legality or enforceability of any Encumbrance expressed to be created pursuant to any Finance Document or the priority or ranking of that Encumbrance; or
|
|
|
(e)
|
the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or any other member of the Group;
|
“
Material of Environmental Concern
” means and includes chemicals, pollutants, contaminants, waste, toxic or hazardous
substances, oil, petroleum, oil and petroleum products and any other polluting substances, the release, discharge, disposal or emission of which into the environment is regulated, prohibited or penalised by or pursuant to any Environmental Law;
“
Mortgage
” means:
|
|
(a)
|
if the Vessel is registered under the laws and flag of Greece, a first priority Greek law mortgage over the Vessel to be executed by the Borrower in favour of the Banks as security for the Outstanding Indebtedness in
such form as the Banks shall reasonably require having regard to the laws of Greece, such mortgage to be for an amount equal to at least 130% of the amount of the Loan drawn on the Drawdown Date; or
|
|
|
(b)
|
if the Vessel is registered under the laws and flag of any other Approved Flag State, a first priority ship mortgage over the Vessel to be executed by the Borrower in favour of the Security Trustee (and/or such other
Banks as may be appropriate) as security for the Outstanding Indebtedness in such form as the Banks shall reasonably require having regard to the laws of such Approved Flag State together with, if customary for vessels registered in that Approved
Flag State, a deed of covenants collateral thereto or a declaration of pledge of mortgage, such document or documents to contain covenants, to the extent relevant, substantially in the same terms as Clauses 15 and 16 of this Agreement;
|
“
Non-Consenting Lender
” means any Lender who does not consent to the terms of a waiver or amendment
requested by the Borrower which pursuant to Clause 20.14 or any other provision of the Finance Documents requires the consent of all the Lenders and where other Lenders whose Contributions aggregate more than 49% of the Total Contributions (or,
before the Loan has been drawn, Lenders whose Commitments aggregate more than 49% of the Total Commitments) have consented to such waiver or amendment request;
“
Nordea Earnings Account
” means the Dollar denominated account with account number NO3960170441527 held by the Borrower with
Nordea Bank Norge ASA at its Oslo branch (or any substitute account from time to time approved by the Lenders);
“
Notice of
Drawdown
” means a notice substantially in the form set out in Schedule 3;
14
“
Obligor
” means the Borrower and any other member of the Group which is a party
from time to time to any of the Finance Documents;
“
Outstanding Indebtedness
” means the aggregate of the Loan
Indebtedness and the Master Agreement Liabilities;
“
Party
” means a party to this Agreement;
“
Permitted Encumbrance
” means:
|
|
(a)
|
any Encumbrance created by or pursuant to the Finance Documents;
|
|
|
(b)
|
any Encumbrance created by or pursuant to the Deferred Payment Security Documents (provided that the Intercreditor Agreement has been executed by all of the parties thereto);
|
|
|
(c)
|
liens for unpaid master’s and crew’s wages;
|
|
|
(e)
|
liens by operation of law for not more than 2 months’ prepaid hire under any charter in relation to the Vessel not prohibited by this Agreement;
|
|
|
(f)
|
liens for master’s disbursements in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Vessel, provided
such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps);
|
|
|
(g)
|
any Encumbrance created in favour of a plaintiff or defendant in any action Of the course or tribunal before whom such action is brought as security for costs and expenses where the Borrower is prosecuting or defending
such proceedings or arbitration in good faith by appropriate steps provided such Encumbrance does not (and is not likely to) result in any sale, forfeiture or loss of the Vessel; and
|
|
|
(h)
|
Encumbrances arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have
been made;
|
“
Pool Earnings
” means any Earnings due to the Borrower which arise from, and are attributable
to, the Vessel’s employment in the Tankers International Pool;
“
Potential Event of Default
” means any event or
circumstance specified in Clause 18 which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default;
“
Quotation Day
” means, in relation to any period for which an interest rate is to be determined, the day falling 2 Banking
Days before the first day of that period;
15
“
Reference Banks
” means, subject to Clause 8.8, the principal offices in London
of the Agent and Skandinaviska Enskilda Banken AB (publ) or such other banks as may be appointed by the Agent in consultation with the Borrower;
“
Relevant Ship
” means the Vessel and any other ship from time to time (whether before or after the date of this Agreement)
owned by, or demise chartered to, the Borrower;
“
Repayment Date
” means each of the Banking Days upon which a Repayment
Instalment is due and payable in accordance with Clause 5.2;
“
Repayment Instalment
” means each of the instalments of the
Loan becoming due on a Repayment Date in accordance with Clause 5.1;
“
Representative
” means, any delegate, agent,
manager, administrator, nominee, attorney, trustee or custodian;
“
Requisition Compensation
” means all moneys or other
compensation payable during the Security Period by reason of a Compulsory Acquisition of the Vessel;
“
Safety Management
Certificate
” has the meaning given to it in paragraph 1.1.6 of the ISM Code;
“
Saverco
” means Saverco NV, a
company incorporated in Belgium with enterprise number 0427685965 whose registered office is at de Gerlachekaai 20, 2000 Antwerpen, Belgium;
“
Screen Rate
” means, in respect of LIBOR for any period, the British Bankers’ Association Interest Settlement Rate for
Dollars for the relevant period, displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after
consultation with the Borrower;
“
Security Period
” means the period from the date of this Agreement until the discharge of
the security created by the Finance Documents by final and irrevocable repayment or payment in full of the Outstanding Indebtedness;
“
Service Bank
” means the Agent or the Security Trustee;
“
Structuring Fee Letter
” means the fee letter agreement dated on or about the date of this Agreement made between the Agent
and the Borrower in respect of the structuring fee payable under Clause 19.3;
“
Swap Provider
” means:
|
|
(a)
|
any Original Swap Provider; and
|
|
|
(b)
|
any bank, financial institution or other entity which has become a Party as Swap Provider in accordance with Clause 7.4,
|
which in each case has not ceased to be a Party as Swap Provider in accordance with the terms of this Agreement;
16
“
Swap Provider Percentage
” means, in respect of a Swap Provider, the proportion
(expressed as a percentage) of any proposed transactions in respect of which such Swap Provider has a right of first refusal under Clause 7.1 being:
|
|
(a)
|
in relation to an Original Swap Provider, the percentage set opposite its name in Schedule 2 as adjusted pursuant to Clause 7.4; and
|
|
|
(b)
|
in relation to any other Swap Provider, the amount of any Swap Provider Percentage transferred to it under this Agreement in accordance with Clause 7.4,
|
to the extent not cancelled, reduced or transferred by it under this Agreement;
“
Tankers International Pool
” means the pool of very large crude carriers (VLCC) and V-Plus vessels operated by Tankers
International LLC as commercial managers and known as the “Tankers International Pool”;
“
Tanklog
” means Tanklog
Holdings Limited, a company incorporated in Cyprus with company number HE 161603 whose registered office is at 1 C. Pantelides Avenue, Nicosia 1010, Cyprus;
“
Technical Management Agreement
” means the agreement for the time being in force between the Borrower and the Technical
Manager with respect to the technical management of the Vessel by the Technical Manager;
“
Technical Manager
” means any
company belonging to the Group that may be appointed as the technical manager of the Vessel or such other company as the Borrower may from time to time appoint as the technical manager of the Vessel with the prior consent of the Agent (such consent
not to be unreasonably withheld);
“
Total Loss
” means:
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of the Vessel; or
|
|
|
(b)
|
Compulsory Acquisition of the Vessel; or
|
|
|
(c)
|
capture, seizure, hijacking, theft, arrest, detention or confiscation of the Vessel by any person (not amounting to Compulsory Acquisition), unless the Vessel is released and restored to the Borrower or any relevant
charterer within 180 days after such capture, seizure, hijacking, theft, arrest, detention or confiscation;
|
“
Total
Loss Date
” means the date upon which a Total Loss of the Vessel is deemed for the purposes of the Finance Documents to have occurred, being:
|
|
(a)
|
if it consists of an actual total loss, the actual date of loss or, if that is not known, the date when the Vessel was last heard of;
|
|
|
(b)
|
if it consists of a constructive total loss, the date notice of abandonment of the Vessel is given to her insurers (provided a claim for total loss is
admitted by the insurers) or, if the insurers do not forthwith admit such a claim, the date on which the total loss is
|
17
|
|
subsequently admitted by the insurers to have occurred or (as the case may be) is subsequently adjudged by a competent court of law or arbitration panel to have occurred or, if earlier, the date
falling 180 days after notice of abandonment of the Vessel was given to the insurers;
|
|
|
(c)
|
if it consists of a compromised, agreed or arranged total loss, the date on which a binding agreement as to such compromised, agreed or arranged total is entered into by or on behalf of the Borrower with the
Vessel’s insurers;
|
|
|
(d)
|
if it consists of a Compulsory Acquisition of the Vessel, the date on which the requisition of title or other compulsory acquisition of the Vessel occurs; and
|
|
|
(e)
|
if it consists of capture, seizure, hijacking, theft, arrest, detention or confiscation of the Vessel by any person (not amounting to Compulsory Acquisition) and the Vessel is not released and restored to the Borrower
or any relevant charterer within 180 days, the date falling 180 days after the date on which the relevant capture, seizure, hijacking, theft, arrest, detention or confiscation occurred;
|
“
Total Loss Event
” means any event which constitutes a Total Loss or which, with the expiry of any relevant grace period,
would constitute a Total Loss;
“
Transfer Certificate
” means a transfer certificate in the form set out in Schedule 5 with
any modifications or amendments approved or required by the Agent;
“
Trust Property
” has the meaning given to it in Clause
21;
“
VAT
” means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature;
“
Vessel
” means the 318,000 dwt very large crude carrier with Builder’s hull number 1894 being constructed by the
Builder pursuant to the Building Contract with a contract price of $158,936,400 and scheduled for delivery on or about 28 February 2012 and which, upon the Delivery Date, is to be registered in the ownership of the Borrower under the laws and
flag of an Approved Flag State.
|
1.2
|
Construction of certain expressions
|
The following expressions shall be construed in the
following manner:
“
affiliate
” means, in relation to any person, a subsidiary of that person or a holding company of that
person or any other subsidiary of that holding company;
“
certified copy
” means, in respect of any document, a copy of it
certified as a true and complete and up to date copy of the original by a director or officer of the Borrower or by its lawyers or by another person acceptable to the Agent;
“
person
” includes a corporate entity and any body of persons (including a partnership) whether corporate or unincorporate;
18
“
subsidiary
” and “
holding company
” have the meanings given to
them by Section 1159 of the Companies Act 2006 provided that a company shall be treated, for the purposes only of the membership requirement contained in subsections 1159(1)(b) and (c), as a member of another company even if its shares in that
other company are registered in the name of (a) another person (or its nominee), whether by way of security or in connection with the taking of security, or (b) its nominee;
“
taxes
” includes all present and future income, corporation and value-added taxes and all stamp and other taxes, duties,
levies, imposts, deductions, charges and withholdings whatsoever, together with interest on them and penalties with respect to them, if any, and any payments of principal, interest, charges, fees or other amounts made on or in respect of them, and
references to “
tax
” and “
taxation
” shall be construed accordingly.
|
1.3
|
General interpretation
|
In this Agreement:
|
|
1.3.1
|
unless the context otherwise requires, words in the singular include the plural and vice versa;
|
|
|
1.3.2
|
references to any document include that document as varied, supplemented or replaced from time to time;
|
|
|
1.3.3
|
references to any enactment include re-enactments, amendments and extensions of that enactment;
|
|
|
1.3.4
|
references to any person include that person’s successors and permitted assigns;
|
|
|
1.3.5
|
clause headings are for convenience of reference only and are not to be taken into account in construction;
|
|
|
1.3.6
|
unless otherwise specified, references to Clauses, Recitals and Schedules are respectively to Clauses of and Recitals and Schedules to this Agreement;
|
|
|
1.3.7
|
any words following the terms “
including
”, “
include
”, “
in particular
” or any similar expression shall be construed as illustrative and shall not limit the sense of the
words, description, definition, phrase or term preceding those terms;
|
|
|
1.3.8
|
references to a document being “
in the agreed form
” are to a document in the form attached to the Agreed Form Certificate and include references to that form with such modifications as the Majority
Lenders may approve or require;
|
|
|
1.3.9
|
references to a period of one or more “
months
” shall mean a period beginning in one calendar month and ending in the relevant
calendar month on the day numerically corresponding to the day of the calendar month in which that period started, provided that (a) if that period started on the last day in a calendar month, or if there is no such numerically corresponding
day, that period shall end on the last Banking Day in the relevant calendar month and (b) if such numerically corresponding day is not a Banking Day, that period shall end on the next following Banking Day in the same
|
19
|
|
calendar month, or if there is no such Banking Day, that period shall end on the preceding Banking Day (and “
month
” and “
monthly
” shall be construed
accordingly).
|
A person who is not a Party may not enforce, or otherwise have the
benefit of, any provision of this Agreement under the Contracts (Rights of Third Parties) Act 1999.
|
2.1
|
Obligations of Banks several
|
The obligations of the Banks under the Finance Documents
and the Master Agreements are several and, accordingly:
|
|
2.1.1
|
no Bank shall be liable for the failure of any other Bank to perform its obligations under any Finance Document or Master Agreement; and
|
|
|
2.1.2
|
the failure of a Bank to perform any of its obligations under any Finance Document or Master Agreement shall not relieve any other Bank or the Borrower from any of their respective obligations under those documents.
|
|
2.2
|
Rights of Banks several
|
The rights and interests of each Bank under the Finance
Documents and the Master Agreements are several and, accordingly, notwithstanding any provision to the contrary in any Finance Document or Master Agreement:
|
|
2.2.1
|
the aggregate of the amounts outstanding at any time under the Finance Documents and/or the Master Agreements to each Bank shall be due as a separate and independent debt; and
|
|
|
2.2.2
|
each Bank shall have the right to sue for any amount due and payable to it from the Borrower or any other Obligor under the Finance Documents or any Master Agreement and it shall not be necessary for any other Bank to
be joined as an additional party in any proceedings to that end.
|
|
2.3
|
Restrictions on other proceedings by individual Banks
|
Except as provided in Clause
2.2.2, no Bank shall, except with the prior written consent of the Majority Lenders, bring any proceedings against the Borrower or any other Obligor in respect of any other claim (whether in contract, tort or otherwise) which that Bank may have
under or in connection with the Finance Documents and/or the Master Agreements. For the avoidance of doubt, this Clause 2.3 applies to any proceedings against the Borrower or any other Obligor to enforce any Encumbrance created in favour of the
Security Trustee by any Finance Document.
20
If and to the extent that any Bank other than the Security Trustee
is a party to the Mortgage in order to secure more effectively the Outstanding Indebtedness owing to it, it undertakes to act under the Mortgage in all respects in accordance with the instructions of the Security Trustee (as directed by the Majority
Lenders).
Subject to the provisions of this Agreement, the Lenders agree to
make the Loan available to the Borrower.
|
3.2
|
Availability and purpose
|
The Loan will be available to be drawn in one amount in
Dollars on the Drawdown Date in an amount not exceeding 70% of the Fair Market Value of the Vessel as at the Delivery Date and is to be applied exclusively for the purpose referred to in Recital (A), provided that none of the Banks shall be bound to
monitor or verify the application of the proceeds of the Loan.
|
3.3
|
Lenders’ participations
|
Subject to the provisions of this Agreement, each Lender
will participate in the Loan up to a principal amount not exceeding its Commitment in the proportion which its Commitment bears to the Total Commitments. No Lender is obliged to lend more than the amount of its Commitment.
|
3.4
|
No advance after expiry of Availability Period
|
No Lender will have any liability
whatsoever to make available its Commitment after the expiry date of the Availability Period and any part of a Lender’s Commitment which has not been advanced to the Borrower at close of business on that date shall be cancelled.
The Borrower may draw the Loan subject to giving the Agent a duly
completed Notice of Drawdown not later than 10:00 a.m. London time 3 Banking Days before the proposed Drawdown Date, which notice shall be irrevocable and will not be regarded as having been duly completed unless (a) the proposed Drawdown Date
is a Banking Day within the Availability Period and (b) the proposed Interest Period complies with Clause 8.4.
|
4.2
|
Agent’s notification to Lenders
|
Upon receipt of a Notice of Drawdown given in
accordance with Clause 4.1, the Agent shall promptly notify each Lender of the contents thereof and the relevant proportion of the Loan to be funded by that Lender.
21
|
4.3
|
Availability of Lenders’ Commitments
|
Each Lender shall, subject to the provisions
of this Agreement, make available to the Agent on the Drawdown Date the relevant proportion of its Commitment.
Notwithstanding the giving of a Notice of Drawdown pursuant to
Clause 4.1, neither the Lenders nor the Agent shall be obliged to disburse any funds in respect of the Loan, and the Borrower shall not be entitled to draw down the Loan, unless the following conditions precedent are satisfied:
|
|
4.4.1
|
the Agent has received payment of the fees and expenses specified in Clause 19 to the extent due and payable on or before the Drawdown Date;
|
|
|
4.4.2
|
the Agent has received the documents and evidence described in Schedule 4, in form and substance satisfactory to it;
|
|
|
4.4.3
|
the Agent is satisfied that both at the date of the relevant Notice of Drawdown and at the Drawdown Date:
|
|
|
(a)
|
the representations and warranties contained in Clause 11 and in any other Finance Document would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;
|
|
|
(b)
|
none of the circumstances specified in Clauses 6.2, 6.4, 6.5, 8.10 or 19.10 has occurred and is continuing;
|
|
|
(c)
|
if the ratio set out in Clause 17.2 were tested immediately following the drawdown of the Loan, the Borrower would not be obliged to provide additional security or prepay the Loan under that Clause; and
|
|
|
(d)
|
no Event of Default or Potential Event of Default has occurred or will arise following the advance of the Loan.
|
|
4.5
|
Waiver of conditions precedent
|
If the Lenders in their absolute discretion advance the
Loan notwithstanding that one or more of the conditions precedent specified above in relation to it remains unsatisfied on the Drawdown Date, the Borrower shall procure the satisfaction of such condition or conditions precedent within 7 days after
the Drawdown Date or such other period as the Majority Lenders may in their absolute discretion agree in writing.
|
4.6
|
Application of Loan proceeds
|
Subject to the provisions of this Agreement, the Agent
will pay to the Borrower on the Drawdown Date the amounts which the Agent receives from the Lenders under Clause 4.3 in like funds as are received by the Agent from the Lenders by paying the same in accordance with the Notice of Drawdown given by
the Borrower. Such payment shall constitute the
22
making of the Loan and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender accordingly, in an amount equal to that Lender’s proportion of the
Loan.
|
5.1
|
Repayment by instalments
|
Subject to the provisions of this Agreement, the Borrower
shall repay the Loan in 10 instalments each in the amount of $2,150,000 together with a balloon instalment of $43,500,000 payable with (and forming part of) the 10
th
and final Repayment
Instalment. If the full amount of the Loan is not advanced to the Borrower, the amount of each Repayment Instalment shall be reduced pro rata to the amount actually advanced.
The Repayment Instalments shall be paid on the Banking Days falling at
successive 6 monthly intervals from the Drawdown Date.
On the Final Maturity Date the Borrower shall additionally pay to the
Agent all sums which are then accrued or owing to the Banks (or any of them) under this Agreement and the other Finance Documents.
|
6.
|
PREPAYMENT AND CANCELLATION
|
|
6.1
|
Voluntary prepayment or cancellation
|
The Borrower shall have the right:
|
|
6.1.1
|
upon giving the Agent not less than 5 Banking Days’ prior written notice, to prepay the Loan in whole or in part on any Banking Day provided that if the Loan is to be prepaid in part the amount prepaid shall be
$5,000,000 or a higher integral multiple of $1,000,000; or
|
|
|
6.1.2
|
upon giving the Agent not less than 15 Banking Days’ prior written notice, to cancel, without penalty, the Commitments in whole or in part on any Banking Day provided that any cancellation of part of the
Commitments must be in the minimum amount of $10,000,000.
|
The Agent shall promptly notify the Lenders of any notice which is
received from the Borrower under this Clause 6.1.
|
6.2
|
Mandatory prepayment and cancellation upon illegality
|
If by reason of the introduction,
imposition, variation or change of any law, regulation or regulatory requirement or by reason of any judgment, order or direction of any relevant court, tribunal or authority it becomes unlawful in any applicable jurisdiction for a Lender to perform
any of its obligations as contemplated by this Agreement or to fund or maintain its Commitment or its Contribution (as the case may be) that Lender shall promptly notify the Agent upon becoming aware of that event, whereupon:
|
|
6.2.1
|
the Agent shall immediately notify the Borrower thereof;
|
23
|
|
6.2.2
|
the relevant Lender shall, following consultation with the Borrower, use all reasonable efforts to avoid the effects of such event and in particular shall consider, subject to obtaining any necessary consents,
transferring at par its rights and obligations under this Agreement to another legal entity approved by the Borrower not affected by such law, regulation, regulatory requirement, judgment, order or direction;
|
|
|
6.2.3
|
if the relevant Lender is unable, within 90 days following the date upon which it became aware of such event, or such shorter period permitted thereby, to avoid the effect thereof, or the Borrower fails to agree to any
proposal put forward by the relevant Lender to avoid the effects of such event, then the Agent shall, at the request and on behalf of the relevant Lender, give notice to the Borrower that on such date or on a future specified date, in either case
not being earlier than the last day of any applicable grace period permitted by law, the Commitment of that Lender (if still undrawn) shall be cancelled or, as the case may be, the Borrower shall be obliged to prepay that Lender’s Contribution
in full.
|
|
6.3
|
Mandatory prepayment upon sale or Total Loss
|
The Borrower shall prepay the Loan in full
if:
|
|
6.3.1
|
the Vessel is sold in accordance with Clause 11.2.4, in which case the Borrower shall make the prepayment simultaneously with the completion of that sale; or
|
|
|
6.3.2
|
the Vessel becomes a Total Loss, in which case the Borrower shall make the prepayment on the date which is the earlier of (a) the date falling 90 days after the Total Loss Date and (b) the date upon which the
insurance proceeds or Requisition Compensation in respect of the Vessel are received by the Security Trustee pursuant to the relevant Finance Documents unless (i) the Vessel was not insured at the time of the Total Loss in accordance with the
Finance Documents in which case the Borrower shall prepay the Loan in full within 10 Banking Days of its receipt of a demand from the Agent (as directed by the Majority Lenders) for prepayment of that amount, or (ii) an insurer has refused to
meet or has disputed the claim for the Total Loss in which case the Borrower shall prepay the Loan in full within 60 Banking Days of its receipt of a demand from the Agent (as directed by the Majority Lenders) for prepayment of that amount.
|
|
6.4
|
Mandatory prepayment and cancellation upon a Change of Control
|
If a Change of Control
occurs without the prior consent of the Majority Lenders (such consent not to be unreasonably withheld or delayed), the Borrower shall prepay the Loan in full on or before the date falling 60 days after the date of the Change of Control or, if the
Loan has not been drawn, any undrawn Commitments shall be cancelled on the date of such Change of Control.
24
|
6.5
|
Mandatory prepayment and cancellation upon breach of financial covenants
|
If there is a
breach of the financial covenants set out in Clause 14.1, the Borrower shall prepay the Loan in full within 5 Banking Days after receipt of a written demand from the Agent (as directed by the Majority Lenders) requiring it to do so or, if the Loan
has not been drawn, any undrawn Commitments shall be cancelled on the date of the Agent’s demand.
|
6.6
|
Conditions of prepayment and cancellation
|
The following shall apply to any prepayment
under this Agreement:
|
|
6.6.1
|
each prepayment must be made together with all accrued interest on the amount prepaid and all other sums payable in respect of that amount under the provisions of this Agreement and, in the case of prepayment of the
whole of the Loan, shall be accompanied by payment of all other Outstanding Indebtedness;
|
|
|
6.6.2
|
unless otherwise specifically stated in this Agreement, any partial prepayment of the Loan shall be applied as follows:
|
|
|
(a)
|
any partial prepayment of the Loan made pursuant to Clause 6.1 or Clause 17.2.2 shall be applied towards the discharge of the remaining Repayment Instalments in inverse order of maturity; and
|
|
|
(b)
|
any partial prepayment of the Loan made pursuant to Clause 6.2, Clause 8.11, Clause 19.10.4 or any other relevant provision of this Agreement shall be paid to the relevant Lender or Lenders and all of the remaining
Repayment Instalments shall be reduced pro rata accordingly;
|
|
|
6.6.3
|
any partial cancellation of the Commitments shall reduce those amounts pro rata;
|
|
|
6.6.4
|
any notice of prepayment or cancellation given by the Borrower shall be effective on receipt by the Agent and, once given, may not be withdrawn or amended without the consent of the Majority Lenders and, in the case of
a notice of prepayment, the Borrower shall be bound to make the relevant prepayment in accordance with it;
|
|
|
6.6.5
|
except as specifically provided in this Agreement, in the absence of an Event of Default and demand for repayment by the Agent, the Lenders shall not be obliged to accept any other prepayment of the whole or any part of
the Loan;
|
|
|
6.6.6
|
any part of the Loan which is repaid or prepaid by the Borrower may not be reborrowed;
|
|
|
6.6.7
|
no amount of the Commitments cancelled under this Agreement may be subsequently reinstated; and
|
|
|
6.6.8
|
any prepayment made on a day other than the last day of an Interest Period applicable to the whole amount prepaid shall be made together with any Break Costs.
|
25
|
7.1
|
Swap Providers’ right of first refusal
|
If the Borrower decides to hedge some or
all of the its exposure in respect of the Loan then the Swap Providers shall have a right of first refusal to effect the transactions (it being agreed that any such transactions shall expire no later than the Final Maturity Date and shall be for a
period exceeding 12 months with interest payment dates falling every 6 months); however there is no obligation on any Swap Provider to offer terms for any such transaction. If all Swap Providers wish to effect the relevant transactions they shall do
so in proportion to their respective Swap Provider Percentages, subject to those relevant transactions each being in all respects in materially the same terms as each other. In the event that the Borrower concludes any such transactions with any or
all of the Swap Providers, such transaction shall be designated as a Designated Transaction.
|
7.2
|
Limitation on security where not all Swap Providers conclude swap transactions
|
Unless
otherwise agreed by the Lenders, if a Swap Provider concludes a Designated Transaction with the Borrower in respect of the Loan for an aggregate initial notional principal amount exceeding its Swap Provider Percentage of the principal amount of the
Loan, the Master Agreement Liabilities owing to that Swap Provider relating to the amount of such excess shall rank behind the rest of the Outstanding Indebtedness in right of payment for the purpose of applying moneys received under the Finance
Documents in accordance with Clause 9.2.
|
7.3
|
Consent to Master Agreement Security Deed
|
Each Swap Provider consents to the execution
of the Master Agreement Security Deed and to the Encumbrances created by it.
|
7.4
|
Changes to Swap Providers
|
Where a Swap Provider (a “
Transferor Swap
Provider
”) effects a transfer of all or any of its rights and obligations under its Master Agreement to any person (a “
Transferee Swap Provider
”) in accordance with the provisions of that Master Agreement, it shall also be
entitled to assign or transfer to the Transferee Swap Provider a commensurate proportion of its rights and obligations as a Swap Provider under this Agreement and the other Finance Documents, provided that:
|
|
7.4.1
|
no such rights and obligations may be assigned or transferred to a Transferee Swap Provider that is a member of the Group, except with the consent of all the Lenders and the other Swap Providers; and
|
|
|
7.4.2
|
no assignment or transfer by a Swap Provider of any of its rights or obligations under this Agreement and the other Finance Documents to a Transferee
Swap Provider that is not already a Party to this Agreement in the capacity of Swap Provider shall be
|
26
|
|
binding on, or effective in relation to, any other Party unless the Transferee Swap Provider has confirmed in writing its agreement to be bound by the provisions of this Agreement insofar as they
apply to the Swap Providers, which confirmation shall be in such form as shall be approved by the Borrower, the Agent and the other Swap Providers.
|
Promptly after completion of any relevant transfer referred to in
Clause 7.4 the Transferor Swap Provider and the Transferee Swap Provider shall give notice in writing to the Agent notifying it of that transfer and, in the case of the Transferee Swap Provider (if it is not already a Swap Provider), advising of its
address for communications under Clause 28.
The Borrower undertakes to do or to procure all such acts and things
and to sign, execute and deliver or procure the signing, execution and delivery of all such instruments and documents as the Transferor Swap Provider and/or the Transferee Swap Provider may reasonably require for the purpose of perfecting any such
assignment or transfer as mentioned in Clause 7.4.
Subject to the provisions of this Agreement, the Borrower shall pay
interest on the Loan or any part of it (as the case may be) at the Interest Rate applicable to it in arrears on the last day of each Interest Period, except in the case of an Interest Period longer than 6 months where interest shall be paid every 6
months during that Interest Period and on the last day of that Interest Period.
Subject to Clauses 8.3 and 8.10, the Interest Rate applicable to the Loan
for each Interest Period applicable to it will be the annual rate of interest determined by the Agent to be the aggregate of:
|
|
8.2.1
|
the Applicable Margin;
|
|
|
8.2.2
|
LIBOR for that Interest Period; and
|
|
|
8.2.3
|
the Mandatory Cost (if any) for that Interest Period.
|
If an Event of Default has occurred and is continuing and notice of such
Event of Default has been given to the Borrower by the Agent (whether or not a demand for immediate repayment of all or any part of the Outstanding Indebtedness has been made under Clause 18.2), all amounts payable by the Borrower under this
Agreement or any other Finance Document shall, for the purposes of this Clause 8.3 only, be deemed to be overdue and interest shall accrue on
27
all those amounts from the date of such Event of Default up to the earlier of (i) if capable of remedy, the date on which such Event of Default is remedied or (ii) if not capable of
remedy or the Borrower has failed to pay any amount actually payable by it under this Agreement or any other Finance Document, the date of actual payment (both before and after judgment) of that overdue amount, at a rate which is 2% per annum
higher than the rate which would have been payable if the overdue amount had, during the period of default, constituted part of the Loan for successive Interest Periods, each of a duration selected by the Agent. Any interest accruing under this
Clause 8.3 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.
|
8.4
|
Borrower’s selection of Interest Periods
|
Subject to Clauses 8.4.1 to 8.4.7 and the
other provisions of this Agreement, the Borrower may, by giving notice in writing to the Agent not later than 11:00 a.m. London time 3 Banking Days before the first day of each Interest Period, select the duration of that Interest Period (being a
period of 3, 6, 9 or 12 months or such other period for which a Screen Rate is published as the Borrower may select and the Agent may agree).
The following shall apply in determining the duration of an Interest Period:
|
|
8.4.1
|
except as provided in this Clause 8.4, the Borrower may select the duration of an Interest Period only in relation to the whole of the Loan;
|
|
|
8.4.2
|
the first Interest Period shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the last day of the immediately preceding Interest Period for it;
|
|
|
8.4.3
|
the Borrower shall make each selection under this Clause 8.4 (and in the case of the duration of any Interest Period being determined in accordance with Clause 8.4.4 below shall be deemed to have selected the period so
determined) in such manner as to ensure that, in the event that any Repayment Date falls within the Interest Period so selected, a separate Interest Period is selected in respect of the part of the Loan due to be repaid under Clause 5 on that
Repayment Date, the expiry of which period coincides with the relevant Repayment Date (and for this purpose alone the Borrower shall be entitled to select Interest Periods of different lengths in relation to the Loan);
|
|
|
8.4.4
|
in the absence of any selection by the Borrower of the duration of an Interest Period, the duration of that Interest Period shall (subject as provided in this Clause 8.4) be 3 months;
|
|
|
8.4.5
|
if the Agent shall certify to the Borrower that matching funds are not available for an Interest Period of the duration selected by the Borrower the duration of that Interest Period shall (subject as provided in this
Clause 8.4) be 3 months unless otherwise agreed between the Borrower and the Agent;
|
28
|
|
8.4.6
|
if an Interest Period would otherwise end on a day which is not a Banking Day, that Interest Period will instead end on the next Banking Day in that calendar month (if there is one) or the preceding Banking Day (if
there is not); and
|
|
|
8.4.7
|
no Interest Period shall extend beyond the Final Maturity Date.
|
The Agent shall promptly notify the Borrower and the Lenders
of each determination under this Agreement of (a) the duration of an Interest Period and/or (b) a rate of interest.
|
8.6
|
Obligation of Reference Banks to quote
|
In circumstances where a quotation is required
from the Reference Banks, a Bank which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.
|
8.7
|
Absence of quotations from Reference Banks
|
Subject to Clause 8.10, if LIBOR is to be
determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11:00 a.m. London time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations provided to the remaining
Reference Bank or Reference Banks.
|
8.8
|
Replacement of Reference Bank
|
If any Reference Bank which is a Lender ceases to be a
Lender or has become an Affected Lender or, in the opinion of the Agent, is substantially unable to provide the Agent from time to time when required with the necessary quotations for the purpose of fixing a rate of interest under this Agreement,
then the Agent shall (after consultation with the Borrower) appoint another bank to be a Reference Bank in replacement of that Reference Bank.
|
8.9
|
Notice of Market Disruption Event by Affected Lenders
|
Any notification to the Agent by
an Affected Lender of a Market Disruption Event occurring under paragraph (b) of the definition of that term shall be in writing and accompanied by a certificate signed by an officer of that Affected Lender certifying the cost to that Affected
Lender of obtaining matching deposits in the London interbank market on the date of that certificate.
The Agent shall pass to the Borrower
a copy of each certificate provided to it under this Clause 8.9 (and each Affected Lender consents to such disclosure).
If a Market Disruption Event occurs in relation to a Lender in
respect of any Interest Period, the rate of interest on that Lender’s Contribution for that Interest Period shall be the percentage rate per annum which is the sum of:
29
|
|
8.10.2
|
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 Contribution from whatever source it may reasonably select; and
|
|
|
8.10.3
|
the Mandatory Cost, if any, applicable to that Lender’s Contribution.
|
|
8.11
|
Alternative basis of interest or funding
|
If a Market Disruption Event occurs, and the
Agent or the Borrower so requires, the Agent, the Lenders or (as the case may be) the Affected Lender and the Borrower shall enter into negotiations (for a period of not more than 15 days) with a view to agreeing an alternative basis for determining
the rate of interest for the Loan or, as the case may be, the Affected Lender’s Contribution. Any alternative basis so agreed shall, with the prior consent of the Borrower and the Lenders or (as the case may be) the Affected Lender, be binding
on those parties. In the absence of such agreement, the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, select the Interest Periods for the Loan and set a rate of interest for each such Interest Period in
accordance with Clause 8.10 provided that the Borrower shall have the right, upon giving 3 Banking Days notice to the Agent, to:
|
|
8.11.1
|
prepay the whole of the Loan; or
|
|
|
8.11.2
|
prepay the Contribution of any Affected Lender; or
|
|
|
8.11.3
|
exercise its rights under Clause 25.14 in respect of any Affected Lender.
|
|
9.1
|
Place, time and manner of payment
|
Unless otherwise specified by the Agent, all moneys
to be paid by the Lenders to the Agent or by the Borrower to any Bank under this Agreement and the other Finance Documents shall be paid to the Agent in Dollars by not later than 10:00 a.m. London time on the due date and in same day funds to such
account as the Agent may from time to time notify the Borrower. The Borrower waives any right it may have in any jurisdiction to pay any such amount in a currency other than that in which it is expressed to be payable.
Except as otherwise specifically provided in this Agreement or any
other Finance Document, all moneys received or recovered by any Bank under the Finance Documents will, after discharging the cost (if any) incurred in collecting those moneys, be applied as follows:
|
|
9.2.1
|
first, in or towards payment of any unpaid fees, costs and expenses of the Banks under this Agreement;
|
|
|
9.2.2
|
secondly, in or towards the satisfaction of any amounts forming the balance of the Outstanding Indebtedness which are then due and payable, whether by reason of payment demanded or otherwise, pro rata between the Banks
in such order of application as the Agent may, with the Majority Lenders’ approval, think fit, but subject always to Clause 7.2;
|
30
|
|
9.2.3
|
lastly, the surplus (if any) shall be paid to the Builder for application in accordance with the Deferred Payment Agreement (unless at such date (i) no payment of any amount of the Deferred Payment or interest is
then due and payable in accordance with the Deferred Payment Agreement or (ii) all moneys secured by the Deferred Payment Security Documents have been finally and irrevocably repaid or paid, in which case the surplus shall be paid to the
Borrower or whomsoever else shall be entitled thereto).
|
The provisions of this Clause 9.2 will override any appropriation
made by the Borrower.
|
9.3
|
Availability of funds conditional upon receipt by Agent
|
The Agent shall not be obliged
to make available to any other Party any amount which it is due to receive for the account of that Party unless it is satisfied that it has unconditionally received the funds concerned.
Without prejudice to Clause 9.3, if the Agent makes an amount
available to the Borrower which has not (but should have) been made unconditionally available to the Agent by a Lender, the Borrower shall on demand refund that amount to the Agent.
Without prejudice to Clause 9.3, if the Agent makes an amount
available to a Bank which has not (but should have) been paid to the Agent by the Borrower, that Bank shall:
|
|
9.5.1
|
on demand refund that amount to the Agent; and
|
|
|
9.5.2
|
pay to the Agent on demand such further amount (as conclusively certified by the Agent) as shall indemnify the Agent against any cost, loss, liability or expense suffered or incurred by the Agent as a result of its
having made available such amount to that Bank before receiving it from the Borrower.
|
Any payment which is due to be made on a day that is not a Banking Day
shall be made on the next Banking Day in the same calendar month (if there is one) or the preceding Banking Day (if there is not).
|
9.7
|
Accrual of interest and periodic payments
|
All payments of interest and other payments
of an annual or periodic nature to be made by the Borrower shall accrue from day to day and be calculated on the basis of the actual number of days elapsed and a 360 day year.
31
The Agent and each other Bank will open and maintain on its books a
control account showing the amounts owing to the Banks (in the case of the Agent) or that Bank (in the case of each other Bank) from the Borrower and the amounts of all payments of principal, interest and other moneys falling due and received by
them or it, as the case may be. The Borrower’s obligation to repay the Loan, to pay interest thereon and to pay all other sums due under this Agreement and the other Finance Documents shall be conclusively evidenced (in the absence of manifest
error) by the entries from time to time made in the control accounts opened and maintained under this Clause 9.8.
|
10.
|
NO SET-OFF, COUNTERCLAIM OR TAX DEDUCTION
|
|
10.1
|
No set-off or counterclaim
|
All payments to be made by the Borrower under this Agreement
and the other Finance Documents shall be made without set-off or counterclaim free and clear of, and without deduction for or on account of, any present or future taxes, unless the Borrower is compelled by law to make payment subject to any such
tax.
If the Borrower is compelled by law to make any tax deduction from any payment
due under this Agreement or any other Finance Document, the Borrower will (subject to Clause 25.12):
|
|
10.2.1
|
promptly notify the Agent upon becoming aware of that requirement;
|
|
|
10.2.2
|
pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
|
|
|
10.2.3
|
pay the Bank to which that payment is made such additional amount as is necessary to ensure that such Bank receives a net amount equal to the full amount which it would have received had that tax deduction not been
required to be made; and
|
|
|
10.2.4
|
as soon as reasonably practicable after making the relevant tax deduction, deliver to the Agent a copy of the receipt from the relevant taxation authority evidencing that the tax had been paid to that authority.
|
If, following any tax deduction as is referred to in Clause 10.2 from any
payment by the Borrower, the recipient of that payment shall receive or be granted a credit against or remission for any taxes payable by it, such recipient shall, subject to the Borrower having made any increased payment in accordance with Clause
10.2.3 and to the extent that such recipient can do so without prejudicing the retention of the amount of such credit or remission and without prejudice to the right of such recipient to obtain any other relief or allowance which may be available to
it, reimburse the Borrower with such amount as such recipient shall in its absolute discretion certify to be the proportion of such credit or remission as will leave it (after such reimbursement) in no worse position than it would have been in had
there been no
32
such deduction or withholding from the payment to such recipient as aforesaid. Such reimbursement shall be made forthwith upon the recipient certifying that the amount of such credit or remission
has been received by it. Nothing contained in this Agreement shall oblige any Bank to rearrange its tax affairs or to disclose any information regarding its tax affairs and computations. Without prejudice to the generality of the foregoing, the
Borrower shall not by virtue of this Clause 10.3 be entitled to enquire about the tax affairs of any Bank.
Where the Borrower is or may be obliged to withhold tax from any
payment to a Bank under this Agreement or any other Finance Document and its obligation to withhold such tax may be eliminated or reduced under any applicable double taxation agreement or treaty, the relevant Bank will promptly comply with all
appropriate formalities required to be performed by it under such double taxation agreement or treaty (save as may depend on action being taken by a third party which has not been taken) so that it can receive the relevant payments from the Borrower
without deduction of such tax or with deduction at the reduced level permitted by such double taxation agreement or treaty.
All amounts expressed to be payable under a Finance Document by any party to a Bank
shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply made by any Bank to any party in connection with a Finance Document, that party shall pay to the Bank (in addition to and at the same time as paying any other
consideration for such supply) an amount equal to the amount of such VAT.
Where a Finance Document requires any party to reimburse a Bank
for any costs or expenses, that party shall also at the same time pay and indemnify such Bank against all VAT incurred by the Bank in respect of those costs or expenses to the extent that the Bank reasonably determines that it is not entitled to
credit or repayment of the VAT.
|
11.
|
REPRESENTATIONS AND WARRANTIES
|
|
11.1
|
Date of representations and warranties
|
The Borrower represents and warrants that the
following matters are true at the date of this Agreement.
|
11.2
|
Existence, listing, powers, compliance and solvency
|
The Borrower:
|
|
11.2.1
|
is a limited liability company duly incorporated and validly existing in goodstanding under the laws of, and has the centre of its main interests in, Belgium;
|
|
|
11.2.2
|
is listed on the First Market of Euronext Brussels;
|
|
|
11.2.3
|
has full power to own its property and assets and to carry on its business as it is now being conducted;
|
33
|
|
11.2.4
|
has complied with all statutory and other requirements relative to its business;
|
|
|
11.2.5
|
is solvent and not 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 it or all or any part of its assets.
|
|
11.3
|
Capacity and authorisation
|
The entry into and performance by the Borrower of this
Agreement, the Master Agreements and the other Finance Documents to which it is (or is to become) a party are within the corporate powers of the Borrower and have been duly authorised by all necessary corporate actions and approvals and no
limitation on its powers will be exceeded as a result of the borrowings made or other liabilities incurred under this Agreement. In entering into this Agreement, the Master Agreements and the other relevant Finance Documents the Borrower is acting
on its own account and not as agent or nominee of any person.
|
11.4
|
N
o contravention of laws or contractual restrictions
|
The entry into and performance by
the Borrower of this Agreement, the Master Agreements and the other Finance Documents to which it is (or is to become) a party do not and will not:
|
|
11.4.1
|
contravene in any respect the constitutional documents of the Borrower or any law, regulation or contractual restriction binding on the Borrower or any of its assets; or
|
|
|
11.4.2
|
result in the creation or imposition of any Encumbrance (other than a Permitted Encumbrance) on any of its assets in favour of any party.
|
|
11.5
|
Licences and approvals in force
|
All licences, authorisations, approvals and consents
necessary for the entry into, performance, validity, enforceability or admissibility in evidence of this Agreement, the Master Agreements and the other Finance Documents have been obtained and are in full force and effect and there has been no
breach of any condition or restriction imposed in this respect.
|
11.6
|
Validity and enforceability
|
When duly executed and delivered, and where applicable
registered, each of the Finance Documents and the Master Agreements will:
|
|
11.6.1
|
constitute the legal, valid and binding obligations of each Obligor which is a party thereto enforceable against such Obligor in accordance with its terms; and
|
|
|
11.6.2
|
(to the extent that by its terms it purports to do so) create a legal, valid and binding first priority Encumbrance in accordance with its terms over all the assets to which by its terms it relates,
|
except insofar as enforcement may be limited by any applicable laws relating to bankruptcy, insolvency, administration and similar laws
affecting creditors’ rights generally and by principles of equity.
34
|
11.7
|
No third party Encumbrances; title
|
At the time of execution of each Finance Document,
no third party will have any Encumbrance (other than a Permitted Encumbrance) on any asset over which an Encumbrance is to be created pursuant to that Finance Document and the Obligor entering into that Finance Document will be the sole and absolute
legal and beneficial owner of that asset.
|
11.8
|
No litigation current or pending
|
No litigation, arbitration, tax claim or
administrative proceeding involving the Borrower is current or pending or (to the knowledge of the Borrower) threatened or likely to commence or be taken, which would potentially have a Material Adverse Effect.
|
|
11.9.1
|
No Event of Default or Potential Event of Default is continuing or might reasonably be expected to result from the advance of the Loan or any part thereof.
|
|
|
11.9.2
|
The Borrower is not in default under any other agreement where such default would have a Material Adverse Effect.
|
|
11.10
|
Truth of financial and other information
|
All factual information furnished in writing
to any Bank by or on behalf of the Borrower in connection with the negotiation and preparation of this Agreement and the other Finance Documents was (when given) true and correct in all material respects and there are no other facts or
considerations the omission of which would render any such information materially misleading.
|
11.11
|
No liability to deduction or withholding; no registration taxes
|
All payments to be made
by the Borrower under this Agreement, the Master Agreements and the other Finance Documents may be made free and clear of and without deduction or withholding for or on account of any taxes, and neither this Agreement nor any other Finance Document
is liable to any registration charge or any stamp, documentary or similar taxes imposed by any authority, including without limitation, in connection with its admissibility in evidence.
The Borrower has complied in all material respects with all relevant tax
laws and regulations applicable to it and its business.
|
11.13
|
Pari passu obligations
|
The payment obligations of the Borrower under this Agreement,
the Master Agreements and the other Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
35
|
11.14
|
Environmental matters
|
Except as may have been disclosed by the Borrower in writing to,
and acknowledged in writing by, the Agent:
|
|
11.14.1
|
the Borrower has complied with the provisions of all Environmental Laws;
|
|
|
11.14.2
|
the Borrower has obtained all Environmental Approvals and is in compliance with all Environmental Approvals;
|
|
|
11.14.3
|
the Borrower has not received notice of any Environmental Claim that alleges that it is not in compliance with any Environmental Law or any Environmental Approval;
|
|
|
11.14.4
|
there is no Environmental Claim pending or, to the best of the Borrower’s knowledge and belief (having made due enquiry), threatened against the Borrower or any Relevant Ship; and
|
|
|
11.14.5
|
no Environmental Incident which could or might give rise to any Environmental Claim has occurred.
|
|
11.15
|
No money laundering
|
In relation to the utilisation by the Borrower of the facility
granted to it under this Agreement, the performance and discharge of its obligations and liabilities under the Finance Documents to which it is a party, and the transactions and other arrangements effected or contemplated by the Finance Documents to
which it is a party, the Borrower confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat
“money laundering” (as defined in Article 1 of the Directive 2005/60/EC of the European Parliament and of the Council of the European Union of 26 October 2005).
|
12.1
|
Duration of undertakings
|
The undertakings in this Clause 12 shall remain in force from
the date of this Agreement to the end of the Security Period.
|
12.2
|
Maintenance of status; listing
|
The Borrower:
|
|
12.2.1
|
shall maintain its separate corporate existence as a limited liability company under the laws of Belgium;
|
|
|
12.2.2
|
shall not, without the prior consent of the Agent, change its name;
|
36
|
|
12.2.3
|
shall maintain its listing on the First Market of Euronext Brussels or another reputable international stock exchange (and any delisting shall only be permitted with the consent of the Lenders);
|
|
|
12.2.4
|
shall not, without the prior consent of the Majority Lenders, change its place of incorporation or domicile or alter its legal status as a limited liability company.
|
The Borrower shall obtain and maintain in force, and promptly upon the
Agent’s request furnish certified copies to the Agent of, all licences, authorisations, approvals and consents, and do all other acts and things, which may from time to time be necessary or desirable for the continued due performance of its
obligations under the Finance Documents and the Master Agreements or which may be required for the validity, enforceability or admissibility in evidence of the Finance Documents and the Master Agreements.
|
12.4
|
Pari passu obligations
|
The Borrower shall ensure that its obligations under the Finance
Documents and the Master Agreements rank at least pari passu with all its other present, future and/or contingent unsecured and unsubordinated obligations.
The Borrower shall conduct its business in a proper and efficient
manner in compliance with its constitutional documents and all relevant applicable laws and regulations (including, without limitation, all relevant Environmental Laws) and notify the Agent immediately upon becoming aware of any breach of any such
law or regulation.
The Borrower shall pay all taxes, assessments and other governmental
charges as they fall due, except to the extent that it is contesting them in good faith by appropriate proceedings and has set aside adequate reserves for their payment if those proceedings fail.
The Borrower shall keep proper books of account in respect of its
business in accordance with IFRS consistently applied and, whenever so requested by the Agent, make them available for inspection by or on behalf of the Agent.
|
12.8
|
Execution of Charter Assignments
|
The Borrower undertakes to procure that, promptly
after the execution of a Long Term Charter, it will:
|
|
12.8.1
|
execute a Charter Assignment in favour of the Security Trustee in respect of that Long Term Charter (unless, despite the commercially reasonable efforts of the Borrower, that Long Term Charter can only be assigned with
the consent of the relevant charterer and the Borrower is unable to obtain the charterer’s consent to the assignment); and
|
37
|
|
12.8.2
|
subject to Clause 12.8.1, give notice of the Charter Assignment to the relevant charterer in the form required by the Charter Assignment and use its commercially reasonable efforts to obtain the charterer’s
acknowledgment thereto in the form required by the Charter Assignment.
|
The Borrower undertakes to procure that, with effect from the Delivery
Date and throughout the remainder of the Security Period, unless and until the Security Trustee shall otherwise direct in accordance with the Account Security Deed, all Earnings due to the Borrower in respect of the Vessel shall be paid and credited
to the Earnings Account provided that, in the case of Pool Earnings only, the Borrower may at its option procure that such Earnings are paid to the Nordea Earnings Account rather than to the Earnings Account.
Unless and until an Event of Default has occurred and is continuing (in which case such moneys shall be applied in accordance with the Account
Security Deed), the Borrower shall be entitled to withdraw any and all moneys from time to time credited to the Earnings Account.
The Borrower shall not, without the prior consent of the Majority
Lenders, create or permit to exist any Encumbrance (other than a Permitted Encumbrance) over any Charged Property, whether present or future (provided that where any such Encumbrance arises in the ordinary course of business, the Borrower shall as
soon as practicably possible discharge it).
|
12.11
|
Restriction on dividends
|
The Borrower shall not declare or pay any dividend, or make
any distribution of any kind or character (whether in cash, property or securities), in respect of any class of the Borrower’s share capital to the holders thereof, or purchase or otherwise acquire any share capital of the Borrower, except as
follows:
|
|
12.11.1
|
payments of aggregate dividends on a semi-annual basis of up to 50% of its semiannual net income; or
|
|
|
12.11.2
|
payments of aggregate dividends exceeding 50% of its annual net income where such payments have been approved by the Majority Lenders
|
provided always that no dividend may be paid if:
|
|
(a)
|
an Event of Default or Potential Event of Default has occurred or will occur as a result of the payment of that dividend; or
|
|
|
(b)
|
one or more of the financial covenants in respect of the Group set out in Clause 14.1 has been breached or will be breached as a result of the payment of that dividend.
|
38
|
12.12
|
No mergers or demergers
|
The Borrower shall not, without the prior consent of the
Majority Lenders, consolidate, amalgamate or merge with any other entity or demerge or enter into any form of reconstruction or reorganisation or do anything analogous thereto which has or could reasonably be expected to have a Material Adverse
Effect.
|
12.13
|
No change to financial year
|
The Borrower shall not, without the prior consent of the
Majority Lenders, alter or extend its financial year for the purposes of the preparation of its accounts.
|
12.14
|
No change of business
|
The Borrower shall not, without the prior consent of the Lenders,
make or permit to be made any substantial change to the general nature of its business from that permitted to be carried out under its articles of association as in force at the date of this Agreement.
|
12.15
|
Restriction on undertakings with affiliates
|
The Borrower shall not, without the prior
consent of the Majority Lenders, undertake any transaction with any person, company or other entity which is an affiliate of the Borrower (other than another member of the Group) unless such transaction is conducted at arm’s length on normal
commercial terms and does not have a Material Adverse Effect.
|
13.
|
INFORMATION UNDERTAKINGS
|
|
13.1
|
Duration of undertakings
|
The undertakings in this Clause 13 shall remain in force from
the date of this Agreement to the end of the Security Period.
|
13.2
|
Financial information
|
The Borrower shall, to the extent that the Agent is unable to
obtain copies from the Borrower’s website, provide to the Agent:
|
|
13.2.1
|
as soon as possible, but in no event later than 120 days after the end of each financial year of the Borrower, the audited consolidated accounts of the Group for that financial year, prepared in accordance with IFRS;
|
|
|
13.2.2
|
as soon as possible, but in no event later than 75 days after the end of each financial half-year of the Borrower, the consolidated accounts of the Group for that financial half-year, prepared in accordance with IFRS,
subjected to a limited audit and certified to their correctness by the chief financial officer of the Borrower;
|
|
|
13.2.3
|
as soon as possible, but in no event later than 60 days after the end of each quarter in each financial year of the Borrower, the Borrower’s press release which shall include its unaudited quarterly income
statement for that relevant quarter certified as to their correctness by the chief financial officer of the Borrower;
|
39
|
|
13.2.4
|
together with the audited consolidated accounts referred to in Clauses 13.2.1 and 13.2.2:
|
|
|
(a)
|
a Compliance Certificate evidencing that as at that date the Borrower is in compliance with all of the financial covenants in respect of the Group as set out in Clause 14.1 and that there is no security shortfall under
Clause 17.2 (or, if not, showing in either case the amount of any shortfall); and
|
|
|
(b)
|
(after the Drawdown Date) copies of the valuations of the Vessel obtained by the Borrower in accordance with Clause 17.1 from the relevant Approved Shipbrokers and dated not earlier than 30 days before the date of such
Compliance Certificate;
|
|
|
13.2.5
|
as soon as possible, but in no event later than 120 days after the end of each financial year of the Borrower, a financial projection for the Borrower and the Group for the next 5 years in a format which is acceptable
to the Borrower;
|
|
|
13.2.6
|
promptly, such further information in the possession or control of the Borrower regarding the financial condition and operations of the Group as the Agent may reasonably request.
|
|
13.3
|
Form of financial statements
|
The audited accounts delivered under Clause 13.2 will:
|
|
13.3.1
|
be prepared in accordance with all applicable laws and IFRS, effective as at that time, consistently applied; and
|
|
|
13.3.2
|
give a true and fair view of the state of affairs of the Group at the date of those accounts and of profit for the period to which those accounts relate.
|
|
13.4
|
Notification of material litigation
|
The Borrower shall inform the Agent promptly of any
litigation, arbitration, tax claim or administrative proceeding instituted or (to its knowledge) threatened and of any other occurrence of which it becomes aware which has or could reasonably be expected to have a Material Adverse Effect.
|
13.5
|
Notification of default
|
The Borrower shall promptly after the happening of any Event of
Default or a Potential Event of Default, notify the Agent of that event and of the steps (if any) which are being taken to remedy it.
|
13.6
|
Inspection of books and records
|
The Borrower shall permit one or more representatives
of the Agent, at the request of the Agent, to have reasonable access to its books and records and to inspect the same during normal business hours at its offices upon reasonable prior written notice.
40
|
13.7
|
“Know your customer” checks
|
The Borrower shall provide the Agent with any
information requested by any Bank in order for that Bank to comply with any anti-money laundering or “know your customer” legislation, regulation or procedures applicable to it from time to time.
|
13.8
|
Provision of further information
|
The Borrower shall, to the extent that the Agent is
unable to obtain such information from the Borrower’s website, promptly provide the Agent with such other financial and other information concerning itself and its affairs as the Agent may from time to time reasonably require and which can be
delivered without breach of confidentiality including, but not limited to, all documents dispatched by the Borrower to all of its shareholders or all of its creditors or all of any class of its creditors.
The Borrower shall ensure that at all times during the Security Period:
|
|
14.1.1
|
Current Assets exceed Current Liabilities;
|
|
|
14.1.2
|
Free Liquid Assets are not less than the higher of:
|
|
|
(b)
|
5% of the Total Indebtedness;
|
|
|
14.1.3
|
the aggregate amount of cash is not less than $30,000,000; and
|
|
|
14.1.4
|
the ratio of Stockholders’ Equity to Total Assets is not less than 30%.
|
The Borrower shall notify the Agent in writing immediately upon
becoming aware of a breach of any of the financial covenants set out in Clause 14.1.
|
14.3
|
Definitions of financial terms
|
For the purposes of this Clause 14:
“
Available Facilities
” means, at any date of determination under this Agreement, the aggregate undrawn amount of any committed
loan or overdraft facilities available to the Borrower or any other member of the Group having a maturity of at least 6 months from that date of determination (including the Facilities provided under this Agreement);
“
Current Assets
” means, at any date of determination under this Agreement, the amount of the current assets of the Group
determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet and including any amounts available under committed credit lines having maturities of more than 12 months;
41
“
Current Liabilities
” means, at any date of determination under this Agreement,
the amount of the current liabilities of the Group determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet;
“
Free Liquid Assets
” means, at any date of determination under this Agreement, the aggregate amount of cash (which, for the
avoidance of doubt, shall include cash on debt reserve accounts or other accounts having the same effect), cash equivalents and Available Facilities of the Group determined on a consolidated basis in accordance with IFRS as in effect on date of this
Agreement and as shown in the Latest Balance Sheet but excluding any of those assets subject to an Encumbrance (other than an Encumbrance in favour of the Security Trustee pursuant to this Agreement) at any time;
“
Latest Balance Sheet
” means, at any date, the consolidated balance sheet of the Group most recently delivered to the Agent
pursuant to Clause 13.2 and/or most recently publicly available;
“
Stockholders’ Equity
” means, at any date of
determination under this Agreement, the amount of the capital and reserves of the Group determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet;
“
Total Assets
” means, at any date of determination under this Agreement, the amount of the total assets of the Group
determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet; and
“
Total Indebtedness
” means, at any date of determination under this Agreement, the amount of long-term loans (including
finance leases, bank loans and other long-term loans) and short- term loans of the Group determined on a consolidated basis in accordance with IFRS as in effect on the date of this Agreement and as shown in the Latest Balance Sheet.
|
15.
|
VESSEL UNDERTAKINGS - INSURANCE
|
|
15.1
|
Duration of undertakings
|
The Borrower undertakes to the Security Trustee to comply with
the undertakings contained in this Clause 15 at all times from the Delivery Date until the end of the Security Period.
|
15.2
|
Obligatory Insurances
|
The Borrower undertakes in respect of the Vessel:
|
|
15.2.1
|
to effect and maintain sufficient insurances on and over the Vessel in respect of (a) hull and machinery, (ii) hull interest, (iii) freight interest, (iv) protection and indemnity (including oil
pollution risks for the Vessel) and (v) war risks (including piracy, terrorism and confiscation);
|
42
|
|
15.2.2
|
to effect such insurances on the Vessel in Dollars and upon such terms as shall from time to time be reviewed by the Security Trustee, but in any event for not less than:
|
|
|
(a)
|
in the case of hull, machinery and equipment, marine and war risks, on an agreed value basis for an amount (the “
agreed insurable value
”) which is equal to the greater of (i) the Fair Market Value
of the Vessel and (ii) 125% of the amount of the Loan, provided however that the amount of hull and machinery cover other than total loss only cover shall be equal to at least 70% of the agreed insurable value of the Vessel; and
|
|
|
(b)
|
in the case of protection and indemnity risks (including pollution risks) for the full value and tonnage of the Vessel, for an aggregate amount equal to the highest level of cover from time to time available under basic
protection and indemnity club entry with a protection and indemnity association belonging to the International Group of Protection and Indemnity Associations;
|
|
|
15.2.3
|
to effect the Insurances through Belgibo or such other brokers (the “
approved insurance brokers
”) and with such insurance companies, underwriters, war risks associations and/or protection and indemnity
associations as shall from time to time be approved in writing by the Security Trustee, as directed by the Lenders (which approval shall not be unreasonably withheld);
|
|
|
15.2.4
|
to notify the Security Trustee, at least 10 days before the relevant policies or contracts expire, of the relevant brokers and/or insurance companies, underwriters, war risks association and/or protection and indemnity
association through and with whom the Insurances for the Vessel are expected to be renewed;
|
|
|
15.2.5
|
to renew the Insurances before the relevant policies or contracts expire, and to procure that the approved insurance brokers or insurers with which the Insurances for the Vessel are effected shall promptly confirm such
renewal in writing to the Security Trustee and inform the Security Trustee of the terms and conditions thereof, as and when the same occurs;
|
|
|
15.2.6
|
punctually to pay all premiums, calls, contributions or other sums in respect of the Insurances and to produce all relevant receipts when so reasonably required by the Security Trustee;
|
|
|
15.2.7
|
to arrange for the execution of such guarantees as may from time to time be required by any protection and indemnity or war risks association (if applicable) for or for the continuance of the Vessel’s entry;
|
|
|
15.2.8
|
to procure that notice of assignment to the Security Trustee in respect of the Vessel signed by the Borrower is duly endorsed upon all slips, cover notes, policies, certificates of entry or other instruments of
insurance issued or to be issued in connection with the Insurances for the Vessel, together with a loss payable clause, in each case in such form as may be required by the Security Trustee, all in accordance with usual industry practice;
|
43
|
|
15.2.9
|
to procure that all such instruments of insurance referred to in Clause 15.2.8 as are effected through the approved insurance brokers shall be deposited with the approved insurance brokers, and that such brokers shall
furnish the Security Trustee with pro forma copies and a letter or letters of undertaking in such form as the Security Trustee may reasonably require having regard to the then current market practice;
|
|
|
15.2.10
|
to procure that the protection and indemnity association and/or war risks association (if applicable) in which the Vessel is entered shall furnish the Security Trustee with a certified copy of the certificate of entry
for the Vessel and a letter or letters of undertaking in such form as may be required by the Security Trustee together with a certified copy of each certificate of financial responsibility for pollution by oil or other substances in relation to the
Vessel;
|
|
|
15.2.11
|
without prejudice to the generality of Clauses 15.2.9 and 15.2.10, if any of the Insurances form part of a fleet cover, to use its reasonable endeavours (having regard to then current market practice including the
practice prescribed by the Lloyds Insurance Brokers’ Committee and/or any other professional association of which the approved insurance brokers are members) to procure that the approved insurance brokers shall undertake to the Security Trustee
that they shall neither set off against any claim in respect of the Vessel any premiums or calls due in respect of any other vessel or in respect of other insurances nor cancel any of the Insurances by reason of non payment of premiums or calls due
in respect of any other vessel or in respect of other insurances;
|
|
|
15.2.12
|
to comply with all the requirements from time to time applicable to the Insurances, and not to make, do, consent or agree to any act or omission which would or might render any such instrument of insurance invalid,
void, voidable or unenforceable or subject to any material exclusion or qualification or which would render any sum payable under them repayable in whole or in part;
|
|
|
15.2.13
|
not to employ the Vessel, or suffer the Vessel to be employed, otherwise than in conformity with the terms of the said instruments of insurance (including any express or implied warranties they contain), without first
obtaining the insurers’ consent to such other employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe, or arranging for additional insurances;
|
|
|
15.2.14
|
to apply all sums received in respect of the Insurances in accordance with the Finance Documents for the purpose of making good the loss and repairing the damage in respect of which those sums have been received;
|
|
|
15.2.15
|
not to alter any of the terms of any of the instruments of insurance referred to in Clause 15.2.8 if, as a result of such alteration, the position of the Banks would be materially adversely affected;
|
|
|
15.2.16
|
not without the prior written consent of the Security Trustee (such consent not to be unreasonably withheld) to settle, compromise or abandon any claim under the Insurances for a Total Loss or a Major Casualty;
|
44
|
|
15.2.17
|
to do all things necessary and provide the Security Trustee with all relevant documents, evidence and information as the Security Trustee may require to enable the Security Trustee to collect or recover any moneys in
respect of the Insurances which are payable to the Security Trustee pursuant to the Finance Documents;
|
|
|
15.2.18
|
to provide the Security Trustee, upon its reasonable request, with copies of all communications of a material nature between the Borrower and the approved insurance brokers or (as the case may be) approved associations
relating to the Insurances in relation to:
|
|
|
(a)
|
any material condition, qualification or exclusion applicable to those Insurances;
|
|
|
(b)
|
any actual or potential suspension of any of those Insurances;
|
|
|
(c)
|
payment of premiums and calls and performance by the Borrower of its other material obligations in respect of those Insurances;
|
|
|
15.2.19
|
to make or procure that the managers of the Vessel shall make such quarterly voyage declarations as may be required from time to time in accordance with the Insurances, especially in order to maintain cover for trading
in and to the United States of America and the Exclusive Economic Zone (as defined in the United States of America Oil Pollution Act 1990) and shall on request supply the Security Trustee with copies thereof.
|
The Borrower undertakes to pay to the Security Trustee on demand all
reasonable premiums and other amounts reasonably payable by the Security Trustee in effecting and maintaining on behalf of the Security Trustee a mortgagee’s interest insurance policy and a mortgagee’s interest additional perils
(pollution) policy in respect of the Vessel in an amount equal to 110% of the amount of the Loan outstanding from time to time and otherwise to be on such terms and conditions as the Security Trustee shall deem appropriate after consulting with the
Borrower.
Notwithstanding the above, if at any time before the date on which the Security Trustee requires any insurances of the nature
referred to in this Clause 15.3 to be effected, the Borrower can demonstrate that a firm of approved insurance brokers is able to arrange those insurances upon the same terms, before that date, for a price lower than that for which any firm of
insurance brokers nominated by the Security Trustee is prepared to arrange those insurances, with a scope of coverage and with underwriters acceptable to the Security Trustee, the Security Trustee shall not unreasonably refuse to effect those
insurances through that firm of insurance brokers so nominated by the Borrower, but only if that firm of insurance brokers will enter into such agreements with the Security Trustee as it may require taking into account the identity of that firm of
insurance brokers.
45
|
16.
|
VESSEL UNDERTAKINGS - OPERATION AND MAINTENANCE
|
|
16.1
|
Duration of undertakings
|
The Borrower undertakes to the Security Trustee to comply with
the undertakings contained in this Clause 16 at all times from the Delivery Date until the end of the Security Period, provided that at any time after a Total Loss Event has occurred and is continuing the Borrower shall not be obliged to perform any
of its undertakings under this Clause 16 in respect of that Vessel to the extent that it would be impossible or impractical for it to do so.
|
16.2
|
Ownership and registration
|
The Borrower undertakes:
|
|
16.2.1
|
to keep the Vessel registered under the laws and flag of an Approved Flag State and not to do or suffer to be done anything by which that registration may be forfeited or imperilled;
|
|
|
16.2.2
|
not to change the port of registration of the Vessel without the prior written consent of the Security Trustee (such consent not to be unreasonably withheld);
|
|
|
16.2.3
|
to inform the Security Trustee in advance of any change to the name of the Vessel;
|
|
|
16.2.4
|
unless the Loan is prepaid in full in accordance with Clause 6.3 upon the completion of that sale, not to sell or agree to sell the Vessel or any share in the Vessel without the prior written consent of the Security
Trustee.
|
|
16.3
|
Classification, repair and surveys
|
The Borrower undertakes:
|
|
16.3.1
|
to procure that the Vessel is kept in a good and seaworthy state of repair, so as to maintain the highest class with its Classification Society free of material overdue recommendations and conditions, and so as to
comply with the provisions of all laws and all other regulations and requirements (statutory or otherwise) from time to time applicable to vessels registered at ports in the Approved Flag State;
|
|
|
16.3.2
|
to procure that the Vessel is submitted regularly to such periodical or other surveys as may be required for classification and regulatory purposes and, if so required by the Security Trustee, to procure that the
Security Trustee is supplied with copies of all survey reports and class and other certificates issued in this respect;
|
|
|
16.3.3
|
to procure that all repairs to or replacement of any damaged, worn or lost parts or equipment shall be effected in accordance with the rules and requirements of the Classification Society in such manner (both as regards
workmanship and quality of materials) as not to diminish the value of the Vessel;
|
|
|
16.3.4
|
not to remove any material part of the Vessel, or any item of equipment installed on it, unless the part or item so removed is promptly replaced by a
suitable part or item
|
46
|
|
which (a) is in the same condition as or better condition than the part or item removed, (b) is free from any Encumbrance (other than a Permitted Encumbrance) or right in favour of any
person other than the Security Trustee and (c) becomes on installation on the Vessel the property of the Borrower and subject to the security constituted by the Mortgage, provided that the Borrower may install and remove equipment owned by a
third party if the equipment can be removed without any risk of damage to the Vessel;
|
|
|
16.3.5
|
except as required by law or by the Classification Society, not without, the prior written consent of the Security Trustee, to cause or permit to be made any substantial change in the structure, type or performance
characteristics of the Vessel which would materially and adversely affect the value of the Vessel.
|
The Borrower undertakes:
|
|
16.4.1
|
to procure that at all times the Vessel is technically managed only by the Technical Manager on the terms of the Technical Management Agreement and is commercially managed only by the Commercial Manager on the terms of
the Commercial Management Agreement;
|
|
|
16.4.2
|
not, without the prior written consent of the Security Trustee (which shall not be unreasonably withheld or delayed), to amend any Management Agreement in any material respect or to terminate or suffer the termination
of any such appointment or to appoint or suffer the appointment of any other managers for the Vessel; and
|
|
|
16.4.3
|
to procure that on or before the Drawdown Date (or, if later, the date of its appointment) each Manager executes and delivers to the Security Trustee a Manager’s Undertaking.
|
The Borrower undertakes:
|
|
16.5.1
|
not to employ the Vessel, or suffer the Vessel to be employed:
|
|
|
(a)
|
in any trade or business which is forbidden by the law of its Approved Flag State or of any country to which the Vessel may sail, or which is otherwise illicit;
|
|
|
(b)
|
in carrying illicit or prohibited goods, or in any manner whatsoever which may render her liable to condemnation in a Prize Court or to destruction, seizure or confiscation;
|
|
|
(c)
|
in the event of hostilities in any part of the world (whether war be declared or not), in carrying any contraband goods, nor to enter or trade to any zone which is declared a war zone by the Vessel’s war risks
insurers unless the Borrower has effected, at its own expense, special insurance cover for the Vessel in relation thereto;
|
47
|
|
16.5.2
|
not, without the prior written consent of the Security Trustee, to let or employ the Vessel on demise charter;
|
|
|
16.5.3
|
fully to perform its own obligations under each Long Term Charter;
|
|
|
16.5.4
|
not to employ or permit any member of the Vessel’s crew to be employed in breach of the International Transport Worker’s Federation (ITF) rules and regulations.
|
|
16.6
|
Inspection; access to records
|
The Borrower undertakes to procure that the Security
Trustee or any representative of the Security Trustee is permitted:
|
|
16.6.1
|
without affecting the Vessel’s daily operations, to board the Vessel at all reasonable times for the purpose of inspecting her condition or satisfying itself as to proposed or executed repairs, and to afford all
proper facilities for such inspections (which inspections shall be at the cost of the Borrower up to a maximum of one inspection per calendar year, provided that following the occurrence of an Event of Default which is continuing, all inspections
shall be at the cost of the Borrower); and
|
|
|
16.6.2
|
at any time after the Borrower has failed to supply such information in accordance with Clause 16.7, with prior notice to the Borrower, to obtain information about the Vessel and her condition from her Classification
Society and the relevant regulatory authorities, to have access to the records of the Vessel maintained by her Classification Society and such authorities and otherwise to communicate direct with each of them as if the Security Trustee were the
owner of the Vessel.
|
The Borrower undertakes:
|
|
16.7.1
|
as soon as practically possible to furnish the Security Trustee, when so reasonably required by it in writing, with a copy of the classification certificate issued by the relevant Classification Society for the Vessel,
all such reasonable information regarding the Vessel, her employment, position and engagements, particulars of all towages and salvages and copies of all charters and other contracts for her employment or otherwise howsoever concerning her and all
such material information as shall be or ought to be supplied to the insurers of the Vessel;
|
|
|
16.7.2
|
to notify the Security Trustee immediately upon its becoming aware of:
|
|
|
(a)
|
any accident to the Vessel or incident which is or is likely to be a Major Casualty;
|
|
|
(b)
|
any occurrence resulting in the Vessel becoming or being likely to become a Total Loss;
|
48
|
|
(c)
|
any requirement or recommendation made by any insurer or the relevant Classification Society, or by any competent authority, in respect of the Vessel which is not complied with within any time limit imposed by that
insurer, Classification Society or authority;
|
|
|
(d)
|
any arrest of the Vessel, or the exercise or purported exercise of any lien on the Vessel or her Earnings or any requisition of the Vessel for hire;
|
|
|
(e)
|
any hijacking or theft (or attempted hijacking or theft) of the Vessel;
|
|
|
(f)
|
any other matter, event or incident, actual or threatened, the effect of which will or may lead to the ISM Code or the ISPS Code not being complied with by the Borrower or the relevant Manager or otherwise in connection
with the Vessel.
|
|
16.8
|
Discharge of debts; avoidance of liens
|
The Borrower undertakes:
|
|
16.8.1
|
unless the same is being contested in good faith by the Borrower, as soon as • practically possible to pay and discharge or secure all debts, damages and liabilities whatsoever which the Borrower shall have been
called upon to pay, discharge or secure and which have given, or may give, rise to maritime or possessory liens on or claims enforceable against the Vessel;
|
|
|
16.8.2
|
unless the same is being contested in good faith by the Borrower, in the event of arrest of the Vessel pursuant to legal process, or in the event of her detention in exercise or purported exercise of any such lien, to
procure the release of the Vessel from such arrest or detention within 30 days (or such longer period as may be agreed by the Lenders) of receiving notice of the same by providing bail or otherwise as the circumstances may require;
|
|
|
16.8.3
|
not without the previous consent in writing of the Security Trustee (as directed by the Majority Lenders) to create or suffer the creation of an Encumbrance (other than a Permitted Encumbrance) over or in respect of the
Vessel or any share in the Vessel;
|
|
|
16.8.4
|
not without the previous consent in writing of the Security Trustee (as directed by the Majority Lenders) to put or suffer the Vessel to be put into the possession of any person for the purpose of work being done upon
her in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless either:
|
|
|
(a)
|
the cost of that work is fully recoverable under the Insurances; or
|
|
|
(b)
|
that person has first given to the Security Trustee in terms satisfactory to the Security Trustee a written undertaking not to exercise any lien on the Vessel or her Earnings for the cost of that work or otherwise; or
|
|
|
(c)
|
the Borrower has established to the reasonable satisfaction of the Security Trustee that it has sufficient funds to pay for the cost of that work.
|
49
|
16.9
|
Perfection of Mortgage
|
The Borrower undertakes:
|
|
16.9.1
|
to place, and at all times and places to retain, a properly certified copy of the Mortgage on board the Vessel with her papers, and to cause such certified copy and such papers to be exhibited to any and all persons
having business with the Vessel which might give rise to any lien on it other than liens for crew’s wages and salvage and to any representative of the Security Trustee and keep prominently displayed in the chart room and in the Master’s
cabin of the Vessel a framed notice in plain type, reading as follows (or in such other form as the Security Trustee may reasonably require having regard to the laws of its Approved Flag State):
|
“NOTICE OF MORTGAGE
This Vessel is subject to a First Priority Mortgage in favour of DNB Bank ASA as agent and trustee for and on behalf of itself and certain
other banks and financial institutions. Under the terms of the said Mortgage neither the Borrower, any charterer, the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this
Vessel any lien whatsoever other than for crew’s wages and salvage”;
|
|
16.9.2
|
to comply with and satisfy all pertinent requirements and formalities to perfect and maintain the Mortgage as a legal, valid and enforceable first priority mortgage over the Vessel.
|
|
16.10
|
Environmental undertakings
|
The Borrower undertakes:
|
|
16.10.1
|
to notify the Security Trustee immediately upon its becoming aware of the occurrence of:
|
|
|
(a)
|
any Environmental Claim against the Borrower or any Relevant Ship; or
|
|
|
(b)
|
any Environmental Incident which would potentially give rise to any Environmental Claim;
|
which, in either case, has affected or could affect the interests of the Banks in a materially adverse way, and to keep the Security Trustee
advised in writing on such regular basis and in such detail as the Security Trustee shall reasonably require of the nature of that Environmental Claim or Environmental Incident and the Borrower’s proposed and actual response thereto;
|
|
16.10.2
|
to comply with and procure that its affiliates comply with all Environmental Laws including, without limitation, requirements relating to manning and establishment of financial responsibility, and to obtain and comply
with, and procure that all such affiliates obtain and comply with, all Environmental Approvals;
|
50
|
|
16.10.3
|
to ensure that the Vessel is, at all times, equipped and accredited with any required trading documentation and/or authorisations necessary to legitimise the entry of the Vessel into the waters of any relevant
jurisdiction. Such trading documentation and authorisations shall include, amongst other things, valid certification under the International Convention on Civil Liability for Oil Pollution Damage (as amended) and the International Convention on
Civil Liability for Bunker Oil Pollution Damage, a valid US Coast Guard certificate of financial responsibility (water pollution), a valid certificate from any US state that requires a state equivalent of a certificate of financial responsibility, a
vessel classification certificate and any other credentials as might be, or may come to be, required. Copies of such trading documentation and/or authorisations shall be made available to the Security Trustee as and when requested.
|
|
16.11
|
ISM Code and ISPS Code
|
The Borrower undertakes to comply, and procure compliance by the
Manager and any other operator of the Vessel, with:
|
|
16.11.1
|
all provisions of the ISM Code including, without limitation, obtaining and maintaining in force at all times a valid Document of Compliance in relation to the company responsible for the Vessel’s compliance with
the ISM Code under paragraph 1.1.2 of the ISM Code and a valid Safety Management Certificate in respect of the Vessel as required by the ISM Code; and
|
|
|
16.11.2
|
all provisions of the ISPS Code including, without limitation, obtaining and maintaining in force a valid International Ship Security Certificate in respect of the Vessel as required by the ISPS Code, and ensuring that
the Vessel’s security system and its associated security equipment comply with the applicable requirements of Part A of the ISPS Code and of Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS), and that an approved ship security plan
is in place,
|
and to procure that certified copies of all such certificates and other documents are provided promptly on
demand to the Security Trustee.
|
17.
|
VALUATIONS AND ASSET PROTECTION
|
The Borrower shall, with effect from the Drawdown Date, arrange at its own
expense for valuations of the Vessel to be carried out on or about each date on which the Borrower is required to provide a Compliance Certificate to the Agent under Clause 13.2.4(a) (and at any other time that the Borrower deems appropriate) in
order to determine her market value as at each such date. Such valuations shall be addressed to the Agent (for the benefit of the Lenders) and shall be prepared:
|
|
17.1.1
|
without a physical inspection of the Vessel (at the discretion of the Agent) in Dollars on the basis of a sale for prompt delivery, charter-free, at arm’s length between a willing seller and a willing buyer;
|
|
|
17.1.2
|
by any two Approved Shipbrokers as the Borrower may from time to time select;
|
51
and the Fair Market Value of the Vessel shall be the mean average of those valuations, except
that:
|
|
(a)
|
where the two valuations obtained differ by a margin of over 10% of the amount of the lower such valuation, a valuation shall be obtained from a third Approved Shipbroker and the Fair Market Value of the Vessel shall be
the mean average of all three valuations;
|
|
|
(b)
|
where the Vessel is subject to a Mortgage under which the amount recoverable is restricted to a registered maximum mortgage amount, the Fair Market Value of the Vessel shall be restricted to that mortgage amount if the
valuation otherwise determined under this Clause 17.1 would be higher; and
|
|
|
(c)
|
where the Vessel becomes a Total Loss but the proceeds of the Insurances in respect of that Total Loss have not yet been applied in accordance with Clause 6.3, the Vessel shall be deemed to have a Fair Market Value
equal to its insured value or, if lower, such amount as the Agent determines is reasonably expected to be received from the Vessel’s insurers in respect of the Total Loss.
|
Each such valuation shall be conclusive and binding on the Borrower and the Banks save in the case of manifest error.
|
17.2
|
Consequences of security shortfall
|
If the aggregate of (a) the Fair Market Value
of the Vessel determined pursuant to Clause 17.1 and (b) the market value of any additional security previously provided under this Clause 17 is at any time less than 125% of the Loan, the Borrower shall at its own discretion, as soon as
possible but in any event not later than 30 days after a written demand by the Agent to make good that shortfall (as directed by the Majority Lenders), either:
|
|
17.2.1
|
provide additional security over cash deposits and/or such other assets and in such form as is acceptable to the Majority Lenders where such cash deposits and/or other assets have an aggregate market value (after
deducting the amount secured by any prior Encumbrances over such assets) at least equal to the shortfall; or
|
|
|
17.2.2
|
prepay such part of the Loan as will eliminate the shortfall in accordance with the relevant provisions of Clause 6.6; or
|
|
|
17.2.3
|
make good the shortfall by combining the provision of additional security under Clause 17.2.1 with a partial prepayment of the Loan under Clause 17.2.2.
|
52
|
17.3
|
Valuation of additional security
|
The market value of any additional security provided
or to be provided under this Clause 17 shall be determined at the cost of the Borrower on such basis and by such independent valuers as the Borrower and the Agent may agree (or, in the absence of such agreement, on such basis and by such independent
valuers as shall reasonably be selected by the Agent), subject to the following:
|
|
17.3.1
|
the value of any cash collateral in Dollars will be valued at its principal amount; and
|
|
|
17.3.2
|
any additional vessel will be valued in accordance with Clause 17.1.
|
|
17.4
|
Agent’s right to obtain valuations after Event of Default
|
If an Event of Default
has occurred and is continuing, the Agent shall be entitled from time to time to obtain its own valuations of:
|
|
17.4.1
|
the Vessel or any additional vessel in accordance with Clause 17.1 from any two Approved Shipbrokers selected by the Agent; and/or
|
|
|
17.4.2
|
any other additional security in accordance with Clause 17.3 from such independent valuers as the Agent shall select,
|
and the Borrower shall reimburse the Agent on demand for the costs of each such valuation. The Borrower undertakes to provide such assistance
as the Agent shall require in connection with all valuations obtained by the Agent in accordance with this Clause 17.4.
Each of the following events or circumstances is an Event of Default:
|
|
18.1.1
|
Non-payment
An Obligor does not pay on the due date any amount payable pursuant to the Finance Documents at the place and in the currency in which it is expressed to be payable or, in respect of moneys payable on
demand, (unless otherwise specifically provided) within 3 Banking Days from the date of demand, unless the non-payment:
|
|
|
(a)
|
is caused by technical or administrative error and is remedied within 3 Banking Days of the due date; or
|
|
|
(b)
|
is caused by a Disruption Event and is remedied within 3 Banking Days of the due date.
|
|
|
18.1.2
|
Insurances
The Vessel is not, or ceases to be, insured in the relevant amount and on the relevant terms specified in Clause 15 or the Borrower fails to comply with any of its other material (in the Agent’s
reasonable opinion) obligations in respect of the Insurances.
|
|
|
18.1.3
|
Security shortfall
The aggregate of (a) the Fair Market Value of the Vessel determined pursuant to Clause 17.1 and (b) the market value of any additional security previously provided under Clause 17 is less than
125% of the aggregate of the Loan and is not remedied in accordance with Clause 17.2.
|
53
|
|
18.1.4
|
Other obligations
An Obligor does not comply with any provision of the Finance Documents other than those referred to in Clauses 18.1.1, 18.1.2 and 18.1.3 provided that no Event of Default will occur under this
Clause 18.1.4 if:
|
|
|
(a)
|
such failure to comply relates to a breach of the financial covenants set out in Clause 14.1 (in which case the mandatory prepayment provisions of Clause 6.5 shall apply but the breach shall not constitute an Event of
Default); or
|
|
|
(b)
|
such failure to comply is capable of remedy (in the Agent’s reasonable opinion) and is remedied within 30 days of the Agent giving notice to the Borrower or the Borrower becoming aware of the failure to comply,
whichever date occurs earlier.
|
|
|
18.1.5
|
Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of an Obligor under or in connection with any
Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
|
|
|
18.1.6
|
Event of Default under a Master Agreement
Any of the Master Agreements is terminated as a result of an Event of Default (as therein defined) in relation to the Borrower.
|
|
|
18.1.7
|
Other cross default
|
|
|
(a)
|
Any repayment of principal in respect of, or any payment of interest on, any Financial Indebtedness of an Obligor is not paid when due or within any originally applicable grace period (unless the due date for payment
thereof is rescheduled with the agreement of the relevant creditor before the expiry of any such grace period); or
|
|
|
(b)
|
any Financial Indebtedness of an Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described); or
|
|
|
(c)
|
any commitment to an Obligor for any Financial Indebtedness is cancelled by a creditor of that Obligor by reason of an event of default (however described); or
|
|
|
(d)
|
any Financial Indebtedness of an Obligor becomes capable of being declared due and payable prior to its specified maturity or any commitment to an Obligor for any Financial Indebtedness becomes capable of being
cancelled in either case as a result of an event of default (however described) and the event giving rise to that event of default is not waived or remedied to the satisfaction of the relevant creditor within 30 days of its occurrence;
|
provided that no Event of Default will occur under this Clause 18.1.7 if the aggregate amount of Financial Indebtedness or
commitment for Financial Indebtedness falling
54
within paragraphs (a) to (d) above is up to (and not exceeding) an agreed minimum amount of less than $10,000,000 (or its equivalent in any other currency or currencies).
|
|
(a)
|
An Obligor is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with its
creditors generally or any class of creditors with a view to rescheduling any of its indebtedness; or
|
|
|
(b)
|
the value of the assets of an Obligor is less than its liabilities (taking into account contingent and prospective liabilities); or
|
|
|
(c)
|
a moratorium is declared in respect of any indebtedness of an Obligor.
|
|
|
18.1.9
|
Insolvency proceedings
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
|
|
|
(a)
|
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, bankruptcy or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of an Obligor
other than a solvent liquidation or reorganisation of an Obligor other than the Borrower; or
|
|
|
(b)
|
a composition, compromise, assignment or arrangement with any class of creditors of an Obligor; or
|
|
|
(c)
|
the appointment of a liquidator (other than in respect of a solvent liquidation of an Obligor other than the Borrower), receiver, administrative receiver, administrator, compulsory manager or other similar officer in
respect of an Obligor or any of its assets; or
|
|
|
(d)
|
enforcement of any Encumbrance over any assets of an Obligor,
|
or any analogous procedure or
step is taken in any jurisdiction.
|
|
18.1.10
|
Creditors’ process
Any expropriation, attachment, sequestration, distress or execution by a creditor affects any asset or assets of an Obligor having an aggregate value of at least $10,000,000 and is not
discharged within 30 days (unless the same is capable of appeal and is being contested in good faith by the relevant Obligor, in which case, as long as the Obligor continues its appeal in good faith, it shall only be an Event of Default if such
appeal fails and such expropriation, attachment, sequestration, distress or execution is not discharged within 30 days of the date on which the Obligor’s final appeal is dismissed).
|
55
|
|
18.1.11
|
Security imperilled
Anything is done, suffered or omitted to be done or occurs which, in the reasonable opinion of the Majority Lenders, would in any way imperil the security created by the Finance Documents.
|
|
|
18.1.12
|
Change or cessation of business
The Borrower ceases, or threatens to cease, to carry on its business, or a material part of its properties or assets is seized or nationalised, appropriated or compulsorily
purchased by or under the authority of any government, and such cessation, disposal, seizure, nationalisation, appropriation or compulsory purchase, in the reasonable opinion of the Majority Lenders, does or would have a Material Adverse Effect.
|
|
|
18.1.13
|
Unlawfulness, impossibility or repudiation
It becomes impossible or unlawful for an Obligor to fulfil any of its obligations under the Finance Documents, or for any Bank to exercise any of the rights vested in it
by, or to enforce the security constituted by, the Finance Documents, or any of the Finance Documents for any reason becomes invalid or unenforceable or ceases to be in full force and effect or (save to the extent that it ranks behind a Permitted
Encumbrance arising by operation of law) loses its first priority ranking or an Obligor repudiates any of the Finance Documents.
|
|
|
18.1.14
|
Revocation or modification of authorisations
Any licence, approval, consent, authorisation or registration at any time necessary or desirable for the validity, enforceability or admissibility in evidence of the
Finance Documents, or for an Obligor to comply with its obligations under them, or in connection with the ownership or operation of the Vessel, is revoked, withheld or expires, or is modified in what the Majority Lenders reasonably consider a
material respect.
|
|
|
18.1.15
|
Breach of Environmental Law
The Borrower fails to comply with any Environmental Law or any Environmental Approval or any Relevant Ship is involved in any incident which gives rise to an Environmental Claim if, in
any such case, that non-compliance or incident or the consequences of it would, in the reasonable opinion of the Majority Lenders, have a Material Adverse Effect.
|
|
|
18.1.16
|
Material Adverse Change
There is any Material Adverse Change.
|
Upon the occurrence of an Event of Default and at any time whilst
it is still continuing, without prejudice to any of the rights and remedies of the Agent and/or the other Banks under any of the other Finance Documents or otherwise:
|
|
18.2.1
|
the Agent may, and shall if so requested by the Majority Lenders, take any one or more of the following actions:
|
|
|
(a)
|
by written notice to the Borrower declare the Total Commitments of the Lenders cancelled, whereupon they shall be cancelled;
|
56
|
|
(b)
|
by written notice to the Borrower demand the immediate repayment of the Loan, all interest accrued thereon and all other Outstanding Indebtedness, whereupon such amount shall become immediately due and payable;
|
|
|
(c)
|
take steps to exercise the rights and remedies conferred upon the Agent and/or the other Banks by this Agreement and the other Finance Documents and exercisable on or after the occurrence of an Event of Default; and
|
|
|
18.2.2
|
the Security Trustee may, and shall if so requested by the Majority Lenders, take steps to enforce the security created by the Finance Documents and/or otherwise exercise the rights and remedies conferred on the
Security Trustee by this Agreement and the other Finance Documents or otherwise under any applicable law and exercisable on or after the occurrence of an Event of Default.
|
|
19.
|
FEES, EXPENSES AND INDEMNITIES
|
The Borrower shall pay to the Agent for the account of the Lenders (pro
rata in accordance with their Commitments) quarterly in arrears a commitment fee on the daily undrawn and uncancelled balance of the Commitments in relation to the relevant period computed from the date of this Agreement at an annual rate equal to:
|
|
19.1.1
|
40% of the Applicable Margin for the period from the date of this Agreement up to (and including) 31 May 2012; and
|
|
|
19.1.2
|
45% of the Applicable Margin thereafter.
|
The first period in respect of which such commitment
fee shall be calculated will be the period from the date of this Agreement up to and including 31 May 2012; subsequently the commitment fee shall be calculated for each of the following consecutive periods of 3 months ending on 31 August,
30 November, 28 February and 31 March respectively in each year with a final instalment being calculated in respect of the period ending on the last, day of the Availability Period.
The amount of the commitment fee payable in respect of each such period shall be calculated by the Agent within 5 Banking Days of the end of
such period and shall be notified by the Agent to the Borrower who shall pay such amount to the Agent not later than 5 Banking Days after receiving the Agent’s notification thereof.
The Borrower shall pay to the Agent for equal distribution to the
Mandated Lead Arrangers a non-refundable arrangement fee on such dates and in such amount as is specified in the Arrangement Fee Letter.
57
The Borrower shall pay to the Agent for equal distribution to the
Mandated Lead Arrangers a non-refundable structuring fee on such dates and in such amount as is specified in the Structuring Fee Letter.
The Borrower shall pay to the Agent for its own account a non-refundable
agency fee on such dates and in such amount as is specified in the Agency Fee Letter.
|
19.5
|
Indemnity against costs
|
The Borrower shall pay to the Agent on demand, and the Borrower
shall indemnify and keep each relevant Bank indemnified against, all costs, charges, expenses, claims, liabilities, losses, duties and fees (including, but not limited to, legal fees and expenses on a full indemnity basis) and taxes thereon suffered
or reasonably incurred:
|
|
19.5.1
|
by the Mandated Lead Arrangers, the Agent and/or the Security Trustee in the negotiation, preparation, printing, execution and registration of this Agreement and the other Finance Documents;
|
|
|
19.5.2
|
by the Agent in collating, monitoring and otherwise attending to the relevant conditions precedent to drawdown of the Loan;
|
|
|
19.5.3
|
by any Bank in the enforcement or preservation or the attempted enforcement or preservation of any of the rights and powers of the Banks (or any of them) under this Agreement and the other Finance Documents or of the
security constituted by the Finance Documents;
|
|
|
19.5.4
|
by any Bank in connection with any actual or proposed amendment of or supplement to this Agreement or any other Finance Document, or with any request to the Banks (or any of them) to grant any consent or waiver in
respect of any provision of this Agreement or any other Finance Document, whether or not it is given,
|
provided that the
Borrower shall not be liable to reimburse the costs of any legal advisers in respect of the matters referred to in Clauses 19.5.1 and 19.5.2 except the legal fees and disbursements of Holman Fenwick Willan LLP as counsel to the Agent and the fees
and disbursements of the legal counsel who are to render opinions in respect of any of the Finance Documents or to deal with the preparation and/or registration of the Mortgage or other Finance Documents on behalf of the Agent.
The Borrower shall promptly pay all stamp duty, registration and
other similar taxes payable on or by reference to any Finance Document and shall indemnify the Banks on the Agent’s written demand against any and all claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower
to pay any such duty or tax.
58
The Borrower shall indemnify each Bank on the Agent’s written demand
against any loss, liability or cost suffered for or on account of tax by that Bank in respect of a Finance Document under any laws in effect (and as interpreted, administered and applied) at the date of this Agreement, except that the indemnity
under this Clause 19.7 shall not apply:
|
|
19.7.1
|
with respect to any tax assessed on a Bank:
|
|
|
(a)
|
under the law of the jurisdiction in which that Bank is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Bank is treated as resident for tax purposes; or
|
|
|
(b)
|
under the law of the jurisdiction in which that Bank’s Lending Office is located in respect of amounts received or receivable in that jurisdiction,
|
if that tax is imposed on or calculated by reference to the overall net income received or receivable (but not any sum deemed to be received
or receivable) by that Bank; or
|
|
19.7.2
|
to the extent a loss, liability or cost is compensated for by a payment under Clause 10.2; or
|
|
|
19.7.3
|
to the extent that Clause 25.12 applies.
|
For the avoidance of doubt, any loss, liability or
cost suffered for or on account of tax by a Bank in respect of a Finance Document as a result of the introduction of, or any change in (or in the interpretation, administration or application of), any law or regulation after the date of this
Agreement, or the compliance with any law or regulation made after the date of this Agreement, shall be indemnified in accordance with the provisions of Clause 19.10 which shall apply thereto.
|
19.8
|
Break costs and other general indemnities
|
The Borrower shall pay to the Agent on
demand, and the Borrower shall indemnify each Bank against all Break Costs and any other actual losses, expenses or liabilities (as to the amount of which the Agent’s certificate shall be conclusive and binding upon the Borrower, except in case
of manifest error) suffered or reasonably incurred by that Bank in connection with or as a result of:
|
|
19.8.1
|
the Loan not being drawn for any reason in full on the Drawdown Date specified in the Notice of Drawdown, other than as a result of a default by that Bank;
|
|
|
19.8.2
|
any repayment or prepayment of the whole or any part of the Loan being made on any date other than the last day of an Interest Period applicable to it;
|
|
|
19.8.3
|
any default in payment by the Borrower of any sum due under this Agreement and/or the other Finance Documents on its due date; or
|
|
|
19.8.4
|
the occurrence or continuance of an Event of Default and/or a Potential Event of Default.
|
59
If any sum due from the Borrower under this Agreement or any other
Finance Documents (a “
Sum
”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “
First Currency
”) in which that Sum is payable into another currency (the
“
Second Currency
”) for the purpose of making or filing a claim or proof against the Borrower or obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, the Borrower shall as an
independent obligation, within 3 Banking Days of demand, indemnify each Bank to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (a) the rate of exchange
used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that Bank at the time of its receipt of that Sum.
If, as result of the introduction of or any change in (or in the
interpretation, administration or application of) any law or regulation after the date of this Agreement or the compliance with any law or regulation made after the date of this Agreement, any Bank suffers or incurs an Increased Cost, it shall
promptly notify the Agent upon becoming aware of that event, whereupon, subject to Clause 19.11 and Clause 25.12:
|
|
19.10.1
|
the Agent shall immediately notify the Borrower thereof;
|
|
|
19.10.2
|
the relevant Bank shall, following consultation with the Borrower, use all reasonable efforts within a period of 60 days from the date of the Agent’s notice under Clause 19.10.1 (the “
Remedy
Period
”) to avoid the effects of such event and in particular shall consider, subject to obtaining any necessary consents, transferring at par its rights and obligations under this Agreement to another legal entity approved by the Borrower
not affected by such law or regulation;
|
|
|
19.10.3
|
if the relevant Bank, having used all reasonable efforts as required under Clause 19.10.2, is unable to avoid the effects of such event during the Remedy Period, the Borrower shall indemnify the relevant Bank against
all Increased Costs suffered or incurred by that Bank or any of its affiliates by paying to the Agent for the account of the relevant Bank within 3 Banking Days of a demand by the Agent the amount of such Increased Costs so suffered or incurred from
time to time as certified by that Bank to the Agent;
|
|
|
19.10.4
|
without prejudice to Clause 19.10.3, if the relevant Bank is a Lender, the Borrower shall have the right at any time (whether during or after the Remedy Period), upon giving 3 Banking Days notice to the Agent, to prepay
that Lender’s Contribution or, to the extent permitted thereunder, to exercise its rights under Clause 25.14 in respect of that Lender.
|
60
|
19.11
|
Exceptions to increased costs provisions
|
Clause 19.10 does not apply to the extent any
Increased Cost is:
|
|
19.11.1
|
compensated for by a payment under Clause 10.2 or Clause 19.7; or
|
|
|
19.11.2
|
compensated for by the payment of the Mandatory Cost; or
|
|
|
19.11.3
|
attributable to any tax assessed on a Bank:
|
|
|
(a)
|
under the law of the jurisdiction in which that Bank is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Bank is treated as resident for tax purposes; or
|
|
|
(b)
|
under the law of the jurisdiction in which that Bank’s Lending Office is located in respect of amounts received or receivable in that jurisdiction,
|
if that tax is imposed on or calculated by reference to the overall net income received or receivable (but not any sum deemed to be received
or receivable) by that Bank; or
|
|
19.11.4
|
attributable to the wilful breach by that Bank or its affiliates of any law or regulation; or
|
|
|
19.11.5
|
attributable to the implementation or application of or compliance with the “
International Convergence of Capital Measurement and Capital Standards, a Revised Framework
” published by the Basel Committee
on Banking Supervision in June 2004 in the form existing on the date of this Agreement (“
Basel II
”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government,
regulator, Bank or any of its affiliates) but, for the avoidance of doubt, shall not include any amendment to Basel II taking account of or incorporating any measure from the Basel III Paper or any law or regulation implementing the Basel III Paper,
in each case irrespective of whether the Basel III Paper is introduced by way of a separate framework, by way of one or more amendments to Basel II or by way of incorporation into Basel II.
|
For the purposes of this Clause 19.11, “
Basel III Paper
” means any of the agreements reached on 26 July 2010 and
12 September 2010 by the Groups of Governors and Heads of Supervision of the Basel Committee on Banking Supervision, the paper “
The Basel Committee’s response to the financial crisis: report to the G20
” published by the
Basel Committee on Banking Supervision in October 2010, the documents “
Basel III: A global regulatory framework for more resilient banks and banking systems” and “Basel III: International framework for liquidity risk measurement,
standards and monitoring
” both published by that committee in December 2010 or any follow-up agreement or paper from that committee.
61
|
19.12
|
Survival of indemnities
|
The indemnities contained in this Agreement and the other
Finance Documents shall continue in full force and effect after the full and final discharge of the Outstanding Indebtedness with respect to matters arising prior to that discharge.
|
20.1
|
Appointment of Agent
|
Each Lender irrevocably appoints and authorises the Agent to act
as its agent under this Agreement and the other Finance Documents.
|
20.2
|
Agent’s powers and discretions
|
The Agent shall have such powers and discretions:
|
|
20.2.1
|
which are expressly delegated to the Agent by the terms of this Agreement and the other Finance Documents;
|
|
|
20.2.2
|
which the Majority Lenders consider appropriate and give to the Agent (generally or in a particular case) with the Agent’s consent; and
|
|
|
20.2.3
|
which the Agent considers to be reasonably incidental to the discharge and performance of any of its functions under this Agreement or any of the Finance Documents or otherwise appropriate in the context of those
functions, including the exercise of any powers given to it by the Majority Lenders.
|
The relationship between the Agent and each Lender is that of agent
and principal only. Nothing in this Agreement or the Finance Documents shall constitute the Agent a trustee or fiduciary for any Lender or any other person and no action taken by the Lenders pursuant hereto or thereto, shall be deemed to constitute
the Lenders a partnership, association, joint venture or other entity.
|
20.4
|
Agent’s responsibility to Borrower
|
In performing its functions and duties under
this Agreement and the other Finance Documents, the Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any responsibility, liability or obligation (whether fiduciary or otherwise) towards, or
relationship of agency or trust with or for, the Borrower except for liability in circumstances where it is not acting in good faith or lawfully or where it acts in breach of the provisions of this Agreement and/or any other Finance Document.
|
20.5
|
Matters within Agent’s authority
|
Subject to Clause 20.6 and the other provisions
of this Agreement and the other Finance Documents, the Agent is irrevocably authorised by the Lenders in their name and on their behalf (and shall, if so directed by written notice from the Majority Lenders after the Lenders shall have consulted for
a period of not less than 5 days, which direction shall be binding on all the Lenders):
|
|
20.5.1
|
to waive, modify, vary or otherwise amend or excuse performance of any provisions of this Agreement or any of the Finance Documents; and
|
|
|
20.5.2
|
to enforce or take or refrain from taking any other action or proceedings with regard to this Agreement or any of the Finance Documents,
|
62
|
20.6
|
Notification of proposed waivers and amendments
|
Except in cases where the Agent is of
the opinion that the Lenders would be prejudiced by any delay in the Agent enforcing or taking action, in which event the Agent may, but shall not be obliged to, enforce or take action without prior notification to the Lenders, the Agent shall be
obliged to notify the Lenders if it proposes to waive, modify, vary or otherwise amend or excuse performance of any provision of this Agreement or any of the Finance Documents or to enforce or take or refrain from taking any action under Clause 18.2
and the Agent shall not be entitled to proceed with that proposal unless the Majority Lenders shall give notice to the Agent agreeing to that proposal. The Agent shall be entitled to cancel that proposal if written notice pursuant to this Clause
20.6 is not received within 5 days of the Lenders being so notified by the Agent.
|
20.7
|
Agent to act in accordance with instructions of Majority Lenders
|
Subject to Clause
20.14 and any other provision of this Agreement and the other Finance Documents which expressly requires the Agent to act in accordance with the instructions of all the Lenders, the Agent agrees to act with respect to this Agreement and the other
Finance Documents in accordance with the written instructions of the Majority Lenders. Any such instructions given by the Majority Lenders shall be binding on all the Banks. In the absence of any instructions (and provided that it is not explicitly
required to obtain the consent of the Lenders or Majority Lenders pursuant to any relevant provision of this Agreement or the Finance Documents) the Agent shall be entitled (but not bound) to give or withhold its consent or approval in such manner
as it considers to be in the interests of all the Lenders without obtaining instructions from, or consulting with, all or any of the Lenders.
|
20.8
|
Agent not required to act
|
In no event shall the Agent be required to take any action
which exposes, or is likely to expose, the Agent to personal liability or which is contrary to the provisions of:
|
|
20.8.1
|
this Agreement or any of the Finance Documents; or
|
|
|
20.8.2
|
any law, regulation or directive.
|
|
20.9
|
Provision of copy documents to Lenders
|
The Agent shall furnish each Lender:
|
|
20.9.1
|
with copies of any documents received by it under Clause 12.2 (but the Agent shall not be obliged to review or check the accuracy or completeness thereof);
|
63
|
|
20.9.2
|
if requested by that Lender, with copies of all documents received by the Agent under Clause 4.4;
|
|
|
20.9.3
|
with details of any communication received from the Borrower or any other Obligor referring to this Agreement and which:
|
|
|
(a)
|
contains a request for a consent or waiver which, under the terms of this Agreement or any Finance Document, requires the consent of the Lenders or the Majority Lenders; or
|
|
|
(b)
|
states that an Event of Default or Potential Event of Default has occurred and is continuing; or
|
|
|
(c)
|
contains any other request or information which, in the reasonable opinion of the Agent, is of a material nature.
|
|
20.10
|
Provision of copy communications to Agent
|
Each Lender will, promptly after receipt or
despatch thereof, forward to the Agent a copy of any communication:
|
|
20.10.1
|
sent by that Lender to the Borrower or any other Obligor; or
|
|
|
20.10.2
|
received by that Lender from the Borrower or any other Obligor and, in each case, relating to this Agreement or any of the Finance Documents.
|
|
20.11
|
Distributions of sums received and deductions by Agent
|
The Agent shall (subject to
Clause 9.3) distribute promptly to each Lender its due proportion of all sums received by the Agent on behalf of the Lenders under this Agreement or any of the other Finance Documents, subject to the Agent’s right to deduct and withhold from
any such payment any amount which is then (or which will, upon demand by the Agent, become) due and payable to the Agent from that Lender.
|
20.12
|
Agent’s retention of fees and expenses
|
The Agent may retain for its own use and
benefit (and shall not be liable to account to any Lender for all or any part of) any sums received by it by way of fees (and not payable to any Lender) or by way of reimbursement of expenses incurred by it.
|
20.13
|
Waiver on instructions of Majority Lenders
|
Save in respect of:
|
|
20.13.1
|
any provision which may only be waived or amended with the consent of all the Lenders and/or the relevant Service Bank (as the case may be) as specified in Clause 20.14 or Clause 20.17;
|
64
|
|
20.13.2
|
any provision which is stated to be expressly for the benefit of a Bank other than the Lenders generally; and
|
|
|
20.13.3
|
any other matter which, under the terms of this Agreement or any other Finance Document, expressly requires the consent or approval of all the Lenders,
|
the provisions of this Agreement and any other Finance Document may be waived, and (subject to the written agreement of each of the other
parties thereto, other than the Banks) varied or amended, by the Agent acting on the written instructions of the Majority Lenders, in each case evidenced by an instrument in writing, and any such waiver, variation or amendment shall be binding upon
all the Banks.
|
20.14
|
Consent of Agent and all Lenders required
|
Nothing in Clause 20.13 shall authorise the
effecting, without the prior written consent of the Agent and all the Lenders, of:
|
|
20.14.1
|
any change in the Applicable Margin or in the definitions of “
Majority Lenders
” or “
Finance Documents
”;
|
|
|
20.14.2
|
any change in the date for, or alteration in the amount (or the basis of determining the amount) of, any payment of principal, interest or fees payable to all the Lenders generally;.
|
|
|
20.14.3
|
any change in a Lender’s Commitment;
|
|
|
20.14.4
|
any extension of the Availability Period;
|
|
|
20.14.5
|
any proposed substitution or replacement of the Borrower;
|
|
|
20.14.6
|
any change to Clauses 3, 4, 5, 6, 8, 9.2, 24 and 30;
|
|
|
20.14.7
|
any change to this Clause 20.14;
|
|
|
20.14.8
|
the release or material variation of any of the security created by or pursuant to the Finance Documents or any of them; or
|
|
|
20.14.9
|
any other matter in respect of which the terms of this Agreement or any of the Finance Documents expressly requires the agreement of all the Lenders.
|
|
20.15
|
Borrower’s reliance upon Agent
|
At all times throughout the Security Period the
Borrower shall be entitled to rely upon the advice of the Agent as to the giving of any approvals or consents or the exercise of any discretions by the Lenders or any other act of the Lenders as required by this Agreement and/or any other Finance
Document.
65
|
20.16
|
Lenders to be informed
|
The Agent shall, subject to Clause 20.6, at all times keep the
Lenders informed of each and every approval or consent given and each exercise of any such discretion and each performance of any such other act which the Agent may have performed on behalf of the Lenders as required by this Agreement or any of the
Finance Documents.
|
20.17
|
Consent of Service Bank required
|
Notwithstanding the provisions of Clauses 20.13 and
20.14, no provision of this Agreement or of any other of the Finance Documents which in any way relates to the rights, duties, functions, powers or responsibilities of a Service Bank may be amended, waived or suspended without the prior consent of
that Service Bank.
|
21.1
|
Trust Property defined
|
In this Agreement, “
Trust Property
” means:
|
|
21.1.1
|
all rights, title and interests that may be mortgaged, charged, pledged or assigned in favour of the Security Trustee under or by virtue of the Finance Documents;
|
|
|
21.1.2
|
all rights granted to, or held or exercisable by, the Security Trustee by virtue of this Agreement and the other Finance Documents;
|
|
|
21.1.3
|
all moneys and other assets, which are received or recovered by or on behalf of the Security Trustee under or by virtue of any of the foregoing rights, including as a result of the enforcement or exercise of any such
right; and
|
|
|
21.1.4
|
all moneys and other assets accrued in respect of or derived from any of the foregoing.
|
|
21.2
|
Duties of Security Trustee
|
The Security Trustee shall:
|
|
21.2.1
|
hold the Trust Property on trust for the Banks in accordance with provisions of this Agreement and the other Finance Documents; and
|
|
|
21.2.2
|
perform and exercise the rights and benefits vested in it and deal with the Trust Property in accordance with the provisions of this Agreement and the other Finance Documents.
|
|
21.3
|
Security Trustee’s responsibility to Obligors
|
The Security Trustee does not assume
and shall not be deemed to have assumed any responsibility, liability or obligation (whether fiduciary or otherwise) towards, or relationship of agency or trust with or for, the Borrower or any other Obligor in any circumstances whatsoever except
for liability in circumstances where it is not acting in good faith or lawfully or where it acts in breach of the provisions of this Agreement and/or any other Finance Document.
66
|
21.4
|
Security Trustee’s powers and discretions
|
The Security Trustee shall have such
powers and discretions:
|
|
21.4.1
|
which are expressly delegated to the Security Trustee by the terms of this Agreement and the other Finance Documents;
|
|
|
21.4.2
|
which the Majority Lenders (or, in respect of any powers or discretions which by their terms would otherwise have to be exercised by all the Lenders together) the Lenders consider appropriate and give to the Security
Trustee (generally or in a particular case) with the Security Trustee’s consent;
|
|
|
21.4.3
|
which the Security Trustee considers to be reasonably incidental and conducive to the discharge and performance of any of its functions under this Agreement or any of the Finance Documents or otherwise appropriate in
the context of those functions, including the exercise of any powers given to it by the Majority Lenders; and
|
|
|
21.4.4
|
which are conferred on a trustee by the Trustee Act 1925 and/or the Trustee Act 2000 and any other applicable law for the time being in force.
|
|
21.5
|
Security Trustee to act in accordance with instructions of Majority Lenders
|
Subject to
the provisions of the Agreement and the other Finance Documents, the Security Trustee agrees to act with respect to this Agreement and the other Finance Documents in accordance with the written instructions of the Agent, or, if the Agent and the
Security Trustee are the same person, the Majority Lenders. Any such instructions given by the Majority Lenders shall be binding on all the Banks. In the absence of any instructions (and provided that it is not explicitly required to obtain the
consent of the Majority Lenders or any other Banks pursuant to any relevant provision of the Finance Documents) the Agent shall be entitled (but not bound) to give or withhold its consent or approval in such manner as it considers to be in the
interests of all the Banks without obtaining instructions from, or consulting with, all or any of the Banks.
|
21.6
|
Security Trustee not required to act
|
In no event shall the Security Trustee be required
to take any action which exposes, or is likely to expose, the Security Trustee to personal liability or which is contrary to the provisions of:
|
|
21.6.1
|
this Agreement or any of the Finance Documents; or
|
|
|
21.6.2
|
any law, regulation or directive.
|
67
|
21.7
|
Provision of copy documents to Banks
|
The Security Trustee shall furnish the Agent, or,
if the Agent and the Security Trustee are the same person, each Lender with copies of any documents received by it under or in connection with this Agreement or any Finance Documents which it considers to be of material importance to the Banks.
|
21.8
|
Transfer of moneys to Agent
|
The Security Trustee shall, except as expressly stated to
the contrary in this Agreement or any Finance Document, transfer any moneys forming part of the Trust Property to the Agent for application in accordance with the relevant provisions of this Agreement and the other Finance Documents, subject to the
Security Trustee’s right to deduct and withhold from any such payment any amount which is then (or which will, upon demand by the Security Trustee, become) due and payable to it, or to any receiver or agent appointed by it, under this Agreement
and the other Finance Documents.
|
21.9
|
Security Trustee’s retention of fees and expenses
|
The Security Trustee may retain
for its own use and benefit (and shall not be liable to account to any other Bank for all or any part of) any sums received by it by way of fees (and not payable to any other Bank) or by way of reimbursement of expenses incurred by it.
|
21.10
|
Release of security
|
At the end of the Security Period the Security Trustee shall,
following a request from the Borrower, release without any recourse, warranty or covenants for title whatsoever, all security granted to it pursuant to the Finance Documents then held by it, whereupon the Security Trustee shall be discharged from
all liabilities and obligations under this Agreement and the other Finance Documents. Any costs associated with the release of any security shall be for the cost of the Borrower.
The perpetuity period applicable to the trusts created by this Clause
21 is 125 years from the date of this Agreement.
|
|
21.12.1
|
Notwithstanding any other provision of this Agreement the Borrower irrevocably and unconditionally undertake to pay to the Security Trustee, as creditor in its own right and not as representative of the Banks, sums
equal to and in the currency of each amount payable by the Borrower to each of the Banks under or by virtue of this Agreement and the other Finance Documents as and when that amount falls due for payment thereunder or would have fallen due but for
any suspension of payment, moratorium, discharge by operation of law or analogous event.
|
|
|
21.12.2
|
The Security Trustee shall have its own independent right to demand payment of the amounts payable by the Borrower under this Clause 21.12,
irrespective of any
|
68
|
|
suspension, extinction or any other discharge for any reason whatsoever (otherwise than by payment) of the Borrower’s obligation to pay those amounts to the Banks other than a discharge by
virtue of payment which those Banks are entitled to retain.
|
|
|
21.12.3
|
Any amount due and payable by the Borrower to the Security Trustee under this Clause 21.12 shall be decreased to the extent that the Banks have received (and are able to retain) payment in full of the corresponding
amount under the other provisions of this Agreement and the other Finance Documents and any amount due and payable by the Borrower to the Banks under those provisions shall be decreased to the extent that the Security Trustee has received (and is
able to retain) payment in full of the corresponding amount under this Clause 21.12.
|
|
|
21.12.4
|
The rights of the Banks (other than the Security Trustee) to receive payment of amounts payable by the Borrower under this Agreement and the other Finance Documents are several and are separate and independent from, and
without prejudice to, the rights of the Security Trustee to receive payment under this Clause 21.12.
|
|
|
21.12.5
|
Any amounts received by the Security Trustee shall, to the extent permitted by the mandatory provisions of the applicable law, be applied in accordance with Clause 9.2.
|
|
21.13
|
Intercreditor Agreement
|
Each of the Banks authorises and instructs the Security Trustee
to execute and perform the Intercreditor Agreement.
|
22.
|
RETIREMENT OR REPLACEMENT OF A SERVICE BANK
|
|
22.1
|
Resignation of Service Bank
|
The following provisions apply where a Service Bank wishes
to retire from its role as such:
|
|
22.1.1
|
Each Service Bank may at any time resign its appointment under this Agreement by giving the Obligors and the other Banks not less than 30 days’ prior written notice to that effect.
|
|
|
22.1.2
|
After the giving by any Service Bank of a notice of termination the Majority Lenders may, in consultation with the Borrower, appoint a successor.
|
|
|
22.1.3
|
If no such successor is appointed within the period specified in Clause 22.1.1, the relevant Service Bank may, in consultation with the Borrower, appoint as its successor any reputable bank or financial institution with
an office in London, Oslo, Paris or Brussels.
|
69
|
22.2
|
Effective time of change of Service Bank
|
Any appointment of a successor Service Bank
under this Clause 22 shall take effect upon:
|
|
22.2.1
|
the successor confirming in writing its agreement to be bound by the provisions of this Agreement, which confirmation shall be in such form as shall be approved by the Majority Lenders; and
|
|
|
22.2.2
|
notice thereof by the outgoing Service Bank and its successor (which notice, in the case of a new Agent, shall specify the bank in New York to which payments to the new Agent shall be made thereafter) being given to
each of the other Parties; and
|
|
|
22.2.3
|
in the case of a new Security Trustee, the outgoing Security Trustee having transferred to its successor all of its rights and obligations under the Finance Documents.
|
|
22.3
|
Consequence of change of Service Bank
|
Upon the appointment of a successor to any
Service Bank taking effect under Clause 22.2:
|
|
22.3.1
|
that successor shall become bound by all the obligations of that Service Bank and become entitled to all the rights, privileges, powers, authorities and discretions of that Service Bank under this Agreement and the
other Finance Documents;
|
|
|
22.3.2
|
the obligations of that Service Bank under this Agreement and the other Finance Documents shall terminate but without prejudice to any liabilities which that Service Bank may have incurred prior to that termination;
|
|
|
22.3.3
|
that Service Bank shall be discharged from any further liability or obligations under this Agreement and the other Finance Documents; and
|
|
|
22.3.4
|
the provisions of this Agreement and the other Finance Documents shall continue in effect for the benefit of that Service Bank in respect of any action taken or omitted to be taken by it or any event occurring before
the termination of its obligations pursuant to this Clause 22.
|
|
23.
|
LIMITS OF THE SERVICE BANKS’ OBLIGATIONS
|
Neither Service Bank shall be obliged to ascertain or enquire:
|
|
23.1.1
|
either initially or on a continuing basis, as to the credit or financial condition or affairs of the Borrower, any other Obligor or any other person;
|
|
|
23.1.2
|
as to the performance or observance by the Borrower or any other Obligor of any of the terms and conditions of this Agreement or the Finance Documents or any other agreement; or
|
|
|
23.1.3
|
whether any Event of Default or Potential Event of Default has occurred, and until it shall have actual knowledge or express notice to the contrary, the Agent shall be entitled to assume that no Event of Default or
Potential Event of Default has occurred.
|
70
|
23.2
|
Responsibilities excluded
|
Neither Service Bank and none of their respective officers,
employees or agents shall be responsible to any other Bank for:
|
|
23.2.1
|
any failure or delay in performance, or breach by the Borrower, of their obligations under any of the Finance Documents or any other agreement or any failure or delay in performance, or breach by any of the other
Obligors, of their respective obligations under any of the Finance Documents or any other agreement; or
|
|
|
23.2.2
|
any recitals, statements, representations or warranties in, or for the legality, validity, effectiveness, enforceability, admissibility in evidence or sufficiency of, any of the Finance Documents or any other agreement;
or
|
|
|
23.2.3
|
the legality, validity, effectiveness or enforceability of any of the security created, or purported to be created, pursuant to any of the Finance Documents.
|
|
23.3
|
Limitation of liability
|
|
|
23.3.1
|
Neither Service Bank and none of their respective officers, employees or agents shall be liable for any loss, damage or expense suffered or incurred by the Borrower or any other Bank or any other person in consequence
of any action taken or omitted to be taken by it under this Agreement or any of the Finance Documents or in connection herewith or therewith unless caused by its gross negligence or wilful misconduct.
|
|
|
23.3.2
|
Without prejudice to the provisions of Clause 23.3.1, none of the other Parties shall take any proceedings against any officer, employee or agent of a Service Bank in respect of any claim which it may have against that
Service Bank or in respect of any act or omission (including, without limitation, negligence or wilful misconduct) by that officer, employee or agent in relation to this Agreement or any of the Finance Documents.
|
|
23.4
|
Lenders’ representations and undertakings
|
Each Lender:
|
|
23.4.1
|
severally represents and warrants to the Service Banks that it has made its own independent investigation of the financial condition and affairs of the Borrower and the other Obligors in connection with the entry by it
into this Agreement and in such respect it has not relied on any information provided to it by either Service Bank; and
|
|
|
23.4.2
|
undertakes that it will continue to make its own independent appraisal of the creditworthiness of the Borrower and the other Obligors and will not rely on any information provided to it by either Service Bank.
|
|
23.5
|
Indemnification by Lenders of Service Banks
|
The Lenders agree (which agreement shall
survive payment of all sums due under this Agreement) to indemnify each Service Bank (to the extent not reimbursed by the Borrower)
71
rateably, according to their respective Contributions (or, if no part of the Loan has been advanced, their respective Commitments) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against that Service Bank in performing its functions or duties under this Agreement
or any of the Finance Documents, or in connection with any action taken or omitted to be taken by that Service Bank in enforcing or preserving or attempting to enforce or preserve the rights of the Banks under this Agreement or any of the Finance
Documents or any other documents or security.
|
23.6
|
Ratification by other Banks
|
If a Service Bank takes any action under or in relation to
this Agreement or any Finance Document but that action is not authorised by the terms of this Agreement or that Finance Document and has not otherwise been specifically approved by the other Banks, the other Banks ratify and agree to ratify each
such action provided that (a) it is lawful, (b) it has been taken in good faith for the purpose of preserving or protecting the rights of the Banks (or any of them) and (c) having regard to all of the circumstances, it was reasonable
for the Service Bank to take such action without first seeking to obtain the approval or authorisation of all of the other Banks.
|
23.7
|
Service Banks’ rights
|
Each Service Bank may:
|
|
23.7.1
|
engage and pay for the advice and services of any lawyers, accountants or other experts whose advice or services may to that Service Bank seem necessary or desirable and that Service Bank shall be entitled to rely on
the advice and opinions of such lawyers, accountants and other experts and shall not be liable to any of the other parties hereto for any of the consequences of any such reliance;
|
|
|
23.7.2
|
perform all or any of its functions and duties under this Agreement and the other Finance Documents through employees or agents or any office or branch of that Service Bank from time to time selected by it and notified
to the other parties hereto;
|
|
|
23.7.3
|
rely on any communication or document believed by it to be genuine and correct and to have been communicated or signed by the person by whom it purports to be communicated or signed and shall not be liable to any of the
other parties hereto for any of the consequences of such reliance; and
|
|
|
23.7.4
|
without liability to account, make loans to, accept deposits from and generally engage in any kind of banking or trust business with the Borrower or the other Obligors as though that Service Bank was not a Service Bank.
|
|
23.8
|
Service Banks as Lenders
|
If it is also a Lender, each Service Bank shall have the same
rights and powers under this Agreement as any other Lender and may exercise those rights and powers as though it were not a Service Bank.
72
|
24.1
|
Relevant circumstances
|
This Clause 24 applies if any Lender (the “
Sharing
Lender
”) at any time receives or recovers (whether by way of voluntary or involuntary payment, by virtue of the exercise of its legal rights including but not limited to any right of set-off, counterclaim or otherwise howsoever) the whole
or any part of any amounts due to it from the Borrower under this Agreement or any of the Finance Documents otherwise than by distribution from the Agent in accordance with the terms of this Agreement.
|
24.2
|
Payment by Sharing Lender to Agent
|
Subject to Clauses 24.3 and 24.4:
|
|
24.2.1
|
the Sharing Lender shall immediately pay to the Agent the full amount or (as the case may be) an amount equal to the equivalent of the full amount so received or recovered;
|
|
|
24.2.2
|
as between the Borrower and the Sharing Lender, the Borrower shall remain or again become indebted to such Sharing Lender under this Agreement in the amount so paid as if it had not been so received or recovered; and
|
|
|
24.2.3
|
the Agent shall treat the amount so paid as if it were a payment by the Borrower on account of amounts due. from the Borrower under this Agreement or any of the Finance Documents for distribution to the Sharing Lender
and such of the other Lenders in the proportions in which the Sharing Lender and the other Lenders would have been entitled to receive such amount had it been paid by the Borrower to the Agent under this Agreement or under such Finance Documents.
|
Any payment and adjustment made pursuant to Clause 24.2 shall be
subject to the condition that, if the amount (or any part thereof) so paid by the Sharing Lender to the Agent subsequently falls to be repaid by the Sharing Lender to the Borrower or any other person, then each of the Lenders who has received any
part thereof from the Agent shall repay the amount received by it to the Sharing Lender, together with such amount (if any) as is necessary to reimburse the Sharing Lender the appropriate portion of any interest it has been obliged to pay when
repaying such amount in accordance with this Clause 24.3, and the relevant adjustments pursuant to Clause 24.2 shall be cancelled.
A Sharing Lender which has commenced or joined in an action or
proceeding in any court to recover sums due to it under this Agreement or any of the Finance Documents, and pursuant to a judgment obtained in that action or proceeding or a settlement or compromise of that action or proceeding shall have received
any amount, shall not be required to share any proportion of that amount with a Lender which has the legal right to, but does not, join such action or proceeding or commence and diligently prosecute a separate action or proceeding to enforce its
rights under this Agreement or any of the Finance Documents in the same or another court.
73
Each Lender shall promptly give notice to the Agent of:
|
|
24.5.1
|
the institution by that Lender of a legal action or proceedings against the Borrower under this Agreement or any of the Finance Documents or in connection therewith; and
|
|
|
24.5.2
|
the receipt or recovery by that Lender of any amount due and payable by the Borrower under this Agreement or any of the Finance Documents which is received or recovered otherwise than through the Agent.
|
Upon receipt of any such notice the Agent will as soon as practicable pass on details of it to the other Banks.
|
25.
|
CHANGES TO THE LENDERS
|
|
25.1
|
Transfers by Lenders
|
Subject to obtaining the prior written consent of the Borrower
(which shall not be unreasonably withheld or delayed) and to complying with the following provisions of this Clause 25, any Lender (the “
Transferor Lender
”) may transfer all or any of its rights and obligations in its capacity as a
Lender under this Agreement and the other Finance Documents to another bank or financial institution (the “
Transferee Lender
”), provided that the consent of the Borrower shall not be required if:
|
|
25.1.1
|
the transfer is made to an affiliate of the Transferor Lender and such transfer does not result in any additional costs for the account of the Borrower; or
|
|
|
25.1.2
|
the transfer is made either (a) after an Event of Default has occurred and is continuing or (b) after a Potential Event of Default has occurred and is continuing in relation to any of the events specified in
Clause 18.1.1, Clause 18.1.7, Clause 18.1.8 or Clause 18.1.9.
|
Any transfer by a Lender of part only of its Commitment or
Contribution shall be in an amount of not less than $20,000,000 (unless the Agent otherwise agrees) and shall be for the same percentage of its Contribution or Commitment, as the case may be.
|
25.3
|
Prohibition on debt buy-backs
|
Except with the prior consent of all of the other
Lenders, no Lender may transfer all or any of its rights and obligations under this Agreement and the other Finance Documents to the Borrower or any other member of the Group.
74
No assignment or transfer by a Lender of any of its rights or
obligations under this Agreement and the other Finance Documents shall be binding on, or effective in relation to, any other Party unless it is effected, evidenced and perfected by the delivery by the Transferor Lender to the Agent of a Transfer
Certificate executed by the Transferor Lender and the Transferee Lender.
However, if a Lender enters into any merger, de-merger or other
reorganisation as a result of which all its rights or obligations vest in another person (the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the
execution and delivery of a Transfer Certificate; and, upon service of the Agent’s notice or, if later, the date on which the relevant merger, de-merger or other reorganisation takes effect, the successor shall become a Lender with the same
Commitments and Contributions as were held by the predecessor Lender.
|
25.5
|
Signature of Transfer Certificate
|
The Agent shall as soon as practicable after receipt
by it of a Transfer Certificate signed by a Transferee Lender permitted under Clause 25.1, sign the Transfer Certificate on behalf of the Obligors, itself and each of the other Banks and give notice to the Obligors and the Banks of its receipt of
that Transfer Certificate (attaching a copy of it).
|
25.6
|
Authorisation of Agent to sign Transfer Certificate
|
Each of the other Parties
irrevocably authorises the Agent to sign any Transfer Certificate on its behalf.
|
25.7
|
Effective date of Transfer Certificate
|
A Transfer Certificate becomes effective on the
date, if any, specified in the Transfer Certificate as its effective date, provided always that it is signed by the Agent under Clause 25.5 on or before that date.
|
25.8
|
Effect of Transfer Certificate
|
A Transfer Certificate shall have effect in accordance
with the following:
|
|
25.8.1
|
to the extent that in that Transfer Certificate the Transferor Lender seeks to transfer its rights and/or its obligations under this Agreement and the other Finance Documents, each Obligor and the Transferor Lender
shall each be released from further obligations to the other under this Agreement and the other Finance Documents and their respective rights against each other shall be cancelled (such rights and obligations being referred to in this Clause 25.8 as
“
discharged rights and obligations
”);
|
|
|
25.8.2
|
each Obligor, the Transferee Lender and the other Banks shall each assume obligations towards each other and/or acquire rights against each other which differ from the discharged rights and obligations only insofar as
the Transferee Lender has assumed and/or acquired the same in place of the Transferor Lender; and
|
75
|
|
25.8.3
|
the Transferee Lender and the other Banks shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the Transferee Lender been an original party to this
Agreement as a Lender with the rights and/or obligations acquired or assumed by it as a result of that transfer.
|
The Transferee Lender shall pay to the Agent for its own account a
transfer fee of $3,500 on the date on which the transfer effected by the relevant Transfer Certificate becomes effective.
|
25.10
|
Sub-participation by Lenders
|
Any Lender may at any time without the consent of the
Borrower or any other Obligor sub-participate all or any of its rights and/or obligations under this Agreement and the other Finance Documents.
|
25.11
|
Change of Lending Office
|
Any Lender may at any time and from time to time change its
Lending Office by giving notice to the Agent and that change shall be effective on the later of (a) the date specified in that notice and (b) the date of receipt by the Agent of that notice from that Lender. The Agent shall promptly notify
the Obligors and the other Banks of any notice received by it pursuant to this Clause 25.11.
If:
|
|
25.12.1
|
a Lender transfers any of its rights and obligations under this Agreement and the other Finance Documents in accordance with Clause 25.1 or changes its Lending Office in accordance with Clause 25.11; and
|
|
|
25.12.2
|
as a result of circumstances existing at the date the transfer or change occurs, an Obligor would be obliged to make a payment to the Transferee Lender or Lender acting through its new Lending Office under Clause 10.2,
Clause 19.7 or Clause 19.10,
|
then the Transferee Lender or Lender acting through its new Lending Office is only entitled to
receive payment under those Clauses to the same extent as the Transferor Lender or Lender acting through its previous Lending Office would have been if the transfer or change had not occurred.
76
The Agent shall keep a register of all the Lenders for the time being with
details of their respective Commitments, Contributions and Lending Office and shall provide any other Party (at that Party’s expense) with a copy of the register on request.
|
25.14
|
Replacement of Lenders by Borrower
|
The Borrower may, at any time in respect of:
|
|
25.14.1
|
an Affected Lender whose costs of funds charged to the Borrower under Clause 8.10.2 are (in the Borrower’s reasonable opinion) materially higher than those of the other Lenders generally;
|
|
|
25.14.2
|
a Lender who makes a claim under Clause 19.7 or who imposes an Increased Cost on the Borrower under Clause 19.10;
|
|
|
25.14.3
|
a Defaulting Lender; or
|
|
|
25.14.4
|
a Non-Consenting Lender
|
by giving 10 Banking Days’ notice to the Agent and that Lender
(the “
Outgoing Lender
”) replace the Outgoing Lender by requiring it to (and the Outgoing Lender must) transfer in accordance with Clause 25.1 all (and not part only) of its rights and obligations under this Agreement to a Lender or
other bank, financial institution or other entity (a “
Replacement Lender
”) selected by the Borrower and which is acceptable to the Agent (acting reasonably) for a purchase price in cash payable at the time of transfer equal to the
outstanding principal amount of the Outgoing Lender’s Contribution and all accrued interest, Break Costs and other amounts payable in relation to that Contribution under this Agreement and the other Finance Documents.
Any transfer of rights and obligations of an Outgoing Lender under this Clause is subject to the following conditions:
|
|
25.14.5
|
neither the Agent nor the Outgoing Lender will have any obligation to the Borrower to find a Replacement Lender;
|
|
|
25.14.6
|
the transfer must take place no later than 10 Banking Days after the Borrower’s notice referred to above; and
|
|
|
25.14.7
|
in no event will the Outgoing Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Outgoing Lender under this Agreement and the other Finance Documents.
|
A Bank may, after the occurrence of an Event of Default which is continuing,
set off any matured obligation due from the Borrower under this Agreement or any Finance Document (to the extent beneficially owned by that Bank) against any matured obligation owed by that
77
Bank to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Bank may convert either obligation
at a market rate of exchange in its usual course of business for the purpose of the set-off.
The provisions of Clause 24 shall apply in
respect of any amount received or recovered by a Bank under this Clause 26.
|
27.1
|
No assignment by Borrower
|
The Borrower may not assign or transfer all or any of its
rights, benefits or obligations under this Agreement or any of the other Finance Documents.
Any Bank may at any time and from to time to time delegate any one or more
of its rights, powers and/or obligations under this Agreement and the other Finance Documents to any person (provided that such Bank shall remain fully responsible for the exercise or performance of any rights, powers and/or obligations delegated by
it).
Time is of the essence as regards every obligation of the Borrower
under this Agreement and the other Finance Documents.
|
27.4
|
Remedies and waivers
|
No failure to exercise, nor any delay in exercising, on the part
of any Bank, any right or remedy under this Agreement or any other Finance Document shall operate as a waiver of it, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise of it or the exercise of any
other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
|
27.5
|
Waivers and amendments to be in writing
|
Any waiver by any Bank of any provision of this
Agreement or any other Finance Document, and any consent or approval given by any Bank under or in respect of this Agreement or any other Finance Document, shall only be effective if given in writing and then only strictly for the purpose and upon
the terms for which it is given. Neither this Agreement nor any other Finance Document may be amended or varied orally but only by an instrument signed by each of the parties to it.
If at any time one or more of the provisions of this Agreement or any
other Finance Document is or becomes invalid, illegal or unenforceable in any respect under any law by which it may be governed or affected, the validity, legality and enforceability of the remaining provisions shall not be in any way affected or
impaired as a result.
78
This Agreement may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute but one and the same instrument.
|
27.8
|
Conclusiveness of Bank’s certificates
|
The certificate or determination of a Bank
of a rate or amount under this Agreement or any other Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates and is binding on the Borrower.
The Borrower shall, upon demand, and at its own expense, sign,
perfect, do, execute and register all such further assurances, documents, acts and things as the Agent may require for the purpose of more effectually accomplishing or perfecting the transaction or security contemplated by this Agreement and the
other Finance Documents.
Notwithstanding the provisions of Clause 29, the Borrower agrees that the
Mandated Lead Arrangers and the Agent shall each have the right, at their own expense, to publish information about their participation in, and their respective roles as arrangers and agent in respect of, the loan facility made available to the
Borrower under this Agreement and that, for such purposes, they may use the Borrower’s logo and trademark in connection with such publication.
|
28.1
|
Communications in writing; addresses
|
All communications (which expression includes any
notice, demand, request, consent or other communication) to be given by one Party to another under this Agreement shall be in writing and (unless delivered personally) shall be given by telefax or first class pre-paid post (airmail if sent
internationally) and be addressed:
|
|
28.1.1
|
in the case of the Agent and the Security Trustee to it at:
|
20 St. Dunstan’s Hill
London
EC3R 8HY
Telefax No: +44 20 7626 5956
Attn:
Shipping Department
79
|
|
28.1.2
|
in the case of an Original Lender, Mandated Lead Arranger or Bookrunner, to it at the address set out beneath its name in Schedule 1 and, in the case of any other Lender, to it at the address specified in the relevant
Transfer Certificate;
|
|
|
28.1.3
|
in the case of an Original Swap Provider, to it at the address set out beneath its name in Schedule 2 and, in the case of any other Swap Provider, to it at the address notified to the Agent pursuant to Clause 7.5;
|
|
|
28.1.4
|
in the case of the Borrower, to it at:
|
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Telefax No: +32 3 247 4409
Attn:
Chief Financial Officer
or to such other address and/or number as is notified by any Party to the others under this Agreement.
|
28.2
|
Communications via Agent
|
Notwithstanding any other provision of this Agreement or any
other Finance Document, all communications to be made under this Agreement and the other Finance Documents between the Borrower on the one hand and all or any of the Banks on the other hand shall be made solely through the Agent.
Where this Agreement or any other Finance Document provides for any matter to be determined by reference to the opinion of the Lenders or the
Majority Lenders or to be subject to the consent or request of the Lenders or the Majority Lenders or for any action to be taken on the instructions of the Lenders or the Majority Lenders and the Agent gives notice to the Borrower that the Lenders
or (as the case may be) the Majority Lenders have given or issued such opinion, consent, request or instructions, the Borrower shall be entitled to rely on such notice whether or not this is in fact the case.
|
28.3
|
Deemed receipt of communications
|
Communications addressed as provided above shall be
deemed to have been duly given when despatched (in the case of telefax), when delivered (in the case of personal delivery), 2 days after posting (in the case of letters sent within the same country), or 5 days after posting (in the case of letters
sent internationally), provided that any communication to a Bank shall be effective only upon its actual receipt by that Bank and then only if it is expressly marked for the attention of the relevant department or officer named above (or any
substitute from time to time notified by that Bank). In each of the above cases any communication received on a non-working day or after business hours in the country of receipt shall be deemed to be given at the opening of business hours on the
next working day in that country.
80
|
28.4
|
Electronic communication
|
Any communication to be made between (a) the Agent and a
Lender or (b) the Borrower and the Agent under or in connection with this Agreement or the other Finance Documents may be made by electronic mail or other electronic means, if (a) the Agent and the relevant Lender or (b) the Borrower
and the Agent (as the case may be):
|
|
28.4.1
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
|
28.4.2
|
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
|
|
|
28.4.3
|
notify each other of any change to their address or any other such information supplied by them.
|
Any electronic communication made pursuant to this Clause 28.4 will be effective only when actually received in readable form and in the case
of any electronic communication made to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.
All communications, notices and documents to be given or delivered
pursuant to or otherwise in relation to this Agreement and the other Finance Documents shall be in the English language or be accompanied by a certified English translation.
|
29.
|
BANKS’ DUTIES OF CONFIDENTIALITY
|
|
29.1
|
Confidential Information
|
Each Bank agrees for the benefit of the Borrower and each
other Obligor to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by the following provisions of this Clause 29, and to ensure that all Confidential Information is protected with security
measures and a degree of care that would apply to its own confidential information.
|
29.2
|
Disclosure of Confidential Information
|
Any Bank may disclose:
|
|
29.2.1
|
to any of its affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Bank shall consider appropriate if any
person to whom the Confidential Information is to be given pursuant to this Clause 29.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there
shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential
Information;
|
81
|
|
(a)
|
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person’s affiliates,
Representatives and professional advisers;
|
|
|
(b)
|
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by
reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s affiliates, Representatives and professional advisers;
|
|
|
(c)
|
appointed by any Bank or by a person to whom Clause 29.2.2(a) or 29.2.2(b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf;
|
|
|
(d)
|
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph Clause 29.2.2(a) or 29.2.2(b) above;
|
|
|
(e)
|
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock
exchange or pursuant to any applicable law or regulation;
|
|
|
(f)
|
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
|
|
|
(g)
|
who is a party to this Agreement; or
|
|
|
(h)
|
with the consent of the Borrower (such consent not to be unreasonably withheld or delayed),
|
in each case, such Confidential Information as that Bank shall consider appropriate if:
|
|
(i)
|
in relation to paragraphs 29.2.2(a) and 29.2.2(b) above, the Borrower has consented (such consent not to be unreasonably withheld or delayed) to the disclosure and the person to whom the Confidential Information is to
be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality
of the Confidential Information;
|
82
|
|
(ii)
|
in relation to paragraph 29.2.2(c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality
Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
|
|
|
(iii)
|
in relation to paragraph 29.2.2(d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in
relation to the Confidential Information it receives and is informed that some or all of such Confidential Information may be price-sensitive information;
|
|
|
(iv)
|
in relation to paragraphs 29.2.2(e) and 29.2.2(f) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be
price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Bank, it is not practicable so to do in the circumstances.
|
This Clause 29 constitutes the entire agreement between the parties in
relation to the obligations of the Banks under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
Each of the Banks acknowledges that some or all of the Confidential
Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Banks undertakes
not to use any Confidential Information for any unlawful purpose.
|
29.5
|
Notification of disclosure
|
Each of the Banks agrees (to the extent permitted by law and
regulation) to inform the Borrower:
|
|
29.5.1
|
of the circumstances of any disclosure of Confidential Information made pursuant to Clause 29.2.2(e) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of
its supervisory or regulatory function; and
|
|
|
29.5.2
|
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 29.
|
83
|
29.6
|
Continuing obligations
|
The obligations in this Clause 29 are continuing and, in
particular, shall survive and remain binding on each Bank for a period of 12 months from the earlier of:
|
|
29.6.1
|
the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
|
|
|
29.6.2
|
the date on which such Bank otherwise ceases to be a Bank.
|
|
30.
|
APPLICABLE LAW AND JURISDICTION
|
This Agreement and any non-contractual obligations arising out of or in
connection with it shall be governed by and construed in accordance with English law.
|
30.2
|
Submission to jurisdiction
|
The Borrower irrevocably agrees for the exclusive benefit of
the Banks that the English courts shall have jurisdiction in relation to any dispute and any suit, action or proceeding (referred to together in this Clause 30 as “
Proceedings
”) which may arise out of or in connection with this
Agreement and for such purposes irrevocably submits to the jurisdiction of those courts.
The Borrower irrevocably agrees:
|
|
30.3.1
|
that, for the purpose of Proceedings in England, any legal process may be served upon Euronav (UK) Agencies Limited whose registered office is presently at Moreau House,
3
rd
Floor, 116 Brompton Road, London SW3 1JJ and who, by this Agreement, are authorised to accept service on its behalf, which shall be deemed to be good service on the Borrower; and
|
|
|
30.3.2
|
that throughout the Security Period it will maintain a duly appointed process agent in England, duly notified to the Agent, and that failure by any such process agent to give notice to the Borrower of such service shall
not impair the validity of that service or of a judgment or order based on it.
|
Nothing in this Clause 30 shall affect the right of any Bank to serve
process in any manner permitted by law or limit the right of any Bank to take Proceedings against the Borrower in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of
Proceedings by any Bank in any other jurisdiction, whether concurrently or not.
84
The Borrower shall not commence any Proceedings in any country other than England in relation to
any matter arising out of or in connection with this Agreement and/or any of the other Finance Documents.
The Borrower irrevocably waives any objection which it may at any
time have on the grounds of inconvenient forum or otherwise to Proceedings being brought in any such court as is referred to in this Clause 30, and further irrevocably agrees that a judgment or order in any Proceedings brought in the English courts
shall be conclusive and binding upon it and may be enforced without review in the courts of any other jurisdiction.
The Borrower consents generally in respect of any Proceedings arising out of or
in connection with this Agreement to the giving of any relief or the issue of any process in connection with those Proceedings, including without limitation, the making, enforcement or execution against any property or assets whatsoever of any order
or judgment which may be made or given in those Proceedings.
IN WITNESS
of which the Parties have executed this Agreement the day and year first
before written.
85
SCHEDULE 1
LENDERS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Commitment
($)
|
|
|
|
|
|
|
DNB Bank ASA
|
|
20 St. Dunstan’s Hill
London
EC3R 8HY
Fax: +44 20 7626 5956
Attn: Shipping Department
|
|
|
32,500,000
|
|
|
|
|
|
|
Skandinaviska Enskilda Banken AB (publ)
|
|
Kungsträdgardsgatan 8
SE-106 40
Stockholm
Sweden
|
|
|
32,500,000
|
|
|
|
|
|
|
|
|
Credit Matters:
Tel: +47 22 82 70 21
Fax: +47 22 82 71 31
Attn: Egil Aarrestad
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
Tel: +46 8 763
8551
Fax: +46 8 611 0384
Atten: Structured Credits
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,000,000
|
|
|
|
|
|
|
|
|
|
86
SCHEDULE 2
SWAP PROVIDERS AND SWAP PROVIDER PERCENTAGES
|
|
|
|
|
|
|
|
|
Swap Provider
|
|
Office
|
|
Swap Provider
Percentage
|
|
|
|
|
|
|
DNB Bank ASA
|
|
20 St. Dunstan’s Hill
London
EC3R 8HY
Fax: +44 20 7626 5956
Attn: Markets
Department/Shipping
Department
|
|
|
50
|
%
|
|
|
|
|
|
Skandinaviska Enskilda Banken AB (publ)
|
|
Kungsträdgardsgatan 8
SE-106 40
Stockholm
Sweden
|
|
|
50
|
%
|
|
|
|
|
|
|
|
Credit Matters:
Tel: +47 22 82 70 21
Fax: +47 22 82 71 31
Attn: Egil Aarrestad
|
|
|
|
|
|
|
|
|
|
|
|
Administration Matters:
Tel: +46 8 763
8551
Fax: +46 8 611 0384
Atten: Structured Credits
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
87
SCHEDULE 3
FORM OF NOTICE OF DRAWDOWN
20 St. Dunstan’s Hill
London
EC3R 8HY
|
Attn:
|
Shipping Department
|
Date: [
—
] 201[
—
]
Dear Sirs
Notice of Drawdown – $65,000,0000 Loan Agreement dated [
—
] 2011
We refer to the loan agreement dated [
—
] 2011 (the “
Loan Agreement
”) made between
(1) ourselves as Borrower, (2) the banks and financial institutions listed in Schedule 1 thereto as Original Lenders, (3) the banks and financial institutions listed in Schedule 2 thereto as Original Swap Providers,
(4) yourselves as Mandated Lead Arranger and Bookrunner and Skandinaviska Enskilda Banken AB (publ) as Mandated Lead Arranger, (5) yourselves as Agent and (6) yourselves as Security Trustee providing for the making available to us of
a secured term loan in the amount of up to $65,000,000.
Expressions defined in the Loan Agreement shall have the same meanings when used in this letter.
Pursuant to Clause 4.1 of the Loan Agreement we give you notice that we wish to draw the sum of $[
—
]
under the Loan Agreement on [
—
] 201[
—
] and select a first Interest Period of [
—
] month(s).
We request and authorise you to pay the proceeds of the Loan to [
—
] under reference [
—
].
We confirm that:
|
1.
|
the representations and warranties made by us as set out in Clause 11 of the Loan Agreement are true and accurate on the date of this letter as if made on the same date as this letter;
|
|
2.
|
no Event of Default or Potential Event of Default has occurred and is continuing or will occur as a result of the proposed borrowing; and
|
|
3.
|
the financial covenants set out in Clause 14.1 of the Loan Agreement are complied with.
|
|
|
|
Yours faithfully
|
|
|
|
|
|
For and on behalf of
|
|
EURONAV N.V.
|
88
SCHEDULE 4
CONDITIONS PRECEDENT
Part 1 –
Documents and evidence to be received on or before the date of this Agreement
|
1.
|
Such certificates and documents as any Bank may reasonably require in order to comply with any anti-money laundering or “know your customer” legislation, regulation or procedures applicable to it.
|
|
2.
|
Originals of the following Finance Documents executed by the Borrower:
|
|
3.
|
In respect of the Borrower, the original or a certified copy of any power of attorney issued by it in favour of any person or persons executing this Agreement and the Fee Letters on its behalf under such power of
attorney.
|
Part 2 – Documents and evidence to be received on or before the Drawdown Date
|
1.
|
In respect of the Borrower:
|
|
|
1.1
|
certified copies of its certificate of incorporation and constitutional documents;
|
|
|
1.2
|
to the extent only that such resolutions are required in connection with any legal opinion mentioned below, certified copies of resolutions duly passed by the board of directors of the Borrower evidencing their approval
of the transactions contemplated by the Finance Documents and authorising the execution of them by the Borrower;
|
|
|
1.3
|
an original certificate, signed by the secretary or a director of the Borrower, stating:
|
|
|
1.3.1
|
its officers and directors;
|
|
|
1.3.2
|
that no licences, authorisations, approvals or consents are required by it in connection with the execution, delivery, performance, validity and enforceability of the Finance Documents to which it is (or is to become) a
party or, if any such licences, authorisations, approvals or consents are required by it, attaching certified copies of them;
|
|
|
1.4
|
a specimen signature for each person executing this Agreement or any other Finance Document on its behalf; and
|
|
|
1.5
|
the original or a certified copy of any power of attorney issued by it in favour of any person or persons executing this Agreement and the other Finance Documents on its behalf under such power of attorney.
|
|
2.
|
Originals of the following Finance Documents executed by the Borrower:
|
|
|
2.1
|
the Agreed Form Certificate;
|
89
|
|
2.3
|
the General Assignment;
|
|
|
2.4
|
a Charter Assignment if and to the extent required by Clause 12.8;
|
|
|
2.5
|
the Master Agreement Security Deed; and
|
|
|
2.6
|
the Account Security Deed.
|
|
3.
|
An original of the Intercreditor Agreement executed by the Borrower and the Builder.
|
|
4.
|
All notices, acknowledgements, instruments and other documents as are required to be delivered to the Agent on or before the Drawdown Date under the terms of the Finance Documents listed in paragraphs 2.2 to 2.6 above,
each duly executed (where appropriate) by the relevant parties.
|
|
5.
|
Certified copies of the Deferred Payment Agreement and the Deferred Payment Security Documents, each in form and substance acceptable to the Lenders.
|
|
6.
|
A Compliance Certificate evidencing that the Borrower is in compliance with all of the financial covenants in respect of the Group as set out in Clause 14.1.
|
|
7.
|
Evidence that the Earnings Account has been duly opened by the Borrower with the Agent.
|
|
8.
|
Evidence that the Mortgage has been registered or is capable of immediate registration with first priority against the Vessel at the appropriate ship registry.
|
|
9.
|
Evidence that the Vessel is registered in the sole name of the Borrower under the laws and flag of an Approved Flag State free from all Encumbrances except for Permitted Encumbrances.
|
|
10.
|
A confirmation from the Borrower that no Long Term Charter has been entered into by it in respect of the Vessel or, if it has, a certified true copy of that Long Term Charter and any related Charter Guarantee.
|
|
11.
|
A certificate of class maintained in respect of the Vessel confirming that she is classed with the highest class applicable to vessels of her age, type and specifications with a Classification Society free of overdue
recommendations and conditions.
|
|
12.
|
Evidence that the Vessel is insured in the manner required by the Finance Documents, that letters of undertaking will be issued in the manner required by the Finance Documents and that all other requirements of the
Finance Documents in respect of the Insurances and the noting of the Security Trustee’s interest thereon have been complied with.
|
|
13.
|
A favourable opinion on the Insurances from Bankserve Insurance Services Ltd. or such other insurance advisers as the Agent may appoint.
|
90
|
14.
|
The following documents relating to the management of the Vessel:
|
|
|
14.1
|
a certified copy of each Management Agreement; and
|
|
|
14.2
|
an original Manager’s Undertaking from each Manager.
|
|
15.
|
The following documents relating to the safety and security of the Vessel:
|
|
|
15.1
|
a copy of the Document of Compliance in relation to the company responsible for the Vessel’s compliance with the ISM Code under paragraph 1.1.2 of the ISM Code;
|
|
|
15.2
|
a copy of the Vessel’s interim Safety Management Certificate as required by the ISM Code;
|
|
|
15.3
|
a copy of the Vessel’s interim International Ship Safety Certificate as required by the ISPS Code.
|
|
16.
|
A valuation of the Vessel dated not earlier than 15 days prior to the Drawdown Date determined in accordance with Clause 17 demonstrating that:
|
|
|
16.1
|
the amount of the Loan to be drawn does not exceed 70% of the Fair Market Value of the Vessel; and
|
|
|
16.2
|
following drawdown of the Loan there will be no security shortfall under Clause 17.2.
|
|
17.
|
Confirmation from the agents in England nominated by the Borrower in the Finance Documents for the acceptance of service of process, that they consent to such nomination.
|
|
18.
|
Favourable legal opinions:
|
|
|
18.1
|
on Belgian law from Fransen;
|
|
|
18.2
|
on English law from Holman Fenwick Willan LLP;
|
|
|
18.3
|
on the laws of the Approved Flag State from such firm in that jurisdiction as the Agent may appoint;
|
|
|
18.4
|
on the laws of any other relevant jurisdiction from such firm in that jurisdiction as the Agent may appoint,
|
or, in respect of any one or more of such legal opinions, confirmation satisfactory to the Agent that the opinion in question will be issued in
form and substance acceptable to it within such period after the Drawdown Date as is acceptable to it.
Every copy document delivered under this Schedule
shall be certified as a true and up to date copy by a director or officer of the Borrower or other Obligor or by its lawyers or by another person acceptable to the Agent.
91
SCHEDULE 5
FORM OF TRANSFER CERTIFICATE
TRANSFER CERTIFICATE
The
Transferor Lender and the Transferee Lender accept exclusive responsibility for ensuring that this Transfer Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
|
To:
|
DNB Bank ASA, as agent on its own behalf and for and on behalf of the Obligors and Banks defined in the Agreement referred to below:
|
|
1.
|
This Transfer Certificate relates to a $65,000,000 loan agreement (the “
Loan Agreement
”) dated [
—
] 2011 and made between (1) Euronav N.V. as
borrower (the “
Borrower
”), (2) the banks and financial institutions defined therein as lenders (the “
Lenders
”), (3) DNB Bank ASA and Skandinaviska Enskilda Banken AB (publ) as swap providers (the
“
Swap Providers
”), (4) DNB Bank ASA as mandated lead arranger and bookrunner and Skandinaviska Enskilda Banken AB (publ) as mandated lead arranger, (5) DNB Bank ASA as agent and (6) DNB Bank ASA as security trustee
(as the same may from time to time be amended or varied).
|
|
2.
|
Terms defined in the Loan Agreement shall, unless otherwise defined herein, have the same meanings when used in this Transfer Certificate.
|
|
3.
|
In this Transfer Certificate:
|
“
Relevant Party
” means each Obligor and each
Bank (other than the Transferor Lender and the Transferee Lender);
“
Transferor Lender
” means [full name] of [lending
office]; and
“
Transferee Lender
” means [full name] of [lending office].
|
4.
|
The Transferor Lender as beneficial owner hereby transfers to the Transferee Lender absolutely in accordance with Clause 25 of the Loan Agreement all its rights and benefit (present, future or contingent) under the Loan
Agreement and the other Finance Documents to the extent of [
—
]% of its Contribution, which percentage represents $[
—
].
|
|
5.
|
By virtue of this Transfer Certificate and Clause 25 of the Loan Agreement the Transferor Lender is discharged [entirely from its Commitment which amounts to
$[
—
]][from [
—
]% of its Commitment which percentage represents $[
—
]] and the Transferee Lender
acquires a Commitment of $[
—
]].
|
|
6.
|
The Transferee Lender hereby requests the Agent and the other Banks to accept the executed copies of this Transfer Certificate as being delivered pursuant to and for the purposes of Clause 25 of the Loan Agreement so as
to take effect in accordance with the terms thereof on [
—
].
|
92
|
7.
|
The Transferee Lender:
|
|
|
7.1
|
confirms that it has received copies of the Loan Agreement and the other Finance Documents together with such other documents and information as it has required in connection with the transaction contemplated thereby;
|
|
|
7.2
|
confirms that it has not relied and will not hereafter rely on the Transferor Lender or any other Bank to check or enquire on its behalf into the legality, validity, effectiveness, adequacy, accuracy or completeness of
the Loan Agreement, any of the other Finance Documents or any such other documents or information;
|
|
|
7.3
|
agrees that it has not relied and will not rely on the Transferor Lender or any other Bank to assess 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 Loan Agreement or any of the other Finance Documents (save as otherwise expressly provided therein);
|
|
|
7.4
|
warrants to the Transferor Lender and each Relevant Party that it has power and authority to become a party to the Loan Agreement and has taken all necessary action to authorise execution of this Transfer Certificate
and to obtain all necessary approvals and consents to the assumption of its obligations under the Loan Agreement and the other Finance Documents;
|
|
|
7.5
|
if not already a Lender, appoints the Agent to act as its agent as provided in the Loan Agreement and the other Finance Documents and agrees to be bound by the terms thereof; and
|
|
|
7.6
|
confirms the accuracy of the administrative details set out in the Schedule to this Transfer Certificate.
|
|
8.
|
The Transferor Lender:
|
|
|
8.1
|
warrants to the Transferee Lender and each Relevant Party that it has full power to enter into this Transfer Certificate and has taken all corporate action necessary to authorise it to do so; and
|
|
|
8.2
|
undertakes with the Transferee Lender that it will, at its own expense, execute any documents which the Transferee Lender reasonably requests for perfecting in any relevant jurisdiction the Transferee Lender’s
title under this Transfer Certificate or for a similar purpose.
|
|
9.
|
The Transferee Lender hereby undertakes with the Transferor Lender and each Relevant Party that it will perform all those obligations which by the terms of the Loan Agreement will be assumed by it after this Transfer
Certificate takes effect.
|
|
10.
|
If this Transfer Certificate takes effect during an Interest Period, the Agent shall make all payments which would have become due to the Transferor
Lender under the Loan Agreement during that Interest Period if no such transfer had been effected to the Transferor Lender and
|
93
|
|
the Transferee Lender according to the percentages of the Transferor Lender’s Contributions and Commitments transferred and retained pursuant to Clauses 4 and 5 of this Transfer Certificate,
and the Transferor Lender and the Transferee Lender shall be responsible for paying to each other pro rata all amounts (if any) due to them from each other for that Interest Period. On and from the commencement of the immediately succeeding Interest
Period, the Agent shall make all payments due under the Loan Agreement for the account of the Transferor Lender to the Transferor Lender and shall make all payments due under the Loan Agreement for the account of the Transferee Lender to the
Transferee Lender. This provision is for administrative convenience only and shall not affect the rights of the Transferor Lender and the Transferee Lender under the Loan Agreement.
|
|
11.
|
Neither the Transferor Lender nor any other Bank:
|
|
|
11.1
|
makes any representation or warranty nor assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Loan Agreement or any of the other Finance Documents or any
other document relating thereto;
|
|
|
11.2
|
assumes any responsibility for the financial condition of the Borrower or any other party to the Loan Agreement or any of the other Finance Documents or any other document relating thereto or for the performance and
observance thereof by (save as otherwise expressly provided therein) and any and all such conditions and warranties, whether expressed or implied by law or otherwise, are hereby excluded (except as aforesaid).
|
|
12.
|
The Transferor Lender and the Transferee Lender undertake that they will on demand fully indemnify the Agent and the Security Trustee in respect of any claim, proceeding, liability or expense which relates to or results
from this Transfer Certificate or any matter connected with or arising out of it unless caused by the Agent’s or Security Trustee’s gross negligence or wilful misconduct, as the case may be.
|
|
13.
|
The agreements and undertaking of the Transferee Lender in this Transfer Certificate are given to and for the benefit of and made with each of the Relevant Parties.
|
|
14.
|
This Transfer Certificate shall be governed by, and construed in accordance with, English law.
|
WARNING:
This Transfer Certificate may not operate to transfer the Transferor Lender’s interest in all of the security created by the Finance Documents (for example, the Mortgage) and the Transferee Lender should check that all deeds of assignment and
other documents necessary to transfer such security to it are signed by the Transferor Lender and, where appropriate, registered.
|
|
|
|
|
|
|
|
|
Transferor Lender
|
|
Transferee Lender
|
|
|
|
|
|
|
|
By: [
—
]
|
|
By: [
—
]
|
|
|
|
|
|
|
|
Dated: [
—
]
|
|
Dated: [
—
]
|
94
|
|
|
|
|
|
|
Agent
(for and on behalf of itself and for every other Relevant Party)
|
|
|
|
|
|
|
By: [
—
]
|
|
|
|
|
|
|
Dated: [
—
]
|
Schedule
Administrative Details of Transferee Lender
Name of Transferee Lender:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Fax:
Account for Payments:
95
SCHEDULE 6
FORM OF COMPLIANCE CERTIFICATE
20 St. Dunstan’s Hill
London
EC3R 8HY
|
Attn:
|
Shipping Department
|
Date: [
—
] 201[
—
]
Dear Sirs
Compliance Certificate - $65,000,000 Loan Agreement
We
refer to the loan agreement dated [
—
] 2011 (the “
Loan Agreement
”) made between (1) ourselves as Borrower, (2) the banks and financial institutions listed in Schedule 1
thereto as Original Lenders, (3) the banks and financial institutions listed in Schedule 2 thereto as Original Swap Providers, (4) yourselves as Mandated Lead Arranger and Bookrunner and Skandinaviska Enskilda Banken AB (publ) as Mandated
Lead Arranger, (5) yourselves as Agent and (6) yourselves as Security Trustee providing for the making available to us of a term loan facility in the amount of $65,000,000.
Expressions defined in the Loan Agreement shall have the same meanings when used in this certificate.
I, the Chief Financial Officer of the Borrower, hereby certify that:
|
1.
|
Attached to this certificate are the latest audited consolidated accounts of the Group for the financial [year][half-year] ending on [
—
] 201[
—
] (the “
Accounts
”).
|
|
2.
|
Set out below are the respective amounts, in Dollars, of the Current Assets, Current Liabilities, Free Liquid Assets (including the respective amounts of cash, cash equivalents and Available Facilities),
Stockholders’ Equity, Total Assets and Total Indebtedness of the Group as at [
—
] 201[
—
]:
|
|
|
|
|
|
|
|
Current Assets
|
|
$
|
[
—
|
]
|
|
|
|
|
Current Liabilities
|
|
$
|
[
—
|
]
|
|
|
|
|
Free Liquid Assets
|
|
$
|
[
—
|
]
|
|
|
|
|
Cash
|
|
$
|
[
—
|
]
|
|
|
|
|
Cash equivalents
|
|
$
|
[
—
|
]
|
|
|
|
|
Available Facilities
|
|
$
|
[
—
|
]
|
|
|
|
|
Stockholders’ Equity
|
|
$
|
[
—
|
]
|
|
|
|
|
Total Assets
|
|
$
|
[
—
|
]
|
|
|
|
|
Total Indebtedness
|
|
$
|
[
—
|
]
|
96
|
3.
|
Accordingly, as at the date of this certificate the financial covenants set out in Clause 14.1 of the Loan Agreement [are] [are not] complied with, in that as at [
—
]
201[
—
]:
|
|
|
3.1
|
Current Assets exceed Current Liabilities by $[
—
];
|
|
|
3.2
|
Free Liquid Assets are $[
—
];
|
|
|
3.3
|
the aggregate amount of cash is $[
—
];
|
|
|
3.4
|
the ratio of Stockholders’ Equity to Total Assets is [
—
] per cent;
|
[or, as the case may be, specify in what respect any of the financial covenants are not complied with.]
|
4.
|
As at [
—
] 201[
—
] no Event of Default has occurred and is continuing.
|
[or, specify/identify any Event of Default]
The Borrower is in compliance with Clause 17.1 of the Loan Agreement.
[If not, specify this and what is proposed as regards Clause 17.2]
The Fair Market Value of the Vessel as at [
—
] 201[
—
]
is $[
—
] based on valuations as at that date as follows from the following Approved Shipbrokers:
|
|
|
|
|
|
|
|
|
|
|
Name of first
shipbroker providing
valuation
|
|
Name of second
shipbroker providing
valuation
|
|
Name of third
shipbroker providing
valuation (if
applicable)
|
|
Average market
value
|
|
|
|
|
|
|
|
[
—
]
|
|
[
—
]
|
|
[
—
][Not applicable]
|
|
$
|
[
—
|
]
|
|
|
|
Yours faithfully
|
|
|
|
|
|
Chief Financial Officer
|
|
EURONAV N.V.
|
97
SCHEDULE 7
MANDATORY COSTS FORMULA
|
1.
|
The Mandatory Cost is an addition to the interest rate to compensate 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.
|
|
2.
|
On the first day of each Interest Period (or as soon as possible after it) the Agent shall calculate, as a percentage rate per annum, 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.
|
|
3.
|
The Additional Cost Rate for any Lender lending from a Lending Office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its
notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in the Loan made from that Lending Office) of complying with the minimum reserve requirements of the European Central
Bank in respect of loans made from that Lending Office.
|
|
4.
|
The Additional Cost Rate for any Lender lending from a Lending 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 designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to
paragraph 7 below and expressed in pounds per £1,000,000.
|
|
5.
|
For the purposes of this Schedule:
|
|
|
5.1
|
“
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;
|
|
|
5.2
|
“
Fees 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;
|
98
|
|
5.3
|
“
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 Fees Rules but taking
into account any applicable discount rate);
|
|
|
5.4
|
“
Participating Member State
” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to
European Monetary Union; and
|
|
|
5.5
|
“
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 Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference 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 Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank
for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
|
7.
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:
|
|
|
7.1
|
the jurisdiction of its Lending Office; and
|
|
|
7.2
|
any other information that the Agent may reasonably require for such purpose.
|
Each Lender
shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.
|
8.
|
The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender
notifies the Agent to the contrary, each Lender’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 Lending Office in the same jurisdiction
as its Lending 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 Lender and shall be entitled to assume that the information provided by any
Lender or Reference 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 Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and
each Reference Bank pursuant to paragraphs 3, 6 and 7 above.
|
99
|
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 Lender 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 Lenders, 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 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.
|
100
EXECUTION PAGE
|
|
|
|
|
|
|
|
|
THE BORROWER
|
|
|
|
|
|
|
|
SIGNED
|
|
)
|
|
|
|
|
by
|
|
)
|
|
|
Ian Hughes
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
EURONAV N.V.
|
|
)
|
|
|
|
|
|
|
|
|
|
|
THE BANKS
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
)
|
|
|
|
|
|
by
|
|
)
|
|
|
Katherine Noble
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
DNB BANK ASA
|
|
)
|
|
|
|
|
|
as Original Lender, Original Swap
|
|
)
|
|
|
|
|
|
Provider, Mandated Lead Arranger,
|
|
)
|
|
|
|
|
|
Bookrunner, Agent and Security
|
|
)
|
|
|
|
|
|
Trustee
|
|
)
|
|
|
|
|
|
|
|
|
|
|
SIGNED
|
|
)
|
|
|
|
|
|
by
|
|
)
|
|
|
|
|
|
duly authorised for and on behalf of
|
|
)
|
|
|
Katherine Noble
|
|
SKANDINAVISKA ENSKILDA
|
|
)
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
BANKEN AB (publ)
|
|
)
|
|
|
|
|
|
as Original Lender, Original Swap
|
|
)
|
|
|
|
|
|
Provider and Mandated Lead Arranger
|
|
)
|
|
|
|
|
101
EXHIBIT 10.5
Execution version
Date 25 March 2014
EURONAV SHIPPING NV
EURONAV TANKERS NV
as joint
and several Initial Borrowers
– and –
EURONAV NV
as guarantor
– and –
THE
BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
– and –
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 2
as
Swap Banks
– and –
ABN AMRO BANK N.V.
DANISH SHIP FINANCE A/S (DANMARKS SKIBSKREDIT A/S)
DNB BANK ASA
ING BANK
N.V.
NORDEA BANK NORGE ASA
MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
as Lead Arrangers
– and
–
BNP PARIBAS FORTIS SA/NV
KBC BANK NV
SCOTIABANK
EUROPE PLC
as Co-Arrangers
– and –
DNB BANK
ASA
NORDEA BANK NORGE ASA
MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
as Bookrunners
– and –
NORDEA BANK NORGE ASA
as Agent
and as Security Trustee
LOAN AGREEMENT
relating to a $500,000,000 term loan facility
Watson, Parley & Williams
INDEX
|
|
|
|
|
|
|
|
|
Clause
|
|
|
|
Page
|
|
|
|
|
|
|
1
|
|
Interpretation
|
|
|
1
|
|
|
2
|
|
Facility
|
|
|
21
|
|
|
3
|
|
Position of the Lenders and Swap Banks
|
|
|
21
|
|
|
4
|
|
Drawdown
|
|
|
23
|
|
|
5
|
|
Interest
|
|
|
24
|
|
|
6
|
|
Interest Periods
|
|
|
26
|
|
|
7
|
|
Default Interest
|
|
|
27
|
|
|
8
|
|
Repayment and Prepayment and Cancellation
|
|
|
28
|
|
|
9
|
|
Conditions Precedent
|
|
|
30
|
|
|
10
|
|
Representations and Warranties
|
|
|
31
|
|
|
11
|
|
General Undertakings
|
|
|
34
|
|
|
12
|
|
Corporate Undertakings
|
|
|
39
|
|
|
13
|
|
Insurance
|
|
|
42
|
|
|
14
|
|
Ship Covenants
|
|
|
46
|
|
|
15
|
|
Security Cover
|
|
|
51
|
|
|
16
|
|
Payments and Calculations
|
|
|
53
|
|
|
17
|
|
Application of Receipts
|
|
|
55
|
|
|
18
|
|
Application of Earnings
|
|
|
56
|
|
|
19
|
|
Events of Default
|
|
|
57
|
|
|
20
|
|
Fees and Expenses
|
|
|
61
|
|
|
21
|
|
Indemnities
|
|
|
62
|
|
|
22
|
|
No Set-Off or Tax Deduction
|
|
|
64
|
|
|
23
|
|
Illegality, etc.
|
|
|
68
|
|
|
24
|
|
Increased Costs
|
|
|
69
|
|
|
25
|
|
Set-Off
|
|
|
71
|
|
|
26
|
|
Transfers and Changes in Lending Offices
|
|
|
71
|
|
|
27
|
|
Variations and Waivers
|
|
|
77
|
|
|
28
|
|
Notices
|
|
|
78
|
|
|
29
|
|
Joint and Several Liability
|
|
|
80
|
|
|
30
|
|
Guarantee
|
|
|
81
|
|
|
31
|
|
Liability as Principal and Independent Debtor
|
|
|
83
|
|
|
32
|
|
Adjustment of Transactions
|
|
|
83
|
|
|
33
|
|
Interest in Relation to Guarantee
|
|
|
83
|
|
|
34
|
|
Enforcement of Guarantee
|
|
|
84
|
|
|
35
|
|
Judgments
|
|
|
84
|
|
|
36
|
|
Supplemental Provisions in Relation to Guarantee
|
|
|
84
|
|
|
37
|
|
Invalidity of Other Provisions of This Agreement
|
|
|
85
|
|
|
38
|
|
Supplemental
|
|
|
86
|
|
|
39
|
|
Law and Jurisdiction
|
|
|
86
|
|
|
|
|
|
Schedules
|
|
|
|
|
|
|
|
|
Schedule 1 Lenders and Commitments
|
|
|
88
|
|
|
Schedule 2 Swap Banks
|
|
|
94
|
|
|
Schedule 3 Drawdown Notice
|
|
|
97
|
|
|
Schedule 4 Condition Precedent Documents
|
|
|
98
|
|
|
Part A
|
|
|
|
|
98
|
|
|
Part B
|
|
|
|
|
99
|
|
|
Schedule 5 Transfer Certificate
|
|
|
101
|
|
|
Schedule 6 Details of Ships
|
|
|
105
|
|
|
Schedule 7 Designation Notice
|
|
|
107
|
|
|
Schedule 8 Form of Certificate of Compliance
|
|
|
108
|
|
|
|
|
|
|
|
|
|
|
Execution
|
|
|
|
|
|
|
|
|
Execution Pages
|
|
|
110
|
|
THIS AGREEMENT
is made on 25 March 2014
BETWEEN
|
(1)
|
EURONAV SHIPPING NV
and
EURONAV TANKERS NV
, as joint and several
Initial Borrowers
|
|
(2)
|
EURONAV NV
as
guarantor
|
|
(3)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1 (
Lenders and Commitments
), as
Lenders
|
|
(4)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 2 (
Swap Banks
), as
Swap Banks
|
|
(5)
|
ABN AMRO BANK N.V., DANISH SHIPFINANCE A/S (DANMARKS SKIBSKREDIT A/S), DNB BANK ASA, ING BANK N.V., NORDEA BANK NORGE ASA
and
MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
,
as
Lead
Arrangers
|
|
(6)
|
BNP PARIBAS FORTIS SA/NV, KBC BANK NV
and
SCOTIABANK EUROPE PLC
, as
Co-Arrangers
|
|
(7)
|
DNB BANK ASA, NORDEA BANK NORGE ASA
and
MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB
, as
Bookrunners
|
|
(8)
|
NORDEA BANK NORGE ASA
, as
Agent
|
|
(9)
|
NORDEA BANK NORGE ASA
, as
Security Trustee
|
BACKGROUND
|
(A)
|
The Lenders have agreed to make available to the Borrowers a term loan facility of $500,000,000 for the purpose of part financing the acquisition cost of the vessels listed in Schedule 6 (
Details of Ships
) or
reimbursing the Borrowers (in part) for the acquisition cost of any of those vessels acquired by either of the Borrowers prior to the first Drawdown Date.
|
|
(B)
|
The Swap Banks may agree to enter into interest rate swap transactions with Euronav from time to time to hedge the Borrowers’ exposure under this Agreement to interest rate fluctuations.
|
|
(C)
|
The Lenders and the Swap Banks have agreed to share in the security to be granted to the Security Trustee pursuant to this Agreement on the terms described herein.
|
IT IS AGREED
as follows:
Subject to Clause 1.5 (
General Interpretation
), in this Agreement:
“
Account Pledge
” means, in respect of an Owner, a deed or pledge creating security in respect of the Earnings Account in
the name of that Owner to be executed by that Owner in favour of the Security Trustee in the Agreed Form.
“
Advance
” means
the principal amount of each borrowing by the Borrowers under this Agreement.
“
Affected Lender
” has the meaning given in
Clause 5.7 (
Market disruption
).
“
Agency and Trust Deed
” means the agency and trust deed dated the same date as
this Agreement and entered into between the same parties as are parties to this Agreement.
“
Agent
” means Nordea Bank
Norge ASA, acting in such capacity through its office at Middelthunsgate 17, 0368 Oslo, Norway, or any successor of it appointed under clause 5 of the Agency and Trust Deed.
“
Agreed Form
” means in relation to any document, that document in a form agreed in writing by the Agent (acting on the
instructions of the Lenders or, if agreed in the Finance Documents, the Majority Lenders), or if otherwise approved in accordance with any other procedure specified in the relevant provision of any Finance Document.
“
Approved Classification Society
” means any of DNV GL Group, Bureau Veritas, Lloyds Register of Shipping, American Bureau of
Shipping, Nippon Kaiji Kyokai or such other classification society which the Agent has approved or selected (with the authorisation of the Majority Lenders).
“
Approved Flag
” means Belgian, French, Greek, Hong Kong and Marshall Islands flags and any other flag approved by the Agent
(acting on the instructions of the Majority Lenders).
“
Approved Manager
” means:
|
|
(a)
|
in relation to the technical management of each Ship:
|
|
|
(i)
|
Euronav Shipmanagement SAS of De Gerlachekaai 20, B 2000 Antwerp 1, Belgium; or
|
|
|
(ii)
|
Maersk Tankers Singapore Pte Ltd. of 200 Cantonment Road, 10-00 Southpoint, 089763, Singapore; and
|
|
|
(b)
|
in relation to the commercial management of each Ship:
|
|
|
(i)
|
the Owner which owns that Ship (as the case may be);
|
|
|
(iii)
|
any wholly owned subsidiary of Euronav,
|
or, in each case, any other company which the Agent
may, with the authorisation of the Majority Lenders, approve from time to time as the technical or commercial manager of that Ship (such approval not to be unreasonably withheld).
“
Approved Shipbroker
” means Arrow Sale & Purchase (UK) Limited, H. Clarkson & Co. Ltd., Braemar Seascope
Limited, Fearnleys, R.S. Platou Shipbrokers A.S., Maersk Broker K/S or such other independent sale and purchase shipbrokers which the Agent has approved or selected (with the authorisation of the Majority Lenders) and Euronav may agree.
“
Arrangers
” means, together, the Lead Arrangers and the Co-Arrangers.
“
Available Commitment
” means, in relation to a Lender and at any time, its Commitment less its Contribution at that time (and
“Total Available Commitments” means the aggregate of the Available Commitments of all the Lenders.
“
Availability
Period
” means the period commencing on the date of this Agreement and ending on the earlier of:
|
|
(a)
|
in relation to the Advance in connection with MAERSK SANDRA, 31 March 2015; or
|
2
|
|
(b)
|
in relation to each other Advance, the first anniversary of this Agreement; or
|
|
|
(c)
|
if earlier in either case, the date on which the Total Commitments are fully cancelled or terminated.
|
“
Base III
” means, together:
|
|
(a)
|
the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III:
International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December
2010, each as amended, supplemented or restated;
|
|
|
(b)
|
the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement - Rules text” published by the Basel
Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
|
|
|
(c)
|
any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.
|
“
Borrower A
” means Euronav Tankers NV, a company incorporated in Belgium whose Belgium registered office is at De Gerlachekaai
20, B-2000 Antwerp 1, Belgium.
“
Borrower B
” means Euronav Shipping NV, a company incorporated in Belgium whose Belgium
registered office is at De Gerlachekaai 20, B-2000 Antwerp 1, Belgium.
“
Borrower
” means:
|
|
(a)
|
from the date of this Agreement until the First Release Date, each of the Initial Borrowers;
|
|
|
(b)
|
from the First Release Date until the Second Release Date, each of Euronav and the Continuing Initial Borrower; and
|
|
|
(c)
|
from the Second Release Date, Euronav.
|
“
Break Costs
” means the amount (if
any) by which:
|
|
(a)
|
the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Interest
Period in relation to the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period
|
exceeds
|
|
(b)
|
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the London interbank market for a period starting on
the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
|
“
Business
Day
” means a day on which banks are open in London, Oslo, Antwerp and Stockholm and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City.
3
“
Change of Control
” means, in relation to Euronav, if 2 or more persons acting
in concert or any individual person in each case other than the Permitted Holders:
|
|
(a)
|
acquires legally and/or beneficially, and either directly or indirectly, in excess of 50 per cent. of the issued share capital or voting rights of Euronav; or
|
|
|
(b)
|
has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent) of Euronav.
|
“
Co-Arrangers
” means BNP Paribas Fortis SA/NV, KBC Bank NV and Scotiabank Europe plc.
“
Code
” means the United States Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
“
Commitment
” means, in relation to a Lender, the amount set opposite its name in
Schedule 1 (
Lenders and Commitments
), or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “
Total
Commitments
” means the aggregate of the Commitments of all the Lenders).
“
Confidential Information
” means all
information relating to any Obligor, the Euronav Group, the Finance Documents or the Loan of which a Creditor Party becomes aware in its capacity as, or for the purpose of becoming, a Creditor Party or which is received by a Creditor Party in
relation to, or for the purpose of becoming a Creditor Party under, the Finance Documents or the Loan from either:
|
|
(a)
|
any member of the Euronav Group or any of its advisers; or
|
|
|
(b)
|
another Creditor Party, if the information was obtained by that Creditor Party directly or indirectly from any member of the Euronav Group or any of its advisers,
|
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording
information which contains or is derived or copied from such information but excludes information that:
|
|
(i)
|
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 26.13 (
Disclosure of information
); or
|
|
|
(ii)
|
is identified in writing at the time of delivery as non-confidential by any member of the Euronav Group or any of its advisers; or
|
|
|
(iii)
|
is known by that Creditor Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Creditor Party after that date, from a source
which is, as far as that Creditor Party is aware, unconnected with the Euronav Group and which, in either case, as far as that Creditor Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of
confidentiality.
|
“
Confidentiality Undertaking
” means a confidentiality undertaking in substantially the
appropriate form recommended by the LMA from time to time or in any other form agreed between the Borrowers and the Agent.
“
Confirmation
”, in relation to any continuing Designated Transaction, has the meaning given in the relevant Master Agreement.
“
Continuing Initial Borrower
” means the Initial Borrower which remains as a Borrower together with Euronav with effect
from the release of the other Initial Borrower from its obligations under the Finance Documents pursuant to Clause 14.16 (
Accession of Euronav and release of Initial Borrowers
).
4
“
Contractual Currency
” has the meaning given in Clause 21.4 (
Currency
indemnity
).
“
Contribution
” means, in relation to a Lender, the part of the Loan which is owing to that Lender.
“
CRD IV
” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the
activity of credit institutions and the prudential supervision of credit institutions and investment firms.
“
Creditor
Party
” means the Agent, the Security Trustee, the Arrangers, any Lender or any Swap Bank, whether as at the date of this Agreement or at any later time.
“
CRR
” means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential
requirements for credit institutions and investment firms.
“
Deed of Covenant
” means, in relation to each Ship and where
(in the opinion of the Agent) it is appropriate in the context of the relevant Approved Flag, a deed of covenant collateral to the Mortgage on that Ship to be executed by the relevant Obligor in favour of the Security Trustee in the Agreed Form.
“
Defaulting Lender
” means any Lender:
|
|
(a)
|
which has failed to make available the relevant proportion of its Commitment in respect of any Advance or has given notice to the Agent that it will not make such amount available by the relevant Drawdown Date pursuant
to Clause 4.3 (
Notification to Lenders of receipt of a Drawdown Notice
); or
|
|
|
(b)
|
which has otherwise rescinded or repudiated a Finance Document; or
|
|
|
(c)
|
with respect to which an Insolvency Event has occurred and is continuing,
|
unless, in the case
of paragraph (a) above:
|
|
(i)
|
its failure to pay is caused by:
|
|
|
(A)
|
administrative or technical error; or
|
|
|
(B)
|
a Disruption Event; and
|
payment is made within 5 Business Days of its due date; or
|
|
(ii)
|
the Lender is disputing in good faith whether it is contractually obliged to make the relevant payment.
|
“
Designated Transaction
” means a Transaction which fulfils the following requirements:
|
|
(a)
|
it is entered into by Euronav pursuant to a Master Agreement with a Swap Bank;
|
|
|
(b)
|
its purpose is the hedging of the exposure of the Initial Borrowers (or either of them) under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no
later than the Maturity Date; and
|
|
|
(c)
|
it is designated by Euronav and/or by the relevant Swap Bank, by delivery by Euronav and/or that Swap Bank to the Agent of a notice of designation in the form set out in Schedule 7 (
Designation Notice
), as a
Designated Transaction for the purposes of the Finance Documents.
|
5
“
Disruption Event
” means either or both of:
|
|
(a)
|
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Loan (or otherwise in
order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, a party to this Agreement (a “
Party
”); or
|
|
|
(b)
|
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other, Party:
|
|
|
(i)
|
from performing its payment obligations under the Finance Documents; or
|
|
|
(ii)
|
from communicating with other parties in accordance with the terms of the Finance Documents,
|
and which (in each case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
“
Dollars
” and “
$
” means the lawful currency for the time being of the United States of America.
“
Drawdown Date
” means, in relation to an Advance, the date requested by the Borrowers for the Advance to be made, or (as the
context requires) the date on which the Advance is actually made.
“
Drawdown Notice
” means a notice in the form set out in
Schedule 3 (
Drawdown Notice
) (or in any other form which the Agent approves or reasonably requires).
“
Earnings
”
means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the relevant Owner and which arise out of the use or operation of that Ship, including (but not limited to):
|
|
(a)
|
all freight, hire and passage moneys, compensation payable to the relevant Owner in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;
|
|
|
(b)
|
all moneys which are at any time payable under Insurances in respect of loss of earnings; and
|
|
|
(c)
|
if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or
sharing arrangement which is attributable to that Ship.
|
“
Earnings Account
” means, in respect of each Owner,
an account in the name of that Owner with the Agent in Oslo designated “[Name of Borrower] - Earnings Account”, or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent)
which is agreed by the Agent and the Obligors as the Earnings Account for the purposes of this Agreement.
6
“
Environmental Claim
” means:
|
|
(a)
|
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
|
|
|
(b)
|
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
and “
claim
” means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar
to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.
“
Environmental Incident
” means:
|
|
(a)
|
any release of Environmentally Sensitive Material from a Ship; or
|
|
|
(b)
|
any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and which involves a collision between a Ship and such other vessel or some other incident of navigation or operation,
in either case, in connection with which a Ship is actually or is reasonably likely to be arrested, attached, detained or injuncted and/or a Ship and/or the relevant Owner and/or any operator or manager of a Ship is at fault or allegedly at fault or
is reasonably likely to be subject to any legal or administrative action; or
|
|
|
(c)
|
any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or reasonably likely to be arrested and/or where the relevant Owner
and/or any operator or manager of a Ship is at fault or allegedly at fault or is reasonably likely to be subject to any legal or administrative action.
|
“
Environmental Law
” means any law relating to pollution or protection of the environment, to the carriage of Environmentally
Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
“
Environmentally Sensitive
Material
” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.
“
Euronav
” means Euronav NV, a company incorporated in Belgium whose Belgium registered office is at De Gerlachekaai 20, B-2000
Antwerp 1, Belgium.
“
Euronav Group
” means Euronav and each of its subsidiaries.
“
Event of Default
” means any of the events or circumstances described in Clause 19.1 (
Events of Default
).
“
FATCA
” means
|
|
(a)
|
sections 1471 to 1474 of the Code or any associated regulations or other official guidance;
|
|
|
(b)
|
any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the
implementation of paragraph (a) above; or
|
|
|
(c)
|
any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
|
7
“
FATCA Deduction
” means a deduction or withholding from a payment under a
Finance Document required by or under FATCA.
“
FATCA Exempt Party
” means a party to a Finance Document that is entitled to
receive payments free from any FATCA Deduction.
“
FATCA FFI
” means a foreign financial institution as defined in section
1471(d)(4) of the Code which could be required to make a FATCA Deduction.
“
FATCA Non-Exempt Lender
” means any Lender who
is not a FATCA Exempt Party.
“
Fair Market Value
” means, in relation to a Ship, a valuation of its market price as
determined in accordance with Clause 15.3 (
Valuation of Ships
).
“
Finance Documents
” means:
|
|
(b)
|
the Agency and Trust Deed;
|
|
|
(d)
|
the Deeds of Covenant;
|
|
|
(e)
|
the General Assignments;
|
|
|
(g)
|
the Master Agreement Assignments;
|
|
|
(h)
|
the Manager’s Undertakings; and
|
|
|
(i)
|
any other document (whether creating a Security Interest or not) which is executed at any time by the Obligors (or any of them) or any other person as security for, or to establish any form of subordination or
priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Banks under this Agreement or any of the other documents referred to in this definition.
|
“
Financial Indebtedness
” means, in relation to a person (the “
debtor
”), a liability of the debtor:
|
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
|
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
|
|
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
8
|
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred
to the other person.
|
“
First Release Date
” means the date on which all the Ships owned by the first of the
Initial Borrowers have been transferred to Euronav in accordance with Clause 14.15 (
Transfer of Ships
).
“
Framework
Agreement
” means the agreement dated 3 January 2014 entered into between the Seller and Euronav in relation to the sale of the Ships by the Seller to, and purchase of the Ships by, Euronav or its nominee company.
“
General Assignment
” means, in relation to each Ship, a deed to be executed by the Owner of that Ship in favour of the
Security Trustee creating security in respect of the Earnings, the Insurances and any Requisition Compensation relating to that Ship and any charter in excess of 24 months in relation to that Ship and any guarantee of such charter in the Agreed
Form.
“
Guarantee
” means each of the guarantees contained within Clause 30 (
Guarantee
) of this Agreement.
“
IFRS
” means International Financial Reporting Standards in effect from time to time save that all accounting terms relating
to operating leases shall be construed in accordance with IFRS as at the date of this Agreement.
“
Impaired Agent
” means
the Agent at any time when:
|
|
(a)
|
it has failed to make (or has notified a party to a Finance Document that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
|
|
|
(b)
|
the Agent otherwise rescinds or repudiates a Finance Document;
|
|
|
(c)
|
(if the Agent is also a Lender), it is a Defaulting Lender under paragraph (a) or (b) of the definition of “Defaulting Lender”; or
|
|
|
(d)
|
an Insolvency Event has occurred and is continuing with respect to the Agent;
|
unless, in the
case of paragraph (a) above:
|
|
(i)
|
its failure to pay is caused by:
|
|
|
(A)
|
administrative or technical error; or
|
|
|
(B)
|
a Disruption Event; and
|
|
|
(ii)
|
payment is made within 10 Business Days of its due date; or
|
|
|
(iii)
|
the agent is disputing in good faith whether it is contractually obliged to make the payment in question.
|
“
Initial Borrower
” means each of Borrower A and Borrower B.
9
“
Insolvency Event
” in relation to a Lender means that Lender:
|
|
(a)
|
is dissolved (other than pursuant to a consolidation, amalgamation or merger);
|
|
|
(b)
|
becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
|
|
|
(c)
|
makes a general assignment, arrangement, or composition with or for the benefit of its creditors;
|
|
|
(d)
|
institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or
organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition
is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;
|
|
|
(e)
|
has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is
presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph
(d) above and:
|
|
|
(i)
|
results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
|
|
|
(ii)
|
is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
|
|
|
(f)
|
has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
|
|
|
(g)
|
seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than,
for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in paragraph (d) above);
|
|
|
(h)
|
has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
|
|
|
(i)
|
causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or
|
|
|
(j)
|
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
|
“
Insurances
” means, in relation to a Ship:
|
|
(a)
|
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, its Earnings or otherwise in relation to it;
and
|
|
|
(b)
|
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium.
|
10
“
Interest Period
” means a period determined in accordance with Clause 6
(
Interest Periods
).
“
ISM Code
” means the International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and the terms “
safety management system
”,
“
Safety Management Certificate
” and “
Document of Compliance
” have the same meanings as are given to them in the ISM Code).
“
ISPS Code
” means the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the
International Maritime Organisation (“
IMO
”) adopted by a Diplomatic conference of the IMO on Maritime Security on 13 December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as
amended) to take effect on 1 July 2004.
“
ISSC
” means a valid and current International Ship Security Certificate
issued under the ISPS Code.
“
Lead Arrangers
” means ABN AMRO Bank N.V., Danish Shipfinance A/S (Danmarks Skibskredit A/S),
DNB Bank ASA, ING Bank N.V., Nordea Bank Norge ASA and Merchant Banking, Skandinaviska Enskilda Banken AB (publ).
“
Lender
” means a bank or financial institution listed in Schedule 1 (
Lenders and Commitments
) and acting through its
branch indicated in Schedule 1 (
Lenders and Commitments
) (or through another branch notified to the Borrowers under Clause 26.14 (
Change of lending office
) or its transferee, successor or assign.
“
LIBOR
” means, for an Interest Period:
|
|
(a)
|
the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on Reuters Page Libor 01 at or about 11.00
a.m. (London time) on the Quotation Date for that Interest Period (and, for the purposes of this Agreement, “Reuters Page Libor 01” means the display designated as “Page Libor 01” on the Reuters Service or such other page as may
replace Page Libor 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by ICE Benchmark Administration Limited for the purpose of displaying ICE Benchmark Administration Limited
Settlement Rates for Dollars); or
|
|
|
(b)
|
if no rate is quoted on Reuters Page Libor 01, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth of one per cent.) of the rates per annum
notified to the Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank’s request at or about 11.00 a.m. (London time) on
the Quotation Date for that Interest Period for a period equal to that Interest Period and for delivery on the first Business Day of it,
|
and if any such rate is below zero, LIBOR will be deemed to be zero. References above to ICE Benchmark Administration Limited shall be
construed to include any other person who takes over the administration of the London interbank offered rate.
“
Loan
”
means the principal amount for the time being outstanding under this Agreement.
11
“
Manager’s Undertaking
” means, in relation to a Ship, the undertaking to be
given by the Approved Manager in favour of the Security Trustee in the Agreed Form.
“
Major Casualty
” means, in relation
to a Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $5,000,000 or the equivalent in any other currency.
“
Majority Lenders
” means:
|
|
(a)
|
before any Advance has been made, Lenders the aggregate of whose Commitments total at least 66
2
⁄
3
per cent. of the Total
Commitments; and
|
|
|
(b)
|
after the first Advance has been made, Lenders the aggregate of whose Contributions total at least 66
2
⁄
3
per cent. of the
Total Contributions.
|
“
Margin
” means 2.75 per cent. per annum.
“
Master Agreement
” means each master agreement (on the 1992 or 2002 (as the case may be) ISDA (Multicurrency-Crossborder)
form) in an agreed form made or to be made between Euronav and a Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under such master agreement.
“
Master Agreement Assignment
” means an assignment or assignments of Euronav’s rights under each of the Master Agreements
executed by Euronav in favour of the Security Trustee in Agreed Form.
“
Maturity Date
” means the sixth anniversary of the
date of this Agreement.
“
MOA
” means, in relation to a Ship, the Memorandum of Agreement dated 3 January 2014 entered
into between the relevant Seller and Euronav pursuant to the Framework Agreement in respect of the sale of that Ship.
“
Mortgage
” means, in relation to each Ship, a first priority or preferred (as the case may be) mortgage on that Ship in the
form appropriate to the relevant Approved Flag in each case executed by Owner of that Ship in favour of the Security Trustee (and/or such other Creditor Parties as may be appropriate in the opinion of the Agent and in the context of the relevant
Approved Flag), each such mortgage to be in the Agreed Form and, where the relevant Approved Flag is Belgian or French flag, the amount secured by such mortgage shall be limited to 125 per cent. of the Fair Market Value of the relevant Ship as
at the date of the relevant mortgage.
“
Non-Consenting Lender
” means any Lender which does not and continues not to
consent or agree to:
|
|
(a)
|
a request of the Borrowers or the Agent (at the request of the Borrowers) to give a consent in relation to, or to agree to a waiver or amendment of, any provision of the Finance Documents;
|
|
|
(b)
|
the consent, waiver or amendment in question requires the approval of all of the Lenders; and
|
|
|
(c)
|
Lenders whose commitments aggregate more than 66
2
⁄
3
per cent. of the Total Commitments have consented or agreed to such
waiver or amendment.
|
“
Notifying Lender
” has the meaning given in Clause 23.1 (
Illegality
) or Clause
24.1 (
Increased costs
) as the context requires.
12
“
Obligors
” means each Initial Borrower (unless it has been released from its
obligations as a Borrower pursuant to Clause 14.16 (
Accession of Euronav and release of Initial Borrowers
)) and Euronav.
“
Owner
” means, at the relevant date, the relevant Obligor which is the registered owner of the particular Ship or Ships.
“
Payment Currency
” has the meaning given in Clause 21.4 (
Currency indemnity
).
“
Permitted Holders
” means each of Saverco, Victrix and Tanklog (and (in each case) any parallel vehicle thereof and their
respective alternative investment vehicles) and their affiliates.
“
Permitted Security Interests
” means:
|
|
(a)
|
Security Interests created by the Finance Documents;
|
|
|
(b)
|
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
|
|
(d)
|
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;
|
|
|
(e)
|
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship,
provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Owner in good faith by appropriate steps);
|
|
|
(f)
|
any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the relevant Owner is prosecuting or
defending such proceedings or arbitration in good faith by appropriate steps provided such Security Interest does not (and is not likely to) result in any sale, forfeiture or loss of a Ship; and
|
|
|
(g)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves
have been made.
|
“
Pertinent Document
” means:
|
|
(a)
|
any Finance Document;
|
|
|
(b)
|
any Master Agreement;
|
|
|
(c)
|
any policy or contract of insurance contemplated by or referred to in Clause 13 (
Insurance
) or any other provision of this Agreement or another Finance Document or Master Agreement;
|
|
|
(d)
|
any other document contemplated by or referred to in any Finance Document; and
|
|
|
(e)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or Master Agreement or any policy, contract or document falling within
paragraphs (c) or (d).
|
13
“
Pertinent Jurisdiction
” in relation to a company, means:
|
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
|
|
(c)
|
a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;
|
|
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or a permanent place of
business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c).
|
“
Pertinent Matter
” means:
|
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
|
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
|
and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or
on or at any time after that signing.
“
Potential Event of Default
” means an event or circumstance which, with the giving
of any notice, the lapse of time, a reasonable determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default.
“
Prohibited Person
” means any person (whether designated by name or by reason of being included in a class of persons and
whether or not having a separate legal personality) that is:
|
|
(a)
|
listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List;
|
|
|
(b)
|
located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or acting on behalf of, a person located in or organized under the laws of a country or territory that is the target of
country-wide or territory-wide Sanctions; or
|
|
|
(c)
|
otherwise a target of Sanctions (“
target of Sanctions
” signifying a person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in
trade, business or other activities or against whom Sanctions are otherwise directed).
|
“
Qualifying Notes
”
means the fixed rate bonds issued by Euronav with:
|
|
(a)
|
issue date 17 January 2014;
|
|
|
(b)
|
principal paying agent and domiciliary agent BNP Paribas Securities Services;
|
14
|
|
(c)
|
trustee BNP Paribas Trust Corporation UK Ltd London; and
|
|
|
(d)
|
an aggregated principal amount of $235,500,000,
|
Provided that
such notes are
subordinated notes that:
|
|
(b)
|
have a maturity date no earlier than 3 months after the Maturity Date;
|
|
|
(c)
|
have a coupon not exceeding:
|
|
|
(i)
|
5.95 per cent. during the period from the date of issue of such notes to the first anniversary of their date of issue;
|
|
|
(ii)
|
8.50 per cent. from the first anniversary of the date of issue of such notes to the third anniversary of their date of issue;
|
|
|
(iii)
|
10.20 per cent. from the third anniversary of the date of issue of such notes to the seventh anniversary of their date of issue;
|
|
|
(d)
|
in relation to which interest is payable semi-annually in arrears; and
|
|
|
(e)
|
which contain subordination provisions with respect to senior secured credit facilities (including the Loan) acceptable to the Agent.
|
“
Quotation Date
” means, in relation to any Interest Period (or any other period for which an interest rate is to be determined
under any provision of a Finance Document), 3 Business days before the first day of that period or the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to
which such rate is to be determined for delivery on the first day of that Interest Period or other period.
“
Replacement Finance
Documents
” means, in relation to a Ship, a Mortgage, Deed of Covenant (if applicable) and General Assignment in relation to the relevant Ship executed by Euronav.
“
Reference Banks
” means, subject to Clause 26.16 (
Replacement of Reference Bank
), each of Nordea Bank Norge ASA, DNB
Bank ASA and Skandinaviska Enskilda Banken AB (publ).
“
Relevant Person
” has the meaning given in Clause 19.9 (
Relevant
Persons
).
“
Repayment Date
” means a date on which a repayment is required to be made under Clause 8 (
Repayment
and Prepayment and Cancellation
).
“
Requisition Compensation
” includes all compensation or other moneys payable by
reason of any act or event such as is referred to in paragraph (b) of the definition of “
Total Loss
”.
“
Restricted Party
” means a person that:
|
|
(a)
|
is listed on or owned or controlled by a person listed on any Sanctions List (whether designated by name or by reason of being included in a class of person);
|
|
|
(b)
|
with which any Obligor or member of the Euronav Group is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions;
|
|
|
(c)
|
is located in, organised or incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under
the laws of a
|
15
|
|
country or territory that is the target of Sanctions (including, without limitation, at the date of this agreement Cuba, Iran, Myanmar (Burma), North Korea, Syria and Sudan) or a person that is
otherwise the target of Sanctions;
|
|
|
(d)
|
is directly or indirectly owned by or controlled by a person referred to in (a) and/or (b) and/or (c) above; or
|
|
|
(e)
|
owns or controls a person referred to in (a) and/or (b) and/or (c) above; or
|
|
|
(f)
|
is otherwise the target of Sanctions.
|
“
Samsung Seller’s Credit
” means
the seller’s credit provided by Samsung Heavy Industries Co. Ltd. to (inter alia) Euronav pursuant to an agreement dated 9 January 2012.
“
Sanctioned Country
” means any country or territory which is subject to general trade, economic or financial sanctions
embargoes imposed, administered or enforced by a Sanctions Authority.
“
Sanctions
” means the economic or financial
sanctions laws and/or regulations or trade embargoes imposed by any Sanctions Authority or any law or regulation enacted, promulgated or issued by any Sanctions Authority after the date of this Agreement.
“
Sanctions Authority
” means the Norwegian State, the United Nations, the European Union (or its member states including the
United Kingdom), the United States of America, the Monetary Authority of Singapore and the Hong Kong Monetary Authority and any authority acting on behalf of any of them in connection with Sanctions or any other relevant governmental or regulatory
authority, institution or agency which administers economic of financial sanctions.
“
Sanctions List
” means any list of
persons or entities published in connection with Sanctions by or on behalf of any Sanctions Authority as amended, supplemented or substituted from time to time.
“
Saverco
” means Saverco NV, a company incorporated in Belgium whose registered office is at de Gerlachekaai 20, B-2000
Antwerp, Belgium.
“
Second Release Date
” means the date on which all the Ships owned by the each of the Initial Borrowers
have been transferred to Euronav in accordance with Clause 14.15 (
Transfer of Ships
).
“
Secured Liabilities
” means
all liabilities which the Initial Borrowers, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or the Master Agreements or any judgment relating to
any Finance Document or the Master Agreements; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy,
liquidation, arrangement or other procedure under the insolvency laws of any country.
“
Security Interest
” means:
|
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
|
|
(b)
|
the security rights of a plaintiff under an action in rem; and
|
|
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a
security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution.
|
16
“
Security Party
” means Euronav and any other person (except a Creditor Party)
who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of “Finance Documents”.
“
Security Period
” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies
the Borrowers, the Security Parties and the other Creditor Parties that:
|
|
(a)
|
all amounts which have become due for payment by any Borrower or any Security Party under the Finance Documents and the Master Agreements have been paid;
|
|
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document or the Master Agreements and all Commitments have terminated;
|
|
|
(c)
|
neither any Borrower nor any Security Party has any future or contingent liability under Clause 20 (
Fees and Expenses
), Clause 21 (
Indemnities
) or Clause 22 (
No Set-Off or Tax Deduction
) or any
other provision of this Agreement or another Finance Document or a Master Agreement; and
|
|
|
(d)
|
the Agent, the Security Trustee and the Majority Lenders, acting reasonably, consider that there is no significant risk that any payment or transaction under a Finance Document or a Master Agreement would be set aside,
or would have to be reversed or adjusted, in any present or possible future bankruptcy of a Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or a Master Agreement or any asset covered (or
previously covered) by a Security Interest created by a Finance Document.
|
“
Security Trustee
” means Nordea
Bank Norge ASA, acting in such capacity through its office at Middelthunsgate 17, 0368 Oslo, Norway, or any successor of it appointed under clause 5 of the Agency and Trust Deed.
“
Servicing Bank
” means the Agent or the Security Trustee.
“
Seller
” means Maersk Tankers Singapore Pte. Ltd., a company incorporated in Singapore with its registered office at 200
Cantonment Road, 10-00 Southpoint, 089763, Singapore.
“
Ship
” means each of the 15 VLCC type vessels listed in Schedule 6
(
Details of Ships
) which are to be acquired by the Initial Borrowers (and which are also sometimes referred to in this Agreement by their individual names listed in Schedule 6 (
Details of Ships
)).
“
Swap Bank
” means a bank or financial institution listed in Schedule 2 (
Swap Banks
) and acting through its branch
indicated in that Schedule.
“
Swap Counterparty
” means, at any relevant time and in relation to a continuing Designated
Transaction, the Swap Bank which enters into that Designated Transaction.
“
Tankers International Pool
” means the Tankers
International tanker pool governed by a pooling agreement entered into in January 2000 (as amended and supplemented from time to time) made between the participants in the pool and Tankers International LLC of Libra Tower, 23 Olympion Street, 3306
Limassol, Cyprus.
“
Tanklog
” means Tanklog Holdings Ltd., a company incorporated in Cyprus whose registered office is at 1
C. Pantelides Avenue, Nicosia 1010, Cyprus.
17
“
Total Loss
” means, in relation to a Ship:
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of that Ship;
|
|
|
(b)
|
any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an
extension) unless it is within 90 days redelivered to the relevant Owner’s full control;
|
|
|
(c)
|
any condemnation of that Ship by any tribunal or by any person claiming to be a tribunal; and
|
|
|
(d)
|
any arrest, capture, seizure or detention of that Ship (including piracy or theft) unless it is within 90 days redelivered to the relevant Owner’s (as the case may be) full control.
|
“
Total Loss Date
” means, in relation to a Ship:
|
|
(a)
|
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
|
|
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:
|
|
|
(i)
|
the date on which a notice of abandonment is given to the insurers; and
|
|
|
(ii)
|
the date of any compromise, arrangement or agreement made by or on behalf of the relevant Owner with that Ship’s insurers in which the insurers agree to treat that Ship as a total loss; and
|
|
|
(c)
|
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.
|
“
Transaction
” has the meaning given in each Master Agreement.
“
Transfer Certificate
” has the meaning given in Clause 26.2 (
Transfer by a Lender
).
“
Trust Property
” has the meaning given in clause 3.1 of the Agency and Trust Deed.
“
Unpaid Sum
” means any sum due and payable but unpaid by an Obligor under the Finance Documents.
“
US Tax Obligor
” means
|
|
(a)
|
a Borrower which is resident for tax purposes in the United States of America; or
|
|
|
(b)
|
an Obligor some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes.
|
“
VAT
” means:
|
|
(a)
|
any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
|
|
|
(b)
|
any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.
|
“
Victrix
” means Victrix NV, a company incorporated in Belgium whose registered office is at Le Grellelei
20, 2600 Berchem, Belgium.
18
|
1.2
|
Construction of certain terms
|
In this Agreement:
“
administration notice
” means a notice appointing an administrator, a notice of intended appointment and any other notice
which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator.
“
approved
” means, for the purposes of Clause 13 (
Insurance
), approved in writing by the Agent acting with the
authorisation of the Majority Lenders (which authorisation shall not be unreasonably withheld).
“
asset
” includes every
kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment.
“
company
” includes any partnership, joint venture and unincorporated association.
“
consent
” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and
legalisation.
“
contingent liability
” means a liability which is not certain to arise and/or the amount of which remains
unascertained.
“
document
” includes a deed; also a letter or fax.
“
excess risks
” means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims.
“
expense
” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value
added or other tax.
“
law
” includes any order or decree, any form of delegated legislation, any treaty or international
convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council.
“
legal or administrative action
” means any legal proceeding or arbitration and any administrative or regulatory action or
investigation.
“
liability
” includes every kind of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise.
“
months
” shall be construed in accordance with Clause 1.3 (
Meaning of
“month”
).
“
obligatory insurances
” means, in relation to a Ship, all insurances effected, or which the Owner
in relation to that Ship is obliged to effect or procure are effected, under Clause 13 (
Insurance
) or any other provision of this Agreement or another Finance Document.
“
parent company
” has the meaning given in Clause 1.4 (
Meaning of “subsidiary”
).
19
“
person
” includes any company; any state, political sub-division of a state and
local or municipal authority; and any international organisation.
“
policy
”, in relation to any insurance, includes a
slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms.
“
protection and
indemnity risks
” means the usual risks covered by a protection and indemnity association including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable
under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (01/11/02 or 01/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/1995 or 1/10/83) or the Institute Amended Running
Down Clause (1/10/71) or any equivalent provision.
“
regulation
” includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation.
“
subsidiary
” has the meaning given in Clause 1.4 (
Meaning of “subsidiary”
).
“
tax
” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any
political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine.
“
war risks
” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or
1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
A period of 1 or more “
months
” ends on
the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“
the numerically corresponding day
”), but:
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding
the numerically corresponding day; or
|
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;
|
and “
month
” and “
monthly
” shall be construed accordingly.
|
1.4
|
Meaning of “subsidiary”
|
A company (S) is a subsidiary of another company
(P) if:
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
|
|
(b)
|
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
|
|
(c)
|
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
|
(d)
|
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;
|
and any company of which S is a subsidiary is a parent company of S.
20
|
1.5
|
General Interpretation
|
In this Agreement:
|
(a)
|
references in Clause 1.1 (
Definitions
) to a Finance Document or any other document being in an “
agreed form
” are to the form agreed between the Agent (acting with the authorisation of each of the
other Creditor Parties) and the Borrowers;
|
|
(b)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
|
(c)
|
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
|
|
(d)
|
words denoting the singular number shall include the plural and vice versa;
|
|
(e)
|
Clauses 1.1 (
Definitions
) to 1.5 (
General Interpretation
) apply unless the contrary intention appears; and
|
|
(f)
|
an Event of Default or Potential Event of Default is “
continuing
” if it has not been remedied or waived.
|
In interpreting a Finance Document or any provision of a Finance Document, all
clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
Subject to the other provisions of this Agreement, the Lenders shall
make available to the Borrowers a Dollar term loan facility not exceeding $500,000,000.
|
2.2
|
Lenders’ participations
|
Subject to the other provisions of this Agreement, each
Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the Total Commitments.
The Borrowers undertake with each Creditor Party to use each
Advance only for the purposes stated in the preamble to this Agreement.
|
3
|
POSITION OF THE LENDERS AND SWAP BANKS
|
The rights of the Lenders and the Swap Banks under this Agreement are
several.
21
|
3.2
|
Individual right of action
|
Each Lender and each Swap Bank shall be entitled to sue for
any amount which has become due and payable by the Borrowers (or either of them) to it under a Finance Document or by Euronav under a Master Agreement without joining the Agent, the Security Trustee, any Arranger, any other Lender or any other Swap
Bank as additional parties in the proceedings.
|
3.3
|
Proceedings requiring Majority Lender consent
|
Except as provided in Clause 3.2
(
Individual right of action
), no Lender and no Swap Bank may commence proceedings against the Borrowers (or either of them) or any Security Party in connection with a Finance Document or a Master Agreement without the prior consent of the
Majority Lenders.
The obligations of the Lenders under this Agreement and of the Swap
Banks under the Master Agreement to which it is a party are several; and a failure of a Lender to perform its obligations under this Agreement or a failure by a Swap Bank to perform its obligations under the Master Agreement to which it is a party
shall not result in:
|
(a)
|
the obligations of the other Lenders or other Swap Banks being increased; nor
|
|
(b)
|
any Borrower, any Security Party, any other Lender or any other Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document or under any Master Agreement;
|
and in no circumstances shall a Lender or a Swap Bank have any responsibility for a failure of another Lender or another Swap Bank to perform
its obligations under this Agreement or the Master Agreement to which it is a party.
|
3.5
|
Security Trustee as joint and several creditor
|
|
(a)
|
Each Obligor and each of the Creditor Parties agrees that the Security Trustee shall be the joint creditor (“
hoofdelijke schuldeiser
”) together with each other Creditor Party of each liability and
obligation of the Obligors (or any of them) towards any Creditor Party under any Finance Document, and that accordingly the Security Trustee will have its own independent right to demand performance by the Obligors of those liabilities and
obligations. However, any discharge of any liability or obligation of the Obligors (or any of them) to one of the Security Trustee or another Creditor Party shall, to the same extent, discharge the corresponding liability or obligation owing to the
others.
|
|
(b)
|
Without limiting or affecting the Security Trustee’s rights against the Obligors (whether under this paragraph or under any other provision of the Finance Documents), the Security Trustee agrees with each other
Creditor Party (on a several and separate basis) that, subject as set out in the next sentence, it will not exercise its rights as a joint creditor with a Creditor Party except with the consent of the relevant Creditor Party. However, for the
avoidance of doubt, nothing in the previous sentence shall in any way limit the Security Trustee’s right to act in the protection or preservation of rights under or to enforce any Finance Document (or to do any act reasonably incidental to any
of the foregoing).
|
|
(c)
|
Subject to the provisions of this Clause 3.5 (
Security Trustee as joint and several creditor
), the Security Trustee holds any security created by a Finance Document in its name and the Security Trustee shall have
full and unrestricted title to and authority in respect of that security, subject always to the terms of the Finance Documents.
|
22
Subject to the following conditions, the Borrowers may request that
an Advance be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 3 Business Days prior to the intended Drawdown Date.
The conditions referred to in Clause 4.1 (
Request for Advance
) are
that:
|
(a)
|
a Drawdown Date has to be a Business Day during the Availability Period and the first Drawdown Date will be on or before 30 May 2014;
|
|
(b)
|
there shall be no more than one Advance in relation to each Ship;
|
|
(c)
|
the amount of each Advance shall not exceed the amount set forth opposite the name of the Ship to which that Advance relates in Schedule 6 (
Details of Ships
); and
|
|
(d)
|
the aggregate amount of the Advances outstanding at any time shall not exceed the Total Commitments at that time.
|
|
4.3
|
Notification to Lenders of receipt of a Drawdown Notice
|
The Agent shall promptly notify
the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
|
(a)
|
the amount of the Advance and the Drawdown Date;
|
|
(b)
|
the amount of that Lender’s participation in the Advance; and
|
|
(c)
|
the duration of the Interest Period for that Advance.
|
|
4.4
|
Drawdown Notice irrevocable
|
A Drawdown Notice must be signed by a duly authorised
person on behalf of each of the Borrowers; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Agent, acting with the authorisation of the Majority Lenders.
|
4.5
|
Lenders to make available Contributions
|
Subject to the provisions of this Agreement,
each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrowers the amount due from that Lender on that Drawdown Date under Clause 2.2 (
Lenders’ participations
).
|
4.6
|
Disbursement of Advances
|
Subject to the provisions of this Agreement, the Agent shall
on each Drawdown Date pay to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5 (
Lenders to make available Contributions
); and that payment to the Borrowers shall be made to the account which the Borrowers
specify in the Drawdown Notice.
|
4.7
|
Disbursement of Advances to third party
|
A payment by the Agent under Clause 4.6
(
Disbursement of Advances
) shall constitute the making of the relevant Advance and the Borrowers shall thereupon become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender’s Contribution.
23
|
5.1
|
Payment of normal interest
|
Subject to the provisions of this Agreement, interest on
each Advance in respect of an Interest Period shall be paid by the Borrowers on the last date of that Interest Period.
|
5.2
|
Normal rate of interest
|
Subject to the provisions of this Agreement, the rate of
interest on each Advance in respect of an Interest Period shall be the aggregate of the Margin and LIBOR for that Interest Period.
|
5.3
|
Payment of accrued interest
|
In the case of an Interest Period longer than 3 months,
accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.
|
5.4
|
Notification of rates of normal interest
|
The Agent shall notify the Borrowers and each
Lender of each rate of interest as soon as practicable after each is determined.
|
5.5
|
Obligation of Reference Banks to quote
|
A Lender which is a Reference Bank shall use all
reasonable efforts to supply any quotation required of it for the purposes of fixing a rate of interest under this Agreement.
|
5.6
|
Quotations by Reference Banks
|
If any Reference Bank fails to supply a quotation when
required, the Agent shall determine the relevant LIBOR on the basis of the mean of the quotations supplied by the other Reference Bank or Banks; but if less than 2 Reference Banks provide a quotation, the relevant rate of interest shall be set in
accordance with the following provisions of this Clause 5 (
Interest
).
The following provisions of this Clause 5 (
Interest
) apply if:
|
(a)
|
no rate is quoted on Reuters Page Libor 01 and 2 or more of the Reference Banks do not, before 1.00 p.m. (London time) on the Quotation Date for an Interest Period, provide quotations to the Agent in order to fix LIBOR;
or
|
|
(b)
|
at least 1 Business Day before the start of an Interest Period, Lenders having Commitments amounting to more than 50 per cent. of the Total Commitments notify the Agent that LIBOR fixed by the Agent would not
accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in the London Interbank Market at or about 11.00 a.m. (London time) on the Quotation Date for the Interest
Period; or
|
|
(c)
|
at least 1 Business Day before the start of an Interest Period, the Agent is notified by a Lender (the “
Affected Lender
”) that for any reason it is unable to obtain Dollars in the London Interbank
Market in order to fund its Contribution (or any part of it) during that Interest Period.
|
24
|
5.8
|
Notification of market disruption
|
The Agent shall notify the Borrowers and each of the
Lenders stating the circumstances falling within Clause 5.7 (
Market disruption
) which have caused its notice to be given.
|
5.9
|
Suspension of drawdown
|
If the Agent’s notice under Clause 5.8 (
Notification of
market disruption
) is served before an Advance is to be made the Lenders’ obligations to make or participate in that Advance (as the case may be) shall be suspended while the circumstances referred to in the Agent’s notice continue.
|
5.10
|
Negotiation of alternative rate of interest
|
If the Agent’s notice under Clause 5.8
(
Notification of market disruption
) is served after an Advance has been made, the Borrowers, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within the 15 days after the date on
which the Agent serves its notice under Clause 5.8 (
Notification of market disruption
) (the “
Negotiation Period
”), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may
be) the Affected Lender to fund or continue to fund their or its Contribution during the relevant Interest Period concerned.
|
5.11
|
Application of agreed alternative rate of interest
|
Any alternative interest rate or an
alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
5.12
|
Alternative rate of interest in absence of agreement
|
If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender,
set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin; and the procedure provided for
by this Clause 5.12 (
Alternative rate of interest in absence of agreement
) shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
|
5.13
|
Notice of prepayment
|
If the Borrowers do not agree with an interest rate set by the
Agent under Clause 5.12 (
Alternative rate of interest in absence of agreement
), the Borrowers may give the Agent not less than 10 Business Days’ notice of its intention to prepay the relevant Advance at the end of the interest period set
by the Agent.
A notice under Clause 5.13 (
Notice of prepayment
) shall be
irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrowers’ notice of intended prepayment; and on the last Business Day of the interest period set by the Agent, the Borrowers shall
prepay (without premium or penalty) the relevant Advance, together with accrued interest thereon at the applicable rate (including the Mandatory Cost) plus the Margin.
|
5.15
|
Application of prepayment
|
The provisions of Clause 8 (
Repayment and Prepayment and
Cancellation
) shall apply in relation to the prepayment.
25
|
6.1
|
Commencement of Interest Periods
|
The first Interest Period applicable to an Advance
shall commence on the Drawdown Date relating to that Advance and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.
|
6.2
|
Duration of normal Interest Periods
|
Subject to Clauses 6.3 (
Duration of Interest
Periods for repayment instalments
) and 6.4 (
No Interest Period to extend beyond final Maturity Date
), each Interest Period shall be:
|
(a)
|
1, 3 or 6 months as notified by the Borrowers to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of the Interest Period; or
|
|
(b)
|
in the case of the first Interest Period applicable to the second and any subsequent Advance and if the Borrowers notify the Agent not later than 11.00 a.m. (London time) 5 Business Days before the commencement of that
Interest Period, a period ending on the last day of the Interest Period applicable to the first Advance then current, whereupon that Advance and the first Advance shall be consolidated and treated as a single Advance and if more than 1 Advance has
been made at the time the Borrowers notify the Agent that they wish to consolidate the Interest Periods of the Advances the relevant Interest Periods shall be consolidated with the Interest Period applicable to the first Advance on the expiry of the
relevant Interest Period so that the next Interest Period for that Advance expires on the same date as the Interest Period for the first Advance;
|
|
(c)
|
3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a) or (b); or
|
|
(d)
|
such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrowers.
|
|
6.3
|
Duration of Interest Periods for repayment instalments
|
In respect of an amount due to
be repaid under Clause 8 (
Repayment and Prepayment and Cancellation
) on a particular Repayment Date, an Interest Period shall end on that Repayment Date.
|
6.4
|
No Interest Period to extend beyond final Maturity Date
|
No Interest Period shall end
after the Maturity Date and any Interest Period which would otherwise extend beyond the Maturity Date shall instead end on the Maturity Date.
|
6.5
|
Non-availability of matching deposits for Interest Period selected
|
If, after the
Borrowers have selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00 a.m. (London time) on the second Business Day before the commencement of that Interest Period that it is not
satisfied that deposits in Dollars for a period equal to that Interest Period will be available to it in the London Interbank Market when that Interest Period commences, that Interest Period shall be of 3 months unless otherwise agreed by the Agent
(acting on the instructions of the Lenders) and the Borrowers.
26
|
7.1
|
Payment of default interest on overdue amounts
|
The Borrowers shall pay interest in
accordance with the following provisions of this Clause 7 (
Default Interest
) on any amount payable by the Borrowers under any Finance Document which the Agent, the Security Trustee or the other designated payee does not receive on or before
the relevant date, that is:
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
|
(c)
|
if such amount has become immediately due and payable under Clause 19.4 (
Acceleration of Loan
), the date on which it became immediately due and payable.
|
|
7.2
|
Default rate of interest
|
Interest shall accrue on an overdue amount from (and
including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2 per cent. above:
|
(a)
|
in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and 7.3(b); or
|
|
(b)
|
in the case of any other overdue amount, the rate set out at Clause 7.3(b).
|
|
7.3
|
Calculation of default rate of interest
|
The rates referred to in Clause 7.2 (
Default
rate of interest
) are:
|
(a)
|
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);
|
|
(b)
|
the aggregate of the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
|
|
(ii)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time
determine.
|
|
7.4
|
Notification of interest periods and default rates
|
The Agent shall promptly notify the
Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3 (
Calculation of default rate of interest
) and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this
shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Agent’s notification.
27
|
7.5
|
Payment of accrued default interest
|
Subject to the other provisions of this Agreement,
any interest due under this Clause 7.5 (
Payment of accrued default interest
) shall be payable on demand; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
|
7.6
|
Compounding of default interest
|
Any such interest which is not paid at the end of the
period by reference to which it was determined shall thereupon be compounded.
|
8
|
REPAYMENT AND PREPAYMENT AND CANCELLATION
|
|
8.1
|
Amount of repayment instalments
|
The Borrowers shall repay the Loan by 11 equal
consecutive six-monthly instalments of $24,000,000 each and a 12th and final instalment of $236,000,000 payable on the Maturity Date.
The first instalment shall be repaid on the earlier of (i) the
date falling 9 months after the first Drawdown Date and (ii) 31 December 2014 and the last instalment shall be payable on the Maturity Date.
On the Maturity Date, the Borrowers shall additionally pay to the Agent
for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
Subject to the following conditions in Clauses 8.5 (
Conditions
for voluntary prepayment
), 8.6 (
Effect of notice of prepayment
) and 8.7 (
Notification of notice of prepayment
), the Borrowers may prepay the whole or any part of the Loan.
|
8.5
|
Conditions for voluntary prepayment
|
The conditions referred to in Clause 8.4
(
Voluntary prepayment
) are that:
|
(a)
|
a partial prepayment shall be $1,000,000 or a higher integral multiple of $1,000,000;
|
|
(b)
|
the Agent has received from the Borrowers at least 3 Business Days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
|
|
(c)
|
the Borrowers have provided evidence satisfactory to the Agent that any consent required by any Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any
requirement relevant to this Agreement which affects any Borrower or any Security Party has been complied with.
|
|
8.6
|
Effect of notice of prepayment
|
A prepayment notice may not be withdrawn or amended
without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.
28
|
8.7
|
Notification of notice of prepayment
|
The Agent shall notify the Lenders promptly upon
receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrowers under paragraph (c) of Clause 8.5 (
Conditions for voluntary prepayment
).
|
8.8
|
Mandatory prepayment on sale or Total Loss
|
The Borrowers shall be obliged to prepay the
relevant amount of the Loan if a Ship is sold or becomes a Total Loss:
|
(a)
|
in the case of a sale, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or
|
|
(b)
|
in the case of a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss;
|
Provided that
the Borrowers shall not be required to make any prepayment pursuant to this Clause 8.8 (
Mandatory
prepayment on sale or total loss
) in connection with the sale of a Ship by an Initial Borrower to Euronav made pursuant to (and in accordance with) Clause 14.15 (
Transfer of Ships
).
In this Clause 8.8 (
Mandatory prepayment on sale or Total Loss
), “
relevant amount
” means the amount of the Loan
multiplied by a fraction:
|
|
(i)
|
the numerator is the Fair Market Value of the Ship (determined as at the date of the most recent appraisal and not more than 3 months prior to the date of the sale or Total Loss) which is to be sold or (as the case may
be) the subject of Total Loss; and
|
|
|
(ii)
|
the denominator is the aggregate of the most recently determined Fair Market Value of the Ships (determined on the same basis) mortgaged pursuant to this Agreement immediately prior to the sale or Total Loss.
|
|
8.9
|
Mandatory prepayment and cancellation on Change of Control
|
If there is a Change of
Control, the Borrowers shall be obliged to prepay the Loan in full and the Commitments shall terminate not later than 60 days following the occurrence of the Change of Control.
|
8.10
|
Mandatory prepayment and cancellation on breach of financial covenants
|
If Euronav is
not in compliance with the financial covenants in Clause 12.5 (
Financial Covenants
) at any time during the Security Period, the Borrowers shall be obliged to repay the Loan in full (and the Commitments shall be cancelled) not later than 5
days following a request in writing from the Agent (acting on the instructions of the Majority Lenders) to the Borrowers to repay the Loan.
|
8.11
|
Amounts payable on prepayment
|
A prepayment shall be made together with accrued interest
(and any other amount payable under Clause 21 (
Indemnities
) or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an applicable Interest Period, together with any sums payable under Clause
21.1(b) but without premium or penalty.
29
|
8.12
|
Application of partial prepayment
|
Each partial prepayment shall be applied pro-rata
against the repayment instalments specified in Clause 8.1 (
Amount of repayment instalments
).
No amount of the Loan repaid or prepaid may be reborrowed.
|
8.14
|
Voluntary cancellation of Commitments
|
Subject to the following conditions, the
Borrowers may cancel the whole or any part of the Total Available Commitments.
|
8.15
|
Conditions for cancellation of Commitments
|
The conditions referred to in Clause 8.14
(
Voluntary cancellation of Commitments
) are that:
|
(a)
|
a partial cancellation shall be $1,000,000 or a higher integral multiple of $1,000,000; and
|
|
(b)
|
the Agent has received from the Borrowers at least 3 Business Days’ prior written notice specifying the amount of the Total Commitments to be cancelled and the date on which the cancellation is to take effect.
|
|
8.16
|
Effect of notice of cancellation
|
The service of a cancellation notice given under
Clause 8.15 (
Conditions for cancellation of Commitments
) shall cause the amount of the Total Commitments specified in the notice to be permanently cancelled and any partial cancellation shall be applied against the Commitment of each Lender
pro rata and also on a pro rata basis against the future instalments repayable pursuant to Clause 8.1 (
Amount of repayment instalments
).
|
8.17
|
Unwinding of Designated Transactions
|
On or prior to any repayment or prepayment of the
Loan under this Clause 8 (
Repayment and Prepayment and Cancellation
) or any other provision of this Agreement, the Borrowers shall at their sole discretion have the right to wholly or partially reverse, offset, unwind or otherwise terminate
one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed
the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1 (
Amount of repayment instalments
).
|
9.1
|
Documents, fees and no default
|
Each Lender’s obligation to contribute to an
Advance is subject to the following conditions precedent:
|
(a)
|
that, on or before the date of this Agreement, the Agent receives the documents and fees described in Part A of Schedule 4 (
Condition Precedent Documents
) in form and substance satisfactory to the Agent and its
lawyers;
|
|
(b)
|
that, on or before the Drawdown Date in relation to each Ship, the Agent receives the documents described in Part B of Schedule 4 (
Condition Precedent Documents
) in form and substance satisfactory to the Agent
and its lawyers;
|
30
|
(c)
|
that both at the date of each Drawdown Notice and at each Drawdown Date:
|
|
|
(i)
|
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the relevant Advance;
|
|
|
(ii)
|
the representations and warranties in Clause 10 (
Representations and Warranties
) and those of any Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading
if repeated on each of those dates with reference to the circumstances then existing; and
|
|
|
(iii)
|
none of the circumstances contemplated by Clause 5.7 (
Market disruption
) has occurred and is continuing;
|
|
|
(iv)
|
during the period from 30 June 2013 to the date of the Drawdown Notice and the relevant Drawdown Date, nothing shall have occurred (and neither the Agent nor any of the Lenders shall have become aware of any
condition or circumstance not previously known to it or them) which the Agent or the Lenders shall determine has had, or could reasonably be expected to have, a material adverse effect (A) on the rights or remedies of the Lenders, (B) on
the performance of the Borrowers or Euronav and its subsidiaries of their respective obligations to the Lenders, (C) with respect to the Loan or (D) on the property, assets, nature of assets, operations, liabilities or condition (financial
or otherwise) of the Borrowers or Euronav and its subsidiaries;
|
|
(d)
|
that, if the ratio set out in Clause 15.1 (
Minimum required security cover
) were applied on the basis of the most recently provided valuations and immediately following the making of the relevant Advance, the
Borrowers would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
|
|
(e)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the
Majority Lenders, reasonably request by notice to the Borrowers prior to the relevant Drawdown Date.
|
|
9.2
|
Waiver of conditions precedent
|
If the Majority Lenders, at their discretion, permit an
Advance to be borrowed before certain of the conditions referred to in Clause 9.1 (
Documents, fees and no default
) are satisfied, the Borrowers shall ensure that those conditions are satisfied within 5 Business Days after the relevant
Drawdown Date (or such other period as the Agent may, with the authorisation of the Majority Lenders, specify).
|
10
|
REPRESENTATIONS AND WARRANTIES
|
Each Obligor represents and warrants to each Creditor Party as follows.
|
(a)
|
Each Obligor is duly incorporated, validly existing and in good standing under the laws of, and has the centre of its main interests in, Belgium.
|
|
(b)
|
No Obligor is a FATCA FFI or a US Tax Obligor.
|
31
Each Obligor has the corporate capacity, and has taken all corporate
action and obtained all consents necessary for it:
|
(a)
|
to enter into the Framework Agreement and the MOAs and for that Obligor to purchase the Ships pursuant thereto;
|
|
(b)
|
to execute the Finance Documents and the Master Agreements to which that Obligor is a party; and
|
|
(c)
|
to borrow under this Agreement, to enter into Designated Transactions under the Master Agreements to which that Obligor is a party and to make all the payments contemplated by, and to comply with, those Finance
Documents and those Master Agreements.
|
All the consents referred to in Clause 10.3 (
Corporate power
)
remain in force and nothing has occurred which makes any of them liable to revocation.
|
10.5
|
Legal validity; effective Security Interests
|
The Finance Documents and the Master
Agreements to which each Obligor is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):
|
(a)
|
constitute that Obligor’s legal, valid and binding obligations enforceable against that Obligor in accordance with their respective terms; and
|
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate;
|
subject to any relevant insolvency laws affecting creditors’ rights generally and to general equity principles.
|
10.6
|
No third party Security Interests
|
Without limiting the generality of Clause 10.5
(
Legal validity; effective Security Interests
), at the time of the execution and delivery of each Finance Document and each Master Agreement:
|
(a)
|
each Obligor that is a party to that Finance Document or Master Agreement will have the right to create all the Security Interests which that Finance Document or Master Agreement purports to create; and
|
|
(b)
|
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms,
relates.
|
The execution by the Obligors of each Finance Document and each Master
Agreement to which it is a party, and the borrowing by the Borrowers of the Loan, and each Obligor’s compliance with each Finance Document and each Master Agreement to which it is a party will not involve or lead to a contravention of:
|
(a)
|
any law or regulation; or
|
32
|
(b)
|
the constitutional documents of that Obligor; or
|
|
(c)
|
any contractual or other obligation or restriction which is binding on that Obligor or any of its subsidiaries or any of their respective assets.
|
No Event of Default or Potential Event of Default has occurred and is
continuing.
All information which has been provided in writing by or on behalf of any
Obligor or any Security Party to the Arrangers or any other Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5 (
Information provided to be accurate
); all audited and unaudited accounts which have
been so provided satisfied the requirements of Clause 11.7 (
Form of financial statements
); and there has been no material adverse change in the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise)
of Euronav and its subsidiaries since 30 June 2013.
No litigation, arbitration or administrative proceedings (including, but
not limited to, investigative proceedings) involving any Obligor has been commenced or taken or, to any Obligor’s knowledge, is likely to be commenced or taken which, in any case, would be likely to have a material adverse effect on the
property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of any Obligor and its subsidiaries or on the ability of any Obligor to perform its obligations under the Finance Documents.
|
10.11
|
Validity and completeness of Framework Agreement and MOAs
|
Each of the Framework
Agreement and MOAs constitutes valid, binding and enforceable obligations of the parties to it respectively in accordance with its terms and:
|
(a)
|
the copy of the Framework Agreement and each MOA delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
|
(b)
|
no material amendments or additions to the Framework Agreement or any MOA have been agreed nor has either party to the Framework Agreement or any MOA waived any of their respective rights under the Framework Agreement
or that MOA.
|
There is no agreement or understanding to allow or pay any rebate,
premium, commission, discount or other benefit or payment (howsoever described) to any Obligor, the Seller or a third party in connection with the purchase by the Obligors of any of the Ships, other than as disclosed to the Lenders in writing on or
prior to the date of this Agreement.
|
10.13
|
Compliance with certain undertakings
|
At the date of this Agreement, the Obligors are in
compliance with Clauses 11.2 (
Title; negative pledge
) and 11.14 (
Principal place of business
).
Each Obligor has paid all taxes applicable to, or imposed on or in relation
to, that Obligor and its business.
33
|
10.15
|
No money laundering
|
Without prejudice to the generality of Clause 2.3 (
Purpose of
Advances
), in relation to the borrowing by the Borrowers of the Loan, the performance and discharge of each Obligor’s obligations and liabilities under the Finance Documents to which each Obligor is a party, and the transactions and other
arrangements effected or contemplated by the Finance Documents to which it is a party, each Obligor confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or
other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive (205/60/EEC) of the European Parliament and of the Council of the European Union of 26 October 2005).
|
10.16
|
ISM Code and ISPS Code compliance
|
All requirements of the ISM Code and the ISPS Code as
they relate to any Obligor, the Approved Manager and the Ships have been, or will be, complied with at the time of the Drawdown Date relating to each Ship.
|
(a)
|
Each Obligor and their respective directors, officers, employees, agents or representatives and each member of the Euronav Group has been and is in compliance with all Sanctions.
|
|
(b)
|
No Obligor and their respective directors, officers, employees, agents or representatives:
|
|
|
(i)
|
is a Restricted Party, is owned or controlled by a Restricted Party or is involved in any transaction through which it could reasonably become a Restricted Party;
|
|
|
(ii)
|
has received notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions; or
|
|
|
(iii)
|
owns or controls a Restricted Party.
|
|
(c)
|
No Obligor nor any member of the Euronav Group (i) is using or will use the proceeds of the Loan for the purpose of financing or making funds available directly or indirectly to any person or entity which is
currently listed on any Sanctions List or currently located in a Sanctioned Country, to the extent such financing or provision of funds would be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions, or
(ii) is contributing or will contribute or otherwise make available the proceeds of the Loan to any other person or entity for the purpose of financing the activities of any person or entity which is currently listed on a Sanctions List or
currently located (or ordinarily resident) in a Sanctioned Country, to the extent such contribution or provision of proceeds would currently be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions.
|
Each Obligor undertakes with each Creditor Party to comply with the following
provisions of this Clause 11 (
General Undertakings
) at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
11.2
|
Title; negative pledge
|
Each Obligor shall hold the legal title to, and own the entire
beneficial interest in any Ship owned by that Obligor, its Earnings and Insurances, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and
34
the effect of assignments contained in the Finance Documents and except for Permitted Security Interests
Provided that
an Initial Borrower may transfer any Ship owned by it to Euronav
subject to the provisions of Clause 14.15 (
Transfer of Ships
).
No Obligor will transfer, lease or otherwise dispose of all or a
substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except in the usual course of its business and for fair market value.
|
11.4
|
Maintenance of ownership of Borrowers
|
Euronav shall remain the legal and beneficial
owner (directly or indirectly) of the entire issued and allotted share capital of each Initial Borrower free of any Security Interest other than Security Interests created by the Finance Documents. At the date of this Agreement, each of the Initial
Borrowers has issued 10,000 shares, 9,999 of such shares are registered in the ownership of Euronav and 1 such share is registered in the ownership of Euronav Ship Management SAS of Nantes, France, acting through its Antwerp branch. Euronav is, and
shall remain, the direct legal and beneficial owner of the entire issued and allotted share capital of Euronav Ship Management SAS free of any Security Interest unless and until both the Initial Borrowers cease to be Borrowers pursuant to the terms
of this Agreement. For the avoidance of doubt, Euronav shall procure that Euronav Ship Management SAS shall not create any Security Interest over the share that it holds, or any other shares it may from time to time hold, in each Initial Borrower.
|
11.5
|
Information provided to be accurate
|
All financial and other information which is
provided in writing by or on behalf of an Obligor under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.
|
11.6
|
Provision of financial statements
|
The Obligors will send to the Agent:
|
(a)
|
as soon as possible, but in no event later than 120 days after the end of each financial year of the Obligors from and including the financial year ending 31 December 2013, the audited consolidated accounts of the
Euronav Group and audited individual accounts of each Obligor;
|
|
(b)
|
as soon as possible, but in no event later than 75 days after the end of each financial half- year of the Obligors (which half-year end shall, for the avoidance of doubt, occur annually), the audited consolidated
balance sheet of the Euronav Group certified as to its correctness by the chief financial officer of Euronav and the audited individual balance sheet of each Obligor certified as to its correctness by an officer or director of that Obligor;
|
|
(c)
|
as soon as possible, but in no event later than 60 days after the end of each financial quarter of the Obligors and provided that these documents have not been published on Euronav’s website or sent to the Lenders
in the form of a press release, unaudited consolidated income statements of the Euronav Group certified as to their correctness by the chief financial officer of Euronav and unaudited individual income statements of each Obligor certified as to
their correctness by an officer or director of that Obligor;
|
|
(d)
|
as soon as possible, but not later than 120 days after the end of each financial year of Euronav, a financial projection for each Obligor and the Euronav Group for the next 3 years in a format which is acceptable to the
Agent; and
|
|
(e)
|
together with the annual audited consolidated accounts and with each balance sheet of the Euronav Group referred to in paragraphs (a) and (b), a compliance certificate (together with supporting schedules, if any)
signed by the chief financial officer of Euronav in the form attached as Schedule 8 (
Form of Certificate of Compliance
) (or in any other format which the Agent may approve and with such other information as the Agent may require) evidencing
compliance with the financial undertakings in Clause 12.5 (
Financial Covenants
) and also listing the Fair Market Value of each of the Ships which are subject to a Mortgage at that time.
|
35
|
11.7
|
Form of financial statements
|
The audited accounts delivered under Clause 11.6
(
Provision of financial statements
) will:
|
(a)
|
be prepared in accordance with all applicable laws and IFRS consistently applied;
|
|
(b)
|
give a true and fair view of the state of affairs of the Euronav Group (or the Obligors, as the case may be) at the date of those accounts and of profit for the period to which those accounts relate; and
|
|
(c)
|
fully disclose or provide for all significant liabilities of the Euronav Group (or the Obligors, as the case may be).
|
|
11.8
|
Provision of further information
|
|
(a)
|
Euronav will, as soon as practicable after receiving a request from the Agent provide the Agent with such additional financial information in relation to the Euronav Group which may be reasonably requested by the Agent
or any Lender through the Agent.
|
|
(b)
|
Each Obligor shall supply to the Agent, promptly upon becoming aware of them, the details of any claim, action, suit, proceeding or investigation with respect to Sanctions against it, any of its direct or indirect
owners, subsidiaries or any of their respective directors, officers, employees, agents or representatives.
|
Each Obligor will send the Agent, at the same time as they are
despatched, copies of all material communications which are despatched to all of that Obligor’s shareholders or creditors or to the whole of any class of them.
Each Obligor will maintain in force and promptly obtain or renew, and will
promptly send certified copies to the Agent of, all consents required:
|
(a)
|
for that Obligor to perform its obligations under any Finance Document and any Master Agreement to which it is a party;
|
|
(b)
|
for the validity or enforceability of any Finance Document and any Master Agreement to which it is a party;
|
and that Obligor will comply with the terms of all such consents.
36
|
11.11
|
Maintenance of Security Interests
|
Each Obligor will:
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document to which it is a party validly creates the obligations and the Security Interests which it purports to create; and
|
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document to which it is a party with any court or authority in all Pertinent Jurisdictions, pay any
stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document to which it is a party, give any notice or take any other step which, in the reasonable opinion of the Majority Lenders, is or has become necessary
for any Finance Document to which it is a party to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
|
11.12
|
No amendment to Framework Agreement or MOAs.
|
No Obligor will agree to any material
amendment or supplement to, or waive or fail to enforce, any of the Framework Agreement or the MOAs or any of their provisions.
|
11.13
|
Notification of litigation
|
Each Obligor will provide the Agent with details of any
legal or administrative action involving that Obligor, any Security Party or any Ship as soon as such action is instituted or it becomes apparent to that Obligor that it is likely to be instituted, unless it is clear that the legal or administrative
action cannot be considered material in the context of any Finance Document.
|
11.14
|
Principal place of business
|
Each Obligor will notify the Agent if it has a place of
business in any jurisdiction which would require a Finance Document to which it is a party to be registered, filed or recorded with any court or authority in that jurisdiction or if the centre of its main interests changes.
|
11.15
|
Notification of default
|
Each Obligor will notify the Agent as soon as that Obligor
becomes aware of:
|
(a)
|
the occurrence of an Event of Default or Potential Event of Default; or
|
|
(b)
|
any matter which indicates that an Event of Default or Potential Event of Default may have occurred,
|
and will keep the Agent fully up-to-date with all developments.
|
11.16
|
Access to books and records
|
Each Obligor shall permit one or more representatives of
the Agent, at the request of the Agent, to have reasonable access to its books and records and to inspect the same during normal business hours at its offices upon reasonable prior written notice.
Euronav will send to the Agent, at the same time as they are dispatched,
copies of all press releases which are issued by the Obligors.
37
|
11.18
|
Notification of flag
|
The Obligors shall advise the Agent:
|
(a)
|
on which Approved Flag each Ship will be registered following its delivery under the relevant MOA not later than 10 Business Days before the relevant Drawdown Date;
|
|
(b)
|
on which Approved Flag each Ship will be registered following its transfer to Euronav pursuant to Clause 14.15 (
Transfer of Ships
) not later than 10 Business Days before the date of such transfer.
|
Each Obligor’s payment obligations under this Agreement and any
other Finance Document to which it is a party shall rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
|
11.20
|
Application of FATCA
|
No Obligor shall become a FATCA FFI or a US Tax Obligor.
|
11.21
|
Know your customer requirements
|
Promptly upon the Agent’s request the Obligors
will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent in order for each Creditor Party to carry out and be satisfied with the results of all necessary “know your client” or
other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity of any parties to the Finance Documents (other than Creditor Parties) and their directors and officers.
No proceeds of any Advance of the Loan shall be made available,
directly or indirectly, to or for the benefit of a Restricted Party nor shall they be otherwise directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.
|
11.23
|
Documents to be provided following execution of a Master Agreement
|
Following the
execution of each Master Agreement, the Obligors shall procure that promptly following the execution of such Master Agreement the Agent has received the following documents in form and substance satisfactory to the Agent and its lawyers:
|
(a)
|
a duly executed original of the Master Agreement Assignment in relation to that Master Agreement (and of each document required to be its terms);
|
|
(b)
|
if required by the Agent and in the case of each Mortgage an amendment or addenda to that Mortgage specifying such consequential amendments to that Mortgage as may be required as a consequence of the entry by Euronav
and the relevant Swap Bank into the Master Agreement;
|
|
(c)
|
in each case if required for the provisions of the legal opinions referred to in paragraph (f), copies of the resolutions of the directors and shareholders of the Obligors authorising the execution of the Master
Agreement Assignment referred to in paragraph (a) and the Mortgage amendments and addenda referred to in paragraph (b);
|
|
(d)
|
the original of any power of attorney under which any of the Master Agreement Assignment referred to in paragraph (a) and the Mortgage amendments and addenda referred to in paragraph (b) are to be executed on
behalf of an Obligor;
|
38
|
(e)
|
documentary evidence that the Mortgage amendments and addenda referred to in paragraph (b) have been duly registered against that Ship as valid amendment or addenda to the Mortgage in accordance with the laws of
the relevant Approved Flag;
|
|
(f)
|
if required by the Agent, favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium, the country where the Ship is registered following such transfer, Norway
(in relation to the first such transfer) and such other relevant jurisdictions as the Agent may require; and
|
|
(g)
|
if the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
|
12
|
CORPORATE UNDERTAKINGS
|
Each Obligor also undertakes with each Creditor Party to comply with the
following provisions of this Clause 12 (
Corporate Undertakings
) at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
12.2
|
Maintenance of status
|
Each Obligor will maintain its separate corporate existence under
the laws of, and the centre of its main interests in, Belgium and Euronav shall maintain its listing on the First Market of Euronext Brussels, the New York Stock Exchange or such other reputable international stock exchange approved by the Agent
(acting on the instructions of the Majority Lenders) in writing, such approval not to be unreasonably withheld or delayed.
|
12.3
|
No change of business
|
No Obligor will operate outside the scope of its Articles of
Association as at the date of this Agreement.
No Obligor will, and each Obligor will procure that none of its
subsidiaries will, enter into any form of merger, sub-division, amalgamation or other reorganisation which may, in the reasonable opinion of the Majority Lenders, have a material adverse effect on the financial position that Obligor.
Euronav will ensure that the consolidated financial position of the
Euronav Group shall at all times during the Security Period be such that:
|
(a)
|
Consolidated Working Capital shall not be less than $0;
|
|
(b)
|
Free Liquid Assets are not less than the higher of:
|
|
|
(ii)
|
5 per cent. of Total Indebtedness;
|
|
(c)
|
the amount of Cash shall equal or exceed US$30,000,000; and
|
|
(d)
|
the ratio of Stockholders’ Equity to Total Assets is not less than 30 per cent.
|
39
In this Clause 12.5 (
Financial Covenants
):
“
Cash
” means, at any date of determination under this Agreement, the aggregate value of the Euronav Group’s credit
balances on any deposit, savings or current account and cash in hand with recognised and reputable banks or financial institutions but excluding any such credit balances and cash subject to a Security Interest at any time;
“
Consolidated Current Assets
” means, at any date of determination under this Agreement, the amount of the current assets of
the Euronav Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet and including any amounts available under committed credit lines having remaining maturities of more than 12 months;
“
Consolidated Current Liabilities
” means, at any date of determination under this Agreement, the amount of the current
liabilities of the Euronav Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
“
Consolidated Working Capital
” means Consolidated Current Assets less Consolidated Current Liabilities;
“
Free Liquid Assets
” means, at any date of determination under this Agreement, the aggregate amount of cash and cash
equivalents of the Euronav Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet but excluding any of those assets subject to a Security Interest (other than a Security Interest in favour of the
Security Trustee pursuant to this Agreement) at any time and, for the avoidance of doubt, “cash and cash equivalents” include any amounts available under committed credit lines having remaining maturities of more than 6 months;
“
Latest Balance Sheet
” means, at any date, the consolidated balance sheet of the Euronav Group most recently delivered to the
Agent pursuant to Clause 11.6 (
Provision of financial statements
) and/or most recently made publicly available;
“
Stockholders’ Equity
” means, at any date of determination under this Agreement, the amount of the capital and reserves
of the Euronav Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
“
Total
Assets
” means, at any date of determination under this Agreement, the amount of the total assets of the Euronav Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet; and
“
Total Indebtedness
” means, at any date of determination under this Agreement, the amount of long-term loans (including
finance leases, banks loans and other long-term loans) and short-term loans of the Euronav Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet.
If, at any time after the date of this Agreement, any mandatory change
is made to IFRS or any applicable law relating to the financial reporting (including but not limited to accounting bases, policies, practices and procedures or reference periods) of the Euronav Group generally or any member of the Euronav Group
individually and the effect of complying with that change would result in the value for “Cash”, “Consolidated Current Assets”, “Consolidated Current Liabilities”, “Consolidated Working Capital”, “Free
Liquid Assets”, “Stockholders’ Equity”, “Total Assets” and/or “Total Indebtedness” being materially different from its value if calculated in accordance with IFRS and all applicable laws in effect at the date
of this Agreement and of which the Lenders would reasonably expect to have been informed, Euronav shall immediately notify the Agent of that change and procure that, as soon as reasonably practicable thereafter, the Euronav’s auditors deliver
to the Agent:
|
(a)
|
a description of the change and what adjustments would need to be made to the financial statements of the Euronav Group following that change in order
to reverse the effects of
|
40
|
|
that change so that the values of “Cash”, “Consolidated Current Assets”, “Consolidated Current Liabilities”, “Consolidated Working Capital”, “Free
Liquid Assets”, “Stockholders’ Equity”, “Total Assets” and/or “Total Indebtedness” will be the same as if calculated in accordance with IFRS and all applicable laws in effect at the date of this Agreement; and
|
|
(b)
|
such information, in form and substance acceptable to the Agent, as may be required:
|
|
|
(i)
|
to enable the Lenders to determine whether there is a breach of any of the financial covenants in respect of the Euronav Group set out in Clause 12.5 (
Financial Covenants
) (based on IFRS and all applicable laws
in effect at the date of this Agreement); and
|
|
|
(ii)
|
to assist the Lenders in making an accurate comparison between the financial position of the Euronav Group indicated in the financial statements prepared following the change and those prepared prior to it.
|
In the event that the Lenders are satisfied that, based on the information provided by Euronav’s auditors, the
financial covenants in Clause 12.5 (
Financial Covenants
) have been complied with, the Lenders and the Obligors shall enter into discussions with a view to agreeing amendments to this Agreement so as to mitigate the effect of the change.
|
12.7
|
Change of accounting period
|
Euronav shall not change its fiscal year end date being 31
December.
|
12.8
|
Restrictions on dividends
|
Euronav may only pay a dividend or make a distribution and/or
buy-back its own common stock subject to the following conditions:
|
(a)
|
no Event of Default has occurred and is continuing or would result upon payment of the proposed dividend or distribution; and
|
|
(b)
|
the payment of such dividend or distribution would not cause any breach of any of the financial covenants set out in Clause 12.5 (
Financial Covenants
).
|
Each Obligor shall pay when due all taxes applicable to, or imposed on
or in relation to that Obligor, its business or any Ship to be owned by it.
|
12.10
|
Negative undertakings
|
No Obligor will:
|
(a)
|
change its legal name, type of organisation or jurisdiction of incorporation; and
|
|
(b)
|
provide any form of credit or financial assistance to any person or enter into any transaction with or involving any person on terms which are, in any respect, less favourable to the Obligor than those which it could
obtain in a bargain made at arms’ length.
|
|
(c)
|
provide any form of credit or financial assistance to any other Obligor other than loans in relation to which the other Obligor’s rights have been fully subordinated to those of the Creditor Parties.
|
41
|
12.11
|
Restrictions on repayment of Qualifying Notes
|
Euronav will not make any repayment of
principal pursuant to the Qualifying Notes except with:
|
(a)
|
proceeds from an initial public offering or other equity offering;
|
|
(b)
|
proceeds from other subordinated debt; or
|
|
(c)
|
cash from Euronav’s operations Provided that cash and cash equivalents of Euronav will exceed $150,000,000 immediately following such repayment,
|
and Euronav shall not make any such repayment of principal pursuant to the qualifying Notes if an Event of Default has occurred and is
continuing or would result from such repayment of the Qualifying Notes except with the consent of the Agent, acting with the authorisation of the Majority Lenders.
Each Obligor shall ensure that none of their, nor any of their subsidiaries,
respective directors, officers, employees, agents or representatives or any other persons acting on any of their behalf, is a person listed on any Sanctions List.
|
12.13
|
Incurrence of Financial Indebtedness
|
No Obligor shall, without the prior consent of the
Majority Lenders, incur any Financial Indebtedness or grant any guarantee in respect of Financial Indebtedness if, as a result of incurring that Financial Indebtedness or incurring the contingent liability under that guarantee (as assessed in
accordance with IFRS), an Event of Default would occur, or one or more of the financial covenants in respect of Euronav set out in Clause 12.5 (
Financial covenants
) would be breached, on the date of such incurrence.
Each Owner also undertakes with each Creditor Party to comply with the
following provisions of Clause 13 (
Insurance
) at all times during the Security Period (in the case of any Ships owned by that Owner) (in the case of each Ship after the Drawdown Date applicable to it) except as the Agent may, with the
authorisation of the Majority Lenders, otherwise permit.
|
13.2
|
Maintenance of obligatory insurances
|
Each Owner shall keep each Ship owned by it
insured at the expense of that Owner against:
|
(a)
|
fire and usual marine risks and war risks (including hull and machinery, hull and freight interest, piracy, terrorism, missing vessel cover, blocking and trapping and confiscation); and
|
|
(b)
|
protection and indemnity risks (including pollution risks), on “full entry terms”.
|
|
13.3
|
Terms of obligatory insurances
|
Each Owner shall, effect such insurances in respect of
each Ship owned by it:
42
|
(b)
|
in the case of fire and usual marine risks and war risks (including coverage for war protection and indemnity with a separate limit for the same amounts insured under war hull), in an amount on an agreed value basis at
least the greater of (i) when aggregated with such insurances on the other Ships which are subject to a Mortgage, 125 per cent. of the Loan and (ii) the Fair Market Value of that Ship;
|
|
(c)
|
in the case of hull and machinery insured values of each Ship in an amount not less than 70 per cent. of the total insured value of that Ship;
|
|
(d)
|
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry with a protection and indemnity
association belonging to the International Group of Protection and Indemnity Associations;
|
|
(e)
|
in relation to protection and indemnity risks in respect of the Ship’s full tonnage on full entry terms;
|
|
(f)
|
on approved terms; and
|
|
(g)
|
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
|
|
13.4
|
Further protections for the Creditor Parties
|
In addition to the terms set out in Clause
13.3 (
Terms of obligatory insurances
), each Owner shall procure that the obligatory insurances shall:
|
(a)
|
in relation to the obligatory insurances for fire and usual marine risks and war risks, whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its
rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other
assessments in respect of such insurance;
|
|
(b)
|
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
|
|
(c)
|
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
|
|
(d)
|
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
|
|
(e)
|
provide that the Security Trustee may make proof of loss if the relevant Owner fails to do so.
|
The Owners shall ensure that:
|
(a)
|
before the expiry of any obligatory insurance, that obligatory insurance is renewed; and
|
|
(b)
|
promptly after each such renewal, there is provided to the Security Trustee details of the terms and conditions on which such obligatory insurances have been renewed.
|
43
If there is a change in the insurers and/or markets through whom the obligatory insurances are
placed the Owners shall procure that the Security Trustee is notified within a reasonable time of the names of the insurers and/or markets employed for the purposes of the renewal of the obligatory insurance and of the amounts in which they are
renewed.
|
13.6
|
Letters of undertaking
|
In relation to all obligatory insurances effected from time to
time under Clause 13.2 (
Maintenance of obligatory insurances
), the Owners shall ensure that all brokers and any protection and indemnity or war risks associations in which any Ship is entered, in each case being approved by the Security
Trustee (such approval not to be unreasonably withheld), provide the Security Trustee with letters of undertaking:
|
(a)
|
in the case of a broker, in a form standard in the insurance market in which such broker operates or any professional association of which that approved broker is a member;
|
|
(b)
|
in the case of a protection and indemnity or war risks association, in its standard form.
|
If
any of the obligatory insurances referred to in Clause 13.2(a) and/or 13.2(b) form part of a fleet cover, the Owners will procure that any letter of undertaking referred to in paragraph (a) of this Clause 13.6 (
Letters of undertaking
) is
amended to provide that the relevant brokers shall undertake to the Security Trustee that they shall neither set-off against any claims in respect of the relevant Ship any premiums due in respect of other vessels under such fleet cover or any
premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances.
|
13.7
|
Copies of certificates of entry
|
The Owners shall ensure that any protection and
indemnity and/or war risks associations in which each Ship is entered provides the Security Trustee with a certified copy of the certificate of entry for that Ship.
|
13.8
|
Deposit of original policies
|
The Owners shall ensure that all policies relating to
obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
The Owners shall ensure that (taking account of any applicable
grace periods) all premiums, calls or contributions or other sums of money from time to time due in respect of any obligatory insurances are paid in full and produce all relevant receipts when so required by the Security Trustee.
The Owners shall arrange for the execution and delivery of all guarantees
and indemnities as may from time to time be required by any Ship’s P&I Club or war risks association.
|
13.11
|
Compliance with terms of insurances
|
No Owner shall do nor omit to do (nor permit to be
done or not to be done) any act or thing which would or might render any obligatory insurance in relation to any Ship invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part;
and, in particular:
|
(a)
|
each Owner shall (in the case of any Ships owned by that Owner) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and ensure that the
obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
44
|
(b)
|
no Owner shall (in the case of any Ships owned by that Owner) make any changes relating to the classification or classification society or manager or operator of any Ship approved by the underwriters of the obligatory
insurances;
|
|
(c)
|
each Owner shall (in the case of any Ships owned by that Owner) make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks
association in which any Ship it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
|
|
(d)
|
no Owner shall (in the case of any Ships owned by that Owner) employ any Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first
obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
|
13.12
|
Alteration to terms of insurances
|
The Owners will procure that:
|
(a)
|
no adverse alteration is made to any obligatory insurance (which alteration is, in the reasonable opinion of the Security Trustee, likely to materially adversely affect the Lenders) without the prior written consent of
the Security Trustee; and
|
|
(b)
|
all the steps under its control are taken to seek to avoid the occurrence of any act or omission which would enable cancellation of any obligatory insurance or render any obligatory insurance invalid, void or
unenforceable or render any sum paid out under any obligatory insurance repayable in whole or in part.
|
|
13.13
|
Settlement of claims
|
No Owner shall (in the case of any Ships owned by that Owner)
settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and each Owner shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect
or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
13.14
|
Provision of information
|
Each Owner shall promptly provide the Security Trustee (or any
persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:
|
(a)
|
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
|
(b)
|
effecting or renewing any such insurances as are referred to in Clause 13.15 (
Mortgagee’s interest and additional perils insurances
) or dealing with or considering any matters relating to any such
insurances;
|
and the Borrowers shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other
expenses reasonably incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
45
|
13.15
|
Mortgagee’s interest and additional perils insurances
|
The Agent for the benefit of
the Security Trustee, or the Security Trustee itself, shall effect, maintain and renew a mortgagee’s interest additional perils insurance and a mortgagee’s interest marine insurance in such amounts, on such terms reasonably available in
the market, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrowers shall upon demand fully indemnify the Agent or the Security Trustee (as the case may be) in respect
of all reasonable premiums and other reasonable expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance
Provided that
the cover in respect of the mortgagee’s interest marine insurance shall not exceed 110 per cent. of the Loan.
Notwithstanding the above, if at any time the Agent or Security Trustee proposes to effect any insurances of the nature referred to in this
Clause, it shall first notify the Borrowers of the insurance which it proposes to effect, the terms on which it requires it to be effected and the date from which it requires it to be so effected. If, before the date on which the Agent or Security
Trustee (as the case may be) requires that insurance to be effected, the Borrowers can demonstrate to the Agent or Security Trustee (as the case may be) that a firm of insurance brokers with a reputation acceptable to the Agent or the Security
Trustee (as the case may be) is able to arrange that insurance upon the same terms, before that date, for a price lower than that for which any firm of insurance brokers nominated by the Agent or Security Trustee is prepared to arrange that
insurance and with underwriters acceptable to the Agent or Security Trustee (as the case may be), and if that firm of insurance brokers will enter into such agreements with the Agent or Security Trustee (as the case may be) as it may require taking
into account the identity of that firm of insurance brokers, the Agent or Security Trustee (as the case may be) shall not unreasonably refuse to effect that insurance through that firm of insurance brokers so nominated by the Borrowers.
Each Owner also undertakes with each Creditor Party to comply with the
provisions of this Clause 14 (
Ship Covenants
) at all times during the Security Period (in the case of any Ships owned by that Owner) (in the case of each Ship after the Drawdown Date applicable to it or, in the case of Euronav, after the
transfer of that Ship to Euronav pursuant to Clause 14.15 (
Transfer of Ships
)) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit (such permission not to be unreasonably withheld in the case of Clause
14.2 (
Ship’s name and registration
), 14.12 (
Restrictions on chartering, appointment of managers etc.
) and 14.14 (
Sharing of Earnings
).
|
14.2
|
Ship’s name and registration
|
Subject to Clause 14.15 (
Transfer of Ships
),
each Owner shall (in the case of any Ships owned by that Owner) keep each Ship owned by it registered in its name on an Approved Flag; and shall not do or allow to be done anything as a result of which such registration might be cancelled or
imperilled and shall not change the name or country of registry of any Ship
Provided that
an Owner may change the registry of a Ship owned by it to any Approved Flag without the consent of the Lenders subject to the relevant Owner, as the
case may be, providing the Creditor Parties with replacement security at the time of such transfer (in form and substance satisfactory to the Agent) so that the Creditor Parties have the same security on that Ship and subject to any appropriate
consequential amendments to the Finance Documents.
46
|
14.3
|
Repair and classification
|
Each Owner shall (in the case of any Ships owned by that
Owner) keep each Ship owned by it in a good safe condition and state of repair:
|
(a)
|
consistent with first-class ship ownership and management practice;
|
|
(b)
|
so as to maintain that Ship’s class as at the date of this Agreement free of overdue recommendations and conditions affecting that Ship’s class with a classification society which has been approved by the
Agent; and
|
|
(c)
|
so as to comply with all laws and regulations applicable to vessels registered on the applicable Approved Flag or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not
limited to the ISM Code and the ISPS Code.
|
No Owner shall (in the case of any Ships owned by that Owner) make any
modification or repairs to, or replacement of, any Ship or equipment installed on it which would or might materially and adversely alter the structure, type or performance characteristics of any Ship or reduce its value.
No Owner shall (in the case of any Ships owned by that Owner) remove
any material part of any Ship, or any item of equipment installed on any Ship, except in the normal course of maintenance and repair, unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition
as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on the Ship the property of the relevant Owner and subject to
the security constituted by the relevant Mortgage
Provided that
the Owner owning the relevant Ship may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship concerned.
Each Owner shall (in the case of any Ships owned by that Owner) submit each
Ship regularly to such periodical or other surveys which may be required for that Ship’s classification purposes and shall comply with all conditions and recommendations affecting that Ship’s class of the relevant classification society in
accordance with their terms unless waived.
Each Owner shall (in the case of any Ships owned by that Owner) permit the
Agent (by surveyors or other persons appointed by it for that purpose, at the Borrowers’ expense once per year) to board any Ship at all reasonable times to inspect its condition (without interfering with that Ship’s operation) or to
satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
|
14.8
|
Prevention of and release from arrest
|
Each Owner shall (in the case of any Ships owned
by that Owner) promptly discharge:
|
(a)
|
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against any such Ship, its Earnings or the Insurances in relation any such Ship;
|
|
(b)
|
all taxes, dues and other amounts charged in respect of any such Ship, its Earnings or the Insurances in relation to any such Ship; and
|
|
(c)
|
all other outgoings whatsoever in respect of any such Ship, its Earnings or the Insurances in relation to any such Ship;
|
47
and, forthwith upon receiving notice of the arrest of any Ship, or of its detention in exercise
or purported exercise of any lien or claim, the Borrowers shall as soon as possible or in any event within 30 days (or such greater period as may be agreed by the Agent) procure its release by providing bail or otherwise as the circumstances may
require.
|
14.9
|
Compliance with laws etc.
|
Each Owner shall:
|
(a)
|
comply, or procure compliance with all laws or regulations:
|
|
|
(i)
|
relating to its business generally; and
|
|
|
(ii)
|
relating to each Ship owned by that Owner, its ownership, employment, operation, management and registration,
|
including the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions and the laws of the Approved Flag in relation to each Ship owned
by that Owner;
|
(b)
|
obtain, comply with and do all that is necessary to maintain in full force and effect any consents required to be obtained and maintained by that Owner in connection with any Environmental Laws;
|
|
(c)
|
without limiting paragraph (a) above, not employ any Ship owned by that Owner nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM
Code, the ISPS Code, all Environmental Laws and all Sanctions; and
|
|
(d)
|
procure that no Obligor nor any member of the Euronav Group is or becomes a Restricted Person.
|
|
14.10
|
Provision of information
|
Each Owner shall (in the case of any Ship owned by that Owner)
promptly provide the Agent with any information which it reasonably requests regarding:
|
(a)
|
any Ship, its employment, position and engagements;
|
|
(b)
|
the Earnings and payments and amounts due to any Ship’s master and crew;
|
|
(c)
|
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of any Ship and any payments made in respect of any Ship;
|
|
(d)
|
any towages and salvages;
|
|
(e)
|
that Owner, Euronav’s, the Approved Managers’ or any Ship’s compliance with the ISM Code and/or the ISPS Code,
|
and, upon the Agent’s request, provide copies of any current charter relating to any Ship and of any current charter guarantee and copies
of any Ship’s Safety Management Certificate.
|
14.11
|
Notification of certain events
|
The Obligors shall immediately notify the Agent by
email, confirmed forthwith by letter, of:
|
(a)
|
any casualty which is or is likely to be or to become a Major Casualty;
|
48
|
(b)
|
any occurrence as a result of which any Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
|
(c)
|
any requirement or recommendation made by any insurer or classification society or by any competent authority which is not complied with within the applicable time limit;
|
|
(d)
|
any arrest or detention of a Ship, any exercise of any lien on any Ship or its Earnings or any requisition of a Ship for hire which may be material in the context of this Agreement;
|
|
(e)
|
any intended dry docking of a Ship other than a routine dry docking;
|
|
(f)
|
any Environmental Claim made against any Obligor or in connection with a Ship, or any Environmental Incident;
|
|
(g)
|
any claim for breach of the ISM Code or the ISPS Code being made against an Obligor, an Approved Manager or otherwise in connection with a Ship; or
|
|
(h)
|
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with;
|
and the Obligors shall keep the Agent advised in writing on a regular basis and in such detail as the Agent shall require of any
Obligor’s, the Approved Manager’s or any other person’s response to any of those events or matters.
|
14.12
|
Restrictions on chartering, appointment of managers etc.
|
No Owner shall (in the case of
any Ships owned by that Owner):
|
(a)
|
let any Ship on demise charter for any period;
|
|
(b)
|
enter into any charter in relation to any Ship under which more than 2 months’ hire (or the equivalent) is payable in advance;
|
|
(c)
|
charter any Ship otherwise than on bona fide arm’s length terms at the time when that Ship is fixed;
|
|
(d)
|
appoint a manager of any Ship other than the Approved Managers or agree to any material alteration to the terms of an Approved Manager’s appointment; or
|
|
(e)
|
put any Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless either:
|
|
|
(i)
|
that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason; or
|
|
|
(ii)
|
the cost of such work is covered by insurances; or
|
|
|
(iii)
|
the Owner owning the relevant Ship establishes to the reasonable satisfaction of the Agent that it has sufficient funds to pay for the cost of such work.
|
Each Owner shall (in the case of any Ships owned by that Owner) keep
each Mortgage registered against the relevant Ship as a valid first priority mortgage, carry on board each
49
Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of each Ship a framed printed notice stating that
that Ship is mortgaged by the relevant Owner to the Security Trustee.
|
14.14
|
Sharing of Earnings
|
No Owner will (in the case of any Ships owned by that Owner) enter
into any agreement or arrangement for the sharing of any Earnings other than pursuant to a pooling agreement relating to the Tankers International Pool.
Notwithstanding Clause 14.2 (
Ship’s name and
registration
), an Initial Borrower may transfer the ownership of a Ship owned by it to Euronav
Provided that
on or before the date of such transfer the Agent has received the following documents in form and substance satisfactory to the
Agent and its lawyers:
|
(a)
|
a duly executed original of the Replacement Finance Documents in relation to the relevant Ship (and of each document required to be delivered by their respective terms);
|
|
(b)
|
on or before the first such transfer, a duly executed original of the Account Pledge in relation to the Earnings Account in the name of Euronav (and of each document required to be delivered by its terms);
|
|
(c)
|
in each case if required for the provisions of the legal opinions referred to in paragraph (h), copies of the resolutions of the directors of Euronav authorising the execution of each of the Replacement Finance
Documents in relation to the relevant Ship;
|
|
(d)
|
the original of any power of attorney under which any of the Replacement Finance Documents in relation to the relevant Ship are to be executed on behalf of Euronav;
|
|
(e)
|
the originals of any mandates or other documents required in connection with the opening or operation of the Earnings Account in the name of Euronav;
|
|
(f)
|
documentary evidence that the relevant Ship:
|
|
|
(i)
|
is definitively and permanently registered in the name of Euronav under the relevant Approved Flag;
|
|
|
(ii)
|
is in the absolute and unencumbered ownership of Euronav save as contemplated by the Finance Documents;
|
|
|
(iii)
|
the Mortgage granted by Euronav in relation to it has been duly registered against that Ship as valid first priority or preferred (as the case may be) ship mortgage in accordance with the laws of the relevant Approved
Flag; and
|
|
|
(iv)
|
notwithstanding the transfer of ownership to Euronav, it is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
|
|
(g)
|
documents establishing that the Ship will, as from the date of such transfer, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
|
|
|
(i)
|
a Manager’s Undertaking in respect of the Ship and in relation to the management of the Ship on behalf of Euronav; and
|
|
|
(ii)
|
copies of the relevant Approved Manager’s Document of Compliance and of that Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Agent
requires) and ISSC (in the name of Euronav where applicable);
|
50
|
(h)
|
favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium, the country where the Ship is registered following such transfer, Norway (in relation to the first
such transfer) and such other relevant jurisdictions as the Agent may require;
|
|
(i)
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the relevant Ship as the Agent may require;
|
|
(j)
|
if required by the Agent, a duly executed original of a supplemental agreement to this Agreement specifying such consequential amendments to the Loan Agreement and other Finance Documents as may be required as a
consequence of:
|
|
|
(i)
|
the transfer of ownership of the relevant Ship;
|
|
|
(ii)
|
the execution of the Replacement Finance Documents in relation to the relevant Ship; and
|
|
|
(iii)
|
if such transfer results in the occurrence of the First Release Date, the accession of Euronav as a Borrower pursuant to paragraph (a)(ii) of Clause 14.16 (
Accession of Euronav and release of Initial Borrowers
);
and
|
|
(k)
|
if the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
|
14.16
|
Accession of Euronav and release of Initial Borrowers
|
|
(a)
|
From the First Release Date:
|
|
|
(i)
|
Euronav shall cease to guarantee the obligations of the Initial Borrowers and Euronav shall be a Borrower under this Agreement and be bound by the terms of this Agreement and the other relevant Finance Documents as a
Borrower in place of the Initial Borrower being released from its obligations under the Loan Agreement and the other Finance Documents;
|
|
|
(ii)
|
provided that no Event of Default has occurred and is continuing, the Initial Borrower that is no longer an Owner shall be released from its obligations under the Loan Agreement and the other Finance Documents and shall
no longer be a Borrower;
|
|
(b)
|
From the Second Release Date and provided that no Event of Default has occurred and is continuing, the Initial Borrower that remained a Borrower after the release of the first Initial Borrower pursuant to paragraph
(a)(i) shall be released from its obligations under the Loan Agreement and the Finance Documents and shall no longer be considered a Borrower.
|
|
15.1
|
Minimum required security cover
|
Clause 15.2 (
Provision of additional security;
prepayment
) applies if the Agent notifies the Borrowers that:
|
(a)
|
the aggregate of the Fair Market Values (determined as provided in Clause 15.3 (
Valuation of Ships
) of each Ship subject to a Mortgage; plus
|
|
(b)
|
the net realisable value of any additional security previously provided under this Clause 15 (
Security Cover
);
|
is below 125 per cent. of the Loan.
51
|
15.2
|
Provision of additional security; prepayment
|
If the Agent serves a notice on the
Borrowers under Clause 15.1 (
Minimum required security cover
), the Borrowers shall, within 30 days after the date on which the Agent’s notice is served:
|
(a)
|
provide, or ensure that a third party provides, acceptable additional security which, in the reasonable opinion of the Majority Lenders, has a net realisable value (taking into account the amount of any prepayment made
pursuant to Clause 15.2(b) in response to the same notice) at least equal to the shortfall and is documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require and, for this purpose, it is agreed that
acceptable additional security shall include cash collateral in Dollars valued at par; and/or
|
|
(b)
|
prepay such part of the Loan as will eliminate the shortfall (taking into account the net realisable value of any additional security provided pursuant to Clause 15.2(a) in response to the same notice).
|
The Fair Market Value of a Ship at any date is that shown by the
average of 2 valuations:
|
(a)
|
as at a date not more than 30 days previously;
|
|
(b)
|
by an Approved Shipbroker;
|
|
(c)
|
without physical inspection of that Ship;
|
|
(d)
|
on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment;
|
|
(e)
|
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
|
The Borrowers shall provide (at their own cost) the valuations of each Ship which are required to determine its Fair Market Value pursuant to
this Clause 15.3 (
Valuation of Ships
) at the same time as Euronav provides to the Agent the compliance certificates pursuant to paragraph (e) of Clause 11.6 (
Provision of financial statements
) and, after the occurrence of an Event
of Default which is continuing, whenever requested by the Agent.
|
15.4
|
Value of additional vessel security
|
The net realisable value of any additional security
which is provided under Clause 15.2 (
Provision of additional security; prepayment
) and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3 (
Valuation of
Ships
).
Any valuation under Clause 15.2 (
Provision of additional
security; prepayment
), 15.3 (
Valuation of Ships
) or 15.4 (
Value of additional vessel security
) shall be binding and conclusive as regards the Borrowers and the Lenders, as shall be any valuation which the Majority Lenders make of
any additional security which does not consist of or include a Security Interest over a vessel.
52
|
15.6
|
Provision of information
|
The Borrowers shall promptly provide the Agent and any
shipbroker or expert acting under Clause 15.3 (
Valuation of Ships
) or 15.4 (
Value of additional vessel security
) with any information which the Agent or the shipbroker or expert may reasonably request for the purposes of its valuation.
|
15.7
|
Payment of valuation expenses
|
Without prejudice to the generality of the
Borrowers’ obligations under Clauses 20.2 (
Costs of negotiation, preparation etc.
), 20.3 (
Costs of variations, amendments, enforcement etc.
) and 21.3 (
Miscellaneous indemnities
), the Borrowers shall, on demand, pay the
Agent the amount of the fees and expenses of any shipbroker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
|
15.8
|
Application of prepayment
|
Clause 8 (
Repayment and Prepayment and Cancellation
)
shall apply in relation to any prepayment pursuant to Clause 15.2(b).
|
16
|
PAYMENTS AND CALCULATIONS
|
|
16.1
|
Currency and method of payments
|
All payments to be made by the Lenders or by any
Obligor under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
(a)
|
by not later than 11.00 a.m. (New York City time) on the due date;
|
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time
for the settlement of international transactions of the type contemplated by this Agreement);
|
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by any Obligor to the Agent or any Lender, to such account with such bank as the Agent may from time to time notify to the Obligors and the other Creditor
Parties; and
|
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Obligors and the other Creditor Parties.
|
|
16.2
|
Payment on non-Business Day
|
If any payment by any Borrower under a Finance Document
would otherwise fall due on a day which is not a Business Day:
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
|
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
53
|
16.3
|
Basis for calculation of periodic payments
|
All interest and commitment fee and any
other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
|
16.4
|
Distribution of payments to Creditor Parties
|
Subject to Clause 16.5 (
Permitted
deductions by Agent
), Clause 16.6 (
Agent only obliged to pay when monies received
) and Clause 16.7 (
Refund to Agent of monies not received
):
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, a Swap Counterparty or the Security Trustee shall be made available by the Agent to that Lender, that Swap
Counterparty or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender and the Swap Counterparty or the Security Trustee may have notified to the Agent not less
than 5 Business Days previously; and
|
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Counterparties generally shall be distributed by the Agent to each Lender and each Swap Counterparty pro
rata to the amount in that category which is due to it.
|
|
16.5
|
Permitted deductions by Agent
|
Notwithstanding any other provision of this Agreement or
any other Finance Document, the Agent may, before making an amount available to a Lender or a Swap Counterparty, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender or that Swap Counterparty under
any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or that Swap Counterparty to pay on demand.
|
16.6
|
Agent only obliged to pay when monies received
|
Notwithstanding any other provision of
this Agreement or any other Finance Document, the Agent shall not be obliged to make available to any Borrower or any Lender or that Swap Counterparty any sum which the Agent is expecting to receive for remittance or distribution to that Borrower or
that Lender or that Swap Counterparty until the Agent has satisfied itself that it has received that sum.
|
16.7
|
Refund to Agent of monies not received
|
If and to the extent that the Agent makes
available a sum to an Obligor or a Lender or a Swap Counterparty, without first having received that sum, that Obligor or (as the case may be) the Lender or the Swap Counterparty concerned shall, on demand:
|
(a)
|
refund the sum in full to the Agent; and
|
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before
receiving it.
|
|
16.8
|
Agent may assume receipt
|
Clause 16.7 (
Refund to Agent of monies not received
)
shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
54
|
16.9
|
Creditor Party accounts
|
Each Creditor Party shall maintain accounts showing the amounts
owing to it by the Obligors and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.
|
16.10
|
Agent’s memorandum account
|
The Agent shall maintain a memorandum account showing
the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Obligors under the Finance Documents and all payments in respect of those amounts made by the Obligors and any Security Party.
|
16.11
|
Accounts prima facie evidence
|
If any accounts maintained under Clauses 16.9
(
Creditor Party accounts
) and 16.10 (
Agent’s memorandum account
) show an amount to be owing by an Obligor or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that
Creditor Party.
|
(a)
|
If, at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 16.1 (
Currency and method of
payments
) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt
obligations of A or higher by S&P or Fitch or A2 or higher by Moody’s or a comparable rating from an internationally recognised credit rating agency and in relation to which no Insolvency Event has occurred and is continuing, in the name of
the Obligor or the Lender making the payment and designated as a trust account for the benefit of the Creditor Party or Creditor Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on
the due date for payment under the Finance Documents.
|
|
(b)
|
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements.
|
|
(c)
|
Where an Obligor or a Lender has made a payment in accordance with this Clause 16.12 (
Impaired Agent
) it shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any
credit risk with respect to the amounts standing to the credit of the trust account.
|
|
(d)
|
Promptly upon the appointment of a successor Agent in accordance with clause 5.5 (
Replacement of Agent
) of the Agency and Trust Deed, the Obligors and each party which has made a payment to a trust account in
accordance with this Clause 16.12 (
Impaired Agent
) shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution
in accordance with Clause 16.4 (
Distribution of payments to Creditor Parties
).
|
|
17
|
APPLICATION OF RECEIPTS
|
|
17.1
|
Normal order of application
|
Except as any Finance Document may otherwise provide, any
sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
(a)
|
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
|
55
|
(b)
|
SECONDLY: in or towards satisfaction of any amounts then due and payable to the Creditor Parties (other than the Swap Banks) under the Finance Documents (or any of them) in such order of application and/or such
proportions as the Agent, acting with the authorisation of the Lenders, may specify by notice to the Borrowers, the Security Parties and the other Creditor Parties,
|
|
(c)
|
THIRDLY: in retention of an amount equal to any amount not then due and payable to the Creditor Parties (other than the Swap Banks) under any Finance Document but which the Agent, by notice to the Borrowers, the
Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause
(b);
|
|
(d)
|
FOURTHLY: in or towards satisfaction pro rata of any amount then due and payable under any Master Agreement which relates to a Designated Transaction;
|
|
(e)
|
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Master Agreement which relates to a Designated Transactions but which the Agent, by notice to the Borrowers, the Security Parties
and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause (d); and
|
|
(f)
|
SIXTHLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.
|
|
17.2
|
Variation of order of application
|
The Agent may, with the authorisation of the Lenders,
by notice to the Borrowers, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 (
Normal order of application
) either as regards a specified sum or sums or as
regards sums in a specified category or categories.
|
17.3
|
Notice of variation of order of application
|
The Agent may give notices under Clause
17.2 (
Variation of order of application
) from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the
third Business Day before the date on which the notice is served.
|
17.4
|
Appropriation rights overridden
|
This Clause 17 (
Application of Receipts
) and any
notice which the Agent gives under Clause 17.2 (
Variation of order of application
) shall override any right of appropriation possessed, and any appropriation made, by any Borrower or any Security Party.
|
18
|
APPLICATION OF EARNINGS
|
Each Owner undertakes with each Creditor Party to ensure that throughout the
Security Period (and subject only to the provisions of the General Assignments) all the Earnings of each Ship owned by it and proceeds under any Insurances in relation to any Ship owned by is are paid to the Earnings Account in relation to that
Owner without delay or deductions
Provided that
the Earnings in respect of each Ship shall be available to the Owners unless an Event of Default has occurred and is continuing.
56
|
18.2
|
Location of accounts
|
Each Owner shall promptly:
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Earnings Account in relation to that Owner; and
|
|
(b)
|
execute any documents which the Agent reasonably specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the
Earnings Account in relation to that Owner.
|
An Event of Default occurs if:
|
(a)
|
any Borrower or any Security Party fails to pay within 3 Business Days of the date when due or, if payable on demand, within 3 Business Days of such demand, any sum payable under a Finance Document or under any document
relating to a Finance Document; or
|
|
(b)
|
any breach occurs of Clause 9.2 (
Waiver of conditions precedent
), Clause 11.2 (
Title; negative pledge
), Clause 11.3 (
Disposal of assets
), Clause 11.4 (
Maintenance of ownership of Borrowers
),
Clause 12.2 (
Maintenance of status
), Clause 12.3 (
No change of business
), Clause 12.4 (
No merger etc.
), Clause 12.8 (
Restrictions on dividends
), Clause 12.11 (
Restrictions on repayment of Qualifying Notes
), Clause
12.12 (
Sanctions
), Clause 13 (
Insurance
), or Clause 15.2 (
Provision of additional security; prepayment
) or paragraph (c) of Clause 14.9 (
Compliance with laws etc.
); or
|
|
(c)
|
(subject to any applicable grace period in the relevant Finance Documents) any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs
(a) or (b)) and if, in the opinion of the Majority Lenders, such default is capable of remedy, such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
|
|
(d)
|
any representation, warranty or statement made by, or by an officer of, any Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is
untrue or misleading in any material respect when it is made; or
|
|
(e)
|
any of the following occurs in relation to the Qualifying Notes or any other Financial Indebtedness of a Relevant Person in respect of $10,000,000 or more (other than in relation to the Samsung Seller’s Credit) or,
as regards Financial Indebtedness arising under different documents or transactions, an aggregate amount of $10,000,000 or more (or the equivalent in another currency) excluding Financial Indebtedness in relation to the Samsung Seller’s Credit:
|
|
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand nor within any applicable grace period; or
|
|
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable prior to its stated maturity date as a consequence of any event of default; or
|
|
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event
unless such termination event is being contested in good faith; or
|
57
|
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of
a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default; or
|
|
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
|
(f)
|
any of the following occurs in relation to a Relevant Person:
|
|
|
(i)
|
a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
|
|
(ii)
|
a Relevant Person fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction or any assets of a Relevant Person are subject to any
form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $10,000,000 or more or the equivalent in another currency; or
|
|
|
(iii)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person or any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
|
(iv)
|
a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or an administration notice is given or filed in relation to a
Relevant Person, or a winding up or administration order is made in relation to a Relevant Person, or the members or directors of a Relevant Person pass a resolution to the effect that it should be wound up, placed in administration or cease to
carry on business, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than any Borrower or Euronav which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously
approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
|
|
|
(v)
|
a petition is presented in any Pertinent Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Relevant Person unless the petition is being contested in good faith and
on substantial grounds and is dismissed or withdrawn within 30 days of the presentation of the petition; or
|
|
|
(vi)
|
a Relevant Person petitions a court, or presents any proposal for, any form of judicial or non-judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or
a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or
|
|
|
(vii)
|
any meeting of the members or directors of a Relevant Person is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or
(vi); or
|
|
|
(viii)
|
in a Pertinent Jurisdiction other than England, any event occurs or any procedure is commenced which, in the opinion of the Majority Lenders, is similar to any of the foregoing; or
|
58
|
(g)
|
any Obligor ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or
|
|
(h)
|
it becomes unlawful in any Pertinent Jurisdiction or impossible:
|
|
|
(i)
|
for any Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
|
|
|
(ii)
|
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
|
(i)
|
any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or
becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
|
|
(j)
|
any event or circumstance occurs which the Majority Lenders determine has, or could reasonably be expected to have, a material adverse effect on:
|
|
|
(i)
|
the ability of any Obligor to perform its obligations under the Finance Documents; or
|
|
|
(ii)
|
the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of any Obligor or any of their respective subsidiaries; or
|
|
(k)
|
at any time, any Obligor is not in compliance with all material Environmental Laws relating to each Ship, its ownership, operation and management or to the business of the relevant Obligor.
|
|
19.2
|
Actions following an Event of Default
|
On, or at any time after, the occurrence of an
Event of Default which is continuing:
|
(a)
|
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
|
|
(i)
|
serve on the Borrowers a notice stating that the Commitments and all other obligations of each Lender to the Borrowers under this Agreement are terminated; and/or
|
|
|
(ii)
|
serve on the Borrowers a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
|
|
|
(iii)
|
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law;
and/or
|
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice
served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Counterparties are entitled to take under any Finance Document or any applicable law.
|
|
19.3
|
Termination of Commitments
|
On the service of a notice under Clause 19.2(a)(i), the
Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall terminate.
59
|
19.4
|
Acceleration of Loan
|
On the service of a notice under Clause 19.2(a)(ii), the Loan, all
accrued interest and all other amounts accrued or owing from any Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
|
19.5
|
Multiple notices; action without notice
|
The Agent may serve notices under Clauses
19.2(a)(i) and (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 (
Actions following an Event of Default
) if no such notice is served or simultaneously with or at
any time after the service of both or either of such notices.
|
19.6
|
Notification of Creditor Parties and Security Parties
|
The Agent shall send to each
Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrowers under Clause 19.2 (
Actions following an Event of Default
); but the notice shall become effective when it is served
on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide any Borrower or any Security Party with any form of claim or defence.
|
19.7
|
Creditor Party rights unimpaired
|
Nothing in this Clause shall be taken to impair or
restrict the exercise of any right given to individual Lenders or a Swap Counterparty under a Finance Document, a Master Agreement or the general law; and, in particular, this Clause is without prejudice to Clause 3.1 (
Interests several
).
|
19.8
|
Exclusion of Creditor Party liability
|
No Creditor Party, and no receiver or manager
appointed by the Security Trustee, shall have any liability to a Borrower or a Security Party:
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the
value of such an asset;
|
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses
shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.
In no event shall any Creditor Party be liable on any theory of liability for any special, indirect, consequential or punitive damages and each
Obligor hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favour.
In this Clause 19 (
Events of Default
) a “
Relevant
Person
” means a Borrower, a Security Party or any of either Borrower’s or Euronav’s subsidiaries, but excluding any company which is dormant and the value of whose gross assets is $5,000,000 or less.
60
In Clause 19.1(e) references to an event of default or a termination
event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 19.1(f) “
petition
” includes an application.
|
19.11
|
Position of Swap Counterparties
|
Neither the Agent nor the Security Trustee shall be
obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19 (
Events of Default
), to have any regard to the requirements of a Swap Counterparty except to the extent that
such Swap Counterparty is also a Lender.
The Borrowers shall pay to the Agent:
|
(a)
|
on the date of this Agreement or as otherwise agreed, the fees in amounts previously agreed in writing between the Agent and the Borrowers; and
|
|
(b)
|
quarterly in arrears on each 31 March, 30 June, 30 September and 31 December and on the first Drawdown Date (or, if earlier, the date on which this Agreement is terminated) during the period from the
date of this Agreement to the last day of the Availability Period (or, if earlier, the date on which this Agreement is terminated), for the account of the Lenders, a commitment fee at the rate of 40 per cent. of the Margin per annum on the
Total Available Commitments, for distribution among the Lenders pro rata to their Commitments.
|
|
20.2
|
Costs of negotiation, preparation etc.
|
The Obligors shall pay to the Agent on its
demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a
Finance Document or a related document.
|
20.3
|
Costs of variations, amendments, enforcement etc.
|
The Obligors shall pay to the Agent,
on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor Party in connection with:
|
(a)
|
any amendment or supplement to a Finance Document or any proposal for such an amendment to be made;
|
|
(b)
|
any consent or waiver by the Lenders, the Swap Banks, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
|
|
(c)
|
the valuation of any security provided or offered under Clause 15 (
Security Cover
) or any other matter relating to such security; or
|
|
(d)
|
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules
of court or any taxation or other procedure carried out under such rules.
61
The Obligors shall promptly pay any tax payable on or by reference to
any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Obligors to pay such a tax.
|
20.5
|
Certification of amounts
|
A notice which is signed by 2 officers of a Creditor Party,
which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 (
Fees and Expenses
) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the
amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
21.1
|
Indemnities regarding borrowing and repayment of Loan
|
The Obligors shall fully
indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party as a result of or
in connection with:
|
(a)
|
an Advance not being borrowed on the date specified in the relevant Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
|
|
(b)
|
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of the applicable Interest Period or other relevant period;
|
|
(c)
|
any failure (for whatever reason) by the Obligors to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the
Obligors on the amount concerned under Clause 7 (
Default Interest
));
|
|
(d)
|
the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19 (
Events of Default
);
|
and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or
payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
Without limiting its generality, Clause 21.1 (
Indemnities regarding
borrowing and repayment of Loan
) covers any Break Costs.
|
21.3
|
Miscellaneous indemnities
|
The Obligors shall fully indemnify each Creditor Party
severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance
Document;
|
62
|
(b)
|
any civil penalty or fine against, and all reasonable costs and expenses (including reasonable fees of counsel and disbursements) incurred in connection with or the defence thereof by, the Agent or any other Creditor
Party as a result of conduct of any Obligor or any of their partners, directors, officers, employees, agents or advisors, that violates any Sanctions; or
|
|
(c)
|
any other Pertinent Matter;
|
other than claims, expenses, liabilities and losses which are
shown to have been caused by the gross negligence, dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.
Without prejudice to its generality, this Clause 21.3 (
Miscellaneous indemnities
) covers any claims, expenses, liabilities and losses
which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code, any Environmental Law or any Sanctions.
If any sum due from any Borrower or any Security Party to a Creditor
Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into
another currency (the “
Payment Currency
”) for the purpose of:
|
(a)
|
making or lodging any claim or proof against any Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
|
(c)
|
enforcing any such order or judgment;
|
the Obligors shall indemnify within 3 Business Days of
demand the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
In this Clause 21.4 (
Currency indemnity
), the “
available rate of exchange
” means the rate at which the Creditor Party
concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Clause 21.4 (
Currency indemnity
) creates a separate liability of the Obligors which is distinct from their other liabilities under
the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.
|
21.5
|
Application to Master Agreements
|
For the avoidance of doubt, Clause 21.4 (
Currency
indemnity
) does not apply in respect of sums due from Euronav to a Swap Counterparty under or in connection with a Master Agreement as to which sums the provisions of section 8 (
Contractual Currency
) of that Master Agreement shall apply.
|
21.6
|
Certification of amounts
|
A notice which is signed by 2 officers of a Creditor Party,
which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 (
Indemnities
) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount,
or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
63
|
21.7
|
Sums deemed due to a Lender
|
For the purposes of this Clause 21 (
Indemnities
), a
sum payable by the Obligors to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
22
|
NO SET-OFF OR TAX DEDUCTION
|
All amounts due from the Obligors (or any of them) under a Finance
Document shall be paid:
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
|
(b)
|
free and clear of any tax deduction except a tax deduction which an Obligor is required by law to make.
|
|
22.2
|
Grossing-up for taxes
|
Subject as provided in Clause 26.18 (
Tax indemnity, tax
gross-up and increased costs on assignment, transfer and change of lending office
), if an Obligor is required by law to make a tax deduction from any payment:
|
(a)
|
that Obligor shall notify the Agent as soon as it becomes aware of the requirement;
|
|
(b)
|
that Obligor shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
|
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would otherwise have received; and
|
|
(d)
|
that Obligor shall, as soon as reasonably practicable after making the relevant tax deduction, deliver to the Agent a copy of the receipt from the relevant taxation authority evidencing that the tax had been paid to
that authority.
|
|
22.3
|
Evidence of payment of taxes
|
Promptly, and in any event within 1 month after making any
tax deduction, the Obligor concerned shall deliver to the Agent for the Creditor Party entitled to the payment an original receipt (or certified copy thereof) satisfactory to that Creditor Party evidencing that the tax had been paid to the
appropriate taxation authority.
A Creditor Party which has obtained (and has derived full use and benefit,
on an affiliated group basis, of) a repayment or credit in respect of tax on account of which the Obligors (or any of them) have made an increased payment under Clause 22.2 (
Grossing-up for taxes
) shall pay to the relevant Obligors a sum
equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from the relevant Obligors in respect of which the relevant Obligors made the increased payment
Provided that
:
|
(a)
|
the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
|
64
|
(b)
|
nothing in this Clause 22.4 (
Tax credit
) shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority
to, another or to make any such claim within any particular time;
|
|
(c)
|
nothing in this Clause 22.4 (
Tax credit
) shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Obligors had not been required to make a tax
deduction from a payment;
|
|
(d)
|
any allocation or determination made by a Creditor Party under or in connection with this Clause 22.4 (
Tax credit
) shall be conclusive and binding on the Obligors and the other Creditor Parties;
|
|
(e)
|
nothing in this Clause 22.4 (
Tax credit
) shall oblige any Creditor Party to disclose any information relating to its affairs (tax or otherwise) or those of its ultimate parent company (or any subsidiary thereof)
or any computations in respect of tax; and
|
|
(f)
|
the Creditor Party’s tax affairs for its tax year in respect of which such credit or repayment was obtained have been finally settled.
|
|
22.5
|
Exclusion of tax on overall net income
|
In this Clause 22 (
No Set-Off or Tax
Deduction
) “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s overall net income.
|
(a)
|
All amounts expressed to be payable under a Finance Document by any party to a Creditor Party shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply made by any Creditor Party to any part in
connection with a Finance Document, that party shall pay to the Creditor Party (in additional to and at the same time as paying the consideration) an amount equal to the amount of the VAT.
|
|
(b)
|
Where a Finance Document requires any party to reimburse a Creditor Party for any costs or expenses, that party shall also at the same time pay and indemnify the Creditor Party against all VAT incurred by the Creditor
Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that it is not entitled to credit or repayment of the VAT.
|
|
22.7
|
Application to Master Agreements
|
For the avoidance of doubt, Clause 22 (
No Set-Off
or Tax Deduction
) does not apply in respect of sums due from Euronav to a Swap Counterparty under or in connection with a Master Agreement as to which sums the provisions of section 2(d) (
Deduction or Withholding for Tax
) of that Master
Agreement shall apply.
|
|
(i)
|
Subject to paragraph (iii) below, each party to a Finance Document shall, within 10 Business Days of a reasonable request by another party to the Finance Documents:
|
|
|
(A)
|
confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and
|
|
|
(B)
|
supply to the requesting party such forms, documentation and other information relating to its status under FATCA (including its applicable
|
65
|
|
“passthru percentage” or other information required under the U.S. Treasury regulations or other official guidance including intergovernmental agreements or treaties) as the requesting
party reasonably requests for the purposes of such requesting party’s compliance with FATCA.
|
|
|
(ii)
|
If a party to any Finance Document confirms to another party pursuant to Clause 22.8(a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt
Party, that party shall notify that other party and the Agent reasonably promptly.
|
|
|
(iii)
|
Subclause (i) above shall not oblige any Creditor Party to do anything which would or might in its reasonable opinion constitute a breach of any law or regulation, any policy of that Creditor Party, any fiduciary
duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, however, that information required (or equivalent to the information so required) by United
States Internal Revenue Service Forms W-8 or W-9 (or any successor forms) shall not be treated as confidential information of such Creditor Party for purposes of this subclause (iii).
|
|
|
(iv)
|
If a party to any Finance Document fails to confirm its status or to supply forms, documentation or other information requested in accordance with subclause (i) above (including, for the avoidance of doubt, where
subclause (iii) above applies), then
|
|
|
(A)
|
if that party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and
|
|
|
(B)
|
if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable passthru percentage is
100%,
|
until (in each case) such time as the party in question provides the requested confirmation, forms, documentation or
other information.
|
|
(i)
|
If any Obligor making a payment under a Finance Document is required to make a FATCA Deduction, that Obligor shall make that FATCA Deduction and shall make a payment to the IRS (or such other taxing authority as
required under FATCA or any intergovernmental agreement entered into thereunder) within the time allowed and in the amount required by FATCA.
|
|
|
(ii)
|
If a FATCA Deduction is required to be made by any Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any FATCA Deductions) leaves an amount equal to the payment
which would have been due if no FATCA Deduction had been required.
|
|
|
(iii)
|
The Obligors shall promptly upon becoming aware that a FATCA Deduction is required (or that there is any change in the rate or basis of a FATCA Deduction) notify the Agent accordingly. Similarly, a Creditor Party shall
notify the Agent on becoming aware that a FATCA Deduction (or that a change in the rate or basis of a FATCA Deduction) may be required on a payment to such Creditor Party.
|
|
|
(iv)
|
As soon as possible and no later than within 15 days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the Obligors shall deliver to the Agent for the Creditor Party
entitled to the payment
|
66
|
|
evidence reasonably satisfactory to that Creditor Party that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the IRS (or other taxing authority as
applicable).
|
|
|
(v)
|
Each Creditor Party may make any FATCA Deduction it is required to make under FATCA, and any payment required in connection with that FATCA Deduction, and no Creditor Party shall be required to increase any payment in
respect of which it makes such a FATCA Deduction. A Creditor Party which becomes aware that it must make a FATCA Deduction in respect of a payment to another party (or that there is any change in the rate or basis of such FATCA Deduction) shall
notify that party and the Agent.
|
|
|
(vi)
|
If the Agent is required to make a FATCA Deduction in respect of a payment to a Creditor Party which relates to a payment by any of the Obligors, the amount of the payment due from that Obligor, shall be increased to an
amount which (after the Agent has made such FATCA Deduction), leaves the Agent with an amount equal to the payment which would have been made by the Agent if no FATCA Deduction had been required.
|
|
|
(vii)
|
The Agent shall promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Creditor Party which relates to a payment by any of the Obligors, as the case may be (or that there is any
change in the rate or the basis of such a FATCA Deduction) notify the relevant Obligor and the relevant Creditor Party.
|
|
|
(i)
|
The Obligors shall, (within 3 Business Days of demand by the Agent) indemnify each Creditor Party and pay to each such Creditor Party an amount equal to the taxes, losses, liabilities or costs which such Creditor Party
determines will be or has been (directly or indirectly) suffered by such Creditor Party as a result of (1) any of the Obligors or any Creditor Party making a FATCA Deduction from any amounts due to such Creditor Party under the Finance
Documents or (2) any taxes, penalties, interest or other amounts being asserted against or imposed on such Creditor Party by any taxing or governmental authority under FATCA in connection with any payment under the Finance Documents. This
paragraph shall not apply to the extent a tax, loss, liability or cost is compensated for by an increased payment under Clause 22.8(b)(ii) or 22.8(b)(vi) above.
|
|
|
(ii)
|
A Creditor Party making, or intending to make, a claim under subclause (i) above shall promptly notify the Agent of the FATCA Deduction which will give, or has given, rise to the claim, following which the Agent
shall notify the Obligors.
|
|
(d)
|
No Double FATCA Indemnity
|
Any amount actually paid by any of the Obligors under Clause
22.8(b)(ii) or (vi) or Clause 22.8(c)(i) shall not also be paid or indemnified under Clauses 22.2 (
Grossing-up for taxes
), 22.4 (
Tax credit
) or 24.4 (
Payment of increased costs
).
67
|
|
(i)
|
If a FATCA Deduction is or will be required to be made by any of the Obligors or the Agent under Clause 22.8(b) in respect of a payment to any FATCA Non-Exempt Lender, the relevant Obligor may (but shall not be required
to), in addition to making any FATCA Deductions already required and any associated gross-up and indemnity payments under this Clause 22.8 (
FATCA
), not later than the second Repayment Date following a notice given under Clauses 22.8(b)(iii)
or 22.8(c)(i) elect to either:
|
|
|
(A)
|
prepay in full the Contribution of the FATCA Non-Exempt Lender in accordance with and subject to the conditions of Clauses 8.11 (
Amounts payable on prepayment
) and 8.13 (
Reborrowing
) upon 30 days’
written notice to the Agent and such FATCA Non-Exempt Lender, specifying the amount to be prepaid, the date on which the prepayment is to be made and the basis for the FATCA Deduction, or
|
|
|
(B)
|
if no Event of Default or Potential Event of Default has occurred, nominate one or more Transferee Lenders who would meet the requirements of Clause 26.2 (
Transfer by a Lender
) of the Loan Agreement and who upon
becoming a Lender would be an Exempt FATCA Party, by notice in writing to the Agent and the FATCA Non-Exempt Lender specifying the terms of the proposed transfer, and, subject to subclause (ii) below, cause such Transferee Lender(s) to
purchase, in accordance with Clause 26 (
Transfers and Changes in Lending Offices
), all of the FATCA Non-Exempt Lender’s Contribution and Commitment.
|
|
|
(ii)
|
If any of the Obligors elects to nominate one or more Transferee Lenders under Clause 22.8(e)(i)(B), the relevant FATCA Non-Exempt Lender shall transfer its Contribution and Commitment to such Transferee Lender(s), but
only after such FATCA Non-Exempt Lender has received one or more payments from any Obligor and such Transferee Lender(s) in an aggregate amount at least equal to the aggregate outstanding Contribution of such FATCA Non-Exempt Lender, together with
accrued interest thereon to the date of payment of such Contribution and all other amounts payable to such FATCA Non-Exempt Lender under the Loan Agreement.
|
This Clause 23 (
Illegality, etc.
) applies if a Lender (the
“
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
|
(b)
|
contrary to, or inconsistent with, any regulation and/or contrary to or declared by any Sanctions Authority to be contrary to Sanctions,
|
for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this
Agreement.
|
23.2
|
Notification of illegality
|
The Agent shall promptly notify the Borrowers, the Security
Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 (
Illegality
) which the Agent receives from the Notifying Lender.
|
23.3
|
Prepayment; termination of Commitment
|
On the Agent notifying the Borrowers under Clause
23.2 (
Notification of illegality
), the Notifying Lender’s Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender’s notice under Clause 23.1 (
Illegality
) as the date on which the
notified event would become effective the Borrowers shall prepay the Notifying Lender’s Contribution in accordance with Clause 8 (
Repayment and Prepayment and Cancellation
).
68
If circumstances arise which would result in a notification under Clause
23.1 (
Illegality
) then, without in any way limiting the rights of the Notifying Lender under Clause 23.3 (
Prepayment; termination of Commitment
), the Notifying Lender shall use reasonable endeavours to transfer its obligations,
liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion,
to do would or might:
|
(a)
|
have an adverse effect on its business, operations or financial condition; or
|
|
(b)
|
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c)
|
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
This Clause 24 (
Increased Costs
) applies if a Lender (the
“
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to
the application to payments under this Agreement of a tax on the Lender’s overall net income);
|
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement; or
|
|
(c)
|
compliance with the implementation by the applicable authorities of the matters set out in Basel III, CRD IV or CRR and the continuing application of the same,
|
the Notifying Lender (or a parent company of it) has incurred or will incur an “
increased cost
”.
|
24.2
|
Meaning of “increased cost”
|
In this Clause 24 (
Increased Costs
),
“
increased cost
” means, in relation to a Notifying Lender:
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its
Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
|
|
(b)
|
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
|
|
(c)
|
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the
proportion of that cost attributable to its Contribution; or
|
69
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an
item covered by the indemnity for tax in Clause 21.1 (
Indemnities regarding borrowing and repayment of Loan
) or by Clause 22 (
No Set-Off or Tax Deduction
) or an item arising directly out of the implementation or application of or
compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004, substantially in the form existing on the date of this
Agreement (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates)
Provided that
the
exclusion in this paragraph shall not include Base III irrespective of whether this is implemented or applied pursuant to Basel II.
For
the purposes of this Clause 24.2 (
Meaning of “increased cost
”) the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis
as it considers appropriate.
|
24.3
|
Notification to Borrowers of claim for increased costs
|
The Agent shall promptly notify
the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1 (
Increased costs
) and there shall then be a 60 day consultation period for the Borrowers and Notifying Lender to discuss
the particular increased cost and amount to be paid to the Notifying Lender.
|
24.4
|
Payment of increased costs
|
Unless something to the contrary is agreed by the Borrowers
and the Notifying Lender during the 60 day consultation period referred to in 24.3 (
Notification to Borrowers of claim for increased costs
), the Borrowers shall pay to the Agent, on the Agent’s demand, for the account of the Notifying
Lender the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
|
24.5
|
Notice of prepayment
|
If the Borrowers are not willing to continue to compensate the
Notifying Lender for the increased cost under Clause 24.4 (
Payment of increased costs
), the Borrowers may give the Agent not less than 5 Business Days’ notice of their intention to prepay the Notifying Lender’s Contribution or to
procure a Transferee Lender.
|
24.6
|
Prepayment; termination of Commitment
|
A notice of prepayment under Clause 24.5
(
Notice of prepayment
) shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers’ notice of intended prepayment; and:
|
(a)
|
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
|
|
(b)
|
on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate
plus the applicable Margin.
|
70
|
24.7
|
Application of prepayment
|
Clause 8 (
Repayment and Prepayment and Cancellation
)
shall apply in relation to the prepayment.
|
25.1
|
Application of credit balances
|
Each Creditor Party may, at any time after the
occurrence of an Event of Default which is continuing, without prior notice:
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of an Obligor at any office in any country of that Creditor Party in or towards satisfaction of any sum then
due from that Obligor to that Creditor Party under any of the Finance Documents; and
|
|
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of that Obligor;
|
|
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars;
|
|
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
|
25.2
|
Existing rights unaffected
|
No Creditor Party shall be obliged to exercise any of its
rights under Clause 25.1 (
Application of credit balances
); and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is
entitled (whether under the general law or any document).
|
25.3
|
Sums deemed due to a Lender
|
For the purposes of this Clause 25 (
Set-Off
), a sum
payable by any Obligor to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the
account of, the Lenders shall be treated as a sum due to such Lender.
|
25.4
|
No Security Interest
|
This Clause 25 (
Set-Off
) gives the Creditor Parties a
contractual right of set-off only and does not create any equitable charge or other Security Interest over any credit balance of any Borrower.
|
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
26.1
|
Transfer by Obligors
|
No Obligor may, without the consent of the Agent given on the
instructions of all the Lenders, transfer any of its rights, liabilities or obligations under any Finance Document.
|
26.2
|
Transfer by a Lender
|
Subject to Clause 26.4 (
Effective Date of Transfer
Certificate
), a Lender (the “
Transferor Lender
”) may, at its own cost, with the prior written consent of the Borrowers (not to be unreasonably withheld or delayed) and the Agent or without the consent of the Borrowers if an
Event of Default has occurred and is continuing, cause:
|
(a)
|
its rights in respect of all or pro rata parts of its Contribution; or
|
71
|
(b)
|
its obligations in respect of all or pro rata parts of its Commitment; or
|
|
(c)
|
a combination of (a) and (b);
|
to be (in the case of its rights) transferred to, or (in
the case of its obligations) assumed by, another bank (a “
Transferee Lender
”) by delivering to the Agent a completed certificate in the form set out in Schedule 5 (
Transfer Certificate
) with any modifications approved or
required by the Agent (a “
Transfer Certificate
”) executed by the Transferor Lender and the Transferee Lender
Provided that
a Lender may make such transfer to any wholly owned subsidiary of it, to its parent company or to
another subsidiary of its parent company without the consent of the Borrowers or the Agent and the fee referred to in Clause 26.11 (
Registration fee
) shall not apply in relation to any such transfer.
Without prejudice to the foregoing, any such transfer by a Lender shall be subject to the following further conditions:
|
|
(i)
|
the amount of the Contribution and/or Commitment of the Lender which is to be transferred shall not be less than $10,000,000 or, if less, the remaining amount of its Contribution and Commitment, unless the Agent agrees
otherwise;
|
|
|
(ii)
|
where no Event of Default has occurred and is continuing, the Agent shall approve the transfer (such approval not to be unreasonably withheld);
|
|
|
(iii)
|
payment of the fee in accordance with Clause 26.11 (
Registration fee
).
|
However any
rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Deed.
|
26.3
|
Transfer Certificate, delivery and notification
|
As soon as reasonably practicable after
a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
|
(a)
|
sign the Transfer Certificate on behalf of itself, the Obligors, the Security Parties, the Security Trustee and each of the other Lenders and each of the Swap Banks;
|
|
(b)
|
on behalf of the Transferee Lender, send to the Obligors and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
|
|
(c)
|
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b).
|
|
26.4
|
Effective Date of Transfer Certificate
|
A Transfer Certificate becomes effective on the
date, if any, specified in the Transfer Certificate as its effective date
Provided that
it is signed by the Agent under Clause 26.3 (
Transfer Certificate, delivery and notification
) on or before that date.
|
26.5
|
No transfer without Transfer Certificate
|
No assignment or transfer of any right or
obligation of a Lender under any Finance Document is binding on, or effective in relation to, any Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
72
|
26.6
|
Lender re-organisation; waiver of Transfer Certificate
|
However, if a Lender enters into
any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security
Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent’s notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
|
26.7
|
Effect of Transfer Certificate
|
A Transfer Certificate takes effect in accordance with
English law as follows:
|
(a)
|
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee
Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which any Borrower or any Security Party had against the Transferor Lender;
|
|
(b)
|
the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;
|
|
(c)
|
the Transferee Lender becomes a Lender with a Contribution and Commitment of the amounts specified in the Transfer Certificate;
|
|
(d)
|
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and
the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
|
|
(e)
|
any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the
transferor, assuming that any defects in the Transferor Lender’s title and any rights or equities of any Borrower or any Security Party against the Transferor Lender had not existed;
|
|
(f)
|
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under
Clause 5.7 (
Market disruption
) and Clause 20 (
Fees and Expenses
), and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
|
(g)
|
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled
to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
|
The rights and equities of any Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any
other kind of cross-claim.
73
|
26.8
|
Maintenance of register of Lenders
|
During the Security Period the Agent shall maintain
a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4
(
Effective Date of Transfer Certificate
)) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Obligors during normal banking hours, subject to receiving at
least 3 Business Days prior notice.
|
26.9
|
Reliance on register of Lenders
|
The entries on that register shall, in the absence of
manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the
Finance Documents for all purposes relating to the Finance Documents.
|
26.10
|
Authorisation of Agent to sign Transfer Certificates
|
Each Obligor, the Security
Trustee, each Lender and each Swap Bank irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
In respect of any Transfer Certificate, the Agent shall be entitled to
recover a registration fee of $3,500 from the Transferor Lender or (at the Agent’s option) the Transferee Lender.
|
26.12
|
Sub-participation; subrogation assignment
|
|
(a)
|
A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, any Security Party, the Agent or the Security
Trustee and (where an Event of Default has occurred and is continuing) any Borrower. Where no Event of Default has occurred and is continuing the Borrowers’ consent to such sub-participation shall be required, such consent not to be
unreasonably withheld or delayed.
|
|
(b)
|
The Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.
|
|
26.13
|
Disclosure of information
|
A Lender may disclose to a potential Transferee Lender or
sub-participant any information which that Lender has received in relation to any Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly Confidential Information. Without
prejudice to the foregoing, a Lender may disclose any Confidential Information delivered by any Obligor hereunder and such other information in relation to any Borrower, Euronav and their respective subsidiaries which it may obtain pursuant to this
Agreement:
|
(a)
|
to authorities in any other countries where that Lender, its subsidiaries, branches and representative officers or any other entity of that Lender are represented:
|
|
|
(i)
|
where such authority has requested information from the relevant entity of that Lender; and
|
|
|
(ii)
|
such disclosure is required by law, regulation or administrative order in order for that Lender to meet its legal requirements relating to reduction and/or prevention of money laundering, terrorism or corruption; or
|
74
|
(b)
|
to a potential Transferee Lender or sub-participant if such person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a
Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information.
|
|
26.14
|
Change of lending office
|
A Lender may change its lending office by giving notice to the
Agent and the change shall become effective on the later of:
|
(a)
|
the date on which the Agent receives the notice; and
|
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
On receiving such a notice, the Agent shall notify the Borrowers, each
other Security Party and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
|
26.16
|
Replacement of Reference Bank
|
If any Reference Bank ceases to be a Lender or is unable
on a continuing basis to supply quotations for the purposes of Clause 5 (
Interest
) then, unless the Borrowers, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after
consulting the Borrowers, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
|
26.17
|
Security over Lenders’ rights
|
In addition to the other rights provided to Lenders
under this Clause 26 (
Transfers and Changes in Lending Offices
), each Lender may without consulting with or obtaining consent from any Borrower or any Security Party, at any time charge, assign or otherwise create a Security Interest in or
over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
|
(a)
|
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
|
|
(b)
|
in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as
security for those obligations or securities;
|
except that no such charge, assignment or Security Interest shall:
|
|
(i)
|
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents;
or
|
|
|
(ii)
|
require any payments to be made by any Borrower or any Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.
|
75
|
26.18
|
Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office
|
If:
|
(a)
|
a Lender assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 26.2 (
Transfer by a Lender
) or changes its lending office; and
|
|
(b)
|
as a result of circumstances existing at the date the assignment, transfer or change occurs the Borrowers would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under
Clause 21.1 (
Indemnities regarding borrowing and repayment of Loan
) in respect of any tax, Clause 22 (
No Set-Off or Tax Deduction
) or Clause 24 (
Increased Costs
),
|
then the Transferee Lender or the Lender acting through its new lending office is only entitled to receive payment under those Clauses to the
same extent as the Transferor Lender or the Lender acting through its previous lending office would have been if the assignment, transfer or change had not occurred.
|
26.19
|
Replacement of Lender by Borrowers
|
The Borrowers may, at any time unless a Potential
Event of Default or Event of Default has occurred and is continuing in respect of:
|
(a)
|
a Lender whose costs of funds charged to the Borrowers are (in the Borrowers’ reasonable opinion) materially higher than those of the other Lenders generally;
|
|
(b)
|
a Lender which is a Defaulting Lender; or
|
|
(c)
|
a Lender which is a Non-Consenting Lender,
|
by giving 10 Business Days’ notice to the
Agent and that Lender (the “
Outgoing Lender
”) replace the Outgoing Lender by requiring it to (and the Outgoing Lender must) transfer in accordance with Clause 26 (
Transfers and Changes in Lending Offices
) all (and not part
only) of its rights and obligations under this Agreement to a Lender or other bank (a “
Replacement Lender
”) selected by the Borrowers and (unless the Agent is an Impaired Agent) which is acceptable to the Agent (acting reasonably)
for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of the Outgoing Lender’s Contribution and all accrued interest, break costs and other amounts payable in relation to that Contribution under
this Agreement and the other Finance Documents.
Any transfer of rights and obligations of an Outgoing Lender under this Clause is subject
to the following conditions:
|
|
(i)
|
neither the Agent nor the Outgoing Lender will have any obligation to the Borrowers to find a Replacement Lender;
|
|
|
(ii)
|
the transfer must take place no later than 10 Business Days after the Borrowers’ notice referred to above;
|
|
|
(iii)
|
in no event will the Outgoing Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Outgoing Lender under this Agreement and the other Finance Documents; and
|
76
|
|
(iv)
|
the Outgoing Lender shall only be obliged to transfer its rights and obligations under this Clause once it is satisfied that it has complied with all necessary “know your customer” or other similar checks
under all applicable laws and regulations in relation to that transfer and the Outgoing Lender shall perform the checks described in this paragraph (iv) above as soon as reasonably practicable following delivery of a notice referred to in this
Clause and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.
|
|
27
|
VARIATIONS AND WAIVERS
|
|
27.1
|
Variations, waivers etc. by Majority Lenders
|
Subject to Clause 27.2 (
Variations,
waivers etc. requiring agreement of all Lenders
), a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or remedies under such a provision or the general law, only
if the document is signed, or specifically agreed to by fax, by the Obligors, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a
Security Party is party, by that Security Party.
The consent of the Borrowers or any Security Party shall not be required to any amendment
or variation to a Finance Document if such amendment or variation does not, in the opinion of the Agent (acting reasonably), materially and adversely affect the rights or interests of the Borrowers or the Security Parties.
|
27.2
|
Variations, waivers etc. requiring agreement of all Lenders
|
However, as regards the
following, Clause 27.1 (
Variations, waivers etc. by Majority Lenders
) applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the words “by or on behalf of every Lender”:
|
(a)
|
a reduction in the Margin or change to the definition of LIBOR;
|
|
(b)
|
a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;
|
|
(c)
|
a change to any Lender’s Commitment;
|
|
(d)
|
a change to the definition of “Majority Lenders” or “Finance Documents”;
|
|
(e)
|
a change to the preamble or to Clause 2 (
Facility
), Clause 3 (
Position of the Lenders and Swap Banks
), Clause 4 (
Drawdown
), Clause 5.1 (
Payment of normal interest
), paragraph (b) of
Clause 16.1 (
Currency and method of payments
), Clause 17 (
Application of Receipts
), Clause 18 (
Application of Earnings
) or Clause 39 (
Law and Jurisdiction
);
|
|
(f)
|
any amendment or waiver if the Agent or a Lender in its sole discretion believes that it may constitute a “material modification” within the meaning of FATCA that may result (directly or indirectly) in any
party to any Finance Document being required to make a FATCA Deduction;
|
|
(g)
|
a change to this Clause 27 (
Variations and Waivers
);
|
|
(h)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document;
|
|
(i)
|
a change to the identity of the Borrowers (or either of them); and
|
|
(j)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required.
|
77
|
27.3
|
Exclusion of other or implied variations
|
Except for a document which satisfies the
requirements of Clauses 27.1 (
Variations, waivers etc. by Majority Lenders
) and 27.2 (
Variations, waivers etc. requiring agreement of all Lenders
), no document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
|
(b)
|
an Event of Default; or
|
|
(c)
|
a breach by a Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law;
|
and there shall
not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
Unless otherwise specifically provided, any notice under or in connection with
any Finance Document shall be given by letter or fax and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.
|
28.2
|
Addresses for communications
|
A notice shall be sent:
|
|
|
|
|
|
|
(a)
|
|
to the Obligors:
|
|
de Gerlachekaai 20
|
|
|
|
|
|
B-2000 Antwerp
|
|
|
|
|
|
Belgium
|
|
|
|
|
|
|
|
|
|
Fax No: 32 3 247 4409
|
|
|
|
|
|
Attn: Finance Director
|
|
|
|
|
|
(b)
|
|
to a Lender:
|
|
At the address below its name in Schedule 1 (
Lenders and Commitments
) or (as the case may require) in the relevant Transfer Certificate.
|
|
|
|
|
|
(c)
|
|
to a Swap Bank:
|
|
At the address below its name in Schedule 2 (
Swap Banks
).
|
|
|
|
|
|
(d)
|
|
to the Agent and
|
|
Middelthunsgate 17
|
|
|
|
the Security Trustee:
|
|
P.O. Box 1166, Sentrum
0107 Oslo
|
|
|
|
|
|
Norway
|
|
|
|
|
|
|
|
|
|
Loan administration matters:
|
|
|
|
|
|
Fax No: (47) 22 48 66 88
|
|
|
|
|
|
|
|
|
|
Attn: International Loans Administration
|
|
|
|
|
|
Credit matters:
|
|
|
|
|
|
|
|
|
|
Fax No: (47) 22 48 44 91
|
|
|
|
|
|
Attn: Shipping, Offshore and Oil Services
|
78
or to such other address as the relevant party may notify the Agent or, if the relevant party is
the Agent or the Security Trustee, the Obligors, the Lenders, the Swap Banks and the Security Parties.
|
28.3
|
Effective date of notices
|
Subject to Clauses 28.4 (
Service outside business
hours
) and 28.5 (
Illegible notices
):
|
(a)
|
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;
|
|
(b)
|
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
|
|
28.4
|
Service outside business hours
|
However, if under Clause 28.3 (
Effective date of
notices
) a notice would be deemed to be served:
|
(a)
|
on a day which is not a business day in the place of receipt; or
|
|
(b)
|
on such a business day, but after 5 p.m. local time;
|
the notice shall (subject to Clause 28.5
(
Illegible notices
) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
Clauses 28.3 (
Effective date of notices
) and 28.4 (
Service
outside business hours
) do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a
material respect.
A notice under or in connection with a Finance Document shall not be
invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
|
(a)
|
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
|
|
(b)
|
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
|
A demand under the Guarantee shall be valid notwithstanding that it
is served:
|
(a)
|
on the date on which the amount to which it relates is payable by the Initial Borrowers under a Finance Document or by Euronav under a Master Agreement;
|
79
|
(b)
|
at the same time as the service of a notice under Clause 19.2 (
Events of Default
) or the equivalent clauses of a Master Agreement;
|
and a demand under the Guarantee may refer to all amounts payable under or in connection with the Finance Documents and/or the Master
Agreements (or either of them) without specifying a particular sum or aggregate sum.
|
28.8
|
Electronic communication
|
Any communication to be made between the Agent and another
Creditor Party or any Obligor under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including by way of the Agent’s Intralinks system), if the Agent and the relevant Creditor Party or
Obligor:
|
(a)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
(b)
|
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
|
|
(c)
|
notify each other of any change to their respective addresses or any other such information supplied to them.
|
Any electronic communication made between the Agent and another Creditor Party or any Obligor will be effective only when actually received in
readable form and, in the case of any electronic communication made by a Creditor Party or an Obligor to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
All Creditor Parties confirm that they have consented to the use of the Agent’s Intralinks systems as an accepted method of communication
under or in connection with the Finance Documents and agree that the Intralinks system (or another electronic collaborative website) will be the primary method of communication between the Agent and the other Creditor Parties. The Creditor Parties
acknowledge that a communication via Intralinks (or such other electronic collaborative website) will be effective once the communication is posted (in a readable form) to Intralinks (or such other electronic collaborative website) by the Agent.
Any notice under or in connection with a Finance Document shall be in
English.
|
28.10
|
Meaning of “notice”
|
In this Clause 28 (
Notices
),
“
notice
” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
|
29
|
JOINT AND SEVERAL LIABILITY
|
All liabilities and obligations of the Borrowers under this Agreement shall,
whether expressed to be so or not, be several and, if and to the extent consistent with Clause 29.2 (
No impairment of Borrower’s obligations
), joint.
|
29.2
|
No impairment of Borrower’s obligations
|
The liabilities and obligations of a
Borrower shall not be impaired by:
|
(a)
|
this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;
|
80
|
(b)
|
any Lender or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;
|
|
(c)
|
any Lender or the Security Trustee releasing any other Borrower or any Security Interest created by a Finance Document; or
|
|
(d)
|
any combination of the foregoing.
|
Each Borrower declares that it is and will, throughout the Security
Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall in any circumstances be construed to be a surety for the obligations of any other Borrower under this Agreement.
Subject to Clause 29.5, during the Security Period, no Obligor shall:
|
(a)
|
claim any amount which may be due to it from any other Obligor whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any
Finance Document; or
|
|
(b)
|
take or enforce any form of security from any other Obligor for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of any other Borrower; or
|
|
(c)
|
set off such an amount against any sum due from it to any other Obligor; or
|
|
(d)
|
prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Obligor or other Security Party; or
|
|
(e)
|
claim any subrogation or other right in respect of any Finance Document or any Master Agreement or any sum received or recovered by any Creditor Party under a Finance Document or a Master Agreement; or
|
|
(f)
|
exercise or assert any combination of the foregoing.
|
|
29.5
|
Borrower’s required action
|
If during the Security Period, the Agent, by notice to
an Obligor, requires it to take any action referred to in paragraphs (a) to (d) of 29.4 (
Subordination
), in relation to any other Obligor, that Obligor shall take that action as soon as practicable after receiving the Agent’s
notice.
|
30.1
|
Guarantee and indemnity of Initial Borrowers’ obligations
|
Euronav unconditionally
and irrevocably:
|
(a)
|
guarantees the due payment of all amounts payable by the Initial Borrowers (or either of them) under or in connection with this Agreement and every other Finance Document;
|
|
(b)
|
undertakes to pay to the Security Trustee, on the Security Trustee’s demand, any such amount which is not paid by the Initial Borrowers (or either of them) when payable; and
|
81
|
(c)
|
agrees to indemnify the Security Trustee and each of the other Creditor Parties on the Security Trustee’s demand in respect of all claims, expenses, liabilities and losses which are made or brought against or
incurred by the Security Trustee or the Creditor Party concerned:
|
|
|
(i)
|
as a result of or in connection with any obligation or liability guaranteed by Euronav under this Agreement being or becoming unenforceable, invalid, void or illegal; or
|
|
|
(ii)
|
by operation of law;
|
and the amount recoverable under this indemnity shall be equal to the
amount which the Security Trustee or the Creditor Party concerned would otherwise have been entitled to recover.
|
30.2
|
Guarantee and indemnity of Euronav’s obligations
|
Each Initial Borrower
unconditionally and irrevocably:
|
(a)
|
guarantees the due payment of all amounts payable by Euronav under or in connection with each Master Agreement;
|
|
(b)
|
undertakes to pay to the Security Trustee, on the Security Trustee’s demand, any such amount which is not paid by Euronav when payable; and
|
|
(c)
|
agrees to indemnify the Security Trustee and each of the other Creditor Parties on the Security Trustee’s demand in respect of all claims, expenses, liabilities and losses which are made or brought against or
incurred by the Security Trustee or the Creditor Party concerned:
|
|
|
(i)
|
as a result of or in connection with any obligation or liability guaranteed by the Initial Borrowers (or either of them) under this Agreement being or becoming unenforceable, invalid, void or illegal; or
|
|
|
(ii)
|
by operation of law;
|
and the amount recoverable under this indemnity shall be equal to the
amount which the Security Trustee or the Creditor Party concerned would otherwise have been entitled to recover.
|
30.3
|
No limit on number of demands
|
The Security Trustee may serve more than one demand under
Clause 30.1 (
Guarantee and indemnity of Initial Borrowers’ obligations
) and 30.2 (
Guarantee and indemnity of Euronav’s obligations
).
|
30.4
|
Subordination of guarantee by Initial Borrowers
|
For the avoidance of doubt, the
guarantee by each Initial Borrower of Euronav’s obligations in connection with the Master Agreements in Clause 30.2 (
Guarantee and indemnity of Euronav’s obligations
) is subordinate to the rights of the Creditor Parties (other than
the Swap Banks) under this Agreement and the other Finance Documents and Clause 17 (
Application of Receipts
) shall apply to any amounts received pursuant to the guarantee under Clause 30.2 (
Guarantee and indemnity of Euronav’s
obligations
).
82
|
31
|
LIABILITY AS PRINCIPAL AND INDEPENDENT DEBTOR
|
|
31.1
|
Principal and independent debtor
|
Each Obligor shall be liable under this Agreement as a
principal and independent debtor and accordingly it shall not have, as regards this Agreement and the Guarantee, any of the rights or defences of a surety.
|
31.2
|
Waiver of rights and defences
|
Without limiting the generality of Clause 31.1
(
Principal and independent debtor
), no Obligor shall be discharged by, nor have any claim against any Creditor Party in respect of:
|
(a)
|
any amendment or supplement being made to the Finance Documents or the Master Agreements;
|
|
(b)
|
any arrangement or concession (including a rescheduling or acceptance of partial payments) relating to, or affecting, the Finance Documents or the Master Agreements;
|
|
(c)
|
any release or loss of any right or Security Interest created by the Finance Documents or the Master Agreements;
|
|
(d)
|
any failure promptly or properly to exercise or enforce any such right or Security Interest, including a failure to realise for its full market value an asset covered by such a Security Interest; or
|
|
(e)
|
any other Finance Document or the Master Agreements or any Security Interest now being or later becoming void, unenforceable, illegal or invalid or otherwise defective for any reason, including a neglect to register it.
|
|
32
|
ADJUSTMENT OF TRANSACTIONS
|
|
32.1
|
Reinstatement of obligation to pay
|
|
(a)
|
Euronav shall pay to the Security Trustee on its demand any amount which any Creditor Party is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of either Initial Borrower
or of another Security Party (or similar person) on the ground that any other provision of this Agreement or a payment by either Initial Borrower or of another Security Party, was invalid or on any similar ground.
|
|
(b)
|
The Initial Borrowers shall pay to the Security Trustee on its demand any amount which any Creditor Party is required, or agrees, to pay pursuant to any claim by, or settlement with, a trustee in bankruptcy of Euronav
on the ground that any provision any Master Agreement or a payment by Euronav pursuant to any Master Agreement, was invalid or on any similar ground.
|
|
33
|
INTEREST IN RELATION TO GUARANTEE
|
Any amount due under the Guarantee shall carry interest after the
date on which the Security Trustee demands payment of it until it is actually paid, unless interest on that same amount also accrues under the other provisions of this Agreement.
|
33.2
|
Calculation of interest
|
Interest under the Guarantee shall be calculated and accrue in
the same way as interest under Clause 7 (
Default Interest
) save that, for the avoidance of doubt, this Clause 33.2
83
(
Calculation of interest
) does not apply to any amount payable under a Master Agreement in respect of any continuing Designated Transaction as to which section 2(e) (
Default Interest;
Other Amounts
) of that Master Agreement shall apply.
|
33.3
|
Guarantee extends to interest payable under this Agreement
|
For the avoidance of doubt,
it is confirmed that the Guarantee by Euronav in Clause 30.1 (
Guarantee and indemnity of Initial Borrowers’ obligations
) covers all interest payable by the Initial Borrowers under this Agreement, including that payable under Clause 7
(
Default Interest
).
|
34
|
ENFORCEMENT OF GUARANTEE
|
|
34.1
|
No requirement to commence proceedings against Borrowers
|
Neither the Security Trustee
nor any other Creditor Party will need to commence any proceedings under, or enforce any Security Interest created by, (i) the provisions of this Agreement other than the Guarantee, (ii) any other Finance Document or (iii) any Master
Agreement before claiming or commencing proceedings under the Guarantee.
The Security Trustee and any Creditor Party may, for the purpose of
claiming or proving in a bankruptcy of an Initial Borrower or any other Security Party, place any sum received or recovered under or by virtue of the Guarantee or any Security Interest connected with it on a separate interest bearing suspense or
other nominal account without applying it in satisfaction of the Borrowers’ obligations under this Agreement or Euronav’s obligations under the Master Agreements.
|
35.1
|
Judgments relating to this Agreement
|
|
(a)
|
The Guarantee by Euronav in Clause 30.1 (
Guarantee and indemnity of Initial Borrowers’ obligations
) shall cover any amount payable by either Initial Borrower under or in connection with any judgment relating
to any Finance Document.
|
|
(b)
|
The Guarantee by each Initial Borrower in Clause 30.2 (
Guarantee and indemnity of Euronav’s obligations
) shall cover any amount payable by Euronav under or in connection with any judgment relating to any
Master Agreement.
|
|
36
|
SUPPLEMENTAL PROVISIONS IN RELATION TO GUARANTEE
|
|
36.1
|
Continuing guarantee
|
|
(a)
|
The Guarantee by Euronav in Clause 30.1 (
Guarantee and indemnity of Initial Borrowers’ obligations
) shall remain in force as a continuing security at all times during the Security Period until Euronav has
become a Borrower pursuant to Clause 14.16 (
Accession of Euronav and release of Initial Borrowers
).
|
|
(b)
|
The Guarantee by each Initial Borrower in Clause 30.2 (
Guarantee and indemnity of Euronav’s obligations
) shall remain in force as a continuing security at all times during the Security Period until that
Initial Borrower has been released from its obligations under the Loan Agreement pursuant to Clause 14.16 (
Accession of Euronav and release of Initial Borrowers
).
|
84
|
36.2
|
Rights cumulative, non-exclusive
|
The Security Trustee’s rights under and in
connection with the Guarantee are cumulative, may be exercised as often as appears expedient and shall not be taken to exclude or limit any right or remedy conferred by law.
|
36.3
|
No impairment of rights under Guarantee
|
If the Security Trustee omits to exercise,
delays in exercising or invalidly exercises any of its rights under the Guarantee, that shall not impair that or any other right of the Security Trustee under the Guarantee.
|
36.4
|
Guarantee not affected by other security
|
The Guarantee shall not impair, nor be
impaired by, any other guarantee, any Security Interest or any right of set-off or netting or to combine accounts which the Security Trustee or any other Creditor Party may now or later hold in connection with the Agreement or the Master Agreements.
|
36.5
|
Applicability of provisions in relation to Guarantee to other Security Interests
|
Any
Security Interest which an Obligor creates (whether at the time at which it signs this Agreement or at any later time) to secure any liability under the Guarantee shall be a principal and independent security, and Clause 31 (
Liability as
Principal and Independent Debtor
) and Clause 37 (
Invalidity of Other Provisions of This Agreement
) shall, with any necessary modifications, apply to it, notwithstanding that the document creating the Security Interest neither describes it
as a principal or independent security nor includes provisions similar to Clause 31 (
Liability as Principal and Independent Debtor
) and Clause 37 (
Invalidity of Other Provisions of This Agreement
).
|
36.6
|
Applicability of provisions in relation to Guarantee to other rights
|
Clauses 31
(
Liability as Principal and Independent Debtor
) and Clause 37 (
Invalidity of Other Provisions of This Agreement
) shall also apply to any right of set-off or netting or to combine accounts which an Obligor creates by an agreement
entered into at the time of this Agreement or at any later time (notwithstanding that the agreement does not include provisions similar to Clauses 31 (
Liability as Principal and Independent Debtor
) and Clause 37 (
Invalidity of Other
Provisions of This Agreement
)), being an agreement referring to this Agreement.
|
37
|
INVALIDITY OF OTHER PROVISIONS OF THIS AGREEMENT
|
|
37.1
|
Invalidity of this Agreement
|
In the event of:
|
(a)
|
any provision of this Agreement other than the Guarantee or this Clause 37 (
Invalidity of Other Provisions of This Agreement
) now being or later becoming void, illegal, unenforceable or otherwise invalid for any
reason whatsoever; or
|
|
(b)
|
without limiting the scope of paragraph (a), a bankruptcy of the Obligors (or any of them), the introduction of any law or any other matter resulting in the Obligors (or any of them) being discharged from liability
under this Agreement, or any provision of this Agreement other than the Guarantee or this Clause 37 (
Invalidity of Other Provisions of This Agreement
) ceasing to operate (for example, by interest ceasing to accrue);
|
the Guarantee in respect on an Obligor shall cover any amount which would have been or become payable under or in connection with this
Agreement if this Agreement had been and
85
remained entirely valid, legal and enforceable, or the Obligors (or any of them) had not suffered bankruptcy, or any combination of such events or circumstances, as the case may be, and the
Obligors had remained fully liable under it for liabilities whether invalidly incurred or validly incurred but subsequently retrospectively invalidated; and references in this Agreement to amounts payable by the Obligors (or any of them) under or in
connection with this Agreement shall include references to any amount which would have so been or become payable as aforesaid.
|
37.2
|
Invalidity of Finance Documents or Master Agreements
|
Clause 37.1 (
Invalidity of this
Agreement
) also applies to each of the other Finance Documents to which the Borrower is a party and the Master Agreements.
|
38.1
|
Rights cumulative, non-exclusive
|
The rights and remedies which the Finance Documents
give to each Creditor Party are:
|
(b)
|
may be exercised as often as appears expedient; and
|
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
|
38.2
|
Severability of provisions
|
If any provision of a Finance Document is or subsequently
becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
A Finance Document may be executed in any number of counterparts.
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.
This Agreement (other than Clause 3.5 (
Security Trustee as joint and
several creditor
) and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law. Clause 3.5 (
Security Trustee as joint and several creditor
) shall be
governed by, and construed in accordance with, Belgian law.
|
39.2
|
Exclusive English jurisdiction
|
Subject to Clause 39.3 (
Choice of forum for the
exclusive benefit of the Creditor Parties
), the courts of England shall have exclusive jurisdiction to settle any Dispute.
86
|
39.3
|
Choice of forum for the exclusive benefit of the Creditor Parties
|
Clause 39.2
(
Exclusive English jurisdiction
) is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
(a)
|
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
|
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
No Obligor shall commence any proceedings in any country other than England in relation to a Dispute.
Each Obligor irrevocably appoints Euronav (UK) Agencies Limited at its
registered office for the time being, presently at Moreau House, 3
rd
Floor, 116 Brompton Road, London SW3 1JJ, to act as its agent to receive and accept on its behalf any process or other document
relating to any proceedings in the English courts which are connected with this Agreement.
|
39.5
|
Creditor Party rights unaffected
|
Nothing in this Clause 39 (
Law and
Jurisdiction
) shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition
or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
39.6
|
Meaning of “proceedings”
|
In this Clause 39 (
Law and Jurisdiction
),
“
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure and a “
Dispute
” means any dispute arising out of or in connection with this Agreement (including a
dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement.
THIS AGREEMENT
has been entered into on the date stated at the beginning of this Agreement.
87
SCHEDULE 1
LENDERS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Total Commitment
($)
|
|
|
|
|
|
|
ABN AMRO Bank N.V.
|
|
Coolsingel 93
3012 AE
The Netherlands
Credit Matters:
Kees Tiemstra
Coolsingel 93, GL1610
3012 AE
The Netherlands
Tel: +31 10 4015192
Fax: +31 10 4015323
Email:
kees.tiemstra@nl.abnamro.com
Operations/Adminstrations:
Peter van Wijk / Martin van den Berg
OPS NL Credits / Mid-Office
Coolsingel 93, GL0914/GL1610
3012 AE
The Netherlands
Tel: +31 10 4016254 / +31 10 4016876
Fax: +31 10 4016118 / +31 10 4015323
Email:
pieter.van.wijk@nl.abnamro.com
/
martijn.m.van.den.berg@nl.abnamro.com
/
loket.leningenadministratie.ccs@nl.abnamro.com
|
|
|
55,000,000
|
|
|
|
|
|
|
Belfius Bank SA/NV
|
|
Pachecolaan 44,
1000 Brussels,
Belgium
Tel: +32 2 222 11 11
Credit Matters:
Mr Koen Vinck
Pachecolaan 44, PA 04/02
1000 Brussels,
Belgium
Tel: +32 2 222 38 47
Fax: +32 2 222 23 11
Email:
koen.vinck@belfius.be
|
|
|
22,000,000
|
|
88
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Total Commitment
($)
|
|
|
|
|
|
|
|
|
Mr Bart Ferrand
Pachecolaan 44,
PA 04/02
1000 Brussels,
Belgium
Tel: +32 2 222 20 58
Fax: +32 2 222 23 11
Email:
bart.ferrand@belfius.be
Operations / Administrations
Mr Niek Poppe / Mrs Katrien De Schepper
Pachecolaan 44, RT 20/03
1000 Brussels,
Belgium
Tel: +32 2 222 76 20 / +32 2 222 20 69
Fax: 32 2 222 79 80
Email:
nikolas.poppe@belfius.be
/
katrien.deschepper@belfius.be
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP Paribas Fortis SA/NV
|
|
3, Montagne du Parc/1KB1A,
1000
Brussels,
Belgium
|
|
|
35,000,000
|
|
|
|
|
|
|
|
|
Geert Sterck
Tel: +32 2 656 2355
Fax: +32 2 565 3403
Email:
geert.sterck@bnpparibasfortis.com
|
|
|
|
|
|
|
|
|
|
|
|
Laura Falzone
Tel: +32 2 312 07 30
Fax: +32 2 565 3403
Email:
laura.falzone@bnpparibasfortis.com
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
Paul Barnes
16 Rue de Hanovre,
75078 Paris CEDEX 2
France
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +33 1 43 16 81 20
Fax: +33 1 42 98 61
66
Email:
paul.p.barnes@bnpparibas.com
|
|
|
|
|
|
|
|
|
|
|
|
Valérie Du Bois
3, Montagne du
Parc/1KB3D,
1000 Brussels,
Belgium
|
|
|
|
|
89
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Total Commitment
($)
|
|
|
|
|
|
|
|
|
Tel: +32 2 565 2510
Fax: +32 2 565
9593
Email:
valerie.du.bois@bnpparibasfortis.com
Operations / Administrations:
Geert Sterck
3, Montagne du Parc/1KB1A,
1000 Brussels,
Belgium
Tel: +32 2 565 2355
Fax: +32 2 565 3403
Email:
geert.sterck@bnpparibasfortis.com
Laura Falzone
3, Montagne du Parc/1KB1A,
1000 Brussels,
Belgium
Tel: +32 2 312 07 30
Fax: +32 2 565 3403
Email:
laura.falzone@bnpparibasfortis.com
/
bruxelles bo export project finance.cib@bnpparibasfortis.com
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Danish Shipfinance A/S
|
|
Sankt Annae Plads 3,
|
|
|
55,000,000
|
|
|
(Danmarks Skibskredit A/S)
|
|
DK-1250 Copenhagen K,
|
|
|
|
|
|
|
|
Denmark
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +45 33 33 93 33
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
Morten Müller
|
|
|
|
|
|
|
|
Sankt Annae Plads 3,
|
|
|
|
|
|
|
|
DK-1250 Copenhagen K,
|
|
|
|
|
|
|
|
Denmark
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +45 33 33 93 33
|
|
|
|
|
|
|
|
Fax: +45 33 33 96 66
|
|
|
|
|
|
|
|
Email:
mul@shipfinance.dk
|
|
|
|
|
|
|
|
|
|
|
|
Operations/Administrations:
|
|
|
|
|
|
|
|
|
|
|
|
Morten Müller / Tabita Falk Thorsen, Loan
|
|
|
|
|
|
|
|
Admin
|
|
|
|
|
|
|
|
Sankt Annae Plads 3,
|
|
|
|
|
|
|
|
DK-1250 Copenhagen K,
|
|
|
|
|
|
|
|
Denmark
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +45 33 33 93 33
|
|
|
|
|
|
|
|
Email:
mul@shipfinance.dk
/
tft@shipfinance.dk
/
loanadmin@shipfinance.dk
|
|
|
|
|
90
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Total Commitment
($)
|
|
|
|
|
|
|
DNB Bank ASA
|
|
20 St. Dunstan’s Hill
London EC3R 8HY
UK
Tel +44 207 621 1111
Credit Matters:
Hugues Calmert
Tel: +44 207 621 6116
Fax +44 207 283 6931
Email:
hugues.calmert@dnb.no
Operations/Administrations:
Sarah Sanders
Tel: +44 207 621 6092
Email:
sarah.sanders@dnb.no
|
|
|
71,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ING Bank N.V.
|
|
Bijlmerplein 888
|
|
|
55,000,000
|
|
|
|
|
1000BV
|
|
|
|
|
|
|
|
Amsterdam
|
|
|
|
|
|
|
|
The Netherlands
Tel: +31 20 56 39102
|
|
|
|
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
|
|
|
|
H.Schuil
|
|
|
|
|
|
|
|
AMPD06.007
|
|
|
|
|
|
|
|
Bijlmerplein 888
|
|
|
|
|
|
|
|
1000 BV
|
|
|
|
|
|
|
|
Amsterdam
|
|
|
|
|
|
|
|
The Netherlands
|
|
|
|
|
|
|
|
|
|
|
|
Tel: +31 20 56 39102
|
|
|
|
|
|
|
|
Fax: +31 20 56 58211
|
|
|
|
|
|
|
|
Email:
harrv.schuil@ingbank.com
|
|
|
|
|
|
|
|
|
|
|
|
Operations/administrations:
|
|
|
|
|
|
|
|
|
|
|
|
C.D. van der Laan / L.R.M. Wester
|
|
|
|
|
|
|
|
Tel: +31 20 576 8152 / +31 20 576 0234
|
|
|
|
|
|
|
|
Email:
execution.sf.team1@ingbank.com
|
|
|
|
|
|
|
|
|
|
KBC Bank NV
|
|
Havenlaan 2
1080 Brussels
Belgium
Credit Matters:
Koen Sruyf / Dennis Ideler
Tel: +32 3 202 90 81 / +32 3 202 92 33
Fax: +32 3 202 92
72
|
|
|
35,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Total Commitment
($)
|
|
|
|
|
|
|
|
|
Email:
koen.struyf@kbc.be
/
|
|
|
|
|
|
|
|
dennis.ideler@kbc.be
|
|
|
|
|
|
|
|
Operations / Administrations:
|
|
|
|
|
|
|
|
Tamara Demarrez / Guido Lenaerts
|
|
|
|
|
|
|
|
Tel: +32 2 429 08 20 / +32 2 429 42 76
|
|
|
|
|
|
|
|
Email:
creditadmin.br2@kbc.be
|
|
|
|
|
|
|
|
|
|
Nordea Bank Norge ASA
|
|
Middelthunsgate 17
P.O. Box 1166,
Sentrum
0107 Oslo
Norway
Credit Matters:
Tel: +47 22 48 50 00
Fax: +47 22 48 66 68
Attn: Shipping, Offshore and Oil Services
Administration Matters:
Tel: (47) 22 48 50 00
Fax: (47) 22 48 42 78
Attn: International Loan Administration
|
|
|
71,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scotiabank Europe plc
|
|
201 Bishopsgate, 6th Floor,
|
|
|
30,000,000
|
|
|
|
|
London EC2M 3NS,
|
|
|
|
|
|
|
|
United Kingdom
|
|
|
|
|
|
|
|
Tel: +44 20 7638 5644
|
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
|
Alex Papavassiliou / Graeme Stark
|
|
|
|
|
|
|
|
Tel: +44 20 7826 5687 / +44 20 7826 5793
|
|
|
|
|
|
|
|
Fax: +44 20 7826 5707
|
|
|
|
|
|
|
|
Email:
|
|
|
|
|
|
|
|
alexios.papavassiliou@scotiabank.com
/
|
|
|
|
|
|
|
|
graeme.stark@scotiabank.com
|
|
|
|
|
|
|
|
Operations / Administrations:
|
|
|
|
|
|
|
|
Tony Sposato / Savi Rampat
|
|
|
|
|
|
|
|
Tel: +44 207 826 5660
|
|
|
|
|
|
|
|
Fax: +44 207 826 5666
|
|
|
|
|
|
|
|
Email:
tony.sposato@scotiabank.com
/
|
|
|
|
|
|
|
|
savi.rampat@scotiabank.com
/
|
|
|
|
|
|
|
|
gwsloansops.uk.gtb@scotiabank.com
|
|
|
|
|
92
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Total Commitment
($)
|
|
|
|
|
|
|
Skandinaviska Enskilda
|
|
SE-106 40 Stockholm,
Sweden
Tel:+46 7 71 62 10 00
Credit Matters:
Egil Aarrestad / Trine von Erpecom
P.O. Box 1843, Vika,
Filipstad Brygge 1
NO-0123 Oslo
Norway
Tel: +47 22827021 / +47 22827008
Email:
egil.aarrestad@seb.no
/ trine.von-
erpecom@seb.no
Operations / Administrations:
Structured Credits Operations
Risneleden 110,106 40,
Stockholm,
Sweden
Tel: +46-8-7638141
Email:
sco@seb.se
|
|
|
71,000,000
|
|
|
Banken AB (publ)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93
SCHEDULE 2
SWAP BANKS
|
|
|
|
|
Swap Bank
|
|
Booking Office
|
|
|
|
|
Belfius Bank SA/NV
|
|
Pachecolaan 44,
|
|
|
|
1000 Brussels,
|
|
|
|
Belgium
|
|
|
|
|
|
|
Tel: +32 2 222 11 11
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
Mr Koen Vinck
|
|
|
|
Pachecolaan 44, PA 04/02
|
|
|
|
1000 Brussels,
|
|
|
|
Belgium
|
|
|
|
|
|
|
Tel: +32 2 222 38 47
|
|
|
|
|
|
|
Fax: +32 2 222 23 11
|
|
|
|
|
|
|
Email:
koen.vinck@belfius.be
|
|
|
|
|
|
|
Mr Bart Ferrand
|
|
|
|
Pachecolaan 44, PA 04/02
|
|
|
|
1000 Brussels,
|
|
|
|
Belgium
|
|
|
|
|
|
|
Tel: +32 2 222 20 58
|
|
|
|
|
|
|
Fax: +32 2 222 23 11
|
|
|
|
|
|
|
Email:
bart.ferrand@belfius.be
|
|
|
|
|
|
|
Operations / Administrations
|
|
|
|
|
|
|
Mr Niek Poppe / Mrs Katrien De Schepper
|
|
|
|
Pachecolaan 44, RT 20/03
|
|
|
|
1000 Brussels,
|
|
|
|
Belgium
|
|
|
|
|
|
|
Tel: +32 2 222 76 20 / +32 2 222 20 69
|
|
|
|
|
|
|
Fax: 32 2 222 79 80
|
|
|
|
|
|
|
Email:
nikolas.poppe@belfius.be
/
katrien.deschepper@belfius.be
|
|
|
|
|
DNB Bank ASA
|
|
20 St. Dunstan’s Hill
|
|
|
|
London EC3R 8HY
|
|
|
|
UK
|
|
|
|
|
|
|
Tel +44 207 621 1111
|
|
|
|
Fax +44 207 626 5956
|
|
|
|
Attn: Shipping, Offshore & Logistics Department
|
94
|
|
|
|
|
ING Bank N.V.
|
|
ING Commercial Banking/Financial Markets
|
|
|
|
Avenue Marnix 24
B-1000 Brussels
|
|
|
|
Belgium
|
|
|
|
|
|
|
Tel. +32 2 557 15 71
|
|
|
|
|
|
|
Fax +32 2 557 19 72
|
|
|
|
|
|
|
Attn: Kurt Lemaire
|
|
|
|
|
KBC Bank NV
|
|
Havenlaan 2
|
|
|
|
1080 Brussels
|
|
|
|
Belgium
|
|
|
|
|
|
|
Attn: Mr. Joris Vermeulen
|
|
|
|
|
|
|
Tel: +32 2 417 49 61
|
|
|
|
|
Nordea Bank Finland Plc
|
|
Aleksanterinkatu 36
|
|
|
|
(FIN – 00020 NORDEA)
|
|
|
|
01000 Helsinki
|
|
|
|
Finland
|
|
|
|
|
Scotiabank Europe plc
|
|
201 Bishopsgate, 6th Floor,
|
|
|
|
London EC2M 3NS,
|
|
|
|
United Kingdom
|
|
|
|
|
|
|
Tel: +44 20 7638 5644
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
Alex Papavassiliou / Graeme Stark
|
|
|
|
|
|
|
Tel: +44 20 7826 5687 / +44 20 7826 5793
|
|
|
|
|
|
|
Fax: +44 20 7826 5707
|
|
|
|
|
|
|
Email:
alexios.papavassiliou@scotiabank.com
/
graeme.stark@scotiabank.com
|
|
|
|
|
|
|
Operations / Administrations:
|
|
|
|
|
|
|
Tony Sposato / Savi Rampat
|
|
|
|
|
|
|
Tel: +44 207 826 5660
|
|
|
|
|
|
|
Fax: +44 207 826 5666
|
|
|
|
|
|
|
Email:
tony.sposato@scotiabank.com
/
savi.rampat@scotiabank.com
/
gwsloansops.uk.gtb@scotiabank.com
|
95
|
|
|
|
|
Skandinaviska Enskilda Banken AB (publ)
|
|
Kungstradgardsgatan 8
|
|
|
|
SE-106 40 Stockholm
|
|
|
|
Sweden
|
|
|
|
|
|
|
Credit Matters:
|
|
|
|
|
|
|
Tel: +47 22 82 70 21
|
|
|
|
|
|
|
Attn: Egil Aarrestad
|
|
|
|
|
|
|
Administration Matters:
|
|
|
|
|
|
|
Tel: +46 8 763 8551
|
|
|
|
Fax: +46 8 611 0384
|
|
|
|
|
|
|
Attn: Structured Credits Operations
|
96
SCHEDULE 3
DRAWDOWN NOTICE
|
To:
|
Nordea Bank Norge ASA
|
Middelthunsgate 17
P.O. Box 1166, Sentrum
0107 Oslo
Norway
|
Attn:
|
Loans Administration
|
[
—
]
DRAWDOWN NOTICE
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated [
—
] 2014 and made between ourselves, as joint and several Borrowers, Euronav NV as
guarantor, the Lenders referred to therein, the Swap Banks referred to therein, the Lead Arrangers, Co-Arrangers and Bookrunners referred to therein, yourselves as Agent and Security Trustee in connection with a term loan facility of US$500,000,000.
Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
|
2
|
We request to borrow the Advance in relation to m.v. [
—
] as follows:
|
|
(b)
|
Drawdown Date: [
—
];
|
|
(c)
|
Duration of the [first] Interest Period shall be [
—
] months;
|
|
(d)
|
Payment instructions: account of [
—
] and numbered [
—
] with [
—
]
of [
—
].
|
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 (
Representations and Warranties
) of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the
circumstances now existing;
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Advance.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
[Name of
Signatory]
|
|
|
|
|
|
|
for and on behalf of
[
—
]
[
—
]
|
97
SCHEDULE 4
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents
and fees referred to in Clause 9.1(a).
|
1
|
A duly executed original of this Agreement and the Agency and Trust Deed.
|
|
2
|
Copies of the certificate of incorporation and constitutional documents of each Borrower and each Security Party.
|
|
3
|
In each case if required for the provisions of the legal opinions referred to in paragraph 13, copies of the resolutions of the directors and shareholders of each Borrower and each Security Party authorising the
execution of each of the Finance Documents to which that Borrower or Security Party (as the case may be) is a party.
|
|
4
|
The original of any power of attorney under which any Finance Document is to be executed on behalf of a Borrower or Security Party.
|
|
5
|
The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Accounts.
|
|
6
|
Copies of all consents which any Borrower or Security Party requires to enter into, or make any payment under, any Finance Document or the Framework Agreement or any MOA.
|
|
7
|
Copies of each MOA and the Framework Agreement and of all documents signed or issued by any Borrower, the Security Party or the Seller (or any of them) under or in connection with any of them.
|
|
8
|
Such documentary evidence as the Agent and its legal advisers may require in relation to the due authorisation and execution by the relevant Seller of each MOA and the Framework Agreement and of all documents to be
executed by the Seller under the MOA and the Framework Agreement.
|
|
9
|
Valuations of each Ship to determine its Fair Market Value, addressed to the Agent and the Lenders, stated to be for the purposes of this Agreement and dated not earlier than the date falling 30 days prior to the date
of this Agreement and obtained in accordance with Clause 15 (
Security Cover
) and showing that the aggregate Fair Market Value of the Ships is equal to or greater than 125 per cent. of the Total Commitments.
|
|
10
|
Documentary evidence that the agent for service of process named in Clause 39 (
Law and Jurisdiction
) has accepted its appointment.
|
|
11
|
The Agent and Lenders have been provided with all information and documentation they have requested in order to carry out and be reasonably satisfied with all necessary “know your customer” or other similar
checks under all applicable laws and regulations pursuant to the transactions contemplated by this Agreement and to satisfy all internal compliance policies of the Agent and the Lenders in relation to “know you customer” requirements.
|
|
12
|
The Agent has received all fees pursuant to the fee letter or letters separately agreed between the Borrowers and the Agent.
|
|
13
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium and such other relevant jurisdictions as the Agent may require.
|
98
PART B
The following are the documents referred to in Clause 9.1(b). The “
Ship
” means the particular Ship to which the Advance relates and the
“
Owner
” means the particular Borrower which owns that Ship.
|
1
|
A duly executed original of the Mortgage, the Deed of Covenant (if applicable), the Account Pledge in relation to each Obligor and the General Assignment in relation to the relevant Ship and of the Master Agreement
Assignment in relation to any Master Agreement executed on or prior to the relevant Drawdown Date (and of each document required to be delivered by their respective terms).
|
|
2
|
In each case if required for the provisions of the legal opinions referred to in paragraph 9, copies of the resolutions of the directors and shareholders of the Owner authorising the execution of each of the Finance
Documents to which the Owner is a party and of Euronav authorising execution of each Master Agreement Assignment.
|
|
3
|
The original of any power of attorney under which any Finance Document is to be executed on behalf of the Owner or Euronav.
|
|
4
|
The Agent and Lenders have been provided with all information and documentation they have requested in order to carry out and be reasonably satisfied with all further necessary “know your customer” or other
similar checks under all applicable laws and regulations pursuant to the transactions contemplated by this Agreement and to satisfy all internal compliance policies of the Agent and the Lenders in relation to “know you customer”
requirements.
|
|
5
|
Documentary evidence that Euronav has received net cash proceeds of $350,000,000 from the issuance of common stock of Euronav during the period 1 January 2014 to the first Drawdown Date (such evidence being
required to be provided prior to the first Drawdown Date only).
|
|
6
|
Documentary evidence that Euronav has issued Qualifying Notes in an amount of at least $200,000,000.
|
|
7
|
Documentary evidence that the relevant Ship:
|
|
(a)
|
is definitively and permanently registered in the name of the Owner under the relevant Approved Flag;
|
|
(b)
|
is in the absolute and unencumbered ownership of the Owner save as contemplated by the Finance Documents;
|
|
(c)
|
maintains class acceptable to the Agent free of all overdue recommendations and conditions of an Approved Classification Society;
|
|
(d)
|
the Mortgage in relation to it has been duly registered against that Ship as valid first priority or preferred (as the case may be) ship mortgage in accordance with the laws of the relevant Approved Flag; and
|
|
(e)
|
it is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
|
|
8
|
Documents establishing that the Ship will, as from the relevant Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
|
|
(a)
|
the Manager’s Undertaking in respect of the Ship; and
|
99
|
(b)
|
copies of the relevant Approved Manager’s Document of Compliance and of that Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Agent
requires) and ISSC.
|
|
9
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium, Norway and, if a different jurisdiction, the country where the relevant Owner is incorporated and
the country where the Ship is registered and such other relevant jurisdictions as the Agent may require.
|
|
10
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the relevant Ship as the Agent may require.
|
|
11
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
Each of the documents specified in paragraphs 3, 6 and 7 of Part A and every other copy document delivered under this Schedule 4 (
Condition Precedent
Documents
) shall be certified as a true and up to date copy by a director or secretary (or equivalent officer) of the relevant Obligor.
100
SCHEDULE 5
TRANSFER CERTIFICATE
The Transferor
and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
|
To:
|
[Name of Agent] for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee, each Lender, each Swap Bank and each Arranger, as defined in the Loan Agreement referred to below.
|
|
1
|
This Certificate relates to a loan agreement (the “
Loan Agreement
”) dated [
—
] 2014 and made between
(1) [
—
] and [
—
] (the “
Borrowers
”), (2) Euronav NV as guarantor (“
Euronav
”), (3) the banks and
financial institutions named therein as Lenders, (4) the banks and financial institutions named therein as Swap Banks, (5) the Lead Arrangers and Co-Arrangers as defined therein, (6) DNB Bank ASA, Nordea Bank Norge ASA and
Skandinaviska Enskilda Banken AB (publ) as Bookrunners and (7) Nordea Bank Norge ASA as Agent and Security Trustee for a term loan facility of US$500,000,000.
|
|
2
|
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
|
“
Relevant Parties
” means the Agent, each Borrower, Euronav, each Security Party, the Security Trustee, each Arranger and each
Lender and each Swap Bank;
“
Transferor
” means [full name] of [lending office]; and
“
Transferee
” means [full name] of [lending office].
|
3
|
The effective date of this Certificate is [
—
]
Provided that
this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
|
|
4
|
The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document
in relation to [
—
] per cent. of its Contribution, which percentage represent $[
—
].
|
|
5
|
By virtue of this Transfer Certificate and Clause 26 (
Transfers and Changes in Lending Offices
) of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amount to $[
—
] [from [
—
] per cent. of its Commitment, which percentage represent $[
—
]], and the Transferee
acquires a Commitment of $[
—
].
|
|
6
|
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 26 (
Transfers and Changes in
Lending Offices
) of the Loan Agreement provides will become binding on it upon this Certificate taking effect.
|
|
7
|
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in
accordance with Clause 26 (
Transfers and Changes in Lending Offices
) of the Loan Agreement.
|
101
|
(a)
|
warrants to the Transferee and each Relevant Party that:
|
|
|
(i)
|
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained ail consents which are required in connection with this transaction; and
|
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferor;
|
|
(b)
|
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and
|
|
(c)
|
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under
this Certificate or for a similar purpose.
|
|
(a)
|
confirms that it has received a copy of the Loan Agreement and each other Finance Document;
|
|
(b)
|
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee, any Arranger, any Lender or any Swap Bank in the event that:
|
|
|
(i)
|
any of the Finance Documents prove to be invalid or ineffective,
|
|
|
(ii)
|
any Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;
|
|
|
(iii)
|
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of any Borrower or Security Party
under the Finance Documents;
|
|
(c)
|
agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee, any Arranger, any Lender or any Swap Bank in the event that this Certificate proves to be invalid or ineffective;
|
|
(d)
|
warrants to the Transferor and each Relevant Party that:
|
|
|
(i)
|
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and
|
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferee; and
|
|
(e)
|
confirms the accuracy of the administrative details set out below regarding the Transferee.
|
|
10
|
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or
expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence
or dishonesty of the Agent’s or the Security Trustee’s own officers or employees.
|
|
11
|
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim,
proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the
full amount demanded by it.
|
102
|
12
|
The Transferee confirms to the Transferor and each of the Creditor Parties that it:
|
|
(a)
|
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in the Loan and
has not relied exclusively on any information provided to it by the Transferor or any other Creditor Party in connection with any Finance Document or the Security Interests created by the Finance Documents; and
|
|
(b)
|
will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities throughout the Security Period.
|
|
13
|
The Transferor makes no representation or warranty and assumes no responsibility to the Transferee for the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any
other document and any representations or warranties implied by law are excluded.
|
|
|
|
|
|
[Name of Transferor]
|
|
[Name of Transferee]
|
|
|
|
|
By:
|
|
By:
|
|
|
|
|
Date:
|
|
Date:
|
Agent
|
|
|
Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party
|
|
|
|
[Name of Agent]
|
|
|
|
By:
|
|
|
|
Date:
|
103
Administrative Details of Transferee
Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Telex:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Telex:
Fax:
Account for payments:
|
Note
:
|
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor’s interest in the security constituted by the Finance Documents in the Transferor’s or
Transferee’s jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
|
104
SCHEDULE 6
DETAILS OF SHIPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship name
|
|
|
|
|
|
|
|
|
|
Maximum Advance
|
|
|
Borrower
|
|
Prior to acquisition by Borrowers
|
|
To be renamed
|
|
DWT
|
|
|
Built
|
|
|
Shipyard
|
|
amount
|
|
|
Borrower A
|
|
MAERSK ILMA
|
|
ILMA
|
|
|
318,477
|
|
|
|
2012
|
|
|
Hyundai Heavy Industries Co., Ltd. (“
Hyundai
”)
|
|
$
|
42,857,144
|
|
|
Borrower A
|
|
MAERSK INGRID
|
|
INGRID
|
|
|
318,478
|
|
|
|
2012
|
|
|
Hyundai
|
|
$
|
42,857,143
|
|
|
Borrower A
|
|
MAERSK ISABELLA
|
|
IRIS
|
|
|
318,478
|
|
|
|
2012
|
|
|
Hyundai
|
|
$
|
42,857,143
|
|
|
Borrower B
|
|
MAERSK NAUTICA
|
|
NAUTICA
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian Shipbuilding Industry Co., ltd (“
Dalian
”)
|
|
$
|
27,551,020
|
|
|
Borrower B
|
|
MAERSK NAUTILUS
|
|
NAUTILUS
|
|
|
307,284
|
|
|
|
2006
|
|
|
Dalian
|
|
$
|
20,918,367
|
|
|
Borrower B
|
|
MAERSK NAVARIN
|
|
NAVARIN
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
$
|
23,979,592
|
|
|
Borrower B
|
|
MAERSK NECTAR
|
|
NECTAR
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
$
|
27,551,020
|
|
|
Borrower B
|
|
MAERSK NEPTUNE
|
|
NEPTUNE
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
$
|
23,979,592
|
|
|
Borrower B
|
|
MAERSK NEWTON
|
|
NEWTON
|
|
|
307 284
|
|
|
|
2009
|
|
|
Dalian
|
|
$
|
30,612,245
|
|
|
Borrower B
|
|
MAERSK NOBLE
|
|
NOBLE
|
|
|
307,284
|
|
|
|
2008
|
|
|
Dalian
|
|
$
|
27,551,020
|
|
|
Borrower B
|
|
MAERSK NUCLEUS
|
|
NUCLEUS
|
|
|
307,284
|
|
|
|
2007
|
|
|
Dalian
|
|
$
|
23,979,592
|
|
|
Borrower A
|
|
MAERSK SARA
|
|
SARA
|
|
|
323,183
|
|
|
|
2011
|
|
|
STX Offshore & Shipbuilding Co., Ltd. (“
STX
”)
|
|
$
|
39,795,918
|
|
105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship name
|
|
|
|
|
|
|
|
|
|
Maximum Advance
|
|
|
Borrower
|
|
Prior to acquisition by Borrowers
|
|
To be renamed
|
|
DWT
|
|
|
Built
|
|
|
Shipyard
|
|
amount
|
|
|
Borrower A
|
|
MAERSK SIMONE
|
|
SIMONE
|
|
|
323,182
|
|
|
|
2012
|
|
|
STX
|
|
$
|
42,857,143
|
|
|
Borrower A
|
|
MAERSK SONIA
|
|
SONIA
|
|
|
322,000
|
|
|
|
2012
|
|
|
STX
|
|
$
|
42,857,143
|
|
|
Borrower A
|
|
MAERSK SANDRA
|
|
SANDRA
|
|
|
323,527
|
|
|
|
2011
|
|
|
STX
|
|
$
|
39,795,918
|
|
106
SCHEDULE 7
DESIGNATION NOTICE
|
To:
|
Nordea Bank Norge ASA
|
[
date
]
Dear Sirs
Loan Agreement dated [
—
] 2014 made between (i) [
—
] and [
—
] as joint and
several Borrowers, (ii) Euronav NV as guarantor (iii) the Lenders as referred to therein, (iv) the Swap Banks as referred to therein, (v) the Lead Arrangers and the Co-Arrangers as referred to therein and (vi) yourselves as Agent
and Security Trustee for a loan facility of up to US$500,000,000 (the “Loan Agreement”)
We refer to:
|
2
|
the Master Agreement dated as of [
—
] made between [
—
] [and
[
—
]]; and
|
|
3
|
a Confirmation delivered pursuant to the said Master Agreement dated [
—
] and addressed by [
—
] to [
—
].
|
In accordance with the terms of the Loan Agreement, we hereby give you notice of the said
Confirmation and hereby confirm that the Transaction evidenced by it will be designated as a “Designated Transaction” for the purposes of the Loan Agreement and the Finance Documents.
Yours faithfully
|
|
|
|
|
|
|
|
|
|
|
|
|
for and on behalf of
|
|
|
|
for and on behalf of
|
|
EURONAV NV
|
|
|
|
[SWAP BANK]
|
107
SCHEDULE 8
FORM OF CERTIFICATE OF COMPLIANCE
|
To:
|
Nordea Bank Norge ASA
|
[Date]
OFFICER’S CERTIFICATE
This
Certificate is rendered pursuant to clause 11.6(e) of the loan agreement dated [
—
] 2014 (the “
Loan Agreement
”) and entered into between (i) [
—
] and [
—
], as joint and several Borrowers, (ii) Euronav NV as guarantor (“
Euronav
”), (iii) the banks and financial
institutions listed in Schedule 1 therein as Lenders, (iv) the banks and financial institutions listed in Schedule 2 therein as Swap Banks, (v) the Lead Arrangers as referred to therein, (vi) the Co-Arrangers as referred to therein,
and (vii) Nordea Bank Norge ASA as Agent and Security Trustee, relating to a term loan facility of US$500,000,000. Words and expressions defined in the Loan Agreement shall have the same meanings when used herein.
I, the Chief Financial Officer of Euronav, hereby certify that:
|
1
|
Attached to this Certificate [are] [is] the latest [audited consolidated accounts of the Euronav Group and audited individual accounts of Euronav for the financial year ending on
[
—
]] [unaudited consolidated balance sheet of the Euronav Group and the unaudited individual balance sheet of Euronav in relation to the [first] [second] six months of the financial year ending on
[
—
]] (the “
Accounts
”).
|
|
2
|
Set out below are the respective amounts, in US Dollars, of the Cash, Consolidated Current Assets, Consolidated Current Liabilities, Free Liquid Assets, Stockholders’ Equity, Total Assets and Total Indebtedness of
the Euronav Group as at [
—
]:
|
|
|
|
|
|
|
|
|
|
US Dollars
|
|
|
|
|
|
Cash
|
|
|
[
—
|
]
|
|
|
|
|
Consolidated Current Assets
|
|
|
[
—
|
]
|
|
|
|
|
Consolidated Current Liabilities
|
|
|
[
—
|
]
|
|
|
|
|
Free Liquid Assets
|
|
|
[
—
|
]
|
|
|
|
|
Stockholders’ Equity
|
|
|
[
—
|
]
|
|
|
|
|
Total Assets
|
|
|
[
—
|
]
|
|
|
|
|
Total Indebtedness
|
|
|
[
—
|
]
|
108
|
3
|
Accordingly, as at the date of this Certificate the financial covenants set out in clause 12.5 of the Loan Agreement [are] [are not] complied with, in that as at [
—
]:
|
|
(a)
|
Consolidated Working Capital is US$[
—
];
|
|
(b)
|
Free Liquid Assets are US$[
—
];
|
|
(c)
|
Cash is US$[
—
]; and
|
|
(d)
|
the ratio of Stockholders’ Equity to Total Assets is [
—
] per cent.;
|
[or, as the case may be, specify in what respect any of the financial covenants are not complied with.]
|
4
|
As at [
—
] no Event of Default has occurred and is continuing.
|
[or, specify/identify any Event of Default]
The Borrowers are in compliance with clause 15.1 of the Loan Agreement.
[
If not, specify this and what is proposed as regards Clause 15.2
]
The Fair Market Value of the Ships which are subject to a Mortgage is as follows as at [
date
]:
|
|
|
|
|
|
|
|
|
Name of Ship
|
|
Name of first shipbroker
providing valuation
|
|
Name of second shipbroker
providing valuation
|
|
Average market value
|
|
|
|
|
|
|
[
—
]
|
|
[
—
]
|
|
[
—
]
|
|
[
—
]
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
EURONAV NV
|
|
Note:
|
Supporting Schedules to be attached.
|
109
EXECUTION PAGES
|
|
|
|
|
|
|
|
|
|
|
BORROWERS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
|
|
|
EURONAV SHIPPING NV
|
|
|
|
)
|
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
|
|
|
EURONAV TANKERS NV
|
|
|
|
)
|
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
GUARANTOR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
|
|
|
EURONAV NV
|
|
|
|
)
|
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
LENDERS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
Nigel Willis
|
|
|
|
|
|
)
|
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
|
|
)
|
|
|
|
|
ABN AMRO BANK N.V.
|
|
|
|
)
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
Meryl Rowlands
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
)
|
|
|
Nigel Willis
|
|
for and on behalf of
|
|
|
|
)
|
|
|
Attorney-in-Fact
|
|
BELFIUS BANK SA/NV
|
|
|
|
)
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Meryl Rowlands
Trainee Solicitor
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
110
|
|
|
|
|
|
|
Execution Pages
|
|
|
|
|
|
|
|
|
|
BORROWERS
|
|
|
|
|
|
|
|
|
|
SIGNED
by Hugo De Stoop
|
|
)
|
|
/s/ Hugo De Stoop
|
|
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
EURONAV SHIPPING NV
|
|
)
|
|
|
|
in the presence of: /s/ Maxime Van Eelke
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by Hugo De Stoop
|
|
)
|
|
/s/ Hugo De Stoop
|
|
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
EURONAV TANKERS NV
|
|
)
|
|
|
|
in the presence of: /s/ Maxime Van Eelke
|
|
)
|
|
|
|
|
|
|
|
GUARANTOR
|
|
|
|
|
|
|
|
|
|
SIGNED
by Hugo De Stoop
|
|
)
|
|
/s/ Hugo De Stoop
|
|
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
EURONAV NV
|
|
)
|
|
|
|
in the presence of: /s/ Maxime Van Eelke
|
|
)
|
|
|
|
|
|
|
|
LENDERS
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
ABN AMRO BANK N.V.
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
BELFIUS BANK SA/NV
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
110
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
BNP PARIBAS FORTIS SA/NV
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
DANISH SHIPFINANCE A/S (DANMARKS
|
|
)
|
|
|
|
SKIBSKREDIT A/S)
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
DNB BANK ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
ING BANK N.V.
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
KBC BANK NV
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
111
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
SCOTIABANK EUROPE PLC
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
SKANDINAVISKA ENSKILDA
|
|
)
|
|
|
|
BANKEN AB (PUBL)
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SWAP BANKS
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
BELFIUS BANK SA/NV
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
DNB BANK ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
ING BANK N.V.
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
KBC BANK NV
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
112
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
NORDEA BANK FINLAND PLC
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
SCOTIABANK EUROPE PLC
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
SKANDINAVISKA ENSKILDA
|
|
)
|
|
|
|
BANKEN AB (PUBL)
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
LEAD ARRANGERS
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
ABN AMRO BANK N.V.
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
DANISH SHIPFINANCE A/S (DANMARKS
|
|
)
|
|
|
|
SKIBSKREDIT A/S)
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
DNB BANK ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
113
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
ING BANK N.V.
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
MERCHANT BANKING, SKANDINAVISKA
|
|
)
|
|
|
|
ENSKILDA BANKEN AB (PUBL)
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
CO-ARRANGERS
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
BNP PARIBAS FORTIS SA/NV
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
KBC BANK NV
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
SCOTIABANK EUROPE PLC
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
114
|
|
|
|
|
|
|
BOOKRUNNERS
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
DNB BANK ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
MERCHANT BANKING, SKANDINAVISKA
|
|
)
|
|
|
|
ENSKILDA BANKEN AB (PUBL)
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
AGENT
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
/s/ Nigel Willis
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
for and on behalf of
|
|
)
|
|
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
|
|
|
|
|
SECURITY TRUSTEE
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
)
|
|
/s/ Nigel Willis
|
|
for and on behalf of
|
|
)
|
|
Attorney-in-Fact
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
|
|
in the presence of: /s/ Meryl Rowlands
|
|
)
|
|
|
115
EXHIBIT 10.6
Date 24 July 2009
TI
AFRICA LIMITED
TI ASIA LIMITED
as joint and several Obligors
-
and -
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as
Banks
- and -
NORDEA
BANK FINLAND PLC
as Issuing Bank
- and -
NORDEA BANK NORGE ASA
as Agent
- and -
ING BANK N.V.
as Security
Trustee
GUARANTEE FACILITY AGREEMENT
relating to
a US$50,000,000 guarantee facility
Watson Farley & Williams
London
INDEX
|
|
|
|
|
|
|
|
|
Clause
|
|
|
|
Page
|
|
|
|
|
|
|
1
|
|
INTERPRETATION
|
|
|
1
|
|
|
|
|
|
|
2
|
|
POSITION OF THE ISSUING BANK, THE BANKS AND THE MAJORITY BANKS
|
|
|
9
|
|
|
|
|
|
|
3
|
|
GUARANTEE FACILITY
|
|
|
10
|
|
|
|
|
|
|
4
|
|
REDUCTION OF GUARANTEE
|
|
|
10
|
|
|
|
|
|
|
5
|
|
SETTLEMENT OF GUARANTEE
|
|
|
11
|
|
|
|
|
|
|
6
|
|
INDEMNITY OF THE OBLIGORS
|
|
|
11
|
|
|
|
|
|
|
7
|
|
INDEMNITIES OF THE BANKS
|
|
|
14
|
|
|
|
|
|
|
8
|
|
DEFAULT INTEREST
|
|
|
15
|
|
|
|
|
|
|
9
|
|
CONDITIONS PRECEDENT
|
|
|
16
|
|
|
|
|
|
|
10
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
17
|
|
|
|
|
|
|
11
|
|
GENERAL UNDERTAKINGS
|
|
|
18
|
|
|
|
|
|
|
12
|
|
CORPORATE UNDERTAKINGS
|
|
|
20
|
|
|
|
|
|
|
13
|
|
PAYMENTS AND CALCULATIONS
|
|
|
20
|
|
|
|
|
|
|
14
|
|
APPLICATION OF RECEIPTS
|
|
|
22
|
|
|
|
|
|
|
15
|
|
LOCATION OF ACCOUNT
|
|
|
22
|
|
|
|
|
|
|
16
|
|
EVENTS OF DEFAULT
|
|
|
23
|
|
|
|
|
|
|
17
|
|
FEES AND EXPENSES
|
|
|
27
|
|
|
|
|
|
|
18
|
|
INDEMNITIES
|
|
|
28
|
|
|
|
|
|
|
19
|
|
NO SET-OFF OR TAX DEDUCTION
|
|
|
29
|
|
|
|
|
|
|
20
|
|
ILLEGALITY, ETC.
|
|
|
30
|
|
|
|
|
|
|
21
|
|
INCREASED COSTS
|
|
|
31
|
|
|
|
|
|
|
22
|
|
SET-OFF
|
|
|
32
|
|
|
|
|
|
|
23
|
|
TRANSFERS AND CHANGES IN BOOKING OFFICES
|
|
|
33
|
|
|
|
|
|
|
24
|
|
VARIATIONS AND WAIVERS
|
|
|
34
|
|
|
|
|
|
|
25
|
|
NOTICES
|
|
|
35
|
|
|
|
|
|
|
26
|
|
JOINT AND SEVERAL LIABILITY
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
27
|
|
SUPPLEMENTAL
|
|
|
38
|
|
|
|
|
|
|
28
|
|
LAW AND JURISDICTION
|
|
|
38
|
|
|
|
|
|
SCHEDULE 1 BANKS AND COMMITMENTS
|
|
|
40
|
|
|
|
|
|
SCHEDULE 2 GUARANTEE ISSUE REQUEST
|
|
|
41
|
|
|
|
|
|
SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS
|
|
|
42
|
|
|
|
|
|
SCHEDULE 4 FORM OF GUARANTEE
|
|
|
44
|
|
|
|
|
|
EXECUTION PAGES
|
|
|
46
|
|
THIS AGREEMENT
is made on 24 July 2009
BETWEEN
|
(1)
|
TI AFRICA LIMITED
and
TI ASIA LIMITED,
each a company incorporated in Hong Kong whose registered office is at Room 3206, 32nd Floor, Lippo Centre, Tower Two, No 89 Queensway, Hong Kong as joint and several
obligors (the “
Obligors
” and each an “
Obligor
”);
|
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as
Banks
;
|
|
(3)
|
NORDEA BANK FINLAND PLC
, as
Issuing Bank
;
|
|
(4)
|
NORDEA BANK NORGE ASA
, as
Agent
; and
|
|
(5)
|
ING BANK N.V.
, as
Security Trustee
.
|
BACKGROUND
The Banks have agreed to make available to the Obligors a guarantee facility of up to US$50,000,000 in order to issue 2 guarantees of up to US$25,000,000 each
as required by a contract entered into between each Obligor and the Beneficiary for the use by the Beneficiary, in the Al Shaheen Oil Field offshore of Qatar, of the FSO owned by the relevant Obligor after it is converted into a floating storage and
off loading facility.
IT IS AGREED
as follows:
|
1.1
|
Definitions.
Subject to Clause 1.5, in this Agreement:
|
“
Agency and Trust
Deed
” means the agency and trust deed dated the same date as this Agreement and made between the same parties;
“
Agent
” means Nordea Bank Norge ASA, acting in such capacity through its office at Middelthunsgate 17, N-0107 Oslo, Norway, or
any successor of it appointed under clause 5 of the Agency and Trust Agreement;
“
Agreed Form
” means in relation to any
document, that document in the form approved by the Agent (acting on the instructions of the Issuing Bank and all the Banks) or as otherwise approved in accordance with any other approval procedure specified in any relevant provision of a Finance
Document;
“
Availability Period
” means, in relation to a Guarantee, the period commencing on the date of this Agreement
and ending on:
|
|
(a)
|
in respect of the Guarantee in relation to “TI ASIA”, the day falling 2 months after the Provisional Delivery Date for that FSO and, in respect of the Guarantee in relation to the “TI AFRICA”, the
day falling 4 months after the Provisional Delivery Date for that FSO (or, in either case, such later date as the Agent may, with the authorisation of the Majority Banks, agree with the Obligors); or
|
|
|
(b)
|
if earlier, the date on which the Total Commitments are fully cancelled or terminated;
|
“
Available Commitment
” means, in relation to a Bank at any time, an amount equal to:
|
|
(a)
|
its Commitment less its Outstandings at that time; or
|
|
|
(b)
|
zero, if its Outstandings at that time exceed its Commitment,
|
(and “
Total Available Commitments
” means the aggregate of the Available
Commitments of all the Banks);
“
Bank
” means a bank or financial institution listed in Schedule 1 and acting through its
branch indicated in Schedule 1 (or through another branch notified to the Agent under Clause 23.6 or its successor or assign;
“
Beneficiary
” means Maersk Oil Qatar AS, as the person in whose favour the Guarantees have been issued under this Agreement;
“
Business Day
” means a day on which banks are open in London, Oslo, Brussels and Helsinki and, in respect of a day on
which a payment is required to be made under a Finance Document, also in New York City;
“
Commitment
” means, in relation
to a Bank, the amount set forth opposite its name in Schedule 1, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “
Total Commitments
” means the aggregate of the Commitments of all the
Banks);
“
Contractual Currency
” has the meaning given in Clause 18.4;
“
Co-ordination Deed
” means the co-ordination deed dated the same date as this Agreement made between (i) the Obligors,
(ii) ING Bank N.V. in its capacity as agent for the Creditor Parties (as defined in the Loan Agreement), (iii) the Agent as agent for the Creditor Parties and (iv) the Security Trustee in its capacity as security trustee under the
Loan Agreement and this Agreement;
“
Corporate Guarantees
” means, in relation to a Corporate Guarantor, the guarantee to
be executed by each Corporate Guarantor in favour of the Issuing Bank in the Agreed Form and in the singular means each such Corporate Guarantee;
“
Corporate Guarantors
” means together, Euronav and OSG and in the singular means each such company;
“
Creditor Party
” means the Issuing Bank, the Agent, the Security Trustee or any Bank, whether as at the date of this Agreement
or at any later time;
“
Current Percentage
” means, in relation to a Bank and in respect of the Guarantees, the proportion,
expressed as a percentage, which the Bank’s Available Commitment bore to the Total Available Commitments as at the Guarantee Issue Date of the Guarantees;
“
Dollars
” and “
$
” means the lawful currency for the time being of the United States of America;
“
Euronav
” means Euronav NV, a company incorporated in Belgium whose registered office is at De Gerlachekaai 20, B-2000 Antwerp
1, Belgium;
“
Event of Default
” means any of the events or circumstances described in Clause 16.1;
“
Finance Documents
” means:
|
|
(b)
|
the Agency and Trust Deed;
|
|
|
(c)
|
the Corporate Guarantees;
|
2
|
|
(d)
|
the Loan/Guarantee Finance Documents;
|
|
|
(e)
|
the Co-ordination Deed; and
|
|
|
(f)
|
any other document (whether creating a Security Interest or not) which is executed at any time by the Obligors or any other person as security for, or to establish any form of subordination or priorities arrangement in
relation to, any amount payable to the Creditor Parties under this Agreement or any of the other documents referred to in this definition;
|
“
Financial Indebtedness
” means, in relation to a person (the “debtor”), a liability of the debtor:
|
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
|
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
|
|
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
|
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within (a) to (e) if the references to the debtor referred to the
other person;
|
“
FSO
” means each of:
|
|
(a)
|
the double hulled tanker type vessel of 442,000 dead weight tons named “TI AFRICA” (tbr “FSO AFRICA”) currently registered in the name of Africa Conversion Corporation under Marshall Islands flag to
be registered in the name of TI Africa Limited after its conversion to a floating storage and off loading facility; and
|
|
|
(b)
|
the double hulled tanker type vessel of 442,000 dead weight tons named “TI ASIA” (tbr “FSO ASIA”) currently registered in the name of Asia Conversion Corporation under Marshall Islands flag to be
registered in the name of TI Asia Limited after its conversion to a floating storage and off loading facility;
|
“
GAAP
” means generally accepted accounting principles in the United States of America;
“
Guarantee
” means, in relation to each FSO, the guarantee to be issued by the Issuing Bank in favour of the Beneficiary in the
form set out in Schedule 4 subject only to such amendments as the Agent and the Issuing Bank may agree in their absolute discretion;
“
Guarantee Issue Date
” means, in relation to each Guarantee, the date requested by the Obligors for the Guarantee to be issued
or (as the context requires) the date on which the Guarantee is actually issued;
3
“
Guarantee Issue Request
” means, in relation to each Guarantee, a notice in the
form of Schedule 2 (or in any other form which the Agent approves or reasonably requires);
“
Guaranteed Obligations
”
means, the actual and contingent, certain and future obligations and liabilities owed by the Obligors to the Beneficiary and secured by the Guarantees;
“
IFRS
” means International Financial Reporting Standards in effect from time to time;
“
Issuing Bank
” means Nordea Bank Finland plc, whose registered office is at Aleksanterinkatu 36, (FIN-00020 NORDEA), 00100
Helsinki, Finland;
“
LIBOR
” means, in relation to any period for which a rate of interest is to be determined under any
provisions of a Finance Document:
|
|
(a)
|
the applicable Screen Rate; or
|
|
|
(b)
|
if no Screen Rate is available for that period, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to 4 decimal places) of the rates, as supplied to the Agent at its request, quoted by
each Reference Bank to leading banks in the London Interbank Market; as of 11.00 a.m. (London time) on the Quotation Date for that period for the offering of deposits in the relevant currency and for a period comparable to that period;
|
“
Loan Agreement
” means the loan agreement dated 3 October 2008 and made between (i) the Obligors,
Africa Conversion Corporation and Asia Conversion Corporation as borrowers (the “
Borrowers
”), (ii) the banks and financial institutions listed in Schedule 1A thereto as lenders (the “
Lenders
”) (iii) the
Lead Arrangers (as defined therein), (iv) the Co-Arrangers (as defined therein) (v) the banks and financial institutions listed in Schedule 1B thereto as Swap Banks; (vi) ING Bank N.V. as agent and security trustee by which it was
agreed that the Lenders would make available to the Borrowers a term loan facility or up to US$500,000,000;
“
Loan/Guarantee
Finance Documents
” means:
|
|
(a)
|
the Mortgage in relation to each FSO from the Transfer Date (as defined in the Loan Agreement);
|
|
|
(b)
|
the General Assignment in relation to each FSO;
|
|
|
(c)
|
the Post Conversion Service Contract Assignment in relation to each FSO;
|
|
|
(e)
|
the Pledge of Bank Accounts; and
|
|
|
(f)
|
the Master Agreement Assignments;
|
executed or to be executed in favour of the Security Trustee
and as each such document is defined in the Loan Agreement;
“
Majority Banks
” means Banks the aggregate of whose Available
Commitments and Outstandings at any relevant time exceed 66.66 per cent, of the aggregate of the Total Available Commitments and the Total Outstandings;
“
Notifying Bank
” has the meaning given in Clause 20.1 or 21.1 as the context requires;
“
Obligors’ Account
” means an account in the joint names of the Obligors with the Agent in Oslo designated “TI Africa
Limited/TI Asia Limited – Obligors’ Account” with
4
account number 6015 04 42322 or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the
Obligors’ Account for the purposes of this Agreement;
“
OSG
” means Overseas Shipholding Group, Inc. a corporation
incorporated in Delaware whose registered office is at 100 West Tenth Street, City of Wilmington, County of New Castle, Delaware;
“
Outstanding Guarantee Amount
” means the maximum amount for which the Guarantees were issued less the aggregate amount of all
reductions to them which have been made in accordance with the provisions of Clause 4.1;
“
Outstandings
” means, in
relation to a Bank at any time, the aggregate of its Current Percentage of each Outstanding Guarantee Amount at that time (and “
Total Outstandings
” means the aggregate of the Outstandings of all the Banks);
“
Payment Currency
” has the meaning given in Clause 18.4;
“
Permitted Security Interests
” means:
|
|
(a)
|
Security Interests created by the Finance Documents;
|
|
|
(b)
|
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the relevant Obligor is actively prosecuting or defending such proceedings
or arbitration in good faith; and
|
|
|
(c)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves
have been made;
|
“
Pertinent Document
” means:
|
|
(a)
|
any Finance Document;
|
|
|
(b)
|
any other document contemplated by or referred to in any Finance Document; and
|
|
|
(c)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any document falling within paragraph (b);
|
“
Pertinent Jurisdiction
”, in relation to a company, means:
|
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
|
|
(c)
|
a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;
|
|
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business,
or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);
|
5
“
Pertinent Matter
” means:
|
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
|
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
|
and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or
on or at any time after that signing;
“
Potential Event of Default
” means an event or circumstance which, with the giving
of any notice, the lapse of time, a reasonable determination of the Majority Banks and/or the satisfaction of any other condition, would constitute an Event of Default;
“
Provisional Delivery Date
” has the meaning ascribed thereto in the Loan Agreement;
“
Quotation Date
” means, in relation to any period for which an interest rate is to be determined under any provision of a
Finance Document, the day which is 2 Business Days before the first day of that period, unless market practice differs in the London Interbank Market for a currency, in which case the Quotation Date will be determined by the Agent in accordance with
market practice in the London Interbank Market (and if quotations would normally be given by leading banks in the London Interbank Market on more than one day, the Quotation Date will be the last of those days);
“
Reference Banks
” means, subject to Clause 23.8, Nordea Bank Norge ASA and Nordea Bank Finland plc and the London branches of
any two other first class international banks nominated by or acceptable to the Agent acting in its absolute discretion;
“
Relevant
Person
” has the meaning given in Clause 16.9;
“
Screen Rate
” means, in relation to any period for which an
interest rate is to be determined under any provision of a Finance Document the British Bankers’ Association Interest Settlement Rate for the relevant currency and period displayed on the appropriate page of the Telerate or Reuters screen and,
if the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Obligors and the Banks;
“
Secured Liabilities
” means all liabilities which the Obligors, the Security Parties or any of them have, at the date of this
Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or
variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;
“
Security Interest
” means:
|
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
6
|
|
(b)
|
the security rights of a plaintiff under an action
in rem
; and
|
|
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a
security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
|
“
Security Party
” means each Corporate Guarantor and any other person (except a Creditor Party) who, as a surety or mortgagor,
as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of “Finance Documents”;
“
Security Period
” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies
the Obligors, the Security Parties, the Issuing Bank and the Banks that:
|
|
(a)
|
all amounts which have become due for payment by the Obligors or any Security Party under the Finance Documents have been paid;
|
|
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
|
|
|
(c)
|
neither Obligor nor any Security Party has any future or contingent liability under Clause 17, 18 or 19 or any other provision of this Agreement or another Finance Document;
|
|
|
(d)
|
the Issuing Bank, the Agent, the Security Trustee and the Majority Banks do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be
reversed or adjusted, in any present or possible future bankruptcy of an Obligor or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest
created by a Finance Document; and
|
|
|
(e)
|
the Guarantees have been returned to the Issuing Bank by the Beneficiary endorsed as cancelled;
|
“
Security Trustee
” means ING Bank N.V. or any successor of it appointed under clause 5 of the Agency and Trust Deed;
“
Servicing Bank
” means the Agent or the Security Trustee;
“
Settlement Amount
” means, in relation to each Guarantee, the amount payable by the Issuing Bank to the Beneficiary in respect
of the Guarantee;
“
Settlement Date
” means, in relation to each Guarantee, the date on which payment of the Settlement
Amount is due to the Beneficiary in respect of the Guarantee;
“
Termination Date
” means the earlier of (i) the date
falling 8 years after the Guarantee Issue Date for the second Guarantee and (ii) 31 March 2018; and
“
Trust
Property
” has the meaning given in clause 3.1 of the Agency and Trust Deed.
7
|
1.2
|
Construction of certain terms.
In this Agreement:
|
“
administrative
notice
” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in
connection with, the appointment of an administrator;
“
asset
” includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or other payment;
“
company
” includes any partnership,
joint venture and unincorporated association;
“
consent
” includes an authorisation, consent, approval, resolution,
licence, exemption, filing, registration, notarisation and legalisation;
“
contingent liability
” means a liability which
is not certain to arise and/or the amount of which remains unascertained;
“
document
” includes a deed; also a letter or
fax;
“
expense
” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any
applicable value added or other tax;
“
law
” includes any order or decree, any form of delegated legislation, any treaty or
international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
“
legal or administrative action
” means any legal proceeding or arbitration and any administrative or regulatory action or
investigation;
“
liability
” includes every kind of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“
months
” shall be construed in accordance with Clause 1.3;
“
parent company
” has the meaning given in Clause 1.4;
“
person
” includes any company; any state, political sub-division of a state and local or municipal authority; and any
international organisation;
“
policy
”, in relation to any insurance, includes a slip, cover note, certificate of entry or
other document evidencing the contract of insurance or its terms;
“
regulation
” includes any regulation, rule, official
directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
“
subsidiary
” has the meaning given in Clause 1.4; and
“
tax
” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any
political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine.
8
|
1.3
|
Meaning of “month”.
A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started
(“the numerically corresponding day”), but:
|
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding
the numerically corresponding day; or
|
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;
|
and “
month
” and “
monthly
” shall be construed accordingly.
|
1.4
|
Meaning of “subsidiary”
. A company (S) is a subsidiary of another company (P) if:
|
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
|
|
(b)
|
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
|
|
(c)
|
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
|
(d)
|
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;
|
and any company of which S is a subsidiary is a parent company of S.
|
1.5
|
General Interpretation.
In this Agreement:
|
|
(a)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before or after the date of this Agreement;
|
|
(b)
|
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before or after the date of this Agreement;
|
|
(c)
|
words denoting the singular number include the plural and vice versa; and
|
|
(d)
|
Clauses 1.1 to 1.5 apply unless the context requires otherwise.
|
|
1.6
|
Headings.
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
|
|
2
|
POSITION OF THE ISSUING BANK, THE BANKS AND THE MAJORITY BANKS
|
|
2.1
|
Interests of Creditor Parties several.
The rights of the Issuing Bank and the Banks under this Agreement are several.
|
|
2.2
|
Individual Creditor Parties’ right of action.
The Issuing Bank and each Bank shall be entitled to sue for any amount which has become due and payable by the Obligors to it under this Agreement without
joining any other Creditor Party as an additional party in the proceedings.
|
|
2.3
|
Proceedings by individual Bank requiring Majority Bank consent.
Except as provided in Clause 2.2, neither the Issuing Bank nor any Bank may commence proceedings against either Obligor or any Security Party in
connection with a Finance Document without the prior consent of the Majority Banks.
|
9
|
2.4
|
Obligation of Creditor Parties several.
The obligations of the Issuing Bank and the Banks under this Agreement are several; and a failure of the Issuing Bank or a Bank to perform its obligations under this
Agreement shall neither result in:
|
|
(a)
|
the obligations of the other Creditor Parties being increased; nor
|
|
(b)
|
either Obligor, any Security Party or any other Creditor Party being discharged (in whole or in part) from its obligations under any Finance Document.
|
In no circumstances shall a Creditor Party have any responsibility for a failure of another Creditor Party to perform its obligations under
this Agreement.
|
3.1
|
Availability of guarantee facility.
Subject to the other provisions of this Agreement, the Banks shall make a guarantee facility not exceeding $50,000,000 available to the Obligors.
|
|
3.2
|
Request for issue of Guarantees.
Subject to the following conditions, the Obligors may make a request for a Guarantee to be issued by the Issuing Bank by ensuring that the Agent receives a completed Guarantee
Issue Request not later than 11 a.m. (Oslo time) 3 Business Days prior to the intended Guarantee Issue Date (or such shorter period as the Issuing Bank may agree).
|
|
3.3
|
Availability.
The conditions referred to in Clause 3.2 are that:
|
|
(a)
|
the Guarantee Issue Date has to be a Business Day during the Availability Period;
|
|
(b)
|
the maximum amount of a Guarantee shall not exceed $25,000,000;
|
|
(c)
|
a maximum of 2 Guarantees shall be issued;
|
|
(d)
|
the maximum aggregate amount of the Guarantees shall not exceed the Total Commitments and the amount of a Guarantee to be issued shall not exceed the Total Available Commitments;
|
|
(e)
|
the Agent must receive, together with the Guarantee Issue Request, a final draft of the form of the relevant Guarantee which the Issuing Bank is being requested to issue on the intended Guarantee Issue Date; and
|
|
(f)
|
the form of the Guarantee has to be in substantially the form of Schedule 4 subject to such amendments as may be approved in writing by the Issuing Bank at least 2 Business Days prior to the intended Guarantee Issue
Date.
|
|
3.4
|
Notification to Issuing Bank.
Upon receipt of the Guarantee Issue Request, the Agent shall notify the Issuing Bank thereof and of the date on which the Guarantee is to be issued.
|
|
3.5
|
Cancellation of guarantee facility.
The Obligors may cancel the Total Available Commitments subject to the condition that the Agent has received from the Obligors at least 5 Business Days prior written notice
specifying the amount to be cancelled and the date on which the cancellation is to take effect. The Total Commitments shall be reduced permanently by the amount of the Total Available Commitments so cancelled.
|
|
4.1
|
Reduction of Outstanding Guarantee Amount.
The Outstanding Guarantee Amount of a Guarantee shall not be treated as reduced unless and until:
|
|
(a)
|
the Issuing Bank, or the Agent on its behalf, has received a written confirmation from the Beneficiary of the amount of such reduction; or
|
10
|
(b)
|
the Issuing Bank has notified the Agent in writing that (notwithstanding the absence of a written confirmation from the Beneficiary) it is satisfied that its liability under a Guarantee has been irrevocably reduced or
discharged; or
|
|
(c)
|
the amount of a Guarantee irrevocably and unconditionally reduces in accordance with its terms; or
|
|
(d)
|
the expiry date of a Guarantee elapses and the Issuing Bank has notified the Obligors in writing, through the Agent, that it is satisfied that no claim or demand has been made, or may thereafter be made, under the
Guarantee concerned.
|
|
5
|
SETTLEMENT OF GUARANTEE
|
|
5.1
|
Notification of Settlement Amount.
The Issuing Bank shall, immediately after receiving a demand from, or after being notified by, the Beneficiary that it is required to make payment under a Guarantee, notify the
Agent that such payment is due and of the Settlement Amount and the Settlement Date, and the Agent shall promptly notify the Obligors in writing.
|
|
5.2
|
Obligors’ settlement.
The Obligors shall:
|
|
(a)
|
immediately after notification from the Agent under Clause 5.1, confirm to the Agent that it will reimburse the Settlement Amount; and
|
|
(b)
|
pay to the Agent, for the account of the Issuing Bank, the Settlement Amount in Dollars on the Settlement Date.
|
|
5.3
|
Obligors’ failure to reimburse.
If the Obligors fail to reimburse the Settlement Amount to the Agent, for the account of the Issuing Bank, on the Settlement Date pursuant to Clause 5.2, it shall pay to the
Agent, for the account of the Issuing Bank, interest on the Settlement Amount from the Settlement Date to the date the Issuing Bank is reimbursed by the Obligors at the rate described in Clause 8 with such interest to be compounded in accordance
with Clause 8.6 and payable on demand.
|
|
6
|
INDEMNITY OF THE OBLIGORS
|
|
6.1
|
Obligors’ undertaking to indemnify.
Each Obligor agrees that it shall:
|
|
(a)
|
pay to the Agent, for the account of the Issuing Bank, upon demand by the Agent an amount equal to each amount:
|
|
|
(i)
|
demanded from or paid by the Issuing Bank under a Guarantee; and
|
|
|
(ii)
|
paid by the Issuing Bank to the Beneficiary under Clause 6.9,
|
and which is not otherwise fully
reimbursed, paid or repaid by the Obligors under this Agreement;
|
(b)
|
pay to the Agent, for the account of the Banks, upon demand by the Agent an amount equal to each amount paid by the Banks to the Issuing Bank, or the Agent on its behalf, pursuant to Clause 7.1; and
|
|
(c)
|
indemnify, as a principal and independent debtor, the Issuing Bank and each of the Banks severally on demand against all actions, claims, demands,
liabilities, costs, losses, damages and expenses incurred, suffered or sustained or any penalty or other expenditure
|
11
|
|
which may result or which the Issuing Bank or any Bank may incur, suffer or sustain in connection with or arising out of or in relation to any Guaranteed Obligations and/or the payment under or
other performance of the Guarantees or Clause 7 unless such damage or loss results from the Issuing Bank’s gross negligence or wilful misconduct.
|
|
6.2
|
Payment to Banks.
The Obligors shall pay to the Agent, for the account of the Bank concerned, upon demand by the Agent an amount equal to each amount paid by a Bank to the Issuing Bank, or the Agent on its
behalf, pursuant to Clause 7 notwithstanding that any Guarantee and/or any Guaranteed Obligations and/or the indemnities contained in Clause 7 is or are void or invalid or not binding on or enforceable against the Obligors or the Issuing Bank or the
Beneficiary (as the case may be) for any reason whatsoever including (without limitation) the effect of any enactment, any legal limitation, illegality, disability, lack of corporate capacity or lack of powers of any party thereto or of any of its
directors or officers.
|
|
6.3
|
Guarantee payments.
Each Obligor:
|
|
(a)
|
irrevocably authorises the Issuing Bank to make any payment demanded from it pursuant to a Guarantee if that demand is made in accordance with its terms;
|
|
(b)
|
accepts that any demand for payment made by the Beneficiary pursuant to a Guarantee and which is made in accordance with its terms shall be conclusive evidence that the Issuing Bank was liable to make payment under a
Guarantee and any payment which the Issuing Bank makes pursuant to any such demand shall be accepted by the Obligors as binding upon the Obligors; and
|
|
(c)
|
acknowledges and agrees that the Issuing Bank shall not in any circumstances whatsoever be liable to the Obligors in respect of any loss or damage suffered by the Obligors by reason of the Issuing Bank making a payment
to the Beneficiary in connection with any payment demanded under a Guarantee, unless such loss or damage results from the Issuing Bank’s gross negligence or wilful misconduct.
|
|
6.4
|
Continuing indemnities.
The liabilities and obligations of the Obligors under the indemnities set out in Clauses 6.1 and under Clause 6.2 shall remain in force as a continuing security until:
|
|
(a)
|
the full, prompt and complete performance of all the terms of such indemnities including the proper and valid payment of all amounts that may become due to the Issuing Bank and each of the Banks under this Clause 6.4;
and
|
|
(b)
|
subject to Clause 6.5, an absolute discharge or release of the Obligors signed by the Issuing Bank or the Bank concerned,
|
and accordingly the Obligors shall not have, as regards those indemnities, any of the rights or defences of a surety.
|
6.5
|
Discharges.
Any such discharge or release referred to in Clause 6.4, and any composition or arrangement which the Obligors may effect with the Issuing Bank or any Bank shall be deemed to be made subject to the
condition that it will be void if any payment or security which any Creditor Party may previously have received or may thereafter receive is set aside under any applicable law or proves to have been for any reason invalid.
|
|
6.6
|
Waiver of rights and defences.
Without limiting the generality of Clauses 6.4 and 6.5, the Obligors shall neither be discharged from any of their liabilities or obligations under Clause 6.1 or Clause 6.2 by, nor
have any claim against any Creditor Party in respect of:
|
|
(a)
|
any misrepresentation or non-disclosure respecting the affairs or condition of the Issuing Bank or any Bank made to the Obligors by any person; or
|
12
|
(b)
|
the Beneficiary and/or any Creditor Party releasing or granting any time or any indulgence whatsoever or making any settlement, composition or arrangement with the Obligors, the Beneficiary or any other person; or
|
|
(c)
|
the Beneficiary and/or any Creditor Party asserting or pursuing, failing or neglecting to assert or pursue, or delaying in asserting or pursuing, or waiving, any of their rights or remedies against the Obligors, the
Beneficiary or any other person; or
|
|
(d)
|
the Beneficiary and/or any Creditor Party and/or the Obligors, with the consent of the Obligors (or with or without the consent of the Obligors in the case of any variation agreed between a Beneficiary and the Obligors
or the person whose obligations are guaranteed thereby), making, whether expressly or by conduct, any variation to any Guaranteed Obligations or any Guarantee; or
|
|
(e)
|
the Beneficiary and/or any Creditor Party and/or the Obligors:
|
|
|
(i)
|
taking, accepting, varying, dealing with, enforcing, abstaining from enforcing, surrendering or releasing any security in relation to the Beneficiary or the Issuing Bank or any Bank or the Obligors or any other person
in such manner as it or they think fit; or
|
|
|
(ii)
|
claiming, proving for, accepting or transferring any payment in respect of the obligations and liabilities of the Obligors and/or the Beneficiary relative to any Guaranteed Obligations or under this Agreement in any
composition by, or winding up of, the Obligors and/or any third party or abstaining from so claiming, proving, accepting or transferring; or
|
|
(f)
|
any assignment or transfer by the Beneficiary of, or any succession to, any of its rights relative to any Guaranteed Obligations or any Guarantee.
|
|
6.7
|
Provision of cash collateral security.
Forthwith upon, or at any time following:
|
|
(a)
|
the occurrence of an Event of Default which is continuing; or
|
|
(b)
|
the service of a notice under paragraph (a)(ii) of Clause 16.2; or
|
|
(c)
|
the service of a notice under Clause 20.2 or Clause 21.5,
|
the Agent on behalf of the Issuing
Bank and the Banks shall be entitled (but not obliged) to demand payment by the Obligors of, and the Obligors forthwith upon such demand shall pay to the Agent on behalf of the Issuing Bank and the Banks such amount as shall be, the aggregate of:
|
|
(i)
|
any Settlement Amount then due from the Obligors to the Issuing Bank pursuant to Clause 5.2 and not reimbursed; and
|
|
|
(ii)
|
the Total Outstandings (or, in the case of paragraph (c) above, the Outstandings of the Notifying Bank concerned).
|
|
6.8
|
Application of cash collateral security.
Subject always to the overriding provisions of Clause 14, moneys received by the Agent for the account of the Issuing Bank and the Banks pursuant to Clause 6.7 shall be
applied (as between the Obligors on the one hand and the Issuing Bank and the Banks on the other) in the following manner:
|
|
(a)
|
first, in or towards payment of any Settlement Amount then due from the Obligors to the Issuing Bank pursuant to Clause 5.2 and not reimbursed;
|
13
|
(b)
|
secondly, in payment to an account or accounts of the Agent for application from time to time by the Agent (and each Obligor hereby irrevocably authorises the Agent so to apply any such moneys) in or towards payment of,
or reimbursement to the Issuing Bank for, any amount which the Issuing Bank shall or may at any time and from time to time thereafter pay or be or become liable to pay to the Beneficiary under or pursuant to or in connection with a Guarantee; and
|
|
(c)
|
thirdly, in or towards payment of all other sums which may be owing to the Issuing Bank and each Bank under or in connection with a Guarantee.
|
|
6.9
|
Payment on Termination Date
. If a Guarantee has not expired or terminated prior to the Termination Date, the Obligors shall pay to the Obligors’ Account on the Termination Date an amount equal to the
Outstanding Guarantee Amount on that date and the Obligors shall execute security over to the Obligors’ Account in favour of the Security Trustee in such form as the Agent may reasonably require unless the Creditor Parties, acting in their
absolute discretion, agree to the extension on the Termination Date in which case such payment to the Obligors’ Account and security over the Obligors’ Account shall apply if the Guarantee concerned has not expired or terminated by the
Termination Date as so extended.
|
|
7
|
INDEMNITIES OF THE BANKS
|
|
7.1
|
Banks’ undertakings to indemnify
.
Each Bank severally agrees that it shall:
|
|
(a)
|
indemnify, as a principal and independent debtor, the Issuing Bank on demand in an amount equal to its Current Percentage of any amount payable by the Obligors to or for the account of the Issuing Bank under Clause
6.1(a) or (c) but unpaid; and
|
|
(b)
|
pay to the Agent (for the account of the Issuing Bank) interest upon any amounts payable by it pursuant to this Clause 7.1 from the date of demand to the date of actual payment by it at a rate from time to time
determined by the Issuing Bank by reference to the cost of funds of the Issuing Bank from such sources as the Issuing Bank may from time to time determine.
|
|
7.2
|
Continuing indemnities
.
The liabilities and obligations of each Bank under the indemnities set out in Clause 7.1 shall remain in force as a continuing security until the full, prompt and complete
performance of all the terms of those indemnities including the proper and valid payment of all amounts that may become due to the Issuing Bank under this Agreement and accordingly no Bank shall have, as regards those indemnities, any of the rights
or defences of a surety.
|
|
7.3
|
Discharges
.
Any discharge or release granted to any Bank in respect of the foregoing indemnities and any composition or arrangement which the Agent or the Security Trustee on behalf of the Banks may effect
with the Issuing Bank, shall be deemed to be made subject to the condition that it will be void to the extent that any payment or security which the Issuing Bank may previously have received or may thereafter receive is set aside under any
applicable law or proves to have been for any reason invalid.
|
|
7.4
|
Waiver of rights and defences
.
Without limiting the generality of Clause 7.2, no Bank shall be discharged from any of its liabilities or obligations under Clause 7.1 by, nor shall any Bank have any claim
against any other Creditor Party in respect of:
|
|
(a)
|
the Issuing Bank, with the prior written consent of all the Banks, releasing or granting any time or any indulgence whatsoever or making any settlement, composition or arrangement with either Obligor or the Beneficiary
or any other person; or
|
14
|
(b)
|
the Beneficiary and/or any Creditor Party and/or either Obligor, making, whether expressly or by conduct, any variation to any Guaranteed Obligations or any Guarantee; or
|
|
(c)
|
the Beneficiary and/or the Issuing Bank, with the prior written consent of all the Banks, and/or either Obligor and/or the Agent and/or the Security Trustee:
|
|
|
(i)
|
taking, accepting, varying, dealing with, enforcing, abstaining from enforcing, surrendering or releasing any security in relation to the Beneficiary or the Issuing Bank or the Obligors or any other person in such
manner as it or they may think fit; or
|
|
|
(ii)
|
claiming, proving for, accepting or transferring any payment in respect of the obligations and liabilities of either Obligor and/or the Beneficiary relative to any Guaranteed Obligations or under this Agreement in any
composition by, or winding up of, that Obligor and/or any third party or abstaining from so claiming, proving, accepting or transferring; or
|
|
(d)
|
any assignment or transfer by the Beneficiary of, or any succession to, any of its rights relative to any Guaranteed Obligations or any Guarantee.
|
|
7.5
|
Transfer of benefit of security on Bank’s failure to pay
.
If any Bank fails to make any payment to the Agent for the account of the Issuing Bank pursuant to Clause 7.1 on the due date then until such
Bank’s failure has been remedied in full the Issuing Bank shall be entitled to:
|
|
(a)
|
the benefit of such Bank’s share of each Obligor’s indemnity under Clause 6 and the benefit of all security then existing or thereafter created to secure the obligations of that Obligor under this Agreement to
which such Bank would have been entitled had it performed its obligations in full as aforesaid;
|
|
(b)
|
such Bank’s rights to commissions and fees in respect of a Guarantee in respect of which it has failed to perform its obligations; and
|
|
(c)
|
such Bank’s Outstandings for the purpose of determining the Majority Banks.
|
The rights
conferred upon the Issuing Bank by this Clause 7.5 shall be in addition and without prejudice to its other rights against such Bank under this Clause 7.
|
8.1
|
Payment of default interest on overdue amounts
.
The Obligors shall pay interest in accordance with the following provisions of this Clause 8 on any amount payable by the Obligors under any Finance Document
which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
|
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is made; or
|
|
(c)
|
if such amount has become immediately due and payable under Clause 16.4, the date on which it became immediately due and payable.
|
|
8.2
|
Default rate of interest
.
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum
determined by the Agent to be 2 per cent. above the rate set out in Clause 8.3.
|
15
|
8.3
|
Calculation of default rate of interest
.
The rate referred to in Clause 8.2 is, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to
time:
|
|
(b)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time
determine.
|
|
8.4
|
Notification of interest periods and default rates
.
The Agent shall promptly notify the Issuing Bank, the Banks and the Obligors of each interest rate determined by the Agent under Clause 8.3 and of each
period selected by the Agent for the purposes of that Clause; but this shall not imply that the Obligors are liable to pay such interest only with effect from the date of the Agent’s notification.
|
|
8.5
|
Payment of accrued default interest
.
Subject to the other provisions of this Agreement, any interest due under this Clause shall immediately be due and payable; and the payment shall be made to the Agent
for the account of the Creditor Party to which the overdue amount is due.
|
|
8.6
|
Compounding of default interest
.
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
|
9.1
|
Documents, fees and no default
.
The Issuing Bank’s obligation to issue any Guarantee is subject to the following conditions precedent:
|
|
(a)
|
that, on or before the service of the first Guarantee Issue Request, the Agent receives the documents described in Schedule 3, Part A in form and substance satisfactory to the Agent and its lawyers;
|
|
(b)
|
that on or before the Guarantee Issue Date for each FSO, the Agent received the documents described in Schedule 3, Part B in form and substance satisfactory to the Agent and its lawyers;
|
|
(c)
|
that, on or before the service of the first Guarantee Issue Request, the Agent receives the arrangement fee referred to in Clause 17.1 and, on or before the service of each Guarantee Issue Request, the Agent has
received payment of the expenses referred to in Clause 17.2;
|
|
(d)
|
that both at the date of each Guarantee Issue Request and at each Guarantee Issue Date:
|
|
|
(i)
|
no Event of Default has occurred and is continuing or Potential Event of Default has occurred or would result from the issue of the Guarantee concerned; and
|
|
|
(ii)
|
the representations and warranties in Clause 10 and those of the Obligors or any Security Party which are set out in the other Finance Documents are true and not misleading as at those dates with reference to the
circumstances then existing; and
|
|
(e)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the
Majority Banks, request by notice to the Obligors prior to the relevant Guarantee Issue Date.
|
16
|
9.2
|
Waiver of conditions precedent
.
If the Majority Banks, at their discretion, permit a Guarantee to be issued before certain of the conditions referred to in Clause 9.1 are satisfied, the Obligors shall
ensure that those conditions are satisfied within 5 Business days after the Guarantee Issue Date (or such longer period as the Agent may, with the authorisation of the Majority Banks, specify).
|
|
10
|
REPRESENTATIONS AND WARRANTIES
|
|
10.1
|
General.
Each Obligor represents and warrants to each Creditor Party as follows.
|
|
10.2
|
Status.
It is duly incorporated and validly existing under the laws of Hong Kong.
|
|
10.3
|
Share capital and ownership.
It has an authorised share capital of $10,000 divided into 10,000 shares of $1.00 each, 2 of which shares have been issued fully paid, and the legal title and beneficial ownership of
all those shares is held, free of any Security Interest or other claim, as to 1 such share owned by Euronav Hong Kong Limited, a subsidiary of Euronav, and as to 1 such share owned by Africa Tanker Corporation, a subsidiary of OSG.
|
|
10.4
|
Corporate power.
It has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
|
|
(a)
|
to execute the Finance Documents to which that Obligor is a party; and
|
|
(b)
|
to make all the payments contemplated by, and to comply with, those Finance Documents.
|
|
10.5
|
Consents in force.
All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
|
|
10.6
|
Legal validity; effective Security Interests.
The Finance Documents to which it is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in
the Finance Documents):
|
|
(a)
|
constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms; and
|
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
|
subject to any relevant insolvency laws affecting creditors’ rights generally.
|
10.7
|
No third party Security Interests.
Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document the relevant Obligor will have the right to create all the
Security Interests which that Finance Document purports to create.
|
|
10.8
|
No conflicts.
The execution by that Obligor of each Finance Document, and its compliance with each Finance Document, will not involve or lead to a contravention of:
|
|
(a)
|
any law or regulation; or
|
|
(b)
|
the constitutional documents of that Obligor; or
|
|
(c)
|
any contractual or other obligation or restriction which is binding on that Obligor or any of its assets.
|
17
|
10.9
|
No withholding taxes.
All payments which either Obligor is liable to make under the Finance Documents may be made without deduction or withholding for or on account of any tax payable under any law of any
Pertinent Jurisdiction.
|
|
10.10
|
No default.
No Event of Default or Potential Event of Default has occurred and is continuing.
|
|
10.11
|
Information.
All information which has been provided in writing by or on behalf of each Obligor or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of
Clause 11.2; all audited and unaudited accounts which have been so provided have been prepared in accordance with all applicable laws and IFRS or GAAP (as the case may be) consistently applied and give a true and fair view of the state of affairs of
the relevant company as at the date of those accounts; and there has been no material adverse change in the financial position or state of affairs of the Obligors from that disclosed in the latest of those accounts.
|
|
10.12
|
No litigation.
No legal or administrative action involving the Obligors has been commenced or taken or, to that Obligors’ knowledge, is likely to be commenced or taken which, in either case, would be likely
to have a material adverse effect on the Obligors’ financial position or profitability.
|
|
10.13
|
Compliance with certain undertakings.
At the date of this Agreement, each Obligor is in compliance with Clauses 11.3 and 11.6.
|
|
10.14
|
Taxes paid.
Each Obligor has paid all taxes applicable to, or imposed on or in relation to it, its business or the FSO owned by it.
|
|
11.1
|
General.
Each Obligor undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the
Majority Banks, otherwise permit.
|
|
11.2
|
Information provided to be accurate.
All financial and other information which is provided in writing by or on behalf of each Obligor under or in connection with any Finance Document will be true and not
misleading and will not omit any material fact or consideration.
|
|
11.3
|
Consents.
Each Obligor will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
|
|
(a)
|
for that Obligor to perform its obligations under any Finance Document; and
|
|
(b)
|
for the validity or enforceability of any Finance Document, and that Obligor will comply with the terms of all such consents.
|
|
11.4
|
Maintenance of Security Interests.
Each Obligor will:
|
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
|
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in
|
18
|
|
respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Banks, is or has become necessary or desirable for any Finance Document to be valid,
enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
|
11.5
|
Notification of litigation.
Each Obligor will provide the Agent with details of any legal or administrative action involving that Obligor or any Security Party as soon as such action is instituted or it becomes
apparent to that Obligor that it is likely to be instituted, unless the legal or administrative action cannot be considered material in the context of any Finance Document.
|
|
11.6
|
Principal place of business.
Each Obligor will maintain its place of business, and keep its corporate documents and records, at the address stated at the commencement of this Agreement.
|
|
11.7
|
Confirmation of no default.
Each Obligor will, within 2 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by 2 directors of that Obligor which:
|
|
(a)
|
states that no Event of Default or Potential Event of Default has occurred; or
|
|
(b)
|
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
|
The Agent may serve requests under this Clause 11.7 from time to time but only if asked to do so by a Bank or Banks having Commitments
exceeding 10 per cent of the Total Commitments; and this Clause 11.7 does not affect the Obligors’ obligations under Clause 11.8.
|
11.8
|
Notification of default.
Each Obligor will notify the Agent as soon as it becomes aware of:
|
|
(a)
|
the occurrence of an Event of Default which is continuing or a Potential Event of Default; or
|
|
(b)
|
any matter which indicates that an Event of Default or a Potential Event of Default has occurred;
|
and will keep the Agent fully up-to-date with all developments.
|
11.9
|
Provision of further information.
Each Obligor will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:
|
|
(b)
|
to any other matter relevant to, or to any provision of, a Finance Document;
|
which may be
reasonably requested by the Agent, the Security Trustee or any Bank at any time.
|
11.10
|
Provision of copies and translation of documents.
Each Obligor will supply the Agent with a sufficient number of copies of the documents referred to above to provide 1 copy for each Creditor Party; and if the
Agent so requires in respect of any of those documents, the relevant Obligor will provide a certified English translation prepared by a translator approved by the Agent.
|
19
|
11.11
|
“Know your customer” checks.
If:
|
|
(a)
|
the introduction of or any change in (or the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
|
|
(b)
|
any change in the status of either Obligor or any Security Party after the date of this Agreement; or
|
|
(c)
|
a proposed assignment or transfer by a Bank of any of its rights and obligations under this Agreement to a party that is not a Bank prior to such assignment or transfer,
|
obliges the Agent, the Issuing Bank or any Bank (or, in the case of paragraph (c), any prospective new Bank) to comply with “know your
customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the relevant Obligor shall promptly upon the request of the Agent, the Issuing Bank or the Bank concerned supply, or
procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of the Bank) or the Bank concerned (for itself, or in the case of the event described in paragraph (c), any prospective new
Bank) 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.
|
12
|
CORPORATE UNDERTAKINGS
|
|
12.1
|
General.
Each Obligor also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of
the Majority Banks, otherwise permit.
|
|
12.2
|
Maintenance of status.
Each Obligor will maintain its separate corporate existence under the laws of Hong Kong.
|
|
12.3
|
Insurance and Ship Covenants.
Each Obligor shall comply with the provisions of Clauses 13 (Insurances) and 14 (FSO Covenants) of the Loan Agreement in relation to the FSO owned by it, all of which are expressly
incorporated in this Agreement with any necessary modifications including all references to Majority Lenders which shall be read and construed as a reference to the Issuing Bank.
|
|
13
|
PAYMENTS AND CALCULATIONS
|
|
13.1
|
Currency and method of payments.
All payments to be made by the Banks or by the Obligors under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
|
(a)
|
by not later than 11.00 a.m. (New York City time) on the due date;
|
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time
for the settlement of international transactions of the type contemplated by this Agreement);
|
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by the Obligors to the Agent or any Bank, to such account with such bank as the Agent may from time to time notify to the Obligors and the other Creditor
Parties; and
|
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Obligors and the other Creditor Parties.
|
20
|
13.2
|
Payment on non-Business Day.
If any payment by the Obligors under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,
|
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
|
13.3
|
Basis for calculation of periodic payments.
All interest, guarantee fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be
calculated on the basis of the actual number of days elapsed and a 365 day year.
|
|
13.4
|
Distribution of payments to Creditor Parties.
Subject to Clauses 13.5, 13.6 and 13.7:
|
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to the Issuing Bank, a Bank or the Security Trustee shall be made available by the Agent to the Issuing Bank, that Bank or, as the
case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Issuing Bank, the Bank or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
|
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Banks generally shall be distributed by the Agent to each Bank pro rata to the amount in that category which is due to it.
|
|
13.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance Document to the contrary, the Agent may, before making an amount available to the Issuing Bank or a Bank,
deduct and withhold from that amount any sum which is then due and payable to the Agent from the Issuing Bank or that Bank under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require the Issuing Bank
or that Bank to pay on demand.
|
|
13.6
|
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Obligors, the Issuing
Bank or any Bank any sum which the Agent is expecting to receive for remittance or distribution to the Obligors, the Issuing Bank or that Bank until the Agent has satisfied itself that it has received that sum.
|
|
13.7
|
Refund to Agent of monies not received.
If and to the extent that the Agent makes available a sum to the Obligors, the Issuing Bank or a Bank, without first having received that sum, the Obligors, the Issuing
Bank or the Bank concerned (as the case may be) shall, on demand:
|
|
(a)
|
refund the sum in full to the Agent; and
|
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before
receiving it.
|
|
13.8
|
Agent may assume receipt.
Clause 13.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the
sum which it made available.
|
|
13.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Obligors and each Security Party under the Finance Documents and all payments of those amounts made by
the Obligors and any Security Party.
|
21
|
13.10
|
Agent’s memorandum account.
The Agent shall maintain a memorandum account showing all sums owing to the Agent, the Security Trustee, the Issuing Bank and each Bank from the Obligors and each Security Party
under the Finance Documents and all payments of those amounts made by the Obligors and any Security Party.
|
|
13.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 13.9 and 13.10 show an amount to be owing by the Obligors or a Security Party to a Creditor Party, those accounts shall, in the absence of
manifest error, be prima facie evidence that that amount is owing to that Creditor Party.
|
|
14
|
APPLICATION OF RECEIPTS
|
|
14.1
|
Normal order of application.
Except as any Finance Document and the provisions of the Co-ordination Deed relating to the Loan/Guarantee Finance Documents may otherwise provide, any sums which are received or
recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
|
(a)
|
FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents (or any of them) in such order of application and/or such proportions as the Agent, acting with the authorisation of the
Majority Banks, may specify by notice to the Obligors, the Security Parties and the other Creditor Parties;
|
|
(b)
|
SECONDLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Obligors, the Security Parties and the other Creditor Parties, states in
its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 14.1(a); and
|
|
(c)
|
THIRDLY: any surplus shall be paid to the Obligors or to any other person entitled to it.
|
|
14.2
|
Variation of order of application.
The Agent may, with the authorisation of the Majority Banks, by notice to the Obligors, the Security Parties and the other Creditor Parties provide for a different manner of
application from that set out in Clause 14.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
|
|
14.3
|
Notice of variation of order of application.
The Agent may give notices under Clause 14.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the
future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
|
|
14.4
|
Appropriation rights overridden.
This Clause 14 and any notice which the Agent gives under Clause 14.2 shall override any right of appropriation possessed, and any appropriation made, by the Obligors or any
Security Party.
|
|
15.1
|
Location of account.
The Obligors shall promptly:
|
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Obligors’ Account; and
|
|
(b)
|
execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the
Obligors’ Account.
|
22
|
16.1
|
Events of Default.
An Event of Default occurs if:
|
|
(a)
|
either Obligor or any Security Party fails to pay when due or, if payable on demand, on such demand, any sum payable under a Finance Document or under any document relating to a Finance Document
Provided that
such failure shall not be an Event of Default if the failure to pay is due to a technical or administrative error and the payment is received within 3 Business Days of the due date or within 3 Business Days of the demand, as applicable; or
|
|
(b)
|
any breach occurs of Clause 9.2 or 12.2; or
|
|
(c)
|
(subject to any applicable grace period specified in the relevant Finance Document) any breach by either Obligor or any Security Party occurs of any provision of a Finance Document (other than a breach covered by
paragraphs (a) or (b)) which, in the opinion of the Majority Banks, is capable of remedy, and such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
|
|
(d)
|
(subject to any applicable grace period specified in the Finance Document) any breach by either Obligor or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs
(a), (b) or (c)); or
|
|
(e)
|
any representation, warranty or statement made or repeated by, or by an officer of, an Obligor or a Security Party in a Finance Document or in the Guarantee Issue Request or any other notice or document relating to a
Finance Document is untrue or misleading when it is made or repeated; or
|
|
(f)
|
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person in respect of a sum, or sums aggregating, $10,000,000 or more in the case of each Obligor and $30,000,000 or more in the case of
each Corporate Guarantor or the equivalent in another currency:
|
|
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due; or
|
|
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or
|
|
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event;
or
|
|
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of
a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default;
or
|
|
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
|
(g)
|
any of the following occurs in relation to a Relevant Person:
|
|
|
(i)
|
a Relevant Person becomes, in the reasonable opinion of the Majority Banks, unable to pay its debts as they fall due; or
|
|
|
(ii)
|
any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $10,000,000 in the case of either Obligor and $30,000,000
in the case of each Corporate Guarantor or more or the equivalent in another currency; or
|
23
|
|
(iii)
|
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
|
(iv)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
|
|
(v)
|
any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, is made by a Relevant Person, or by directors of a Relevant Person or, in any proceedings,
by a lawyer acting for a Relevant Person; or
|
|
|
(vi)
|
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person;
|
|
|
(vii)
|
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a
Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view
to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or
payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Obligors or the Corporate Guarantors which is, or is to be, effected for the purposes of an amalgamation or
reconstruction previously approved by the Majority Banks and effected not later than 3 months after the commencement of the winding up; or
|
|
|
(viii)
|
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which
together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction,
unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa)
the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will
ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
|
|
|
(ix)
|
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise)
with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value)
of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
|
24
|
|
(x)
|
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any
action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or
should be taken if certain conditions materialise or fail to materialise; or
|
|
|
(xi)
|
in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the reasonable opinion of the Majority Banks is similar to any of the foregoing;
or
|
|
(h)
|
an Obligor ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Banks, is material in the context of this Agreement; or
|
|
(i)
|
it becomes unlawful in any Pertinent Jurisdiction or impossible:
|
|
|
(i)
|
for an Obligor or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Banks consider material under a Finance Document; or
|
|
|
(ii)
|
for the Agent, the Security Trustee or the Banks to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
|
(j)
|
any provision which the Majority Banks acting reasonably consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to
have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
|
|
(k)
|
the security constituted by a Finance Document is materially imperilled or in jeopardy;
|
|
(l)
|
any event of default occurs and is continuing under the Loan Agreement; or
|
|
(m)
|
any event or circumstance occurs which the Majority Banks determine has, or could reasonably be expected to have, a material adverse effect:
|
|
|
(i)
|
on the ability of an Obligor or a Corporate Guarantor to perform its obligations under the Finance Documents; or
|
|
|
(ii)
|
on the property, assets, nature of assets, operations liability or condition (financial or otherwise) of an Obligor or a Corporate Guarantor.
|
|
16.2
|
Actions following an Event of Default.
On, or at any time after, the occurrence of an Event of Default which is continuing:
|
|
(a)
|
the Agent may, and if so instructed by the Majority Banks, the Agent shall:
|
|
|
(i)
|
serve on the Obligors a notice stating that the Commitments and all other obligations of the Issuing Bank and each Bank to the Obligors under this Agreement are cancelled and requiring the Obligors to pay to the Agent
the amount due under Clause 6.7; and/or
|
|
|
(ii)
|
serve on the Obligors a notice stating that all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
|
|
|
(iii)
|
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Issuing Bank and/or the Banks are entitled to take under any Finance Document
or any applicable law; and/or
|
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Banks, the Security Trustee shall take any action which, as a result of the Event of Default or any notice
served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Issuing Bank and/or the Banks are entitled to take under any Finance Document or any applicable law.
|
25
|
16.3
|
Termination of Commitments.
On the service of a notice under Clause 16.2(a)(i), the Commitments and all other obligations of the Issuing Bank and each Bank to the Obligors under this Agreement shall be cancelled
and the amount specified in Clause 6.7 shall become immediately due and payable.
|
|
16.4
|
Acceleration of liabilities.
On the service of a notice under Clause 16.2(a)(ii), all amounts accrued or owing from the Obligors or any Security Party under this Agreement and every other Finance Document shall
become immediately due and payable or, as the case may be, payable on demand.
|
|
16.5
|
Multiple notices; action without notice.
The Agent may serve notices under Clauses 16.2(a)(i) and (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to
in Clause 16.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
|
|
16.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to the Issuing Bank, each Bank, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on
the Obligors under Clause 16.2; but the notice shall become effective when it is served on the Obligors, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the
Obligors or any Security Party with any form of claim or defence.
|
|
16.7
|
Banks’ rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Banks under a Finance Document or the general law; and, in particular, this
Clause is without prejudice to Clause 2.1.
|
|
16.8
|
Exclusion of Creditor Party liability.
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Obligors or a Security Party:
|
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the
value of such an asset;
|
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses
shown to have been caused directly and mainly by the dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or ( as the case may be) such receiver’s or manager’s own partners or employees.
|
16.9
|
Relevant Persons.
In this Clause 16, a “
Relevant Person
” means each Obligor and the Corporate Guarantors.
|
26
|
16.10
|
Interpretation.
In Clause 16.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination
event in a finance lease; and in Clause 16.1(g) “petition” includes an application.
|
|
17.1
|
Guarantee, arrangement fees.
The Obligors shall pay to the Agent:
|
|
(a)
|
quarterly in advance during the period from (and including) the Guarantee Issue Date for each Guarantee to the Termination Date (and on the Termination Date), for the account of the Banks, a guarantee fee in respect of
each Guarantee equal to 1.15 per cent per annum of the relevant Outstanding Guarantee Amount from time to time for distribution among the Banks pro rata to their Current Percentage;
|
|
(b)
|
on the date of this Agreement, an arrangement fee of $325,000 for distribution among the Banks in the proportions agreed by the Agent and the Banks; and
|
|
(c)
|
quarterly in arrears during the period from (and including) 20 November 2008 to and including the Guarantee Issue Date for the second Guarantee, a commitment fee calculated in relation to the Total Available
Commitments in effect from time to time, at the rate of 0.50 per cent per annum on the Total Available Commitments for distribution among the Banks pro rata to their Current Percentage.
|
|
17.2
|
Costs of negotiation, preparation etc.
The Obligors shall pay to the Agent on its demand the amount of all reasonable expenses incurred by the Agent or the Security Trustee in connection with the negotiation,
preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
|
|
17.3
|
Costs of variations, amendments, enforcement etc.
The Obligors shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor
Party in connection with:
|
|
(a)
|
any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;
|
|
(b)
|
any consent or waiver by the Issuing Bank, the Banks, the Majority Banks or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver; or
|
|
(c)
|
any step taken by the Issuing Bank or the Bank concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
There shall be recoverable under paragraph (c) the full amount of all legal expenses, whether or not such as would be
allowed under rules of court or any taxation or other procedure carried out under such rules.
|
17.4
|
Documentary taxes.
The Obligors shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims,
expenses, liabilities and losses resulting from any failure or delay by the Obligors to pay such a tax.
|
|
17.5
|
Financial Services Authority fees.
The Obligors shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amounts which the Agent from time to time notifies the
Obligors that a Creditor Party has notified the Agent to be necessary to compensate it for the cost attributable to its Commitment and/or the issue of
|
27
|
|
any Guarantee resulting from the imposition from time to time under or pursuant to the Bank of England Act 1998 and/or by the Bank of England and/or by the Financial Services Authority (or other
United Kingdom governmental authorities or agencies) of a requirement to pay fees to the Financial Services Authority calculated by reference to contingent liabilities under any Guarantee.
|
|
17.6
|
Certification of amounts.
In the absence of manifest error, a notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party
under this Clause 17 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
|
18.1
|
Indemnities regarding issue of Guarantees.
Without prejudice to the Obligors’ indemnity contained in Clause 6, the Obligors shall fully indemnify the Agent, the Issuing Bank and each Bank on the Agent’s
demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates
that it will incur, as a result of or in connection with:
|
|
(a)
|
a Guarantee not being issued on the date specified in the Guarantee Issue Request for any reason other than a default by the Creditor Party claiming the indemnity;
|
|
(b)
|
any failure (for whatever reason) by the Obligors to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the
Obligors on the amount concerned under Clause 8);
|
|
(c)
|
the occurrence of an Event of Default or a Potential Event of Default;
|
and in respect of any
tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
|
18.2
|
Breakage costs.
Without limiting its generality, Clause 18.1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Bank in liquidating or employing deposits from
third parties acquired or arranged to fund or maintain any overdue amount.
|
|
18.3
|
Miscellaneous indemnities.
The Obligors shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought
against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance
Document;
|
|
(b)
|
any other Pertinent Matter,
|
other than claims, expenses, liabilities and losses which are
shown to have been caused by the gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.
|
18.4
|
Currency indemnity.
If any sum due from the Obligors or any Security Party to a Creditor Party under a Finance Document or under any order or
judgment relating to a
|
28
|
|
Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into another currency (the
“
Payment Currency
”) for the purpose of:
|
|
(a)
|
making or lodging any claim or proof against the Obligors or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
|
(c)
|
enforcing any such order or judgment;
|
the Obligors shall indemnify the Creditor Party
concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
In this Clause 18.4 “
available rate of exchange
” means the rate at which the Creditor Party concerned is able at the opening
of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Clause 18.4 creates a separate liability of the Obligors which is distinct from its other liabilities under the Finance Documents and
which shall not be merged in any judgment or order relating to those other liabilities.
|
18.5
|
Certification of amounts.
In the absence of manifest error, a notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party
under this Clause 18 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
|
18.6
|
Sums deemed due to a Bank.
For the purposes of this Clause 18, a sum payable by the Obligors to the Agent or the Security Trustee for distribution to the Issuing Bank or a Bank shall be treated as a sum due to
the Issuing Bank or that Bank (as the case may be).
|
|
19
|
NO SET-OFF OR TAX DEDUCTION
|
|
19.1
|
No deductions.
All amounts due from an Obligor under a Finance Document shall be paid:
|
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
|
(b)
|
free and clear of any tax deduction except a tax deduction which that Obligor is required by law to make.
|
|
19.2
|
Grossing-up for taxes.
If an Obligor is required by law to make a tax deduction from any payment:
|
|
(a)
|
that Obligor shall notify the Agent as soon as it becomes aware of the requirement;
|
|
(b)
|
that Obligor shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
|
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would otherwise have received.
|
29
|
19.3
|
Evidence of payment of taxes.
Within 1 month after making any tax deduction, the Obligor concerned shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the
appropriate taxation authority.
|
|
19.4
|
Tax credit.
A Creditor Party which has obtained (and has derived full use and benefit, on an affiliated group basis from) a repayment or credit in respect of tax on account of which an Obligor has made an
increased payment under Clause 19.2 shall pay to that Obligor a sum equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from that Obligor in respect of which that Obligor made the increased
payment
Provided that
:
|
|
(a)
|
the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
|
|
(b)
|
nothing in this Clause 19.4 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to
make any such claim within any particular time;
|
|
(c)
|
nothing in this Clause 19.4 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the relevant Obligor had not been required to make a tax deduction from
a payment;
|
|
(d)
|
any allocation or determination made by a Creditor Party under or in connection with this Clause 19.4 shall be conclusive and binding on the Obligors and the other Creditor Parties;
|
|
(e)
|
nothing in this Clause 19.4 shall oblige any Creditor Party to disclose to any information relating to its affairs (tax or otherwise) or those of its ultimate payment company (or any subsidiary thereof) or any
computations in respect of tax; and
|
|
(f)
|
the Creditor Party’s tax affairs for its tax year in respect of which such credit or repayment was obtained have been finally settled.
|
|
19.5
|
Exclusion of tax on overall net income.
In this Clause 19 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s
overall net income.
|
|
20.1
|
Illegality.
This Clause 20 applies if a Bank (the “
Notifying Bank
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
|
(b)
|
contrary to, or inconsistent with, any regulation,
|
for the Notifying Bank to maintain or give
effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
|
20.2
|
Notification of illegality.
The Agent shall promptly notify the Obligors, the Security Parties, the Security Trustee, the Issuing Bank and the other Banks of the notice under Clause 20.1 which the Agent receives
from the Notifying Bank.
|
|
20.3
|
Effect of illegality.
On the Agent notifying the Obligors under Clause 20.2:
|
|
(a)
|
the Notifying Bank’s Available Commitment shall terminate;
|
30
|
(b)
|
the Obligors shall use their best endeavours to procure the prompt cancellation of the Outstandings of the Notifying Bank; and
|
|
(c)
|
thereupon or, if later, on the date specified in the Notifying Bank’s notice under Clause 20.1 as the date on which the notified event would become effective the Obligors shall pay to the Agent the amount due under
Clause 6.7.
|
|
20.4
|
Mitigation
.
If circumstances arise which would result in a notification under Clause 20.1 then, without in any way limiting the rights of the Notifying Bank under Clause 20.3, the Notifying Bank shall use
reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Bank shall not be under any
obligation to take any such action if, in its opinion, to do would or might:
|
|
(a)
|
have an adverse effect on its business, operations or financial condition; or
|
|
(b)
|
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c)
|
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
|
21.1
|
Increased costs.
This Clause 21 applies if the Issuing Bank or a Bank (the “
Notifying Bank
”) notifies the Agent that the Notifying Bank considers that as a result of:
|
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to
the application to payments under this Agreement of a tax on the Notifying Bank’s overall net income); or
|
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Bank allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
|
the Notifying Bank (or a parent company of it) has incurred or will incur an “
increased cost
”.
|
21.2
|
Meaning of “increased costs”.
In this Clause 21, “
increased costs
” means in relation to a Notifying Bank:
|
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Bank having entered into, or being a party to, this Agreement or having taken an assignment of rights under this Agreement,
of maintaining its Commitment or Outstandings or performing its obligations under this Agreement, or of having outstanding all or any part of its Outstandings or other unpaid sums; or
|
|
(b)
|
a reduction in the amount of any payment to the Notifying Bank under this Agreement or in the effective return which such a payment represents to the Notifying Bank or on its capital;
|
|
(c)
|
an additional or increased cost of funding all or maintaining all or any part of the Notifying Bank’s Outstandings or other unpaid sums or (as the case may require) the proportion of that cost attributable to the
Outstandings or other unpaid sums; or
|
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Bank under this Agreement;
|
31
|
(e)
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Bank (or a parent company of it) or an item covered by the indemnity for tax in Clause 18.1 or by Clause 19 or an
item arising directly out of the implementation or application of or a compliance with the “International Convergence of Capital Measurement and Capital Standards”, a “Revised Framework” published by the Basle Committee on
Banking Supervision in June 2004, in the form existing on the date of this Agreement (“
Basel II
”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government,
regulator, Creditor Party or any of its affiliates).
|
For the purposes of this Clause 21.2 the Notifying Bank may in good
faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
|
21.3
|
Notification to Obligors of claim for increased costs.
The Agent shall promptly notify the Obligors and the Security Parties of the notice which the Agent received from the Notifying Bank under Clause 21.1.
|
|
21.4
|
Payment of increased costs.
The Obligors shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Bank the amounts which the Agent from time to time notifies the Obligors that the
Notifying Bank has specified to be necessary to compensate the Notifying Bank for the increased cost.
|
|
21.5
|
Notice of cancellation.
If the Obligors are not willing to continue to compensate any Notifying Bank for the increased cost under Clause 21.4, the Obligors may give the Agent not less than 14 days’ notice of
its intention to cancel the Notifying Bank’s Available Commitment and procure the cancellation of the Notifying Bank’s Outstandings.
|
|
21.6
|
Cancellation.
A notice under Clause 21.5 shall be irrevocable; the Agent shall promptly notify the Notifying Bank of the Obligors’ notice of intended cancellation; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Available Commitment of the Notifying Bank shall be cancelled;
|
|
(b)
|
the Obligors shall procure the cancellation of the Outstandings of the Notifying Bank on the date specified in its notice of intended cancellation; and
|
|
(c)
|
on the date specified in its notice of intended cancellation, the Obligors shall pay to the Agent the amount due under Clause 6.7.
|
|
22.1
|
Application of credit balances.
Each Creditor Party may, after the occurrence of an Event of Default which is continuing, without prior notice:
|
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of either Obligor at any office in any country of that Creditor Party in or towards satisfaction of any sum
then due from the Obligors to that Creditor Party under any of the Finance Documents; and
|
|
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of each Obligor;
|
|
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
|
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned reasonably considers appropriate.
|
32
|
22.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights under Clause 22.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
|
|
22.3
|
Sums deemed due to a Bank.
For the purposes of this Clause 22, a sum payable by the Obligors to the Agent or the Security Trustee for distribution to, or for the account of, a Bank shall be treated as a sum due
to that Bank; and each Bank’s proportion of a sum so payable for distribution to, or for the account of, the Banks shall be treated as a sum due to such Bank.
|
|
22.4
|
No Security Interest.
This Clause 22 gives the Creditor Parties a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of the Obligors.
|
|
23
|
TRANSFERS AND CHANGES IN BOOKING OFFICES
|
|
23.1
|
Transfer by Obligors.
No Obligor may, without the consent of the Agent, given on the instructions of all the Banks, transfer any of its rights, liabilities or obligations under any Finance Document.
|
|
23.2
|
Transfer by Banks.
Any Bank may transfer all or any of the rights and interests which it has under or by virtue of the Finance Documents:
|
|
(a)
|
subject to the prior consent of the Issuing Bank; and
|
|
(b)
|
with the prior written consent of the Obligors (not to be unreasonably withheld or delayed) or without the consent of the Obligors if an Event of Default or Potential Event of Default has occurred and is continuing,
|
Provided that
a Bank may make such transfer to any wholly owned subsidiary of it, to its parent company or to another
subsidiary of its parent company without the consent of the Obligors.
|
23.3
|
Rights of transferee.
In respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document, or any misrepresentation made in or in connection with a Finance Document, a direct
or indirect transferee of any of a Bank’s rights or interests under or by virtue of the Finance Documents shall be entitled to recover damages by reference to the loss incurred by that transferee as a result of the breach or misrepresentation,
irrespective of whether that Bank would have incurred a loss of that kind or amount.
|
|
23.4
|
Sub-participation; subrogation assignment.
A Bank may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to,
the Obligors, any Security Party, the Issuing Bank, the Agent or the Security Trustee; and the Banks may assign, in any manner and terms agreed by the Issuing Bank, the Majority Banks, the Issuing Bank, the Agent and the Security Trustee, all or any
part of those rights to an insurer or surety who has become subrogated to them.
|
|
23.5
|
Disclosure of information.
A Bank may disclose to a potential transferee Bank or sub-participant any information which the Bank has received in relation to the Obligors, any Security Party or their affairs under
or in connection with any Finance Document, unless the information is clearly of a confidential nature.
|
33
|
23.6
|
Change of booking office.
A Bank may change its booking office by giving notice to the Agent and the change shall become effective on the later of:
|
|
(a)
|
the date on which the Agent receives the notice; and
|
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
|
23.7
|
Notification.
On receiving such a notice, the Agent shall notify the Obligors and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Bank is acting through
the booking office of which the Agent last had notice.
|
|
23.8
|
Replacement of Reference Bank.
If any Reference Bank ceases to be a Bank or is unable on a continuing basis to supply quotations for the purposes of Clause 8 then, unless the Obligors, the Agent and the Majority
Banks otherwise agree, the Agent, acting on the instructions of the Majority Banks, and after consulting the Obligors, shall appoint another bank (whether or not a Bank) to be a replacement Reference Bank; and, when that appointment comes into
effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
|
|
23.9
|
Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office.
If:
|
|
(a)
|
a Bank assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 23.2 or changes its booking office; and
|
|
(b)
|
as a result of circumstances existing at the date of assignment, transfer or change occurs the Obligors would be obliged to make a payment to the transferee Bank or Bank acting through its new booking office under
Clause 18.1 in respect of any tax, Clause 21 or Clause 22,
|
then the transferee Bank or the Bank acting through its new
booking office is only entitled to receive payment under those Clauses to the same extent as the transferor Bank or the Bank acting through its previous booking office would have been if the assignment, transfer or change had not occurred.
|
24
|
VARIATIONS AND WAIVERS
|
|
24.1
|
Variations, waivers etc. by Majority Banks.
Subject to Clause 24.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or
remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax or telex, by the Obligors, by the Agent on behalf of the Majority Banks, by the Issuing Bank, by the Agent and the Security Trustee
in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.
|
|
24.2
|
Variations, waivers etc. requiring agreement of all Banks.
However, as regards the following, Clause 24.1 applies as if the words “by the Agent on behalf of the Majority Banks” were replaced by the
words “by or on behalf of every Bank”:
|
|
(a)
|
a change in the definition of LIBOR;
|
|
(b)
|
a change to the date for, or the amount of, any payment of any other sum payable under this Agreement;
|
|
(c)
|
an increase in the Total Commitments;
|
|
(d)
|
an extension of the Availability Period;
|
34
|
(e)
|
a change to the definition of “Majority Banks” or “Finance Documents”;
|
|
(f)
|
a change to the preamble or to Clause 2, 3, 4, 5, 6, 7, 8, 15 or 27;
|
|
(g)
|
a change to this Clause 24;
|
|
(h)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
|
(i)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Bank’s consent is required.
|
|
24.3
|
Exclusion of other or implied variations.
Except for a document which satisfies the requirements of Clauses 24.1 and 24.2, no document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
|
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
|
(b)
|
an Event of Default; or
|
|
(c)
|
a breach by an Obligor or a Security Party of an obligation under a Finance Document or the general law; or
|
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law;
|
and there shall
not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
|
25.1
|
General.
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in
writing and notices signed by particular persons shall be construed accordingly.
|
|
25.2
|
Addresses for communications.
A notice by letter or fax shall be sent:
|
|
|
|
|
|
(a) to the Obligors:
|
|
De Gerlachekaai 20
|
|
|
|
2000 Antwerp 1
|
|
|
|
Belgium
|
|
|
|
|
|
|
Fax No: +32 32 47 44 09
|
|
|
|
Attn: Finance Director
|
|
|
|
|
|
|
- and -
|
|
|
|
|
|
|
Overseas Shipholding Group, Inc.
|
|
|
|
666 Third Avenue, New York
|
|
|
|
New York, USA
|
|
|
|
|
|
|
Fax No: +212 578 1670
|
|
|
|
Attn: Vice President Corporate Finance
|
35
|
|
|
|
|
(b) to the Issuing Bank:
|
|
c/o Middelthunsgate 17
PO Box 1166 Sentrum
0107 Oslo, Norway
|
|
|
|
|
|
|
Guarantee administration matters
Fax No: +47 22
48 69 36
Attn: Trade Finance
|
|
|
|
|
(c) to a Bank:
|
|
At the address below its name in Schedule 1
|
|
|
|
|
(d) to the Agent
|
|
Middelthunsgate 17
PO Box 1166 Sentrum
0107 Oslo, Norway
|
|
|
|
|
|
|
Loan administration matters
Fax No: +47 22 48
69 36
Attn: Trade Finance
|
|
|
|
|
|
|
Credit matters
Fax No +47 22 48 66 68
Attn: Shipping, Offshore and Oil Services
|
|
|
|
|
(e) to the Security Trustee:
|
|
Bijlmerplein 888
1102 MG Amsterdam
The Netherlands
|
|
|
|
|
|
|
PO Box 1800
1000 BV Amsterdam
The Netherlands
|
|
|
|
|
|
|
Fax No: +31 20 5658226
Attn: Reina
Kroon
|
or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or
the Security Trustee, the Obligors, the Banks and the Security Parties.
|
25.3
|
Effective date of notices.
Subject to Clauses 25.4 and 25.5:
|
|
(a)
|
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;
|
|
(b)
|
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
|
|
25.4
|
Service outside business hours.
If under Clause 25.3 a notice would be deemed to be served:
|
|
(a)
|
on a day which is not a business day in the place of receipt; or
|
|
(b)
|
on such a business day, but after 5 p.m. local time;
|
the notice shall (subject to Clause 25.5)
be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
|
25.5
|
Illegible notices.
Clauses 25.3 and 25.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has
been received in a form which is illegible in a material respect.
|
36
|
25.6
|
Valid notices.
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if:
|
|
(a)
|
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
|
|
(b)
|
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
|
|
25.7
|
Electronic Communication.
Any communication to be made between the Agent and a Bank under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the
relevant Bank:
|
|
(a)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
(b)
|
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
|
|
(c)
|
notify each other of any change to their respective addresses or any other such information supplied to them.
|
Any electronic communication made between the Agent and a Bank will be effective only when actually received in readable form and, in the case
of any electronic communication made by a Bank to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
|
25.8
|
English language.
Any notice under or in connection with a Finance Document shall be in English.
|
|
25.9
|
Meaning of “notice”.
In this Clause 25, “
notice
” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
|
|
26
|
JOINT AND SEVERAL LIABILITY
|
|
26.1
|
General.
All liabilities and obligations of the Obligors under this Agreement shall, whether expressed to be so or not, be several and, if and to the extent consistent with Clause 26.2, joint.
|
|
26.2
|
No impairment of Obligor’s obligations.
The liabilities and obligations of an Obligor shall not be impaired by:
|
|
(a)
|
this Agreement being or later becoming void, unenforceable or illegal as regards any other Obligor;
|
|
(b)
|
any Bank or the Issuing Bank entering into any rescheduling, refinancing or other arrangement of any kind with any other Obligor;
|
|
(c)
|
any Bank or the Issuing Bank releasing any other Obligor or any Security Interest created by a Finance Document; or
|
|
(d)
|
any combination of the foregoing.
|
37
|
26.3
|
Principal debtors.
Each Obligor declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Obligor shall in
any circumstances be construed to be a surety for the obligations of the other Obligor under this Agreement.
|
|
26.4
|
Subordination.
Subject to Clause 26.5, during the Security Period, neither Obligor shall:
|
|
(a)
|
claim any amount which may be due to it from the other Obligor whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or any
Finance Document; or
|
|
(b)
|
take or enforce any form of security from the other Obligor for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of the other Obligor; or
|
|
(c)
|
set off such an amount against any sum due from it to the other Obligor; or
|
|
(d)
|
prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving the other Obligor or other Security Party; or
|
|
(e)
|
exercise or assert any combination of the foregoing.
|
|
26.5
|
Obligors’ required action.
If during the Security Period, any Bank or the Issuing Bank, by notice to an Obligor, requires it to take any action referred to in paragraphs (a) to (d) of Clause 26.4,
in relation to the other Obligor, that Obligor shall take that action as soon as practicable after receiving the Issuer’s notice.
|
|
27.1
|
Rights cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to each Creditor Party are:
|
|
(b)
|
may be exercised as often as appears expedient; and
|
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
|
27.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions
of that Finance Document or of the provisions of any other Finance Document.
|
|
27.3
|
Counterparts.
A Finance Document may be executed in any number of counterparts.
|
|
27.4
|
Third party rights.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
|
28.1
|
English law.
This Agreement is governed by, and construed in accordance with, English law.
|
38
|
28.2
|
Exclusive English jurisdiction.
Subject to Clause 28.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.
|
|
28.3
|
Choice of forum for the exclusive benefit of Creditor Parties.
Clause 28.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the rights:
|
|
(a)
|
to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and
|
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
Neither Obligor shall commence any proceedings in any country other than England in relation to a matter which arises out of or in connection
with this Agreement.
|
28.4
|
Process agent.
Each Obligor irrevocably appoints Euronav (UK) Agencies Ltd. at its registered office for the time being, presently at Moreau House, 3 Floor, 116 Brompton Road, London SW3 1JJ, to act as its agent
to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.
|
|
28.5
|
Creditor Party rights unaffected.
Nothing in this Clause 28 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with
regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
|
28.6
|
Meaning of “proceedings”.
In this Clause 28, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure.
|
THIS AGREEMENT
has been entered into on the date stated at the beginning of this Agreement.
39
SCHEDULE 1
BANKS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
Bank
|
|
Booking Office
|
|
Commitment
(US Dollars)
|
|
|
|
|
|
|
Nordea Bank Finland plc
|
|
Aleksanterinkatu 36
(FIN-00020 NORDEA)
00100 Helsinki
Finland
|
|
$
|
50,000,000
|
|
40
SCHEDULE 2
GUARANTEE ISSUE REQUEST
|
To:
|
Nordea Bank Norge ASA
|
Middelthunsgate 17
PO Box 1166, Sentrum
Oslo,
Norway
|
|
|
|
|
Attention: Loans Administration
|
|
[
—
] 2009
|
GUARANTEE ISSUE REQUEST
|
1
|
We refer to the facility agreement (the “
Facility Agreement
”) dated [
—
] 2009 and made between ourselves, as Obligors, the Banks referred to therein,
Nordea Bank Finland plc as Issuing Bank and yourselves as Agent and ING Bank N.V. as Security Trustee in connection with a guarantee facility of up to US$50,000,000. Terms defined in the Facility Agreement have the meanings given to them in the
Facility Agreement when used in this Drawdown Notice.
|
|
2
|
We request the issue of the Guarantee in the form attached as follows:-
|
|
(a)
|
Amount of Guarantee: US$25,000,000 in relation to TI [Asia/Africa] Limited;
|
|
(b)
|
Guarantee Issue Date: [
—
]; and
|
|
(c)
|
Delivery Instructions: [
—
].
|
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 of the Facility Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the issue of the Guarantee.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Banks.
|
[Name of
Signatory]
Director
for and
on behalf of
TI AFRICA LIMITED
TI ASIA LIMITED
41
SCHEDULE 3
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents
referred to in Clause 9.1.
|
1
|
A duly executed original of each Finance Document and of each document required to be delivered by each Finance Document other than those referred to in Part B.
|
|
2
|
Copies of the certificate of incorporation and constitutional documents of the Obligors and each Security Party.
|
|
3
|
Copies of resolutions of the directors (and, if required, for the provision of the legal opinions as referred to in paragraph 9, shareholders) of the Obligors and each Security Party authorising the execution of
each of the Finance Documents to which the Obligors or that Security Party is a party and, in the case of the Obligors, authorising named directors or officers to make the Guarantee Issue Request.
|
|
4
|
The original of any power of attorney under which any Finance Document is executed on behalf of the Obligors or a Security Party.
|
|
5
|
Copies of all consents which the Obligors or any Security Party requires to enter into, or make any payment under, any Finance Document.
|
|
6
|
The originals of any mandates or other documents required in connection with the opening or operation of the Obligors’ Account.
|
|
7
|
A copy of the joint venture agreement between Euronav and OSG in relation to the Obligors (or, if this has not been entered into by the Guarantee Issue Date, the Obligors shall provide this to the Agent promptly
after it is entered into).
|
|
8
|
Documentary evidence that the agent for service of process named in Clause 28.4 has accepted its appointment.
|
|
9
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Hong Kong, Belgium and Delaware and such other relevant jurisdictions as the Agent may require.
|
|
10
|
Receipt of all documentation required by any Creditor Party in respect of the Obligors or any Security Party pursuant to that Creditor Party’s “Know your client” requirements.
|
|
11
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
Each of the documents specified in paragraphs 2, 3 and 7 and every other copy document delivered under this Schedule shall be certified as a true and up to
date copy by a director or the secretary (or equivalent officer) of the Obligors.
42
PART B
The following are the documents referred to in Clause 9.1(b) required before the Guarantee Issue Date for the relevant FSO. The “
FSO
” in this
Part B, means the particular FSO to which the Guarantee concerned relates,
|
1
|
A duly executed original of the Mortgage, the General Assignment, the Post Conversion Service Contract Assignment in relation to the FSO (and of each document to be delivered by each of them).
|
|
2
|
Documentary evidence that:
|
|
(a)
|
the FSO is definitively and permanently registered in the name of the relevant Obligor under Marshall Islands flag;
|
|
(b)
|
the FSO has been accepted by Maersk Oil Qatar AS, in accordance with the Service Contract dated 31 March 2008 for that FSO including a certified copy of the signed Notice of Readiness (as defined in the Service
Contract);
|
|
(c)
|
the FSO is in the absolute and unencumbered ownership of the relevant Obligor, save as contemplated by the Loan/Guarantee Finance Documents;
|
|
(d)
|
the FSO maintains the classification referred to in Clause 14.3 of the Loan Agreement free of all overdue recommendations and conditions of such classification society;
|
|
(e)
|
all applicable requirements of any regulatory authority, and all consents, authorisations, licences, approvals and permits required, in connection with the FSO have been obtained in relation to the Project (as defined
in the Loan Agreement) and complied with and the relevant Obligor is not in breach of any of its obligations under any agreements which it has entered into in relation to the Project in respect of the FSO (which can be confirmed in a certificate
supplied by the Obligors);
|
|
(f)
|
the Mortgage (executed by the relevant Obligor) has been duly registered on Marshall Islands flag (or such other flag as the Agent may agree) as a valid first preferred ship mortgage in accordance with the laws of the
Marshall Islands (or such other jurisdiction as may be agreed); and
|
|
(g)
|
the FSO is insured in accordance with the provisions of the Loan Agreement and all requirements therein in respect of insurances have been complied with.
|
|
3
|
Evidence of the expiry of pre-delivery guarantee issued in relation to the relevant Obligor (being Pre-delivery Guarantee 401-02-0148211-X issued on 7 April 2008 (as amended on 25 April 2008) for TI Africa Limited
and Pre-delivery Guarantee 401-02-0148211-X issued on 7 April 2008 (as amended on 25 April 2008) for TI Asia Limited).
|
|
4
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the Marshall Islands, Hong Kong and Belgium (as the case may be) and such other relevant jurisdictions as the Agent may
require.
|
|
5
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for FSO as the Agent may require.
|
|
6
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
43
SCHEDULE 4
FORM OF GUARANTEE
Operating Period Guarantee
P.O. Box 22050
Doha
QATAR
Date [ ]
We refer to Contract No.
C-01385 (the “Contract”) between Maersk Oil Qatar AS (the “Company”) and [Contractor] (the “Contractor”) for the supply, operation and maintenance of a Floating Storage and Offloading facility for the Al Shaheen Field.
All terms defined in the Contract shall have the same meaning when used in this guarantee.
|
1.
|
We [the Bank] (the “Guarantor”) do hereby unconditionally and irrevocably guarantee, as primary obligor, the payment to the Company on demand in respect of any amount due by the Contractor to the Company under
the Contract the sum of twenty five million United States Dollars (US$25,000,000).
|
|
1.1
|
Any demand under this guarantee must be accompanied by a statement signed by the Company that the Contractor has failed to meet its obligations under the Contract. Such statement shall be accepted by us as conclusive
evidence of the Contractor’s failure aforesaid and that the amount specified in the demand is due to the Company under this guarantee.
|
|
1.2
|
The Company may make more than one demand hereunder, provided that our aggregate liability shall not exceed the limit specified above.
|
|
2.
|
This Guarantee is an unconditional, irrevocable and on demand guarantee and our liability to pay under this Guarantee shall arise immediately upon our receipt of a written demand from the Company irrespective of whether
or not there is any dispute between the Contractor and the Company in respect of any matter whatsoever and irrespective of whether any such dispute has been settled, resolved, litigated and/or adjudicated upon otherwise howsoever.
|
|
3.
|
A written demand made by the Company shall, as between the Company and ourselves, be conclusive evidence of the amount due and owing to the Company from the Contractor and, without prejudice to the provisions of this
Guarantee, we shall effect payment to the Company immediately after our receipt of such demand.
|
|
4.
|
This Guarantee shall not be discharged or prejudiced by any time or concession given by the Company to the Contractor or any third party or by anything which the Company may do or omit to do or by any other dealing or
thing which, but for this provision, might operate to discharge us from liability.
|
|
5.
|
This Guarantee shall be effective from [ ] (expected Provisional Delivery Date) and shall remain valid and binding and in force until ninety (90) days after the expiry of the Contract Period
(the “Expiry Date”). All claims if any in respect of this Guarantee must be made in writing and received by us at any time within three (3) months after the Expiry Date.
|
|
6.
|
This Guarantee shall be governed by and construed in accordance with English law and we irrevocably submit to the jurisdiction of the English Courts in all matters arising out of this Guarantee.
|
44
Executed as a deed and delivered on the date appearing at the beginning of this Deed.
|
|
|
|
|
Executed as a deed
by [Bank]
|
|
)
|
|
and signed by
|
|
)
|
|
[authorised signatory(ies)]
|
|
)
|
|
being [a] person[s] who
|
|
)
|
|
in accordance with the law of
|
|
)
|
|
[territory or incorporation] are acting
|
|
)
|
|
under the authority of the company
|
|
)
|
45
EXECUTION PAGES
|
|
|
|
|
THE OBLIGORS
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
)
|
|
for and on behalf of
|
|
)
|
|
TI AFRICA LIMITED
|
|
)
|
|
|
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
)
|
|
for and on behalf of
|
|
)
|
|
TI ASIA LIMITED
|
|
)
|
|
|
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
|
|
THE BANKS
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
)
|
|
for and on behalf of
|
|
)
|
|
NORDEA BANK FINLAND PLC
|
|
)
|
|
in the presence of:
|
|
)
|
|
Sarah Lunn
Watson, Farley & Williams LLP
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
THE ISSUING BANK
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
)
|
|
for and on behalf of
|
|
)
|
|
NORDEA BANK FINLAND PLC
|
|
)
|
|
in the presence of:
|
|
)
|
|
|
|
|
Sarah Lunn
Watson, Farley & Williams LLP
15 Appold Street
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simon Petch
Attorney-in-Fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simon Petch
|
|
|
|
Attorney-in-Fact
|
|
|
46
|
|
|
|
|
THE AGENT
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
)
|
|
for and on behalf of
|
|
)
|
|
NORDEA BANK NORGE ASA
|
|
)
|
|
in the presence of:
|
|
)
|
|
|
|
|
Sarah Lunn
Watson, Farley & Williams LLP
15 Appold Street
London EC2A 2HB
|
|
|
|
|
|
|
THE SECURITY TRUSTEE
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
)
|
|
for and on behalf of
|
|
)
|
|
ING BANK N.V.
|
|
)
|
|
in the presence of:
|
|
)
|
|
|
|
|
Sarah Lunn
Watson, Farley & Williams LLP
15 Appold Street
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simon Petch
|
|
|
|
Attorney-in-Fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Simon Petch
|
|
|
|
Attomey-in-Fact
|
|
|
47
EXHIBIT 10.7
SUPPLEMENTAL LETTER
|
|
|
|
|
To:
|
|
TI Africa Limited
|
|
|
|
TI Asia Limited
|
|
|
|
as
Obligors
|
|
|
|
c/o Euronav NV
|
|
|
|
De Gerlachekaai 20
|
|
|
|
B-2000 Antwerp 1
|
|
|
|
Belgium
|
|
|
|
Fax No: +32 32 47 4409
|
|
|
|
Attn: Finance Director
|
|
|
|
|
|
|
-and-
|
|
|
|
|
|
|
c/o Overseas Shipholding Group, Inc.
|
|
|
|
666 Third Avenue
|
|
|
|
New York, New York 10017
|
|
|
|
Fax No: +1 212 578 1670
|
|
|
|
Attn: Vice President Corporate Finance
|
|
|
|
|
And:
|
|
Euronav NV
as
Guarantor
|
|
|
|
De Gerlachekaai 20
|
|
|
|
B-2000 Antwerp 1
|
|
|
|
Belgium
|
|
|
|
Fax No: +32 32 47 4419
|
|
|
|
Attn: Chief Financial Officer
|
|
|
|
|
And:
|
|
Overseas Shipholding Group, Inc.
|
|
|
|
as
Guarantor
|
|
|
|
666 Third Avenue
|
|
|
|
New York, New York 10017
|
|
|
|
Fax No: +1 212 578 1670
|
|
|
|
Attn: Vice President Corporate Finance
|
23 September 2010
Dear Sirs
We refer to the guarantee facility agreement dated
24 July 2009 (the “
Guarantee Facility Agreement
”) entered into between (i) TI Africa Limited and TI Asia Limited as Obligors, (ii) the banks and financial institutions listed in schedule 1 therein as Banks,
(iii) Nordea Bank Finland Plc as Issuing Bank, (iv) Nordea Bank Norge ASA as Agent and (v) ING Bank N.V. as Security Trustee relating to a guarantee facility of up to US$50,000,000. Words and expressions defined in the Guarantee
Facility Agreement have the same meaning when used in this letter.
We refer to our recent discussions and the request (the “
Request
”) by
the Obligors to the Issuing Bank to provide a guarantee in the amount of US$6,500,000 in favour of Maersk
Oil Qatar AS (“
Maersk
”) pursuant to the service contract for “FSO AFRICA” dated 18 August 2010 (the “
New FSO Africa Service Contract
”) entered
into between TI Africa Limited and Maersk. It is our understanding that if the Request is granted by the Issuing Bank the amount of the guarantee facility to be made available to the Obligors pursuant to the Guarantee Facility Agreement shall be
reduced from US$50,000,000 to US$31,500,000.
We, as Agent for the Creditor Parties, confirm that the Creditor Parties have agreed to the Request and the
Issuing Bank shall provide a guarantee to Maersk in an amount of US$6,500,000 as required by the New FSO Africa Service Contract. The agreement of the Creditor Parties is subject to the Agent having received all of the following documents or
evidence in form and substance satisfactory to it and its legal advisors:
|
1.
|
A duly executed original of this letter signed by the Obligors and the Guarantors;
|
|
2.
|
A certified copy of the resolutions of the directors and duly executed original power of attorney of each Obligor and each Guarantor or other evidence from the Obligors and the Guarantors to confirm the signing
authority for this letter;
|
|
3.
|
A certified copy of the incorporation and constitutional documents of the Obligors and the Guarantors or confirmation that such documents have not been amended since the date these were provided to the Agent pursuant to
paragraph 2 of Part A to Schedule 3 of the Guarantee Facility Agreement;
|
|
4.
|
A certified copy of the New FSO Africa Service Contract and of all documents signed by or issued by the parties thereto in connection with it together with such documentary evidence as the Agent may require in relation
to the due authorisation and execution of the New FSO Africa Service Contract by TI Africa Limited and Maersk;
|
|
5.
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Hong Kong, Belgium and Delaware covering the execution of this letter by the Obligors and the Guarantors; and
|
|
6.
|
A supplement to the Co-ordination Deed to be signed by the Agent and acknowledged by ING Bank N.V. as agent and security trustee under the Loan Agreement.
|
We further confirm that the Guarantee Facility Agreement and other Finance Documents shall be amended with effect from the date that the guarantee required by
the New FSO Africa Service Contract in the amount of US$6,500,000 is issued to Maersk as follows:
|
1.
|
All references to the amount of the guarantee facility made available under the Guarantee Facility Agreement shall be construed as references to (a) US$31,500,000 instead of US$50,000,000 and (b) US$25,000,000
in the case of “FSO ASIA” and US$6,500,00 in the case of “FSO AFRICA”;
|
|
2.
|
All references to the Guarantees shall be construed as:
|
|
|
(a)
|
in the case of “FSO ASIA”, the operating period guarantee dated 20 August 2010 (with guarantee number 401-02-0248835-X) in the amount of US$25,000,000 issued by the Issuing Bank in favour of Maersk
pursuant to the service contract dated 31 March 2008 for “FSO ASIA” entered into between TI Asia Limited and Maersk; and
|
|
|
(b)
|
in the case of “FSO AFRICA”, the guarantee to be issued by the Issuing Bank in favour of Maersk in the amount of US$6,500,000 pursuant to the New FSO Africa Service Contract, the form of which guarantee is
attached as Schedule 1 to this letter;
|
2
|
3.
|
All references to the Post Conversion Service Contract for “FSO AFRICA” shall be construed as references to the New FSO Africa Service Contract; and
|
|
4.
|
All references to the Co-ordination Deed shall be construed so as to include the supplement to the Co-ordination Deed to which this letter refers.
|
Save as amended by this letter and any other consequential changes as may be required in order to give effect to the changes agreed in this letter, the
Guarantee Facility Agreement and other Finance Documents remain and shall remain in full force and effect. We further confirm that the Guarantee Facility Agreement and other Finance Documents shall be amended by construing all references in the
Guarantee Facility Agreement to “
this Agreement
” and references in the other Finance Documents to “
the Guarantee Facility Agreement
” as references to the Guarantee Facility Agreement as amended and supplemented by
this letter.
The Obligors undertake that TI Africa Limited shall execute an assignment of the New FSO Africa Service Contract in favour of the Security
Trustee to secure the obligations of the Obligors under the Guarantee Facility Agreement as amended by this letter. The Obligors undertake to execute this assignment not later than 29 October 2010 or such later date as the Banks shall agree to.
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English
law. The provisions of clauses 28.2 to 28.6 (inclusive) of the Guarantee Facility Agreement shall apply to this letter as if set out in full herein with references to “
this Agreement
” construed as references to this letter and
references to the Obligors construed to include the Guarantors.
Please confirm your agreement to this letter by signing below.
|
|
|
|
|
|
|
|
|
Yours faithfully
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for and on behalf of
|
|
|
|
|
|
|
|
NORDEA BANK NORGE ASA
as Agent for the
Creditor Parties
|
|
|
|
|
|
|
We, the undersigned, each acknowledge receipt of the above letter and confirm our agreement to the terms hereof and confirm
that the Finance Documents to which we are a party, including the Corporate Guarantees in the case of the Guarantors, remain in full force and effect and shall continue to stand as security for the obligations of the Obligors under the Guarantee
Facility Agreement as amended by this letter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director, Egied Verbeeck
|
|
//
|
|
Peter N. Popov
|
|
|
|
for and on behalf of
|
|
|
|
|
|
|
|
TI AFRICA LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: 23 September 2010
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director Egied Verbeeck
|
|
//
|
|
Peter N. Popov
|
|
|
|
for and on behalf of
|
|
|
|
|
|
|
|
TI ASIA LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: 23 September 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
Hugo De Stoop
|
|
//
|
|
Egied Verbeeck
|
|
|
|
for and on behalf of
|
|
|
|
|
|
|
|
EURONAV NV
Members of the Executive Committee
|
|
|
|
|
|
|
|
|
Date: September 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary Walsh
Attorney-in-Fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
for and on behalf
of
|
|
|
|
|
|
|
|
OVERSEAS SHIPHOLDING GROUP, INC.
|
|
|
|
|
|
|
|
|
Date: 23 September 2010
|
|
|
|
|
|
|
4
SCHEDULE 1
Form of Guarantee for “FSO AFRICA”
Operating Period Guarantee
|
|
|
|
|
To:
|
|
Maersk Oil Qatar AS
|
|
|
|
P.O. Box 22050
|
|
|
|
Doha
|
|
|
|
QATAR
|
Date [ , 2010]
We refer to the vessel contract for FSO AFRICA (the
“
Contract
”
) between Maersk Oil Qatar AS (the
“
Company
”
) and TI Africa Limited (the
“
Contractor
”
) for certain services to be provided by the Contractor to the Company at the Al Shaheen Field. All terms defined in the Contract have
the same meaning when used in this guarantee.
|
1.
|
We [the Bank] (the
“
Guarantor
”
) do hereby unconditionally and irrevocably guarantee, as primary obligor, the payment on demand to the Company of an amount not to exceed United States
Dollars (US$ ) (“
Guaranteed Amount
”) due by the Contractor to the Company under the Contract.
|
|
1.1
|
Any demand under this guarantee must be accompanied by a statement signed by the Company that the Contractor has failed to meet its obligations under the Contract. Such statement shall be accepted by us as conclusive
evidence of the Contractor’s failure aforesaid and that the amount specified in the demand is due to the Company under this guarantee.
|
|
1.2
|
The Company may make more than one demand hereunder, provided that our aggregate liability shall not exceed the Guaranteed Amount.
|
|
1.
|
This Guarantee is an unconditional, irrevocable and on demand guarantee and our liability to pay under this Guarantee shall arise immediately upon our receipt of a written demand from the Company whether or not:
(a) there is any dispute between the Contractor and the Company over any matter whatsoever; and (b) any such dispute has been settled, resolved, litigated and/or adjudicated otherwise howsoever.
|
|
2.
|
A written demand made by the Company shall, as between the Company and ourselves, be conclusive evidence of the amount due and owing to the Company from the Contractor and without prejudice to the provisions of this
Guarantee, we shall effect payment to the Company immediately after our receipt of such demand.
|
|
3.
|
This Guarantee shall not be discharged or prejudiced by any time or concession given by the Company to the Contractor or any third party or by anything which the Company may do or omit to do or by any other dealing or
thing which, but for this provision, might operate to discharge us from liability.
|
|
4.
|
This Guarantee shall be effective from the delivery of FSO AFRICA to the Company pursuant to the Contract and shall remain valid and binding and in force until ninety (90) days after the expiry of the Contract
Period (the
“
Expiry Date
”
). All claims if any under this Guarantee must be made in writing and received by us at any time within three (3) months after the Expiry Date.
|
|
5.
|
This Guarantee shall be governed by and construed in accordance with English law and we irrevocably submit to the jurisdiction of the English Courts in all matters arising out of this Guarantee.
|
Executed as a deed and delivered on the date appearing at the beginning of this Deed.
|
|
|
|
|
|
|
Executed as a deed by [Bank]
|
|
)
|
|
|
|
and signed by
|
|
)
|
|
|
|
[authorised signatory(ies)]
|
|
)
|
|
|
|
being [a] person[s] who
|
|
)
|
|
|
|
in accordance with the law of [territory
|
|
)
|
|
|
|
or incorporation] are acting under the
|
|
)
|
|
|
|
authority of the company
|
|
)
|
|
|
Exhibit 10.8
Date 3 October 2008
AFRICA CONVERSION CORPORATION
ASIA CONVERSION CORPORATION
TI AFRICA LIMITED
TI
ASIA LIMITED
as joint and several Borrowers
– and –
THE BANKS
AND FINANCIAL INSTITUTIONS
listed in Schedule 1A
as Lenders
– and –
BNP PARIBAS
FOKUS BANK
being the Norwegian Branch of Danske Bank A/S
FORTIS BANK S.A./N.V., UK BRANCH
ING BANK N.V.
NORDEA
BANK NORGE ASA
SUMITOMO MITSUI BANKING CORPORATION, BRUSSELS BRANCH
as Lead Arrangers
– and
–
DANISH SHIP FINANCE A/S (DANMARKS SKIBSKREDIT A/S)
DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT
LANDESBANK HESSEN-THURINGEN GIROZENTRALE
DEXIA BANK BELGIUM SA/NV
SCOTIABANK (IRELAND) LIMITED
as Co-Arrangers
– and –
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1B
as
Swap Banks
– and –
ING BANK N.V.
as Agent
and as Security Trustee
LOAN
AGREEMENT
relating to
a loan facility of up
to US$500,000,000 to finance the acquisition of
the “TI ASIA” and “TI AFRICA” and their conversion
to floating storage and offloading facilities
Watson, Farley & Williams
London
INDEX
|
|
|
|
|
|
|
|
|
Clause
|
|
|
|
Page
|
|
|
|
|
|
|
1
|
|
INTERPRETATION
|
|
|
2
|
|
|
|
|
|
|
2
|
|
FACILITY
|
|
|
19
|
|
|
|
|
|
|
3
|
|
POSITION OF THE LENDERS AND SWAP BANKS
|
|
|
20
|
|
|
|
|
|
|
4
|
|
DRAWDOWN
|
|
|
20
|
|
|
|
|
|
|
5
|
|
INTEREST
|
|
|
21
|
|
|
|
|
|
|
6
|
|
INTEREST PERIODS
|
|
|
23
|
|
|
|
|
|
|
7
|
|
DEFAULT INTEREST
|
|
|
24
|
|
|
|
|
|
|
8
|
|
REPAYMENT AND PREPAYMENT
|
|
|
25
|
|
|
|
|
|
|
9
|
|
CONDITIONS PRECEDENT
|
|
|
27
|
|
|
|
|
|
|
10
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
28
|
|
|
|
|
|
|
11
|
|
GENERAL UNDERTAKINGS
|
|
|
30
|
|
|
|
|
|
|
12
|
|
CORPORATE UNDERTAKINGS
|
|
|
35
|
|
|
|
|
|
|
13
|
|
INSURANCE
|
|
|
36
|
|
|
|
|
|
|
14
|
|
FSO COVENANTS
|
|
|
40
|
|
|
|
|
|
|
15
|
|
PAYMENTS AND CALCULATIONS
|
|
|
43
|
|
|
|
|
|
|
16
|
|
APPLICATION OF RECEIPTS
|
|
|
44
|
|
|
|
|
|
|
17
|
|
APPLICATION OF EARNINGS
|
|
|
45
|
|
|
|
|
|
|
18
|
|
EVENTS OF DEFAULT
|
|
|
46
|
|
|
|
|
|
|
19
|
|
FEES AND EXPENSES
|
|
|
50
|
|
|
|
|
|
|
20
|
|
INDEMNITIES
|
|
|
52
|
|
|
|
|
|
|
21
|
|
NO SET-OFF OR TAX DEDUCTION
|
|
|
53
|
|
|
|
|
|
|
22
|
|
ILLEGALITY, ETC
|
|
|
54
|
|
|
|
|
|
|
23
|
|
INCREASED COSTS
|
|
|
55
|
|
|
|
|
|
|
24
|
|
SET-OFF
|
|
|
56
|
|
|
|
|
|
|
25
|
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
|
57
|
|
|
|
|
|
|
26
|
|
VARIATIONS AND WAIVERS
|
|
|
60
|
|
|
|
|
|
|
27
|
|
NOTICES
|
|
|
61
|
|
|
|
|
|
|
28
|
|
JOINT AND SEVERAL LIABILITY
|
|
|
63
|
|
|
|
|
|
|
29
|
|
SUPPLEMENTAL
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
30
|
|
LAW AND JURISDICTION
|
|
|
65
|
|
|
|
|
|
SCHEDULE 1 A LENDERS AND COMMITMENTS
|
|
|
66
|
|
|
|
|
|
B SWAP BANKS
|
|
|
67
|
|
|
|
|
|
SCHEDULE 2 DRAWDOWN NOTICE
|
|
|
68
|
|
|
|
|
|
SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS
|
|
|
69
|
|
|
|
|
|
SCHEDULE 4 TRANSFER CERTIFICATE
|
|
|
73
|
|
|
|
|
|
SCHEDULE 5 DESIGNATION NOTICE
|
|
|
77
|
|
|
|
|
|
SCHEDULE 6 MANDATORY COST FORMULA
|
|
|
78
|
|
|
|
|
|
EXECUTION PAGES
|
|
|
80
|
|
THIS AGREEMENT
is made on 3 October 2008
BETWEEN
|
(1)
|
AFRICA CONVERSION CORPORATION, ASIA CONVERSION CORPORATION, TI AFRICA LIMITED
and
TI ASIA LIMITED
, as joint and several
Borrowers
;
|
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1A, as
Lenders
;
|
|
(3)
|
BNP PARIBAS, FOKUS BANK being the Norwegian Branch of Danske Bank A/S, FORTIS BANK S.A./N.V. UK BRANCH, ING BANK N.V., NORDEA BANK NORGE ASA
and
SUMITOMO MITSUI BANKING CORPORATION, BRUSSELS BRANCH
as
Lead Arrangers
;
|
|
(4)
|
DANISH SHIP FINANCE A/S (DANMARKS SKIBSKREDIT A/S), DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT, LANDESBANK HESSEN-THURINGEN GIROZENTRALE, DEXIA BANK BELGIUM SA/NV
and
SCOTIABANK (IRELAND) LIMITED
as
Co-Arrangers
;
|
|
(5)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1B, as
Swap Banks
;
|
|
(6)
|
ING BANK N.V.
, as
Agent
; and
|
|
(7)
|
ING BANK N.V.
, as
Security Trustee
.
|
BACKGROUND
The Lenders have agreed to make available to the Borrowers a facility of up to $500,000,000 in 2 Tranches for the following purposes:
|
(A)
|
Tranche 1 in an amount of up to $270,000,000 comprised of:
|
|
|
(i)
|
Tranche 1A in an amount up to $90,000,000, to finance the acquisition of FSO 1 (initially by Asia Conversion Corporation and, following delivery of FSO 1 and subject to the provisions of Clause 28.6, by TI Asia Limited)
and for general corporate purposes; and
|
|
|
(ii)
|
Tranche 1B in an amount up to $180,000,000 to finance the Conversion Costs for FSO 1; and
|
|
(B)
|
Tranche 2 in an amount, when aggregated with the amount of Tranche 1B, up to $410,000,000 comprised of:
|
|
|
(i)
|
Tranche 2A in an amount up to $90,000,000, to finance the acquisition of FSO 2 (initially by Africa Conversion Corporation and, following delivery of FSO 2 and subject to the provisions of Clause 28.6, by TI Africa
Limited) and for general corporate purposes; and
|
|
|
(ii)
|
Tranche 2B in an amount, when aggregated with the amount of Tranche 1B, up to $320,000,000 to finance the Conversion Costs for FSO 2.
|
|
(C)
|
The Swap Banks may agree to enter into interest rate swap transactions with the Borrowers from time to time to hedge the Borrowers’ exposure under this Agreement to interest rate fluctuations.
|
|
(D)
|
The Lenders and the Swap Banks have agreed to share in the security to be granted to the Security Trustee pursuant to this Agreement on the terms described herein.
|
IT IS AGREED
as follows:
|
1.1
|
Definitions.
Subject to Clause 1.5, in this Agreement:
|
“
Accounts Security
Deed
” means a deed creating security in respect of the Earnings Accounts and the Debt Service Reserve Accounts in the Agreed Form;
“
Advance
” means the principal amount of each borrowing by the Borrowers under this Agreement;
“
Africa Conversion
” means Africa Conversion Corporation, a corporation incorporated in the Marshall Islands whose registered
office is at Trust Company Complex, Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands;
“
Africa Tanker
” means
Africa Tanker Corporation, a corporation incorporated in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands;
“
Agency and Trust Deed
” means the agency and trust deed dated the same date as this Agreement and made between the same
parties;
“
Agent
” means ING Bank N.V., acting in such capacity through its office at Bijlmerplein 888,1102 MG, Amsterdam,
The Netherlands, or any successor of it appointed under clause 5 of the Agency and Trust Deed;
“
Agreed Form
” means in
relation to any document, that document in the form approved in writing by the Agent (acting on the instructions of all the Lenders) or as otherwise approved in accordance with any other approval procedure specified in any relevant provisions of any
Finance Document;
“
Approved Flag
” means:
|
|
(a)
|
in the case of FSO 1, Marshall Islands flag until the Transfer Date for FSO 1 and, thereafter, Belgian flag, Marshall Islands flag or Hong Kong flag; and
|
|
|
(b)
|
in the case of FSO 2, Marshall Islands flag;
|
“
Approved Manager
” means:
|
|
(a)
|
in the case of FSO 1, Euronav Shipmanagement SAS of De Gerlachekaai 20, B-2000 Antwerp 1, Belgium; and
|
|
|
(b)
|
in the case of FSO 2, OSG Ship Management (UK) Ltd. of Quorum 4, Balliol Business Park, East Benton Lane, Newcastle upon Tyne NE12 8EZ, England,
|
or, in each case, any other company which the Agent may, with the authorisation of the Majority Lenders, approve from time to time as the
technical manager of that FSO, such approval not to be unreasonably withheld or delayed;
“
Arrangers
” means each of the
Lead Arrangers and the Co-Arrangers;
2
“
Asia Conversion
” means Asia Conversion Corporation, a corporation incorporated
in the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands;
“
Availability Period
” means the period commencing on the date of this Agreement and ending on:
|
|
(a)
|
in the case of Tranche 1A and Tranche 2A, the day falling 2 months after the Provisional Delivery Date for the relevant FSO and, in the case of Tranche 1B and Tranche 2B, the day falling 4 months after the Provisional
Delivery Date for the relevant FSO (or, in each case, such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrowers); or
|
|
|
(b)
|
if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;
|
“
Bank Guarantor
” means the bank or banks which are a party to the Guarantee Facility and issue the Operating Period Guarantee
(as defined in each Service Contract) for the FSOs;
“
Borrowers
” means each of the Conversion Borrowers and the TI
Borrowers;
“
Business Day
” means a day on which banks are open in London, Brussels, Hong Kong, Oslo, Copenhagen and
Amsterdam and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;
“
CAR
Insurances
” means, in relation to a FSO, the construction all risks insurances to be taken out by Africa Conversion or Asia Conversion, as the case may be, during the period of the Conversion Works on that FSO;
“
Change of Control
” means:
|
|
(a)
|
in the case of Euronav, if 2 or more persons acting in concert or any individual person other than Saverco nv:
|
|
|
(i)
|
acquires legally and/or beneficially, and either directly or indirectly, in excess of 50 per cent. of the issued share capital of Euronav; or
|
|
|
(ii)
|
has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent) of Euronav; and
|
|
|
(i)
|
any “
person
” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that for purposes of this Clause (i) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 50 per cent. of the total voting power of OSG’s voting stock; or
|
|
|
(ii)
|
the replacement of a majority of the board of directors of OSG over a 2 year period who constituted the board of directors of OSG at the beginning of such period, and such replacement shall not have been approved by a
vote of at least a majority of the board of directors of OSG in office as of the date of such replacement who either were members of such board of directors at the beginning of such period or whose election as members of such board of directors was
previously so approved;
|
3
“
Co-Arrangers
” means Danish Ship Finance A/S (Danmarks Skibskredit A/S),
Deutsche Schiffsbank Aktiengesellschaft, Landesbank Hessen-Thuringen Girozentrale, Dexia Bank Belgium SA/NV and Scotiabank (Ireland) Limited;
“
Commitment
” means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the
amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “
Total Commitments
” means the aggregate of the Commitments of all the Lenders);
“
Confirmation
” and “
Early Termination Date
”, in relation to any continuing Designated Transaction, have
the meaning given in the relevant Master Agreement;
“
Contractual Currency
” has the meaning given in Clause 20.4;
“
Contribution
” means, in relation to a Lender, the part of the Loan which is owing to that Lender;
“
Conversion Borrowers
” means each of Africa Conversion and Asia Conversion;
“
Conversion Budget
” means, in relation to a FSO, the budget to be provided by the Borrowers to the Agent on or before service
of the first Drawdown Notice, in form and substance satisfactory to the Lenders, detailing, amongst other things, the time required for the Conversion Works to be completed, the total expense of such work and the timing of such expenses, as may from
time to time be modified in accordance with Clause 11.19;
“
Conversion Contracts
” means each of the FSO 1 Conversion
Contract and the FSO 2 Conversion Contract;
“
Conversion Costs
” means, in relation to a FSO, the cost of the Conversion
Works in relation to that FSO, including owner supplied items, design, yard supervision and yard work, and finance costs under this Agreement up until that FSO is delivered on site in Qatar;
“
Conversion Works
” means, in relation to a FSO, the works required to convert that FSO to a floating storage and offloading
facility to be carried out pursuant to the Conversion Contract for that FSO;
“
Co-ordination Deed
” means the co-ordination
deed to be entered into between the TI Borrowers, the Agent on behalf of the Lenders and the Bank Guarantor to regulate the relationship between the Lenders, the Bank Guarantor and the TI Borrowers and access to the security which will secure the
obligations of the Borrowers under this Agreement as set forth in the Finance Documents and the obligations of the TI Borrowers under the Guarantee Facility;
“
Creditor Party
” means the Agent, the Security Trustee, the Arrangers, any Lender or any Swap Bank, whether as at the date of
this Agreement or at any later time;
“
Debt Service Reserve Account
” means, in relation to a FSO, an account in the name
of the TI Borrower owning that FSO with the Agent in Amsterdam designated “[Name of FSO] - Debt Service Reserve Account”, or any other account (with that or another office of the Agent or with a bank or financial institution other than the
Agent) which is designated by the Agent as the Debt Service Reserve Account in relation to that FSO for the purposes of this Agreement;
4
“
Designated Transaction
” means a Transaction which fulfils the following
requirements:
|
|
(a)
|
it is entered into by the Borrowers pursuant to a Master Agreement with a Swap Bank and the Borrowers’ rights under such Master Agreement are subject to a Master Agreement Assignment;
|
|
|
(b)
|
its purpose is the hedging of the Borrowers’ exposure under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the final Repayment
Date; and
|
|
|
(c)
|
it is designated by the Borrowers and/or by the relevant Swap Bank, by delivery by the Borrowers and/or that Swap Bank to the Agent of a notice of designation in the form set out in Schedule 5, as a Designated
Transaction for the purposes of the Finance Documents;
|
“
Dollars
” and “
$
” means the lawful
currency for the time being of the United States of America;
“
Drawdown Date
” means, in relation to an Advance, the date
requested by the Borrowers for the Advance to be made, or (as the context requires) the date on which the Advance is actually made;
“
Drawdown Notice
” means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or
reasonably requires);
“
Earnings
” means, in relation to a FSO, all moneys whatsoever which are now, or later become,
payable (actually or contingently) to the Borrower owning that FSO or the Security Trustee and which arise out of the use or operation of that FSO, including (but not limited to):
|
|
(a)
|
all freight, hire and passage moneys and all amounts payable by Maersk under the Service Contract for a FSO (including, for the avoidance of doubt, any termination fee or mobilisation/demobilisation fee);
|
|
|
(b)
|
compensation payable to any Borrower or the Security Trustee in the event of requisition of a FSO for hire;
|
|
|
(c)
|
remuneration for salvage and towage services;
|
|
|
(d)
|
demurrage and detention moneys;
|
|
|
(e)
|
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of a FSO; and
|
|
|
(f)
|
all moneys which are at any time payable under any Insurances in respect of loss of hire;
|
“
Earnings Account
” means, in relation to a FSO, an account in the name of the TI Borrower owning that FSO with the Agent in
Amsterdam designated “[Name of FSO] - Earnings Account”, or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent as the Earnings Account
in relation to that FSO for the purposes of this Agreement;
5
“
Environmental Claim
” means:
|
|
(a)
|
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
|
|
|
(b)
|
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
and “
claim
” means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar
to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;
“
Environmental Incident
” means:
|
|
(a)
|
any release of Environmentally Sensitive Material from a FSO; or
|
|
|
(b)
|
any incident in which Environmentally Sensitive Material is released from a vessel other than a FSO and which involves a collision between a FSO and such other vessel or some other incident of navigation or operation,
in either case, in connection with which a FSO is actually or reasonably likely to be arrested, attached, detained or injuncted and/or a FSO and/or any Borrower and/or any operator or manager of a FSO is at fault or allegedly at fault or otherwise
reasonably likely to be subject to any legal or administrative action; or
|
|
|
(c)
|
any other incident in which Environmentally Sensitive Material is released otherwise than from a FSO and in connection with which a FSO is actually or reasonably likely to be arrested and/or where any Borrower and/or
any operator or manager of a FSO is at fault or allegedly at fault or reasonably likely to be subject to any legal or administrative action;
|
“
Environmental Law
” means any law relating to pollution or protection of the environment, to the carriage of Environmentally
Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;
“
Environmentally Sensitive
Material
” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;
“
Euronav
” means Euronav NV, a company incorporated in Belgium whose Belgium registered office is at De Gerlachekaai 20,
B-2000 Antwerp 1, Belgium;
“
Event of Default
” means any of the events or circumstances described in Clause 18.1;
“
Extended Conversion Period
” means, in relation to a FSO, the period ending 4 months after completion of the Conversion
Works on that FSO and re delivery of that FSO by the Yard to the relevant Conversion Borrower;
“
Finance Documents
” means:
|
|
(b)
|
the Agency and Trust Deed;
|
6
|
|
(e)
|
the Insurance Assignments;
|
|
|
(f)
|
the General Assignments;
|
|
|
(g)
|
the Service Contract Assignments;
|
|
|
(h)
|
the Accounts Security Deed;
|
|
|
(i)
|
the Shares Security Deed;
|
|
|
(j)
|
the Co-ordination Deed;
|
|
|
(k)
|
the Master Agreement Assignments;
|
|
|
(l)
|
the Quiet Enjoyment Letters; and
|
|
|
(m)
|
any other document (whether creating a Security Interest or not) which is executed at any time by any Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in
relation to, any amount payable to the Lenders and/or the Swap Banks under this Agreement or any of the other documents to which this definition refers;
|
“
Financial Indebtedness
” means, in relation to a person (the “
debtor
”), a liability of the debtor:
|
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
|
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
|
|
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
|
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred
to the other person;
|
“
First Repayment Date
” means:
|
|
(a)
|
in relation to Tranche 1, the date falling 6 months after the Provisional Delivery Date of FSO 1; and
|
|
|
(b)
|
in relation to Tranche 2, the date falling 6 months after the Provisional Delivery Date of FSO 2;
|
“
FSO 1
” means the double hulled tanker type vessel of 442,839 dead weight tons named “TI ASIA” which is currently
registered in the name of Euronav under Belgian flag which is to be transferred to, and registered in the ownership of, Asia Conversion before drawdown of the first Advance in relation to Tranche 1 and which is then to be
7
transferred to, and registered in the ownership of, TI Asia on an Approved Flag for FSO 1 on completion of the Conversion Works in relation to that FSO and operation of that FSO under the
relevant Service Contract;
“
FSO 2
” means the double hulled tanker type vessel of 441,655 dead weight tons named “TI
AFRICA” which is currently registered in the name of Africa Tanker under Marshall Islands flag which is to be transferred to, and registered in the ownership of, Africa Conversion before drawdown of the first Advance in relation to Tranche 2
and which is then to be transferred to, and registered in the ownership of, TI Africa on Marshall Islands flag on completion of the Conversion Works in relation to that FSO and operation of that FSO under the relevant Service Contract;
“
FSOs
” means each of FSO 1 and FSO 2;
“
FSO 1 Conversion Contract
” means the standard docking repair and conversion contract dated 4 September 2008 entered into
between Asia Conversion and the Yard for the conversion of FSO 1 to a floating storage and offloading facility;
“
FSO 2 Conversion
Contract
” means the standard docking, repair and conversion contract dated 4 September 2008 entered into between Africa Conversion and the Yard in relation to the conversion of FSO 2 to a floating storage and offloading facility;
“
FSO 1 Service Contract
” means the service contract dated 31 March 2008 in relation to FSO 1 entered into between TI Asia
and Maersk for service of FSO 1 in the A1 Shaheen Field, Block 5, offshore Qatar for a period of 8 years;
“
FSO 2 Service
Contract
” means the service contract dated 31 March 2008 in relation to FSO 2 entered into between TI Africa and Maersk for service of FSO 2 in the A1 Shaheen Field, Block 5, offshore Qatar for a period of 8 years;
“
GAAP
” means generally accepted accounting principles applicable in jurisdiction of the relevant company;
“
General Assignment
” means:
|
|
(a)
|
in relation to FSO 1, the general assignment of Earnings, the Post Conversion Insurances and any Requisition Compensation in relation to that FSO to be executed by TI Asia in favour of the Security Trustee; and
|
|
|
(b)
|
in relation to FSO 2, the general assignment of Earnings, the Post Conversion Insurances and any Requisition Compensation in relation to that FSO to be executed by TI Africa in favour of the Security Trustee,
|
each in the Agreed Form (and each to secure the obligations of the Borrowers under this Agreement and the obligations of the
TI Borrowers under the Guarantee Facility);
“
Guarantee Facility
” means the guarantee facility to be entered into between
the TI Borrowers and the Bank Guarantor (and ING Bank N.V. as security trustee) in relation to the Operating Period Guarantee (as defined in each Service Contract and which shall not exceed $25,000,000 each) to be issued by the Bank Guarantor
pursuant to each Service Contract;
“
Guarantees
” means, in relation to a Guarantor, the several guarantee of the
liabilities of the Borrowers under this Agreement and the other Finance Documents to be executed by that Guarantor in favour of the Security Trustee in the Agreed Form;
“
Guarantors
” means each of Euronav and OSG;
8
“
IFRS
” means international accounting standards within the meaning of the IAS
Regulations 1606/2002 to the extent applicable to the relevant financial statements;
“
Insurance Assignment
” means:
|
|
(a)
|
in relation to FSO 1, an assignment of the CAR Insurances in respect of FSO 1 to be executed by Asia Conversion in favour of the Security Trustee; and
|
|
|
(b)
|
in relation to FSO 2, an assignment of the CAR Insurance in respect of FSO 2 to be executed by Africa Conversion in favour of the Security Trustee,
|
each in the Agreed Form;
“
Insurances
” means, in relation to a FSO:
|
|
(a)
|
all policies and contracts of insurance, including entries of the FSO in any protection and indemnity or war risks association, which are effected in respect of the FSO, its Earnings or otherwise in relation to it; and
|
|
|
(b)
|
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;
|
“
Interest Period
” means a period determined in accordance with Clause 6;
“
ISM Code
” means the International Safety Management Code (including the guidelines on its implementation), adopted by the
International Maritime Organisation as the same may be amended or supplemented from time to time (and the terms “
safety management system
”, “
Safety Management Certificate
” and “
Document of
Compliance
” have the same meanings as are given to them in the ISM Code);
“
ISPS Code
” means the International
Ship and Port Facility Security Code as adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time;
“
ISSC
” means a valid and current International Ship Security Certificate issued under the ISPS Code;
“
Lead Arrangers
” means BNP Paribas, Fokus Bank (being the Norwegian Branch of Danske Bank A/S), Fortis Bank S.A./N.V., UK
Branch, ING Bank N.V., Nordea Bank Norge ASA, and Sumitomo Mitsui Banking Corporation, Brussels Branch;
“
Lender
” means a
bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1A (or through another branch notified to the Agent under Clause 25.14) or its transferee, successor or assign;
“
LIBOR
” means, in relation to any period for which an interest rate is to be determined under any provision of a Finance
Document:
|
|
(a)
|
the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, that period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m. (London
time) on the Quotation Date for that period (and, for the purposes of this Agreement, “REUTERS BBA Page LIBOR 01” means the display designated as “Page 01” on the REUTERS Service or such other page as may replace Page 01 on that
service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for Dollars); or
|
9
|
|
(b)
|
if no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards, if necessary, to the nearest one-sixteenth of one per cent.) of the rates per
annum notified to the Agent by each Reference Bank as the rate at which deposits in Dollars are offered to that Reference Bank by leading banks in the London Interbank Market at that Reference Bank’s request at or about 11.00 a.m. (London time)
on the Quotation Date for that period for a period equal to that period and for delivery on the first Business Day of it;
|
“
Loan
” means the principal amount for the time being outstanding under this Agreement;
“
Maersk
” means Maersk Oil Qatar AS, a company incorporated in Denmark and having a branch in Qatar at P.O. Box 22050, Doha,
Qatar, which is a 100 per cent. subsidy of Maersk Oil AS;
“
Maersk Bareboat Option
” means, in relation to a FSO, the
bareboat option in favour of Maersk under clause 29 of the Service Contract for that FSO;
“
Maersk Purchase Option
” means,
in relation to a FSO, the purchase option in favour of Maersk under clause 28 of the Service Contract for that FSO;
“
Major
Casualty
” means, in relation to a FSO, any casualty to the FSO in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $10,000,000 or the
equivalent in any other currency;
“
Majority Lenders
” means:
|
|
(a)
|
before an Advance has been made, Lenders whose Commitments total 66.66 per cent. of the Total Commitments; and
|
|
|
(b)
|
after an Advance has been made, Lenders whose Contributions total 66.66 per cent. of the Loan;
|
“
Mandatory Cost
” means the percentage rate per annum calculated by the Agent in accordance with Schedule 6;
“
Margin
” means 1.15 per cent. per annum;
“
Maturity Date
” means, in relation to each FSO, the date falling 8 years after the Provisional Delivery Date as defined in the
Service Contract for that FSO;
“
Master Agreement
” means each master agreement (on the 1992 or 2002 (as the case may be)
ISDA (Multicurrency-Crossborder) form) in an agreed form made or to be made between the Borrowers and a Swap Bank and includes all Designated Transactions from time to time entered into and Confirmations from time to time exchanged under such master
agreement;
“
Master Agreement Assignment
” means, in relation to a Master Agreement, the Assignment of that Master
Agreement to be executed by the Borrowers in favour of the Security Trustee in the Agreed Form;
10
“
Mortgage
” means:
|
|
(a)
|
in the case of FSO 1:
|
|
|
(i)
|
from the first Drawdown Date for FSO 1 up until the Transfer Date for FSO 1, the first preferred Marshall Islands ship mortgage to be executed by Asia Conversion in favour of the Security Trustee; and
|
|
|
(ii)
|
from the Transfer Date for FSO 1, the first preferred or priority (as the case may be) ship mortgage and, if appropriate given the Approved Flag for FSO 1, also the deed of covenant collateral to the said mortgage to be
executed by TI Asia in favour of the Security Trustee; and
|
|
|
(b)
|
in the case of FSO 2:
|
|
|
(i)
|
from the first Drawdown Date for FSO 2 up until the Transfer Date for FSO 2, the first preferred Marshall Islands ship mortgage to be executed by Africa Conversion in favour of the Security Trustee; and
|
|
|
(ii)
|
from the Transfer Date for FSO 2, the first preferred Marshall Islands Ship Mortgage to be executed by TI Africa in favour of the Security Trustee,
|
each in the Agreed Form or, in the case of the mortgage on FSO 1 to be executed by TI Asia, in such form as the Agent (acting with the
authorisation of the Majority Lenders) shall reasonably require (and each to secure the obligations of the Borrowers under this Agreement and also, in the case of the mortgages to be signed by the TI Borrowers, the TI Borrowers under the Guarantee
Facility;
“
Negotiation Period
” has the meaning given in Clause 5.10;
“
Notifying Lender
” has the meaning given in Clause 22.1 or Clause 23.1 as the context requires;
“
Original Project Costs
” means the estimated total project cost of the acquisition and conversion of each of TI ASIA and TI
AFRICA to an FSO, such estimate to be agreed between the Borrowers and the Lenders on or before the first Drawdown Date but currently anticipated to be $359,975,294 for each FSO (comprising, for each FSO, Conversion Costs of $159,975,294 plus the
cost of acquiring each vessel by the Conversion Borrowers for their market value of $200,000,000 for conversion to FSOs);
“
OSG
” means Overseas Shipholding Group, Inc., a corporation incorporated in Delaware whose registered office is at 100 West
Tenth Street, City of Wilmington, County of New Castle, Delaware;
“
Payment Currency
” has the meaning given in Clause
20.4;
“
Permitted Security Interests
” means:
|
|
(a)
|
Security Interests created by the Finance Documents;
|
|
|
(b)
|
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
|
|
(d)
|
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a FSO not prohibited by this Agreement;
|
11
|
|
(e)
|
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a FSO,
provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause
14.12(f);
|
|
|
(f)
|
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses while a Borrower is actively prosecuting or defending such proceedings or
arbitration in good faith; and
|
|
|
(g)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves
have been made;
|
“
Pertinent Document
” means:
|
|
(a)
|
any Finance Document;
|
|
|
(b)
|
any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;
|
|
|
(c)
|
any other document contemplated by or referred to in any Finance Document; and
|
|
|
(d)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
|
“
Pertinent Jurisdiction
”, in relation to a company, means:
|
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
|
|
(c)
|
a country in which the company has the centre of its main interests or which the company’s central management and control is or has recently been exercised;
|
|
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business,
or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as a main or territorial or ancillary proceedings, or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);
|
“
Pertinent Matter
” means:
|
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
|
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),
|
12
and covers any such transaction, matter or statement, whether entered into, arising or made at
any time before the signing of this Agreement or on or at any time after that signing;
“
Post Conversion Insurances
”
means, in relation to a FSO, all Insurances on that FSO to be taken out by TI Africa or TI Asia, as the case may be, after completion of the Conversion Works on that FSO;
“
Post Conversion Service Contract Assignment
” means:
|
|
(a)
|
in relation to FSO 1, the assignment in relation to the FSO 1 Service Contract to be executed by TI Asia in favour of the Security Trustee; and
|
|
|
(b)
|
in relation to FSO 2, the assignment in relation to the FSO 2 Service Contract to be executed by TI Africa in favour of the Security Trustee,
|
each in the Agreed Form (and each to secure the obligations of the Borrowers under this Agreement and the obligations of the TI Borrowers under
the Guarantee Facility);
“
Potential Event of Default
” means an event or circumstance which, with the giving of any
notice, the lapse of time, a determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;
“
Pre Conversion Service Contract Assignment
” means:
|
|
(a)
|
in relation to FSO 1, the assignment in relation to the FSO 1 Service Contract to be executed by TI Asia in favour of the Security Trustee; and
|
|
|
(b)
|
in relation to FSO 2, the assignment in relation to the FSO 2 Service Contract to be executed by TI Africa in favour of the Security Trustee,
|
each in the Agreed Form;
“
Project
” means, in relation to a FSO, the design, development, financing, conversion, ownership, operation and maintenance of
that FSO as further outlined in the Service Contract for that FSO or any other service or employment permitted by the Lenders during the Security Period;
“
Project Costs
” means the total project cost estimated for the acquisition and conversion of the FSOs, currently the Original
Project Costs, as may from time to time be modified in accordance with Clauses 11.18 and 11.19;
“
Provisional Delivery
Date
” means, in relation to a FSO, the “Provisional Delivery Date” as defined in the Service Contract for that FSO;
“
Quiet Enjoyment Letter
” means, in relation to a FSO, the letter of quiet enjoyment to be provided by the Security Trustee to
Maersk (and to be signed by TI Asia or TI Africa (as the case may be) and Maersk) pursuant to the Service Contract in relation to that Ship;
“
Quotation Date
” means, in relation to any period for which an interest rate is to be determined under any provision of a
Finance Document, the day which is 2 London business days before the first day of that period, unless market practice differs in the London Interbank Market for a currency, in which case the Quotation Date will be determined by the Agent in
accordance with market practice in the London Interbank
13
Market (and if quotations would normally be given by leading banks in the London Interbank Market on more than one day, the Quotation Date will be the last of those days);
“
Reference Banks
” means, subject to Clause 25.16, the London branches of ING Bank N.V., Sumitomo Mitsui Banking Corporation
Europe Limited, Fortis Bank SA/NV, Nordea Bank Finland plc and BNP Paribas;
“
Relevant Person
” has the meaning given in
Clause 18.9;
“
Repayment Date
” means, in relation to a Tranche, a date on which a repayment is required to be made under
Clause 8;
“
Requisition Compensation
” includes all compensation or other moneys payable by reason of any act or event such
as is referred to in paragraph (b) of the definition of “Total Loss”;
“
Secured Liabilities
” means all
liabilities which the Borrowers, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or the Master Agreements or any judgment relating to any Finance
Document or the Master Agreements; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation,
arrangement or other procedure under the insolvency laws of any country;
“
Security Interest
” means:
|
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
|
|
(b)
|
the security rights of a plaintiff under an action
in rem
; and
|
|
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a
security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
|
“
Security Party
” means each Guarantor and each Shareholder and any other person (except a Creditor Party) who, as a surety or
mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the last paragraph of the definition of “Finance Documents”;
“
Security Period
” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies
the Borrowers, the Security Parties and the Lenders that:
|
|
(a)
|
all amounts which have become due for payment by any Borrower or any Security Party under the Finance Documents and the Master Agreements have been paid;
|
|
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document or any Master Agreement;
|
|
|
(c)
|
neither any Borrower nor any Security Party has any future or contingent liability under Clause 19, 20 or 21 or any other provision of this Agreement or another Finance Document or a Master Agreement; and
|
14
|
|
(d)
|
the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document or a Master Agreement would be set aside, or would have
to be reversed or adjusted, in any present or possible future bankruptcy of a Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or a Master Agreement or any asset covered (or previously
covered) by a Security Interest created by a Finance Document;
|
“
Security Trustee
” means ING Bank N.V.,
acting in such capacity through its office at Bijlmerplein 888,1102 MG, Amsterdam, The Netherlands, or any successor of it appointed under clause 5 of the Agency and Trust Deed;
“
Service Contract Assignment
” means:
|
|
(a)
|
in relation to each FSO for the period up until the Transfer Date for that FSO, the Pre Conversion Service Contract Assignment for that FSO; and
|
|
|
(b)
|
in relation to each FSO from the Transfer Date for that FSO throughout the remainder of the Security Period, the Post Conversion Service Contract Assignment for that FSO;
|
“
Service Contracts
” means each of the FSO 1 Service Contract and the FSO 2 Service Contract;
“
Service Contract Rights
” means, in relation to a Service Contract:
|
|
(a)
|
all rights and interests relating to any amount of any kind payable under the terms of that Service Contract;
|
|
|
(b)
|
all rights to have Maersk take the FSO pursuant to that Service Contract or withdraw the FSO from Maersk;
|
|
|
(c)
|
all rights to commence, conduct, defend or compromise or abandon any legal or arbitration relating to that Service Contract or any matter arising out of or in connection with the Service Contract; and
|
|
|
(d)
|
to the extent not included in the foregoing, the Assigned Property defined in the Service Contract Assignment for that Service Contract;
|
“
Servicing Bank
” means the Agent or the Security Trustee;
“
Share Security Deed
” means, in relation to a Borrower, a deed creating security over the shares of that Borrower to be
executed by the relevant Shareholders in favour of the Security Trustee in the Agreed Form;
“
Shareholders
” means:
|
|
(a)
|
in relation to each Conversion Borrower, Euronav Hong Kong Limited, a company incorporated in Hong Kong, and Africa Tanker; and
|
|
|
(b)
|
in relation to each TI Borrower, Euronav Hong Kong Limited and OSG International Inc., a company incorporated in the Marshall Islands;
|
“
Swap Bank
” means a bank or financial institution listed in Schedule 1B and acting through its branch indicated in
Schedule 1B;
“
Swap Counterparty
” means, at any relevant time and in relation to a continuing Designated Transaction,
the Swap Bank which is a party to that Designated Transaction;
15
“
TI Africa
” means TI Africa Limited, a company incorporated in Hong Kong whose
registered office is at Room 3206, 32nd Floor, Lippo Centre, Tower Two, 89 Queensway, Hong Kong;
“
TI Asia
” means TI Asia
Limited, a company incorporated in Hong Kong whose registered office is at Room 3206, 32nd Floor, Lippo Centre, Tower Two, 89 Queensway, Hong Kong;
“
TI Borrowers
” means each of TI Africa and TI Asia;
“
Total Loss
” means, in relation to a FSO:
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of the FSO;
|
|
|
(b)
|
any expropriation, confiscation, requisition or acquisition of the FSO, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected
by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless
it is within 3 months redelivered to the full control of the Borrower owning the FSO; and
|
|
|
(c)
|
any arrest, capture, seizure or detention of the FSO (including any hijacking or theft) unless it is within 3 months redelivered to the full control of the Borrower owning the FSO;
|
“
Total Loss Date
” means, in relation to a FSO:
|
|
(a)
|
in the case of an actual loss of the FSO, the date on which it occurred or, if that is unknown, the date of the last communication from the FSO;
|
|
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss of the FSO, the earliest of:
|
|
|
(i)
|
the date on which a notice of abandonment is given to the insurers; and
|
|
|
(ii)
|
the date of any compromise, arrangement or agreement made by or on behalf of the Borrower owning the FSO with the FSOs’ insurers in which the insurers agree to treat the FSO as a total loss; and
|
|
|
(c)
|
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;
|
“
Tranche 1
” means an amount up to $270,000,000 comprised of Tranche 1A and Tranche 1B;
“
Tranche 1A
” means an amount of up to $90,000,000 to be made available to the Borrowers for the purpose of financing the
acquisition of FSO 1 and for general corporate purposes, of which $50,000,000 will be made available on the transfer of FSO 1 to Asia Conversion and $40,000,000 will be made available on the Transfer Date in relation to FSO 1;
“
Tranche 1B
” means an amount of up to $180,000,000 to be made available to the Borrower to fund the Conversion Costs in
relation to FSO 1;
“
Tranche 2
” means, when aggregated with the amount of Tranche 1B, an amount up to $410,000,000
comprised of Tranche 2A and Tranche 2B;
16
“
Tranche 2A
” means an amount of up to $90,000,000 to be made available to the
Borrowers for the purpose of financing the acquisition of FSO 2 and for general corporate purposes, of which $50,000,000 will be made available on the transfer of FSO 2 to Africa Conversion and $40,000,000 will be made available on the Transfer Date
in relation to FSO 2;
“
Tranche 2B
” means, when aggregated with the amount of Tranche 1B, an amount up to $320,000,000 to
be made available to the Borrower to fund the Conversion Costs in relation to FSO 2;
“
Tranches
” means each of Tranche 1
and Tranche 2;
“
Transaction
” has the meaning given in each Master Agreement;
“
Transfer Certificate
” has the meaning given in Clause 25.2;
“
Transfer Date
” means:
|
|
(a)
|
in relation to FSO 1, the date on which FSO 1 is transferred from Asia Conversion to, and registered in the ownership of, TI Asia under the Belgium flag following completion of the Conversion Works for FSO 1; and
|
|
|
(b)
|
in relation to FSO 2, the date on which FSO 2 is transferred from Africa Conversion to, and registered in the ownership of, TI Africa under the Marshall Islands flag following completion of the Conversion Works for FSO
2;
|
“
Trust Property
” has the meaning given in clause 3.1 of the Agency and Trust Deed; and
“
Yard
” means Drydock-World Dubai (LLC).
|
1.2
|
Construction of certain terms.
In this Agreement:
|
“
administration
notice
” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in
connection with, the appointment of an administrator;
“
approved
” means, for the purposes of Clause 13, approved in
writing by the Agent;
“
asset
” includes every kind of property, asset, interest or right, including any present, future or
contingent right to any revenues or other payment;
“
company
” includes any partnership, joint venture and unincorporated
association;
“
consent
” includes an authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;
“
contingent liability
” means a liability which is not certain to arise
and/or the amount of which remains unascertained;
“
document
” includes a deed; also a letter or fax;
“
excess risks
” means, in relation to a FSO, the proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of the FSO in consequence of its insured value being less than the value at which the FSO is assessed for the purpose of such claims;
17
“
expense
” means any kind of cost, charge or expense (including all legal costs,
charges and expenses) and any applicable value added or other tax;
“
law
” includes any order or decree, any form of
delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
“
legal or administrative action
” means any legal proceeding or arbitration and any administrative or regulatory action or
investigation;
“
liability
” includes every kind of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“
months
” shall be construed in accordance with Clause 1.3;
“
obligatory insurances
” means, in relation to a FSO, all insurances effected, or which the Borrower owning the FSO is obliged
to effect, under Clause 13 or any other provision of this Agreement or another Finance Document;
“
parent company
” has the
meaning given in Clause 1.4;
“
person
” includes any company; any state, political sub-division of a state and local or
municipal authority; and any international organisation;
“
policy
”, in relation to any insurance, includes a slip, cover
note, certificate of entry or other document evidencing the contract of insurance or its terms;
“
protection and indemnity
risks
” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not
recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or clause 8 of the Institute
Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
“
regulation
” includes any regulation, rule, official directive, request or guideline whether or not having the force of law of
any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
“
subsidiary
” has the meaning given in Clause 1.4;
“
tax
” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any
political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and
“
war risks
” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or
1/11/03), clause 24 of the Institute Time Clauses (Hulls)(l/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
18
|
1.3
|
Meaning of “month”.
A period of one or more “
months
” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period
started (“
the numerically corresponding day
”), but:
|
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding
the numerically corresponding day; or
|
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,
|
and “
month
” and “
monthly
” shall be construed accordingly.
|
1.4
|
Meaning of “subsidiary”.
A company (S) is a subsidiary of another company (P) if:
|
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
|
|
(b)
|
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
|
|
(c)
|
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
|
(d)
|
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P,
|
and any company of which S is a subsidiary is a parent company of S.
|
1.5
|
General Interpretation.
In this Agreement:
|
|
(a)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
|
(b)
|
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
|
|
(c)
|
words denoting the singular number shall include the plural and vice versa; and
|
|
(d)
|
Clauses 1.1 to 1.5 apply unless the contrary intention appears.
|
|
1.6
|
Headings.
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
|
|
2.1
|
Amount of facility.
Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrowers a loan facility not exceeding $500,000,000 comprised of Tranches 1 and 2.
|
|
2.2
|
Lenders’ participations in Advances.
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment
bears to the Total Commitments.
|
|
2.3
|
Purpose of Advances.
The Borrowers undertake with each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement.
|
19
|
3
|
POSITION OF THE LENDERS AND SWAP BANKS
|
|
3.1
|
Interests several.
The rights of the Lenders and of the Swap Banks under this Agreement and under the Master Agreements are several.
|
|
3.2
|
Individual right of action.
Each Lender and each Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrowers to it under this Agreement or under a Master Agreement without
joining the Agent, the Security Trustee, any other Lender or any other Swap Bank as additional parties in the proceedings.
|
|
3.3
|
Proceedings requiring Majority Lenders’ consent.
Except as provided in Clause 3.2, no Lender and no Swap Bank may commence proceedings against any Borrower or any Security Party in connection with a Finance
Document or a Master Agreement without the prior consent of the Majority Lenders.
|
|
3.4
|
Obligations several.
The obligations of the Lenders under this Agreement and of the Swap Banks under the Master Agreement to which each is a party are several; and a failure of a Lender to perform its obligations
under this Agreement or a failure of a Swap Bank to perform its obligations under the Master Agreement to which it is a party shall not result in:
|
|
(a)
|
the obligations of the other Lenders or Swap Banks being increased; nor
|
|
(b)
|
any Borrower, any Security Party, any other Lender or any other Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document or under any Master Agreement;
|
and in no circumstances shall a Lender or a Swap Bank have any responsibility for a failure of another Lender or another Swap Bank to perform
its obligations under this Agreement or a Master Agreement.
|
4.1
|
Request for Advance.
Subject to the following conditions, the Borrowers may request an Advance to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (Amsterdam time)
3 Business Days prior to the intended Drawdown Date.
|
|
4.2
|
Availability.
The conditions referred to in Clause 4.1 are that:
|
|
(a)
|
a Drawdown Date has to be a Business Day during the Availability Period;
|
|
(b)
|
an Advance of $50,000,000 in relation to Tranche 1A shall be made available on the transfer of FSO 1 from Euronav to Asia Conversion and an Advance of $50,000,000 shall be made available in relation to Tranche 2A on the
transfer of FSO 2 from Africa Tanker to Africa Conversion;
|
|
(c)
|
an Advance of $40,000,000 in relation to Tranche 1A shall be made available on the Transfer Date in relation to FSO 1 and an Advance of $40,000,000 in relation to Tranche 2A shall be made available on the Transfer Date
in relation to FSO 2;
|
|
(d)
|
each Advance in relation to Tranche 1B shall be made available to fund the Conversion Costs in relation to FSO 1 and each Advance in relation to Tranche 2B shall be made available to fund the Conversion Costs in
relation to FSO 2;
|
|
(e)
|
there shall be no more than 14 Advances in relation to each of Tranche 1 and Tranche 2 at any time;
|
20
|
(f)
|
the aggregate amount of the Advances in relation to Tranche 1B and Tranche 2B shall not exceed $320,000,000;
|
|
(g)
|
the aggregate amount of Tranche 1 and Tranche 2 shall not exceed 70 per cent. of the aggregate Project Costs; and
|
|
(h)
|
the aggregate amount of the Advances shall not exceed the Total Commitments.
|
|
4.3
|
Notification to Lenders of receipt of a Drawdown Notice.
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
|
|
(a)
|
the amount of the Advance, the Tranche to which the Advance relates to and the Drawdown Date;
|
|
(b)
|
the amount of that Lender’s participation in the Advance; and
|
|
(c)
|
the duration of the first Interest Period.
|
|
4.4
|
Drawdown Notice irrevocable.
A Drawdown Notice must be signed by 2 directors or by a duly authorised person on behalf of the Borrowers; and once served, a Drawdown Notice cannot be revoked without the prior
consent of the Agent.
|
|
4.5
|
Lenders to make available Contributions.
Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the
Borrowers the amount due from that Lender on that Drawdown Date under Clause 2.2.
|
|
4.6
|
Disbursement of Advance.
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrowers the amounts which the Agent receives from the Lenders under Clause 4.5; and that
payment to the Borrowers shall be made:
|
|
(a)
|
to the account which the Borrowers specify in the Drawdown Notice; and
|
|
(b)
|
in the like funds as the Agent received the payments from the Lenders.
|
|
4.7
|
Disbursement of Advance to third party.
The payment by the Agent under Clause 4.6 to any third party shall constitute the making of the Advance and the Borrowers shall at that time become indebted, as principal
and direct obligors, to each Lender in an amount equal to that Lender’s Contribution.
|
|
5.1
|
Payment of normal interest.
Subject to the provisions of this Agreement, interest on an Advance in respect of each Interest Period applicable to it shall be paid by the Borrowers on the last day of that Interest
Period.
|
|
5.2
|
Normal rate of interest.
Subject to the provisions of this Agreement, the rate of interest on an Advance in respect of an Interest Period applicable to it shall be the aggregate of the Margin, the Mandatory Cost
(if any) and LIBOR for that Interest Period.
|
|
5.3
|
Payment of accrued interest.
In the case of an Interest Period longer than 6 months, accrued interest shall be paid every 6 months during that Interest Period and on the last day of that Interest Period.
|
|
5.4
|
Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrowers and each Lender of:
|
|
(a)
|
each rate of interest; and
|
|
(b)
|
the duration of each Interest Period,
|
as soon as reasonably practicable after each is
determined.
21
|
5.5
|
Obligation of Reference Banks to quote.
A Reference Bank which is a Lender shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this
Agreement.
|
|
5.6
|
Absence of quotations by Reference Banks.
If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or
Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.
|
|
5.7
|
Market disruption.
The following provisions of this Clause 5 apply if:
|
|
(a)
|
no rate is quoted on REUTERS BBA Page LIBOR 01 and 2 or more of the Reference Banks do not, before 1.00 p.m. (Amsterdam time) on the Quotation Date, provide quotations to the Agent in order to fix LIBOR; or
|
|
(b)
|
at least 1 Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than 50 per cent. of the Loan (or, if an Advance has not been made, Commitments amounting to
more than 50 per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent would not accurately reflect the cost to those Lenders of funding their respective Contributions (or any part of them) during the Interest Period in
the London Interbank Market at or about 11.00 a.m. (Amsterdam time) on the Quotation Date for the Interest Period.
|
|
5.8
|
Notification of market disruption.
The Agent shall promptly notify the Borrowers, each of the Lenders and each of the Swap Counterparties stating the circumstances falling within Clause 5.7 which have caused its
notice to be given.
|
|
5.9
|
Suspension of drawdown.
If the Agent’s notice under Clause 5.8 is served before an Advance is made the Lenders’ obligations to make the Advance shall be suspended while the circumstances referred to in
the Agent’s notice continue unless and until an alternative interest rate has been agreed in accordance with Clauses 5.10 to 5.12 (inclusive).
|
|
5.10
|
Negotiation of alternative rate of interest.
If the Agent’s notice under Clause 5.8 is served after an Advance is made, the Borrowers, the Agent, the Lenders and the Swap Counterparties shall use reasonable
endeavours to agree, within the 15 days after the date on which the Agent serves its notice under Clause 5.8 (the “
Negotiation Period
”), an alternative interest rate or (as the case may be) an alternative basis for the Lenders to
fund or continue to fund their or its Contribution during the Interest Period concerned.
|
|
5.11
|
Application of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
|
5.12
|
Alternative rate of interest in absence of agreement.
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of
the Negotiation Period, then the Agent shall, with the agreement of each Lender, set an interest period and interest rate representing the cost of funding of the Lenders in Dollars or in any available currency of their or its Contribution plus the
Margin and the Mandatory Cost (if any); and the procedure provided for by this Clause 5.12 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
|
22
At the request of the Borrowers, the Agent will advise the Borrowers of the then current status
of the circumstances giving rise to any market disruption referred to in Clause 5.7 during the period of any alternative rate of interest under Clauses 5.10, 5.11 and/or 5.12.
|
5.13
|
Notice of prepayment.
If the Borrowers do not agree with an interest rate set by the Agent under Clause 5.12, the Borrowers may give the Agent not less than 15 Business Days’ notice of their intention to
prepay at the end of the interest period set by the Agent.
|
|
5.14
|
Prepayment; termination of Commitments.
A notice under Clause 5.13 shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrowers’ notice of intended prepayment; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Total Commitments shall be cancelled; and
|
|
(b)
|
on the last Business Day of the interest period set by the Agent, the Borrowers shall prepay (without premium or penalty) the Loan together with accrued interest thereon at the applicable rate plus the Margin.
|
|
5.15
|
Application of prepayment.
The provisions of Clause 8 shall apply in relation to the prepayment.
|
|
6.1
|
Commencement of Interest Periods.
The first Interest Period applicable to an Advance shall commence on the Drawdown Date of that Advance and each subsequent Interest Period applicable to that Advance shall
commence on the expiry of the preceding Interest Period applicable to it.
|
|
6.2
|
Duration of normal Interest Periods.
Subject to Clauses 6.3 and 6.4, each Interest Period shall be:
|
|
(a)
|
3, 6, 9 or 12 months as notified by the Borrowers to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of the Interest Period; or
|
|
(b)
|
in the case of any Interest Period applicable to an Advance in relation to Tranche 1 which is in effect on the date falling 4 months after the Transfer Date for FSO 1, that Interest Period shall end on the said date,
whereupon all the Advances in relation to Tranche 1 shall be consolidated and treated as a single Advance for Tranche 1;
|
|
(c)
|
in the case of any Interest Period applicable to an Advance in relation to Tranche 2 which is in effect on the date falling 4 months after the Transfer Date for FSO 2, that Interest Period shall terminate on the said
date, whereupon all the Advances in relation to Tranche 2 shall be consolidated and treated as a single Advance for Tranche 2;
|
|
(d).
|
3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a); or
|
|
(e)
|
such other period as the Agent may, with the authorisation of the Lenders, agree with the Borrowers.
|
|
6.3
|
Duration of Interest Periods for repayment instalments.
In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.
|
23
|
6.4
|
Non-availability of matching deposits for Interest Period selected.
If, after the Borrowers have selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Agent by
11.00 a.m. (Amsterdam time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market
when the Interest Period commences, the Interest Period shall be 3 months.
|
|
7.1
|
Payment of default interest on overdue amounts.
The Borrowers shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrowers under any Finance Document
which the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
|
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
|
(c)
|
if such amount has become immediately due and payable under Clause 18.4, the date on which it became immediately due and payable.
|
|
7.2
|
Default rate of interest.
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by
the Agent to be 2 per cent. above:
|
|
(a)
|
in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and 7.3(b); or
|
|
(b)
|
in the case of any other overdue amount, the rate set out at Clause 7.3(b).
|
|
7.3
|
Calculation of default rate of interest.
The rates referred to in Clause 7.2 are:
|
|
(a)
|
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period applicable to it);
|
|
(b)
|
the Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
|
|
(ii)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time
determine.
|
|
7.4
|
Notification of interest periods and default rates.
The Agent shall promptly notify the Lenders and the Borrowers of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the
Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrowers are liable to pay such interest only with effect from the date of the Agent’s notification.
|
|
7.5
|
Payment of accrued default interest.
Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and
the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
|
24
|
7.6
|
Compounding of default interest.
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
|
7.7
|
Application to Master Agreements.
For the avoidance of doubt, this Clause 7 does not apply to any amount payable under a Master Agreement in respect of any continuing Designated Transaction as to which section
2(e) (Default Interest; Other Amounts) of that Master Agreement shall apply.
|
|
8
|
REPAYMENT AND PREPAYMENT
|
|
8.1
|
Amount of repayment instalments.
|
|
(a)
|
A Tranches.
The Borrowers shall repay each of Tranche 1A and Tranche 2A by annuity style amortisation to a balloon of $45,000,000 by 16 semi-annual instalments together with the balloon of $45,000,000 payable
together with the final instalment. The Agent shall provide the Borrowers and the Lenders with a repayment schedule for Tranche 1A and Tranche 2A before the Drawdown Date of that Tranche.
|
|
(b)
|
B Tranches.
The Borrowers shall repay each of Tranche 1B and Tranche 2B by annuity style amortisation to zero by 16 semi-annual instalments. An illustrative repayment schedule assuming an amount of $160,000,000
for Tranche 1B and Tranche 2B is shown in the Repayment Schedule. The Agent agrees that, promptly after receipt of the relevant Drawdown Notice evidencing the amount of Tranche 1B and Tranche 2B (as the case may be), it shall provide the Borrowers
and the Lenders with a repayment schedule for that Tranche.
|
|
8.2
|
Repayment Dates.
The first instalment for each Tranche shall be repaid on the First Repayment Date for that Tranche and the last instalment on the date falling 90 months after such First Repayment Date.
|
|
8.3
|
Final Repayment Date.
On the Maturity Date for each Tranche, the Borrowers shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance
Document in relation to that Tranche.
|
|
8.4
|
Voluntary prepayment.
Subject to the following conditions, the Borrowers may prepay, without penalty, the whole or any part of the Loan.
|
|
8.5
|
Conditions for voluntary prepayment.
The conditions referred to in Clause 8.4 are that:
|
|
(a)
|
a partial prepayment shall be $1,000,000 or a multiple of $1,000,000 (or such other amount as may be agreed by the Agent);
|
|
(b)
|
the Agent has received from the Borrowers at least 3 Business Days prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
|
|
(c)
|
the Borrowers have provided evidence satisfactory to the Agent that any consent required by any Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any
official regulation relevant to this Agreement which affects any Borrower or any Security Party has been complied with.
|
|
8.6
|
Effect of notice of prepayment.
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the
prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.
|
25
|
8.7
|
Notification of notice of prepayment.
The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the
Borrowers under Clause 8.5(c).
|
|
8.8
|
Mandatory prepayment on sale or Total Loss.
The Borrowers shall be obliged to prepay the relevant proportion of the Loan if a FSO is sold (which, for the avoidance of doubt, includes a transfer pursuant to the
Maersk Purchase Option) or becomes a Total Loss:
|
|
(a)
|
in the case of a sale, on or before the date on which the sale is completed by delivery of the FSO to the buyer; or
|
|
(b)
|
in the case of a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.
|
In this Clause 8.8 and in Clauses 8.9, 8.10 and 8.11 the “
relevant proportion
” means the full amount of
Tranche 1A (in the case of FSO 1) and the full amount of Tranche 2A (in the case of FSO 2) plus, in each case, an amount equal to the higher of:
|
|
(i)
|
50 per cent. of the aggregate of the amount of Tranche 1B and Tranche 2B outstanding as at the date of the sale or Total Loss; and
|
|
|
(ii)
|
such amount as may be required so that the market value (as determined on a basis which is satisfactory to the Lenders) of the FSO which remains financed under this Agreement is not less than 143 per cent. of the
amount of the Loan outstanding after such prepayment.
|
If the remaining FSO is sold or becomes a Total Loss, the Borrowers
shall prepay the full amount of the Loan.
|
8.9
|
Mandatory prepayment on non-completion of the Conversion Works.
The Borrowers shall be obliged to repay the relevant proportion of the Loan if the Conversion Works in relation to the relevant FSO have not been
completed by the day falling 180 days after the Scheduled Provisional Delivery Date (as referred to in clause 9.1 in the Service Contract for that FSO).
|
|
8.10
|
Mandatory prepayment on termination of Service Contract.
The Borrowers shall be obliged to prepay the relevant proportion of the Loan if the Service Contract in relation to an FSO is terminated (including, for
the avoidance of doubt, cancellation for convenience or war) unless such termination results from Maersk exercising the Maersk Bareboat Option and the relevant TI Borrower has executed in favour of the Security Trustee an assignment of such bareboat
charter in such form as the Lenders may reasonably require.
|
|
8.11
|
Mandatory prepayment on Maersk Bareboat Option.
The Borrowers shall be obliged to prepay the relevant proportion of the Loan if Maersk exercises the Maersk Bareboat Option, on or before the date on which the
bareboat charter is entered into pursuant to the said Maersk Bareboat Option, unless the relevant TI Borrower has executed in favour of the Security Trustee an assignment of such bareboat charter in such form as the Lenders may reasonably require.
|
|
8.12
|
Mandatory prepayment on Change of Control.
If there is a Change of Control, the Borrowers shall be obliged to prepay the Loan not later than 60
days following the occurrence of the Change of Control unless the Agent has approved the Change of Control (acting with the authorisation of the Majority Lenders, which authorisation shall
|
26
|
|
not be unreasonably withheld or delayed and shall only be withheld if there is a valid and reasonable concern on the part of such Lenders as to the financial position of the person in control
after the Change of Control or the identity of such person).
|
|
8.13
|
Amounts payable on prepayment.
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 20 or otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period together with any sums payable under Clause 20.1(b) but without premium or penalty.
|
|
8.14
|
Application of partial prepayment.
Each partial prepayment shall be applied pro rata against each Tranche and then pro rata against the repayment instalments (including the balloon) specified in Clause 8.1 in
inverse order of maturity.
|
|
8.15
|
No reborrowing.
No amount prepaid may be reborrowed.
|
|
8.16
|
Unwinding of Designated Transactions.
Immediately after any partial repayment or prepayment of the Loan under this Clause 8 or any other provision of this Agreement, the Borrowers shall wholly or partially
reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining corresponds to (taking into account the
scheduled amortisation) the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1
provided
that
the Borrowers shall not be required to wholly or partially reverse, offset, unwind or otherwise terminate any
continuing Designated Transaction on any repayment or prepayment of the Loan if that Designated Transaction is out of the money for the Borrowers.
|
If a FSO is sold or becomes a Total Loss and the Borrowers do not wholly or partially reverse, offset, unwind or otherwise terminate one or
more of any continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining corresponds to (taking into account the scheduled amortisation) the amount of the Loan as reducing
from time to time thereafter pursuant to Clause 8.1, then the Borrowers shall, simultaneously with the prepayment of the relevant amount of the Loan pursuant to Clause 8.8, provide security in the form of a pledged cash deposit or such other
security as may be agreed between the Borrowers and the Agent (acting with the authorisation of the Lenders or, with the authorisation of the Swap Banks, if the Loan has been repaid) in an amount acceptable to the Swap Banks. Such security shall be
executed in favour of the Security Trustee and shall be held for the benefit of the Swap Banks whose Designated Transactions have not been wholly or partially reversed, offset, unwound or otherwise terminated on the sale or Total Loss of the
relevant FSO.
|
9.1
|
Documents, fees and no default.
Each Lender’s obligation to contribute to an Advance is subject to the following conditions precedent:
|
|
(a)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
|
|
(b)
|
that, on the first Drawdown Date but prior to the making of the first Advance in relation to each of Tranche 1A and Tranche 2A, the Agent receives or is satisfied that it will receive on the making of the first Advance
the documents described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers;
|
|
(c)
|
that, on the first Drawdown Date but prior to making the second Advance in relation to each of Tranche 1A and Tranche 2A, the Agent receives or is satisfied that it will receive on the making of the Advance on that date
the documents in relation to that FSO described in Part C of Schedule 3 in form and substance satisfactory to it and its lawyers;
|
27
|
(d)
|
that, on or before the making of each Advance in relation to each of Tranche 1B and Tranche 2B, the Agent receives copies of invoices or such other documentation which may be satisfactory to the Lenders in relation to
the Conversion Works to be financed by that Advance together with such other documents which the Agent, with the authorisation of the Majority Lenders, may request by notice to the Borrowers before the Drawdown Date;
|
|
(e)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the arrangement fee referred to in Clause 19.1, all accrued commitment fee payable pursuant to Clause 19.1 and the first instalment of the
annual agency fee referred to in Clause 19.1;
|
|
(f)
|
that both at the date of each Drawdown Notice and at each Drawdown Date:
|
|
|
(i)
|
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Advance;
|
|
|
(ii)
|
the representations and warranties in Clause 10.1 and those of any Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with
reference to the circumstances then existing; and
|
|
|
(iii)
|
none of the circumstances contemplated by Clause 5.7 has occurred and is continuing;
|
|
(g)
|
that the aggregate amount of the Advances in relation to the FSOs, following the making of the Advance, shall not exceed 70 per cent. of the aggregate of the Project Costs; and
|
|
(h)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the
Majority Lenders, reasonably request by notice to the Borrowers prior to the Drawdown Date.
|
|
9.2
|
Waiver of conditions precedent.
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrowers shall ensure
that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
|
|
10
|
REPRESENTATIONS AND WARRANTIES
|
|
10.1
|
General.
Each Borrower represents and warrants to each Creditor Party as follows.
|
|
10.2
|
Status.
Each Borrower is duly incorporated and validly existing and in good standing (as the case may be) under the laws of the Marshall Islands in the case of the Conversion Borrowers and Hong Kong in the case
of the TI Borrowers.
|
|
10.3
|
Share capital and ownership.
|
|
(a)
|
Each Conversion Borrower has 500 authorised shares with no par value, 2 of which shares have been issued and fully paid, and the legal title and beneficial ownership of all those shares is held, free of any Security
Interest or other claim, as to 1 share by Euronav Hong Kong Limited, a subsidiary of Euronav and as to 1 share by Africa Tanker, an indirect subsidiary of OSG; and
|
28
|
(b)
|
each TI Borrower has an authorised share capital of $10,000 divided into 10,000 shares of $1.00 each, 2 of which shares have been issued and fully paid, and the legal title and beneficial ownership of all those shares
is held, free of any Security Interest or other claim, as to 1 share by Euronav Hong Kong Limited, a subsidiary of Euronav and as to 1 share by OSG International, Inc., a subsidiary of OSG.
|
|
10.4
|
Corporate power.
Each Borrower (or, in the case of paragraph (a), will have) has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
|
|
(a)
|
to register the FSO in its name under the Approved Flag for that FSO;
|
|
(b)
|
to execute the Conversion Contracts and the Service Contracts to which it is a party;
|
|
(c)
|
to execute the Finance Documents to which that Borrower is a party and the Master Agreements; and
|
|
(d)
|
to borrow under this Agreement, to enter into Designated Transactions under the Master Agreements and to make all the payments contemplated by, and to comply with, those Finance Documents to which that Borrower is a
party and the Master Agreements.
|
|
10.5
|
Consents in force.
All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
|
|
10.6
|
Legal validity; effective Security Interests.
The Finance Documents to which each Borrower is a party and the Master Agreements, do now or, as the case may be, will, upon execution and delivery (and, where
applicable, registration as provided for in the Finance Documents):
|
|
(a)
|
constitute that Borrower’s legal, valid and binding obligations enforceable against that Borrower in accordance with their respective terms; and
|
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
|
subject to any relevant insolvency laws affecting creditors’ rights generally.
|
10.7
|
No third party Security Interests.
Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:
|
|
(a)
|
each Borrower which is a party to that Finance Document will have the right to create all the Security Interests which that Finance Document purports to create; and
|
|
(b)
|
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms,
relates.
|
|
10.8
|
No conflicts.
The execution by each Borrower of each Finance Document to which it is a party and the Master Agreements, and the borrowing by that Borrower of the Loan, and its compliance with each Finance
Document to which it is a party and each Master Agreement will not involve or lead to a contravention of:
|
|
(a)
|
any law or regulation; or
|
|
(b)
|
the constitutional documents of that Borrower; or
|
|
(c)
|
any contractual or other obligation or restriction which is binding on that Borrower or any of its assets.
|
29
|
10.9
|
No withholding taxes.
All payments which each Borrower is liable to make under the Finance Documents to which it is a party may be made without deduction or withholding for or on account of any tax payable under
any law of any Pertinent Jurisdiction.
|
|
10.10
|
No default.
No Event of Default or Potential Event of Default has occurred and is continuing.
|
|
10.11
|
Information.
All information which has been provided by or on behalf of the Borrowers or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.5;
all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7; and there has been no material adverse change in the financial position or state of affairs of any Borrower from that disclosed in the latest
of those accounts.
|
|
10.12
|
No litigation.
No legal or administrative action involving any Borrower or Africa Tanker (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken
or, to any Borrower’s knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on any Borrower’s ability to perform its obligations under the Finance Documents.
|
|
10.13
|
Validity and completeness of Conversion Contracts and Service Contracts.
Each of the Conversion Contracts and Service Contracts constitutes valid, binding and enforceable obligations of the parties thereto in
accordance with its terms and:
|
|
(a)
|
the copy of each of the Conversion Contracts and Service Contracts delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
|
(b)
|
no amendments or additions to any of the Conversion Contracts and Service Contracts have been agreed nor has any parties thereto waived any of their respective rights under such documents.
|
|
10.14
|
Compliance with certain undertakings.
At the date of this Agreement, the Borrowers are in compliance with Clauses 11.2, 11.4, 11.9 and 11.13.
|
|
10.15
|
Taxes paid.
Each Borrower has paid all taxes applicable to, or imposed on or in relation to that Borrower, its business or the FSO owned or to be owned by it.
|
|
10.16
|
ISM Code and ISPS Code compliance.
All requirements of the ISM Code and the ISPS Code as they relate to the Borrowers, the Approved Manager and the FSOs have been complied with.
|
|
10.17
|
No money laundering.
Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrowers of the Loan, the performance and discharge of their obligations and liabilities under the
Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which a Borrower is a party, the Borrowers confirm (i) that they are acting for their own account; (ii) that they will use
the proceeds of the Loan for their own benefit, under their full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official
requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive (91/308) (EEC) of the Council of the European Communities).
|
|
11.1
|
General.
Each Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the
Majority Lenders, otherwise permit (such permission not to be unreasonably withheld or delayed in the case of Clause 11.12).
|
30
|
11.2
|
Title; negative pledge.
Each Borrower will:
|
|
(a)
|
hold the legal title to, and own the entire beneficial interest in the FSO owned or to be owned by it (which shall be owned by the relevant Conversion Borrower until transferred to the relevant TI Borrower on the
Transfer Date for that FSO), its Insurances and Earnings and the Conversion Contract and Service Contract Rights in relation to that FSO, free from all Security Interests and other interests and rights of every kind, except for the Maersk Purchase
Option and Maersk Bareboat Option and except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests; and
|
|
(b)
|
not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future;
|
|
11.3
|
No disposal of assets.
No Borrower will transfer, lease or otherwise dispose of:
|
|
(a)
|
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except for the Maersk Purchase Option and the Maersk Bareboat Option; or
|
|
(b)
|
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation,
|
Provided that
the Conversion Borrowers may transfer the FSOs to the TI Borrowers subject to the terms of this Agreement and satisfaction
of the conditions precedent in Part C to Schedule 3.
|
11.4
|
No other liabilities or obligations to be incurred.
No Borrower will incur any liability or obligation except liabilities and obligations under the Conversion Contracts, the Service Contracts, the Guarantee
Facility, the Master Agreements and the Finance Documents to which it is a party and liabilities or obligations incurred in the ordinary course of operating and chartering the FSO owned or to be owned by it.
|
|
11.5
|
Information provided to be accurate.
All financial and other information which is provided in writing by or on behalf of a Borrower under or in connection with any Finance Document will be true and not misleading
and will not omit any material fact or consideration.
|
|
11.6
|
Provision of financial statements.
Each Borrower will send to the Agent:
|
|
(a)
|
as soon as possible, but in no event later than 180 days after the end of each financial year of that Borrower, the audited accounts of that Borrower;
|
|
(b)
|
as soon as possible, but in no event later than 45 days after the end of each quarter in each financial year of that Borrower:
|
|
|
(i)
|
unaudited accounts of that Borrower which are certified as to their correctness by 2 directors of that Borrower; and
|
|
|
(ii)
|
management accounts in a format approved by the Agent which show the results of the operation of the FSO owned by it during the preceding financial quarter and which are certified as to their correctness by 2 directors
of that Borrower;
|
|
(c)
|
as soon as possible, but in no event later than 60 days after the end of each financial year of that Borrower, a budget in a format approved by the Agent which shows all anticipated income and expenditure of the FSO
owned by it during the next financial year of that Borrower; and
|
|
(d)
|
the Borrowers shall also endeavour to procure that the Agent is sent as soon as possible, but in no event later than 180 days after the end of each financial year of Maersk, the audited accounts of Maersk.
|
31
|
11.7
|
Form of financial statements.
All accounts (audited and unaudited) delivered under Clause 11.6 will:
|
|
(a)
|
be prepared in accordance with all applicable laws and GAAP consistently applied;
|
|
(b)
|
give a true and fair view of the state of affairs of the relevant Borrower at the date of those accounts and of its profit for the period to which those accounts relate; and
|
|
(c)
|
fully disclose or provide for all significant liabilities of the relevant Borrower.
|
|
11.8
|
Creditor notices.
Each Borrower will send the Agent, at the same time as they are despatched, copies of all material communications which are despatched to that Borrower’s creditors or any class of them.
|
|
11.9
|
Consents.
Each Borrower will maintain in force and promptly obtain or renew, and, if so requested, will promptly send certified copies to the Agent of, all consents required:
|
|
(a)
|
for that Borrower to perform its obligations under the Conversion Contract, the Service Contract, any Finance Document to which it is a party and any Master Agreement;
|
|
(b)
|
for the validity or enforceability of the Conversion Contract, the Service Contract and any Finance Document to which it is a party and any Master Agreement;
|
|
(c)
|
for that Borrower to continue to own and operate the FSO owned or to be owned by it (which shall be from the first Drawdown Date of the relevant Tranche up until the Transfer Date for that FSO the relevant Conversion
Borrower and, thereafter, throughout the Security Period the relevant TI Borrower),
|
and that Borrower will comply with the
terms of all such consents.
|
11.10
|
Maintenance of Security Interests.
Each Borrower will:
|
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
|
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid,
enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
|
11.11
|
Notification of litigation.
Each Borrower will provide the Agent with details of any legal or administrative action involving that Borrower, any Security Party, the Approved Manager or the FSO owned by it, the
Earnings or the Insurances, the Conversion Contracts, the Service Contracts or the Project as soon as such action is instituted or it becomes apparent to that Borrower that it is likely to be instituted, unless it is clear that the legal or
administrative action cannot be considered material in the context of any Finance Document.
|
|
11.12
|
No amendment to Conversion Contracts or Service Contracts.
No Borrower will agree to any material amendment or supplement to, or waive or fail
to enforce, the Conversion Contract or Service Contract to which it is a party or any of its provisions,
|
32
|
|
and, for the avoidance of doubt, neither of the TI Borrowers shall agree any extension to the Provisional Delivery Date under the Service Contracts without the consent of the Agent (acting with
the authorisation of the Lenders) unless Maersk is entitled to extend the Provisional Delivery Date under the Service Contracts without requiring the consent of the TI Borrowers
|
|
11.13
|
Principal place of business.
Each Borrower will maintain its place of business, and keep its corporate documents and records, at either its registered address or the address of its parent; and no Borrower will
establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than its place of incorporation.
|
|
11.14
|
Confirmation of no default.
Each Borrower will, within 5 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by 2 directors of that Borrower and which:
|
|
(a)
|
states that no Event of Default or Potential Event of Default has occurred and is continuing; or
|
|
(b)
|
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
|
The Agent may serve requests under this Clause 11.14 from time to time but only if asked to do so by a Lender or Lenders having Contributions
exceeding 10 per cent. of the Loan or (if no Advances have been made) Commitments exceeding 10 per cent. of the Total Commitments; and this Clause 11.14 does not affect the Borrowers’ obligations under Clause 11.15.
|
11.15
|
Notification of default.
Each Borrower will notify the Agent as soon as that Borrower becomes aware of:
|
|
(a)
|
the occurrence of an Event of Default or a Potential Event of Default; or
|
|
(b)
|
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,
|
and will keep the Agent fully up-to-date with all developments.
|
11.16
|
Provision of further information.
Each Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:
|
|
(a)
|
to that Borrower, the FSO owned or to be owned by it, the Earnings or the Insurances; or
|
|
(b)
|
to the Conversion Contracts and their performance by the parties thereto; or
|
|
(c)
|
to the Service Contracts and any action by Maersk under or on connection with the Service Contracts; or
|
|
(d)
|
to any other matter relevant to, or to any provision of, a Finance Document or the Project,
|
which may be reasonably requested by the Agent, the Security Trustee or any Lender at any time.
|
11.17
|
“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;
|
33
|
(b)
|
any change in the status of the Borrowers or any Security Party 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,
|
obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with “know your customer” or
similar identification procedures in circumstances where the necessary information is not already available to it, the Borrowers shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such
documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in
order for the Agent, the Lender concerned or, in the case of the event described in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks
under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
|
11.18
|
Updates on Conversion Contracts.
The Borrowers will:
|
|
(a)
|
with a first report not later than 30 days after the first Drawdown Date send to the Agent monthly updates throughout the period of the Conversion Works on the performance of the Conversion Contracts and, promptly after
a request from the Agent, any additional information which the Agent may request in relation to such reports;
|
|
(b)
|
promptly notify the Agent of any material defect, imperfection or other fault becoming apparent in any part of the works being carried out pursuant to the Conversion Contracts (and for the purpose of this paragraph, a
defect, imperfection or other fault is material if the cost or estimated cost of repairing, amending, reconstruction, rectifying or making good the same is or may reasonably be expected to be in the excess of $5,000,000 (or the equivalent of
$5,000,000 in any other currency); and
|
|
(c)
|
inform the Agent as soon as reasonably possible if there is, or is likely to be, any material delay, or cost overrun in the performance of any of the Conversion Contracts or a default or possible default by the Yard or
any other person under any of the Conversion Contracts or any other incident which will or might affect the due performance of any of the Conversion Contracts.
|
|
11.19
|
Project Costs and Conversion Budget.
Without limiting its obligations under Clause 11.18, the Borrowers will, as soon as they become aware of any change or prospective change in the Original Project Costs or to
any detail of the Conversion Budget in either case resulting individually or cumulatively in an increase of the Project Costs or Conversion Budget of more than $16,000,000 from that incorporated and detailed in the Original Project Costs (an
“
Excess
”), notify the Agent of such change in writing. Following such notification, the Agent and the Borrowers will discuss such change or prospective change and, if so requested by the Borrowers and the Agent agrees, the Project
Costs and Conversion Budget shall, for the purpose of this Agreement, be as amended by such change or prospective change to the Original Project Costs. If no agreement can be reached within 1 week of the commencement of such discussions, the
Agent’s decision to change or not change the Original Project Costs or the Conversion Budget (after consultation with the Lenders and subject to the consent of the Majority Lenders) shall be final and binding on the Borrowers
Provided
that
the agreement of the Agent shall not be required for any changes in the Project Costs where the amount of the Excess shall be and is funded by a corresponding payment from Maersk.
|
34
|
11.20
|
No amendment to Master Agreements.
The Borrowers will not agree to any amendment or supplement to, or waive or fail to enforce, any Master Agreement or any of its provisions.
|
|
12
|
CORPORATE UNDERTAKINGS
|
|
12.1
|
General.
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period except as the Agent may, with the authorisation of
the Majority Lenders, otherwise permit.
|
|
12.2
|
Maintenance of status.
Each Borrower will maintain its separate corporate existence and remain in good standing (as applicable in the relevant jurisdiction) under the laws of the Marshall Islands in the case of
the Conversion Borrowers and under the laws of Hong Kong in the case of the TI Borrowers.
|
|
12.3
|
Negative undertakings.
No Borrower will:
|
|
(a)
|
carry on any business other than the ownership, chartering and operation of the FSO (or the transfer before its conversion) owned or to be owned by it; or
|
|
(b)
|
pay any dividend or make any other form of distribution or effect any form of redemption, purchase or return of share capital
Provided that
the Borrowers may pay a dividend or make a distribution subject to the
following conditions:
|
|
|
(i)
|
the Borrowers are in compliance with the covenants and undertakings in this Agreement and no Event of Default has occurred and is continuing or would result from the payment of such dividend;
|
|
|
(ii)
|
no force majeure event has occurred and is continuing under a Service Contract with no force majeure rates payable under a Service Contract;
|
|
|
(iii)
|
the rate payable under a Service Contract has not remained unpaid for a period of 30 days or more; and
|
|
|
(iv)
|
the Debt Service Reserve Accounts each have at least an amount equal to 6 months of principal and gross interest (non-capitalised) due under this Agreement in relation to the relevant Tranche in accordance with Clause
12.4.
|
|
(c)
|
provide any form of credit or financial assistance to:
|
|
|
(i)
|
a person who is directly or indirectly interested in that Borrower’s share or loan capital; or
|
|
|
(ii)
|
any company in or with which such a person is directly or indirectly interested or connected,
|
or enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to that Borrower
than those which it could obtain in a bargain made at arms’ length;
|
(d)
|
issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital;
|
|
(e)
|
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks with a minimum Standard and Poor’s rating of AA-, or enter into
any transaction in a derivative other than Designated Transactions; or
|
|
(f)
|
enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation.
|
35
|
12.4
|
Debt service reserve.
The Borrowers undertake to pay to each Debt Service Reserve Account an account equal to 6 months principal and gross interest (non-capitalised) due under this Agreement in relation to each
Tranche (the Debt Service Reserve Account in relation to FSO 1 in the case of Tranche 1 and the Debt Service Reserve Account in relation to FSO 2 in the case of Tranche 2) to be built up during the period commencing on the Transfer Date in relation
to the relevant FSO and the date falling 30 months after that date and, thereafter, to maintain such amount on each Debt Service Reserve Account throughout the remainder of the Security Period.
|
|
12.5
|
Transfer of ownership.
Subject to the consent of the Agent, acting with the authorisation of all of the Lenders (such consent not to be unreasonably withheld or delayed), the shares in a Borrower or Borrowers may
be transferred so that 1 Guarantor becomes the beneficial owner of all the shares in that Borrower or Borrowers subject to the amendment of the Guarantee of the Guarantor which becomes the 100 per cent. owner to cover 100 per cent. of the
liabilities of the relevant Borrower or Borrowers under the Loan Agreement and other Finance Documents and, for the avoidance of doubt, such event shall not constitute a prepayment event.
|
|
13.1
|
General.
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 at all times during the Security Period except as the Agent may, with the authorisation of
the Majority Lenders, otherwise permit.
|
|
13.2
|
Maintenance of obligatory insurances.
Each Borrower shall keep the FSO owned by it insured at the expense of that Borrower against:
|
|
(a)
|
during the period of the Conversion Works in relation to the FSO and prior to the Transfer Date for that FSO, CAR Insurances (and the Borrowers shall not be required to insure the FSO against the risks referred to in
(b), (c) or (d) of this Clause 13.2 until completion of the Conversion Works);
|
|
(b)
|
fire and usual marine risks (including hull and machinery and excess risks);
|
|
(d)
|
protection and indemnity risks; and
|
|
13.3
|
Terms of obligatory insurances.
Each Borrower shall effect such insurances:
|
|
(b)
|
in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) when aggregated with such insurances of the other FSO 125 per cent. of the Loan and
(ii) the market value of the FSO owned by it;
|
|
(c)
|
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine
insurance market;
|
|
(d)
|
in relation to protection and indemnity risks in respect of the full tonnage of the FSO owned by it;
|
36
|
(f)
|
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations;
and
|
|
(g)
|
so as to comply with the requirements of the Service Contract for the FSO.
|
|
1
3.4
|
Further protections for the Creditor Parties.
In addition to the terms set out in Clause 13.3, each Borrower shall procure that the obligatory insurances shall:
|
|
(a)
|
in relation to the obligatory insurances for hire and usual marine risks and war risks, whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its
rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other
assessments in respect of such insurance;
|
|
(b)
|
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
|
|
(c)
|
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
|
|
(d)
|
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
|
|
(e)
|
provide that the Security Trustee may make proof of loss if the Borrowers fail to do so.
|
|
13.5
|
Renewals.
The Borrowers shall ensure that:
|
|
(a)
|
before the expiry of any obligatory insurance, that obligatory insurance is renewed; and
|
|
(b)
|
promptly after each such renewal, there is provided to the Security Trustee details of the terms and conditions on which such obligatory insurances have been renewed.
|
If there is a change in the insurers and/or markets through whom the obligatory insurances are placed the Borrowers shall procure that the
Security Trustee is notified within a reasonable time of the names of the insurers and/or markets employed for the purposes of the renewal of the obligatory insurance and of the amounts in which they are renewed.
|
13.6
|
Letters of undertaking.
In relation to all obligatory insurances effected from time to time under Clause 13.2, the Borrowers shall ensure that all brokers and any protection and indemnity or war risks
associations in which a FSO is entered, in each case being approved by the Security Trustee, provide the Security Trustee with letters of undertaking:
|
|
(a)
|
in the case of a broker, in a form standard in the insurance market in which such broker operates or any professional association of which that approved broker is a member;
|
|
(b)
|
in the case of a protection and indemnity or war risks association, in its standard form.
|
If
any of the obligatory insurances referred to in Clause 13.2(a) and/or (b) form part of a fleet cover, the Borrowers will procure that any letter of undertaking referred to in paragraph (a) of this Clause 13.6 is amended to provide that the
relevant brokers shall undertake to the Security Trustee that they shall neither set-off against any claims in respect of the relevant FSO any premiums due in respect of other vessels under such fleet
37
cover or any premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances.
|
13.7
|
Copies of certificates of entry.
Each Borrower shall ensure that any protection and indemnity and/or war risks associations in which the FSO owned by it is entered provides the Security Trustee with:
|
|
(a)
|
a certified copy of the certificate of entry for that FSO; and
|
|
(b)
|
a letter or letters of undertaking in such form as may be required by the Security Trustee.
|
|
13.8
|
Deposit of original policies.
Each Borrower shall ensure that all policies relating to obligatory insurances effected by it are deposited with the approved brokers through which the insurances are effected or
renewed.
|
|
13.9
|
Payment of premiums.
Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances effected by it and produce all relevant receipts when so required by the Security
Trustee.
|
|
13.10
|
Guarantees.
Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
|
13.11
|
Compliance with terms of insurances.
No Borrower shall do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or
unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
|
|
(a)
|
each Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and ensure that the obligatory insurances are not made subject to
any exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
|
(b)
|
no Borrower shall make any changes relating to the classification or classification society or manager or operator of the FSO owned by it approved by the underwriters of the obligatory insurances
Provided that
a
Borrower may change the classification society of the FSO owned by it subject to the prior written consent of the Agent acting with the authorisation of the Majority Lenders (such consent not to be unreasonably withheld or delayed) and
Provided
that
no consent of the Agent shall be required if the change of manager or operator result in Euronav or OSG becoming the manager or operator of both FSOs; and
|
|
(c)
|
no Borrower shall employ the FSO owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and
complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
|
13.12
|
Alteration to terms of insurances.
The Borrowers shall procure that:
|
|
(a)
|
no adverse alteration is made to any obligatory insurance (which alteration is, in the reasonable opinion of the Security Trustee, likely to materially adversely affect the Lenders) without the prior written consent of
the Security Trustee; and
|
|
(b)
|
all the steps under its control are taken to seek to avoid the occurrence of any act or omission which would enable cancellation of any obligatory insurance or render any obligatory insurance invalid, void or
unenforceable or render any sum paid out under any obligatory insurance repayable in whole or in part.
|
38
|
13.13
|
Settlement of claims.
No Borrower shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents,
evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
|
13.14
|
Provision of copies of communications.
Promptly after a request of the Agent (acting reasonably), each Borrower shall provide the Security Trustee, at the time of each such communication, copies of all written
communications between that Borrower and:
|
|
(a)
|
the approved brokers;
|
|
(b)
|
the approved protection and indemnity and/or war risks associations; and
|
|
(c)
|
the approved insurance companies and/or underwriters, which relate directly or indirectly to:
|
|
|
(i)
|
that Borrower’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and
|
|
|
(ii)
|
any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.
|
|
13.15
|
Provision of information.
Each Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person)
reasonably requests for the purpose of:
|
|
(a)
|
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
|
(b)
|
effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 or dealing with or considering any matters relating to any such insurances,
|
and the Borrowers shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses reasonably incurred by
or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
|
13.16
|
Mortgagee’s interest and additional perils insurances.
The Security Trustee shall maintain and renew a mortgagee’s interest additional perils insurance and a mortgagee’s interest marine insurance
in such amounts, on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrowers shall upon demand fully indemnify the Agent or Security Trustee (as the case may
be) in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.
|
Notwithstanding the above, if at any time the Agent or Security Trustee proposes to effect any insurances of the nature
referred to in this Clause, it shall first notify the Borrowers of the insurance which it proposes to effect, the terms on which it requires it to be effected and the date from which it requires it to be so effected. If, before the date on which the
Agent or Security Trustee (as the case may be) requires that insurance to be effected, the Borrowers can demonstrate to the Agent or Security Trustee (as the case may be) that a firm of insurance brokers with a reputation acceptable to the Agent or
the Security Trustee (as the case may be) is able to arrange that insurance upon the same terms, before that date, for a price lower than that for which any firm of insurance brokers nominated by the Agent or Security Trustee is prepared to arrange
that insurance and
39
with underwriters acceptable to the Agent or Security Trustee (as the case may be), and if that firm of insurance brokers will enter into such agreements with the Agent or Security Trustee (as
the case may be) as it may require taking into account the identity of that firm of insurance brokers, the Agent or Security Trustee (as the case may be) shall not unreasonably refuse to effect that insurance through that firm of insurance brokers
so nominated by the Borrowers.
|
14.1
|
General.
Each Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 at all times during the Security Period (in the case of each FSO, after it has been
redelivered to the relevant Borrower under the Conversion Contracts where applicable) except as the Agent, with the authorisation of the Majority Lenders, may otherwise permit (such permission not to be unreasonably withheld or delayed in the case
of Clause 14.14).
|
|
14.2
|
FSO’s name and registration.
Each Borrower shall keep the FSO owned or to be owned by it registered in its name under the Approved Flag for that FSO; shall not do, omit to do or allow to be done anything as
a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of the FSO during its period of ownership by that Borrower.
|
|
14.3
|
Repair and classification.
Each Borrower shall keep the FSO owned or to be owned by it in a good and safe condition and state of repair:
|
|
(a)
|
consistent with first-class ship ownership and management practice;
|
|
(b)
|
after completion of the Conversion Works, so as to maintain that FSO’s class as referred to in the relevant Service Contract (namely segregated ballast tanks Floating, Storage and Offloading Facility with class
notation +A1 (SBT) (FSO) (DH) (S)20 with America Bureau of Shipping, Lloyd’s Register, Bureau Veritas or Det Norske Veritas) free of overdue recommendations and conditions affecting that FSO’s class; and
|
|
(c)
|
so as to comply with all laws and regulations applicable to vessels registered at ports in the relevant Approved Flag or to vessels operating or trading to any jurisdiction to which that FSO may trade from time to time,
including but not limited to the ISM Code and the ISPS Code.
|
|
14.4
|
Modification.
Following completion of the Conversion Works, no Borrower shall make any modification or repairs to, or replacement of, any FSO or equipment installed on it which would or might materially alter the
structure, type or performance characteristics of that FSO or materially reduce its value unless so requested by Maersk in accordance with the terms of the Service Contracts.
|
|
14.5
|
Removal of parts.
Other than as required for the Conversion Works and unless so requested by Maersk in accordance with the terms of the Service Contracts, no Borrower shall remove any material part of any FSO, or
any item of equipment installed on, any FSO unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest
or any right in favour of any person other than the Security Trustee and becomes on installation on the relevant FSO the property of the relevant Borrower and subject to the security constituted by the relevant Mortgage
Provided that
a
Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the FSO owned by it.
|
|
14.6
|
Surveys.
Each Borrower shall submit the FSO owned by it regularly to all periodical or other surveys which may be required for classification purposes and shall comply with all conditions and recommendations
affecting that FSO’s class of the relevant classification society in accordance with their terms unless waived.
|
40
|
14.7
|
Inspection.
Each Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose, at the Borrowers’ expense once a year and after reasonable notice to the
Borrowers) to board the FSO owned by it at all reasonable times to inspect its condition (without interfering with that FSO’s operation) or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such
inspections.
|
|
14.8
|
Prevention of and release from arrest.
Each Borrower shall promptly discharge:
|
|
(a)
|
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the FSO owned by it, the Earnings or the Insurances;
|
|
(b)
|
all taxes, dues and other amounts charged in respect of the FSO owned by it, the Earnings or the Insurances; and
|
|
(c)
|
all other outgoings whatsoever in respect of the FSO owned by it, the Earnings or the Insurances,
|
and, forthwith upon receiving notice of the arrest of the FSO owned by it, or of its detention in exercise or purported exercise of any lien or
claim, that Borrower shall procure its release by providing bail or otherwise as the circumstances may require.
|
14.9
|
Compliance with laws etc.
Each Borrower shall:
|
|
(a)
|
comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the FSO owned by it, its ownership, operation and management or to the business of
that Borrower;
|
|
(b)
|
not employ the FSO owned by it nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
|
|
(c)
|
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the FSO owned by it to enter or trade to any zone which is declared a war zone by any government or by the FSOs
war risks insurers unless that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.
|
|
14.10
|
Provision of information.
Each Borrower shall promptly provide the Security Trustee with any information which it reasonably requests regarding:
|
|
(a)
|
the FSO owned by it, its employment, position and engagements;
|
|
(b)
|
the Earnings and payments and amounts due to the master and crew of the FSO owned by it;
|
|
(c)
|
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the FSO owned by it and any payments made in respect of that FSO;
|
|
(d)
|
any towages and salvages; and
|
|
(e)
|
its compliance, the Approved Manager’s compliance and the compliance of the FSO owned by it with the ISM Code and the ISPS Code,
|
41
and, upon the Security Trustee’s request, provide copies of any current charter relating to
the FSO owned by it, of any current charter guarantee and copies of the Borrower’s or the Approved Manager’s Document of Compliance.
|
14.11
|
Notification of certain events.
Each Borrower shall immediately notify the Security Trustee by fax, confirmed forthwith by letter, of:
|
|
(a)
|
any casualty which is or is likely to be or to become a Major Casualty;
|
|
(b)
|
any occurrence as a result of which the FSO owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
|
(c)
|
any outstanding or overdue requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;
|
|
(d)
|
any arrest or detention of the FSO owned by it, any exercise or purported exercise of any lien on that FSO or its Earnings or any requisition of that FSO for hire;
|
|
(e)
|
any intended dry docking of the FSO owned by it other than a routine drydocking;
|
|
(f)
|
any Environmental Claim made against that Borrower or in connection with the FSO owned by it, or any Environmental Incident;
|
|
(g)
|
any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, the Approved Manager or otherwise in connection with the FSO owned by it; or
|
|
(h)
|
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with,
|
and that Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall
require of that Borrower’s, the Approved Manager’s or any other person’s response to any of those events or matters.
|
14.12
|
Restrictions on chartering, appointment of managers etc.
No Borrower shall, in relation to the FSO owned by it:
|
|
(a)
|
let that FSO on demise charter for any period unless bareboat chartered to Maersk pursuant to the Maersk Bareboat Option and in accordance with Clause 8.11;
|
|
(b)
|
enter into any charter in relation to that FSO under which more than 2 months’ hire (or the equivalent) is payable in advance;
|
|
(c)
|
charter that FSO otherwise than on bona fide arm’s length terms at the time when that FSO is fixed;
|
|
(d)
|
appoint a manager of that FSO other than the Approved Manager or agree to any alteration to the terms of the Approved Manager’s appointment;
|
|
(e)
|
de-activate or lay up that FSO other than as permitted pursuant to the Service Contract for that FSO; or
|
|
(f)
|
put that FSO into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed the amount specified for a Major Casualty (or the equivalent in any other currency)
unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that FSO or its Earnings for the cost of such work or for any other reason.
|
42
|
14.13
|
Notice of Mortgage.
Each Borrower shall keep the relevant Mortgage registered against the FSO owned by it as a valid first preferred or priority mortgage (as the case may be), carry on board that FSO a certified
copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of that FSO a framed printed notice stating that that FSO is mortgaged by that Borrower to the Security Trustee.
|
|
14.14
|
Sharing of Earnings.
No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings.
|
|
14.15
|
ISPS Code.
Each Borrower shall comply with the ISPS Code and in particular, without limitation, shall:
|
|
(a)
|
procure that the FSO owned by that Borrower and the company responsible for that FSO’s compliance with the ISPS Code comply with the ISPS Code; and
|
|
(b)
|
maintain for that FSO an ISSC; and
|
|
(c)
|
notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.
|
|
15
|
PAYMENTS AND CALCULATIONS
|
|
15.1
|
Currency and method of payments.
All payments to be made by the Lenders or by any Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
|
(a)
|
by not later than 11.00 a.m. (Amsterdam time) on the due date;
|
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time
for the settlement of international transactions of the type contemplated by this Agreement);
|
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by any Borrower to the Agent or any Lender, to such account with such bank as the Agent may from time to time notify to the Borrowers and the other Creditor
Parties; and
|
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.
|
|
15.2
|
Payment on non-Business Day.
If any payment by any Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day,
|
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
|
15.3
|
Basis for calculation of periodic payments.
All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be
calculated on the basis of the actual number of days elapsed and a 360 day year.
|
43
|
15.4
|
Distribution of payments to Creditor Parties.
Subject to Clauses 15.5, 15.6 and 15.7:
|
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security
Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
|
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.
|
|
15.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that
amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
|
|
15.6
|
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to any Borrower or any Lender
any sum which the Agent is expecting to receive for remittance or distribution to that Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
|
|
15.7
|
Refund to Agent of monies not received.
If and to the extent that the Agent makes available a sum to a Borrower or a Lender, without first having received that sum, that Borrower or (as the case may be) the
Lender concerned shall, on demand:
|
|
(a)
|
refund the sum in full to the Agent; and
|
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before
receiving it.
|
|
15.8
|
Agent may assume receipt.
Clause 15.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the
sum which it made available.
|
|
15.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each Security Party under the Finance Documents and all payments in respect of those
amounts made by the Borrowers and any Security Party.
|
|
15.10
|
Agent’s memorandum account.
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the
Borrowers and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any Security Party.
|
|
15.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 15.9 and 15.10 show an amount to be owing by a Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie
evidence that that amount is owing to that Creditor Party.
|
|
16
|
APPLICATION OF RECEIPTS
|
|
16.1
|
Normal order of application.
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
|
(a)
|
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
|
44
|
(b)
|
SECONDLY: in or towards payment pro rata of any accrued interest or commission due but unpaid under this Agreement;
|
|
(c)
|
THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement;
|
|
(d)
|
FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Document (other than in relation to the Master Agreements);
|
|
(e)
|
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document (other than in relation to the Master Agreements) but which the Agent, by notice to the Borrowers, the Security
Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 16.1(a),
16.1(b), 16.1(c) and 16.1(d); and
|
|
(f)
|
SIXTHLY: in or towards satisfaction pro rata of any amount then due and payable under any Master Agreement which relates to a Designated Transaction;
|
|
(g)
|
SEVENTHLY: in retention of an amount equal to any amount not then due and payable under any Master Agreement which relates to a Designated Transactions but which the Agent, by notice to the Borrowers, the Security
Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 16.1(f);
and
|
|
(h)
|
EIGHTHLY: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.
|
|
16.2
|
Variation of order of application.
The Agent may, with the authorisation of the Lenders, by notice to the Borrowers, the Security Parties and the other Creditor Parties provide for a different manner of
application from that set out in Clause 16.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
|
|
16.3
|
Notice of variation of order of application.
The Agent may give notices under Clause 16.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the
future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
|
|
16.4
|
Appropriation rights overridden.
This Clause 16 and any notice which the Agent gives under Clause 16.2 shall override any right of appropriation possessed, and any appropriation made, by any Borrower or any
Security Party.
|
|
17
|
APPLICATION OF EARNINGS
|
|
17.1
|
Payment of Earnings.
Each Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period after the Transfer Date in relation to that FSO (and subject only to the provisions of the
General Assignment), all the Earnings of the FSO owned by it are paid to the Earnings Account for that FSO. The finance element of the daily rate paid by Maersk under each Service Contract (after operating expenses and taxes) shall be held in the
Earnings Account for the relevant FSO for the Borrowers to make the payments of principal and interest due under this Agreement and the balance of the Earnings shall be available to the Borrowers unless an Event of Default has occurred and is
continuing.
|
45
|
17.2
|
Location of accounts.
Each Borrower shall promptly:
|
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Earnings Accounts and the Debt Service Reserve Accounts (or any of them); and
|
|
(b)
|
execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings
Accounts and the Debt Service Reserve Accounts.
|
|
17.3
|
Debits for expenses etc.
Upon the occurrence of an Event of Default which is continuing, the Agent shall be entitled (but not obliged) from time to time to debit any Earnings Account with prior or contemporaneous
notice in order to discharge any amount due and payable under Clause 19 or 20 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 19 or 20.
|
|
18.1
|
Events of Default.
An Event of Default occurs if:
|
|
(a)
|
any Borrower or any Security Party fails to pay within 3 Business Days of the date when due or (if so payable) on demand, within 3 Business Days of such demand, any sum payable under a Finance Document or under any
document relating to a Finance Document; or
|
|
(b)
|
any breach occurs of Clause 9.2, 11.2, 11.3, 12.2, 12.3 or 12.4; or
|
|
(c)
|
any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of
remedy, and such default continues unremedied 15 Business Days after written notice from the Agent requesting action to remedy the same; or
|
|
(d)
|
(subject to any applicable grace period specified in the Finance Document) any breach by any Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs
(a), (b) or (c)); or
|
|
(e)
|
any representation, warranty or statement made or repeated by, or by an officer of, a Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance
Document is untrue or misleading when it is made or repeated ; or
|
|
(f)
|
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person in respect of $10,000,000 or more (and in the case of each Guarantor in respect of $30,000,000 or more or, as regards Financial
Indebtedness arising under different documents or transactions, an aggregate amount of $30,000,000 or more (or the equivalent in another currency)):
|
|
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due; or
|
|
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or
|
|
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event;
or
|
46
|
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of
a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default;
or
|
|
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
|
(g)
|
any of the following occurs in relation to a Relevant Person:
|
|
|
(i)
|
a Relevant Person becomes unable to pay its debts as they fall due; or
|
|
|
(ii)
|
any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $10,000,000 or more in the case of a Borrower or a
Shareholder or $30,000,000 or more in the case of a Guarantor or, in each case, the equivalent in another currency; or
|
|
|
(iii)
|
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
|
(iv)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
|
|
(v)
|
any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in
any proceedings, by a lawyer acting for a Relevant Person; or
|
|
|
(vi)
|
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or
|
|
|
(vii)
|
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a
Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view
to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or
payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrowers or the Guarantors which is, or is to be, effected for the purposes of an amalgamation or reconstruction
previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
|
|
|
(viii)
|
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a
Relevant Person (other than a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator
in respect of a Relevant Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other
|
47
|
|
insolvency law procedure being implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the
administration notice being given or filed, or the other relevant steps being taken, other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business
in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
|
|
|
(ix)
|
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise)
with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value)
of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
|
|
|
(x)
|
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any
action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or
should be taken if certain conditions materialise or fail to materialise; or
|
|
|
(xi)
|
in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or
|
|
(h)
|
without prejudice to Clause 28.6, any Borrower ceases or suspends carrying on its business or a part of its business which is material in the context of this Agreement; or
|
|
(i)
|
it becomes unlawful in any Pertinent Jurisdiction or impossible:
|
|
|
(i)
|
for any Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other material obligation under a Finance Document; or
|
|
|
(ii)
|
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
|
(j)
|
any official consent necessary to enable any Borrower to own, operate or charter the FSO owned by it or to enable any Borrower or any Security Party to comply with any provision which the Majority Lenders acting
reasonably consider material of a Finance Document or the Conversion Contracts or Service Contracts is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or
|
|
(k)
|
it appears to the Majority Lenders that, without their prior consent, a change has occurred after the date of this Agreement in the ultimate beneficial ownership of any of the shares in any Borrower
Provided that
this shall not apply (i) if there is an inter-group change of ownership of any Borrower if the Guarantors each continue to be the beneficial owners of 50 per cent. of the shares in that Borrower and the Guarantees remain in full force and
effect or (ii) if it is a transfer in accordance with Clause 12.5; or
|
|
(l)
|
any provision which the Majority Lenders acting reasonably consider material of a Finance Document proves to have been or becomes invalid or
unenforceable, or a
|
48
|
|
Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another
Security Interest or any other third party claim or interest; or
|
|
(m)
|
both Service Contracts are terminated or cease to be in full force or effect for any reason;
|
|
(n)
|
the security constituted by a Finance Document is in any way materially imperilled or materially placed in jeopardy; or
|
|
(o)
|
any event of default occurs and is continuing under the Guarantee Facility; or
|
|
(p)
|
any Event of Default (as defined in section 14 of a Master Agreement) occurs and is continuing; or
|
|
(q)
|
any event or circumstance occurs which the Majority Lenders reasonably determine has, or could reasonably be expected to have, a material adverse affect on the ability of a Borrower or a Guarantor to perform its
obligations under the Finance Documents.
|
|
18.2
|
Actions following an Event of Default
.
On, or at any time after, the occurrence of an Event of Default and which it is continuing:
|
|
(a)
|
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
|
|
(i)
|
serve on the Borrowers a notice stating that the Commitments and all other obligations of each Lender to the Borrowers under this Agreement are cancelled; and/or
|
|
|
(ii)
|
serve on the Borrowers a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
|
|
|
(iii)
|
take any other action which, as a result of the Event of Default having occurred and continuing or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders and/or the Swap Counterparties are
entitled to take under any Finance Document or any applicable law; and/or
|
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default having occurred
and continuing or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.
|
|
18.3
|
Termination of Commitments.
On the service of a notice under Clause 18.2(a)(i), the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.
|
|
18.4
|
Acceleration of Loan.
On the service of a notice under Clause 18.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or owing from the Borrowers or any Security Party under this Agreement and
every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
|
|
18.5
|
Multiple notices; action without notice.
The Agent may serve notices under Clauses 18.2(a)(i) or (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to
in Clause 18.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
|
|
18.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy
or the text of any notice
|
49
|
|
which the Agent serves on the Borrowers under Clause 18.2; but the notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the
text of the notice to any other person shall invalidate the notice or provide any Borrower or any Security Party with any form of claim or defence.
|
|
18.7
|
Creditor Parties’ rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or Swap Counterparties under a Finance Document, a
Master Agreement or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.
|
|
18.8
|
Exclusion of Creditor Party liability.
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to a Borrower or a Security Party:
|
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the
value of such an asset,
|
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses
shown to have been caused by the gross negligence, dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.
|
18.9
|
Relevant Persons.
In this Clause 18, a “
Relevant Person
” means the Borrowers, the Guarantors and the Shareholders.
|
|
18.10
|
Guarantor default.
If there is an Event of Default in relation to only 1 Guarantor the other Guarantor may with the agreement of all of the Lenders remedy such default by providing the Lenders with a guarantee in
respect of the full amount of all the obligations of the Borrowers under this Agreement and the other Finance Documents within 30 days of such default.
|
|
18.11
|
Interpretation.
In Clause 18.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination
event in a finance lease; and in Clause 18.1(g) “petition” includes an application.
|
|
18.12
|
Position of Swap Counterparties.
Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this
Clause 18, to have any regard to the requirements of a Swap Counterparty except to the extent that such Swap Counterparty is also a Lender.
|
In addition, the Swap Counterparties agree that if an Event of Default or Potential Event of Default occurs and is continuing any payments due
to the Swap Counterparties on an unwinding of the Master Agreements shall not be paid until the loan has first been repaid.
|
19.1
|
Co-ordination, arrangement, commitment, agency fees.
The Borrowers shall pay to the Agent:
|
|
(a)
|
on the date of this Agreement, an agency co-ordination fee of an amount previously agreed in writing between the Agent and the Borrowers for the account of the Agent;
|
50
|
(b)
|
on the date of this Agreement, an arrangement fee of an amount previously agreed in writing between the Borrowers and the Lenders, for distribution among the Lenders pro rata to their Commitments;
|
|
(c)
|
monthly in arrears during the period from (and including) the date of this Agreement to the earlier of (i) the last Drawdown Date and (ii) the end of the Availability Period and on the last day of that period
for the account of the Lenders, a commitment fee at the rate of 0.50 per cent. per annum on the amount of the Total Commitments less the amount of the Loan, for distribution among the Lenders pro rata to their Commitments; and
|
|
(d)
|
on the date of this Agreement and on each anniversary thereof during the Security Period, an annual agency fee of an amount previously agreed in writing between the Agent and the Borrowers, such agency fee to be payable
to the Agent in advance for its own
account
.
|
|
19.2
|
Costs of negotiation, preparation etc.
The Borrowers shall pay to the Agent on its demand the amount of all expenses reasonably incurred by the Agent or the Security Trustee in connection with the negotiation,
preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
|
|
19.3
|
Costs of variations, amendments, enforcement etc.
The Borrowers shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a
Creditor Party in connection with (and which shall be reasonably incurred in the case of sub-clause (a), (b) and (c):
|
|
(a)
|
any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;
|
|
(b)
|
any consent or waiver by the Lenders, the Swap Banks, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
|
|
(c)
|
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; or
|
|
(d)
|
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules
of court or any taxation or other procedure carried out under such rules.
|
19.4
|
Documentary taxes.
The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims,
expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.
|
|
19.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 19 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
51
|
20.1
|
Indemnities regarding borrowing and repayment of Loan.
The Borrowers shall fully indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in respect of all claims,
expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
|
|
(a)
|
an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
|
|
(b)
|
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
|
|
(c)
|
any failure (for whatever reason) by the Borrowers to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the
Borrowers on the amount concerned under Clause 7); and
|
|
(d)
|
the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 18,
|
and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or
payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
|
20.2
|
Breakage costs.
Without limiting its generality, Clause 20.1 covers any claim, expense, liability or loss incurred by a Lender:
|
|
(a)
|
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or
any overdue amount); and
|
|
(b)
|
in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned)
to hedge any exposure arising under this Agreement which is attributable to this Agreement of the amount of the liabilities, expenses or losses incurred by it in terminating, or otherwise in connection with, a number of transactions of which this
Agreement is one.
|
|
20.3
|
Miscellaneous indemnities.
The Borrowers shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought
against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance
Document; or
|
|
(b)
|
any other Pertinent Matter,
|
other than claims, expenses, liabilities and losses which are
shown to have been caused by the gross negligence, dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.
Without prejudice to its generality, this Clause 20.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under
or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.
52
|
20.4
|
Currency indemnity.
If any sum due from any Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into another currency (the “
Payment Currency
”) for the purpose of:
|
|
(a)
|
making or lodging any claim or proof against any Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
|
(c)
|
enforcing any such order or judgment,
|
the Borrowers shall indemnify the Creditor Party
concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
In this Clause 20.4 the “
available rate of exchange
” means the rate at which the Creditor Party concerned is able at the
opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Clause 20.4 creates a separate liability of the Borrowers which is distinct from their other liabilities under the Finance Documents and
which shall not be merged in any judgment or order relating to those other liabilities.
|
20.5
|
Application to Master Agreements.
For the avoidance of doubt, Clause 20.4 does not apply in respect of sums due from a Borrower to a Swap Counterparty under or in connection with a Master Agreement as to which
sums the provisions of section 8 (Contractual Currency) of that Master Agreement shall apply.
|
|
20.6
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
|
20.7
|
Sums deemed due to a Lender.
For the purposes of this Clause 20, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
|
21
|
NO SET-OFF OR TAX DEDUCTION
|
|
21.1
|
No deductions.
All amounts due from the Borrowers under a Finance Document shall be paid:
|
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
|
(b)
|
free and clear of any tax deduction except a tax deduction which a Borrower is required by law to make.
|
|
21.2
|
Grossing-up for taxes.
If a Borrower is required by law to make a tax deduction from any payment:
|
|
(a)
|
that Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
|
(b)
|
that Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
|
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would otherwise have received.
|
53
|
21.3
|
Evidence of payment of taxes.
Within 1 month after making any tax deduction, the Borrower concerned shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the
appropriate taxation authority.
|
|
21.4
|
Tax credit.
A Creditor Party which has obtained (and has derived full use and benefit, on an affiliated group basis from) a repayment or credit in respect of tax on account of which the Borrowers have made an
increased payment under Clause 21.2 shall pay to the Borrowers a sum equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from the Borrowers in respect of which the Borrowers made the increased
payment
Provided that:
|
|
(a)
|
the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
|
|
(b)
|
nothing in this Clause 21.4 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to
make any such claim within any particular time;
|
|
(c)
|
nothing in this Clause 21.4 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrowers had not been required to make a tax deduction from a
payment;
|
|
(d)
|
any allocation or determination made by a Creditor Party under or in connection with this Clause 21.4 shall be conclusive and binding on the Borrowers and the other Creditor Parties;
|
|
(e)
|
nothing in this Clause 21.4 shall oblige any Creditor Party to disclose to the Borrowers any information relating to its affairs (tax or otherwise) or those of its ultimate parent company (or any subsidiary thereof) or
any computations in respect of tax; and
|
|
(f)
|
the Creditor Party’s tax affairs for its tax year in respect of which such credit or repayment was obtained have been finally settled.
|
|
21.5
|
Exclusion of tax on overall net income.
In this Clause 21 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s
overall net income.
|
|
21.6
|
Application to Master Agreements.
For the avoidance of doubt, Clause 21 does not apply in respect of sums due from a Borrower to a Swap Counterparty under or in connection with a Master Agreement as to which sums
the provisions of section 2(d) (Deduction or Withholding for Tax) of that Master Agreement shall apply.
|
|
22.1
|
Illegality.
This Clause 22 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
|
(b)
|
contrary to, or inconsistent with, any regulation,
|
for the Notifying Lender to maintain or
give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
54
|
22.2
|
Notification of illegality.
The Agent shall promptly notify the Borrowers, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 22.1 which the Agent receives from the
Notifying Lender.
|
|
22.3
|
Prepayment; termination of Commitment.
On the Agent notifying the Borrowers under Clause 22.2, the Notifying Lender’s Commitment shall terminate; and thereupon or, if later, on the date specified in the
Notifying Lender’s notice under Clause 22.1 as the date on which the notified event would become effective the Borrowers shall prepay the Notifying Lender’s Contribution in accordance with Clause 8.
|
|
22.4
|
Mitigation.
If circumstances arise which would result in a notification under Clause 22.1 then, without in any way limiting the rights of the Notifying Lender under Clause 22.3, the Notifying Lender shall use
reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or might:
|
|
(a)
|
have an adverse effect on its business, operations or financial condition; or
|
|
(b)
|
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c)
|
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
|
23.1
|
Increased costs.
This Clause 23 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to
the application to payments under this Agreement of a tax on the Lender’s overall net income); or
|
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
|
the Notifying Lender (or a parent company of it) has incurred or will incur an “
increased cost
”.
|
23.2
|
Meaning of “increase cost”.
In this Clause 23, “
increased cost
” means, in relation to a Notifying Lender:
|
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its
Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
|
|
(b)
|
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
|
55
|
(c)
|
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the
proportion of that cost attributable to the Contribution; or
|
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement,
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an
item covered by the indemnity for tax in Clause 20.1 or by Clause 20 or an item arising directly out of the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a
Revised Framework” published by the Basel Committee on Banking Supervision in June 2004, in the form existing on the date of this Agreement (“
Basel II
”) or any other law or regulation which implements Basel II (whether such
implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates.
For the purposes of this
Clause 23.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
|
23.3
|
Notification to Borrowers of claim for increased costs.
The Agent shall promptly notify the Borrowers and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 23.1.
|
|
23.4
|
Payment of increased costs.
The Borrowers shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrowers that the
Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
|
|
23.5
|
Notice of prepayment.
If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 23.4, the Borrowers may give the Agent not less than 14 days’ notice
of their intention to prepay the Notifying Lender’s Contribution at the end of an Interest Period.
|
|
23.6
|
Prepayment; termination of Commitment.
A notice under Clause 23.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers’ notice of intended prepayment; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
|
|
(b)
|
on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate
plus the Margin.
|
|
23.7
|
Application of prepayment.
Clause 8 shall apply in relation to the prepayment.
|
|
24.1
|
Application of credit balances.
Each Creditor Party may, after the occurrence of an Event of Default which is continuing, without prior notice:
|
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of a Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then
due from that Borrower to that Creditor Party under any of the Finance Documents; and
|
56
|
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of that Borrower;
|
|
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
|
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
|
24.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights under Clause 24.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
|
|
24.3
|
Sums deemed due to a Lender.
For the purposes of this Clause 24, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum
due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
|
|
24.4
|
No Security Interest.
This Clause 24 gives the Creditor Parties a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of any Borrower.
|
|
25
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
25.1
|
Transfer by Borrowers.
No Borrower may, without the consent of the Agent, given on the instructions of all the Lenders transfer any of its rights, liabilities or obligations under any Finance Document.
|
|
25.2
|
Transfer by a Lender.
Subject to Clause 25.4, a Lender (the “
Transferor Lender
”) may at any time, with the prior written consent of the Borrowers (not to be unreasonably withheld or delayed) or
without the consent of the Borrowers if an Event of Default or Potential Event of Default has occurred and is continuing or if such transfer is to a wholly owned subsidiary, the parent company or another subsidiary of the parent company of the
Transferor Lender, cause:
|
|
(a)
|
its rights in respect of all or part of its Contribution; or
|
|
(b)
|
its obligations in respect of all or part of its Commitment; or
|
|
(c)
|
a combination of (a) and (b),
|
to be (in the case of its rights) transferred to, or (in
the case of its obligations) assumed by, another bank or financial institution or a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial
assets (a “
Transferee Lender
”) by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a “
Transfer Certificate
”) executed by the
Transferor Lender and the Transferee Lender.
However any rights and obligations of the Transferor Lender in its capacity as Agent or
Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Deed.
57
|
25.3
|
Transfer Certificate, delivery and notification.
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate
may be defective):
|
|
(a)
|
sign the Transfer Certificate on behalf of itself, the Borrowers, the Security Parties, the Security Trustee, the Arrangers, each of the other Lenders and each of the Swap Banks;
|
|
(b)
|
on behalf of the Transferee Lender, send to each Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it; and
|
|
(c)
|
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,
|
but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once
it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to that Transferee Lender.
|
25.4
|
Effective Date of Transfer Certificate.
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, Provided that it is signed by the Agent under
Clause 25.3 on or before that date.
|
|
25.5
|
No transfer without Transfer Certificate.
No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, any Borrower, any Security Party,
the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
|
|
25.6
|
Lender re-organisation; waiver of Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person
(the “successor”), the Agent may, if it sees fit, by notice to the successor and the Borrowers and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent’s notice,
the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
|
|
25.7
|
Effect of Transfer Certificate.
A Transfer Certificate takes effect in accordance with English law as follows:
|
|
(a)
|
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee
Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which any Borrower or any Security Party had against the Transferor Lender;
|
|
(b)
|
the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;
|
|
(c)
|
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
|
|
(d)
|
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and
the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
|
58
|
(e)
|
any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the
transferor, assuming that any defects in the transferor’s title and any rights or equities of any Borrower or any Security Party against the Transferor Lender had not existed;
|
|
(f)
|
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under
Clause 5.7 and Clause 19, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
|
(g)
|
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled
to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
|
The rights and equities of any Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any
other kind of cross-claim.
|
25.8
|
Maintenance of register of Lenders.
During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending
office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 25.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security
Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days’ prior notice.
|
|
25.9
|
Reliance on register of Lenders.
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and
Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
|
|
25.10
|
Authorisation of Agent to sign Transfer Certificates.
Each Borrower, the Security Trustee, each Arranger, each Lender and each Swap Bank irrevocably authorises the Agent to sign Transfer Certificates on its
behalf.
|
|
25.11
|
Registration fee.
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,000 from the Transferor Lender or (at the Agent’s option) the Transferee Lender.
|
|
25.12
|
Sub-participation; subrogation assignment.
A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to,
any Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who
has become subrogated to them.
|
|
25.13
|
Disclosure of information.
A Lender may disclose to a potential Transferee Lender in accordance with Clause 25.2 or (subject to the consent of the Borrowers (such consent not to be unreasonably withheld or
delayed) sub-participant any information which the Lender has received in relation to any Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.
|
59
|
25.14
|
Change of lending office.
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
|
|
(a)
|
the date on which the Agent receives the notice; and
|
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
|
25.15
|
Notification.
On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through
the lending office of which the Agent last had notice.
|
|
25.16
|
Replacement of Reference Bank.
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrowers, the Agent and the
Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrowers, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment
comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
|
|
25.17
|
Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office.
If
:
|
|
(a)
|
a Lender assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 25.2 or changes its lending office; and
|
|
(b)
|
as a result of circumstances existing at the date of assignment, transfer or change occurs the Borrowers would be obliged to make a payment to the Transferree Lender or Lender acting through its new lending office under
Clause 20.1 in respect of any tax, Clause 23 or Clause 24,
|
then the Transferree Lender or the Lender acting through its new
lending office is only entitled to receive payment under those Clauses to the same extent as the Transferor Lender or the Lender acting through its previous lending office would have been if the assignment, transfer or change had not occurred.
|
26
|
VARIATIONS AND WAIVERS
|
|
26.1
|
Variations, waivers etc. by Majority Lenders.
Subject to Clause 26.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or
remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrowers, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and,
if the document relates to a Finance Document to which a Security Party is party, by that Security Party.
|
|
26.2
|
Variations, waivers etc. requiring agreement of all Lenders.
However, as regards the following, Clause 26.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the
words “by or on behalf of every Lender”:
|
|
(a)
|
a change in the Margin or in the definition of LIBOR;
|
|
(b)
|
a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;
|
|
(c)
|
a change to any Lender’s Commitment;
|
|
(d)
|
an extension of Availability Period or Maturity Date;
|
60
|
(e)
|
a change to the definition of “
Majority Lenders
” or “
Finance Documents
”;
|
|
(f)
|
a change to the preamble or to Clause 2, 3, 4, 5.1,16,17 or 29;
|
|
(g)
|
a change to this Clause 26;
|
|
(h)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
|
(i)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required.
|
|
26.3
|
Exclusion of other or implied variations.
Except for a document which satisfies the requirements of Clauses 26.1 and 26.2, no document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
|
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
|
(b)
|
an Event of Default; or
|
|
(c)
|
a breach by a Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law,
|
and there shall
not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
|
27.1
|
General.
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in
writing and notices signed by particular persons shall be construed accordingly.
|
|
27.2
|
Addresses for communications.
A notice by letter or fax shall be sent:
|
|
|
|
|
|
|
|
(a)
|
|
to the Borrowers:
|
|
c/o Euronav NV
|
|
|
|
|
|
De Gerlachekaai 20
|
|
|
|
|
|
2000 Antwerp 1
|
|
|
|
|
|
Belgium
|
|
|
|
|
|
|
|
|
|
Fax No: + 32 32 47 44 09
|
|
|
|
|
|
Attn: Finance Director
|
|
|
|
|
|
|
|
|
|
-and-
|
|
|
|
|
|
|
|
|
|
c/o Overseas Shipholding Group, Inc.
|
|
|
|
|
|
666 Third Avenue
|
|
|
|
|
|
New York, New York
|
|
|
|
|
|
|
|
|
|
Fax No: + 212 578 1670
|
|
|
|
|
|
Attn: Vice President Corporate Finance
|
61
|
|
|
|
|
|
|
(b)
|
|
to a Lender:
|
|
At the address below its name in Schedule 1A or (as the case may require) in the relevant Transfer Certificate.
|
|
|
|
|
|
(c)
|
|
to a Swap Bank:
|
|
At the address below its name in Schedule 1B
|
|
|
|
|
|
(d)
|
|
to the Agent:
|
|
Bijlmerplein 888
1102 MG
Amsterdam
The Netherlands
PO Box 1800
1000 BV Amsterdam
The Netherlands
Fax No: +31 20 5658226
Attn: Reina Kroon
|
|
|
|
|
|
(e)
|
|
to the Security Trustee:
|
|
Bijlmerplein 888
1102 MG
Amsterdam
The Netherlands
PO Box 1800
1000 BV Amsterdam
The Netherlands
Fax No: +31 20 5658226
Attn: Reina Kroon
|
or to such other address as the relevant party may notify the Agent, the Swap Banks or, if the relevant party
is the Agent or the Security Trustee, the Borrowers, the Lenders and the Security Parties.
|
27.3
|
Effective date of notices.
Subject to Clauses 27.4 and 27.5:
|
|
(a)
|
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered; and
|
|
(b)
|
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
|
|
27.4
|
Service outside business hours.
However, if under Clause 27.3 a notice would be deemed to be served:
|
|
(a)
|
on a day which is not a business day in the place of receipt; or
|
|
(b)
|
on such a business day, but after 5 p.m. local time,
|
the notice shall (subject to Clause 27.5)
be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
|
27.5
|
Illegible notices.
Clauses 27.3 and 27.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has
been received in a form which is illegible in a material respect.
|
62
|
27.6
|
Valid notices.
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if:
|
|
(a)
|
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
|
|
(b)
|
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
|
|
27.7
|
Electronic communication.
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and
the relevant Lender:
|
|
(a)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
(b)
|
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
|
|
(c)
|
notify each other of any change to their respective addresses or any other such information supplied to them.
|
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and, in the
case of any electronic communication made by a Lender to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
|
27.8
|
English language.
Any notice under or in connection with a Finance Document shall be in English.
|
|
27.9
|
Meaning of “notice”.
In this Clause 27, “notice” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
|
|
28
|
JOINT AND SEVERAL LIABILITY
|
|
28.1
|
General.
All liabilities and obligations of the Borrowers under this Agreement shall, whether expressed to be so or not, be several and, if and to the extent consistent with Clause 28.2, joint.
|
|
28.2
|
No impairment of Borrower’s obligations.
The liabilities and obligations of a Borrower shall not be impaired by:
|
|
(a)
|
this Agreement being or later becoming void, unenforceable or illegal as regards any other Borrower;
|
|
(b)
|
any Lender or the Security Trustee entering into any rescheduling, refinancing or other arrangement of any kind with any other Borrower;
|
|
(c)
|
any Lender or the Security Trustee releasing any other Borrower or any Security Interest created by a Finance Document; or
|
|
(d)
|
any combination of the foregoing.
|
63
|
28.3
|
Principal debtors.
Each Borrower declares that it is and will, throughout the Security Period, remain a principal debtor for all amounts owing under this Agreement and the Finance Documents and no Borrower shall
in any circumstances be construed to be a surety for the obligations of any other Borrower under this Agreement. For the avoidance of doubt, this is without prejudice to the provisions of Clause 28.6.
|
|
28.4
|
Subordination.
Subject to Clause 28.5, during the Security Period, no Borrower shall:
|
|
(a)
|
claim any amount which may be due to it from any other Borrower whether in respect of a payment made, or matter arising out of, this Agreement or any Finance Document, or any matter unconnected with this Agreement or
any Finance Document; or
|
|
(b)
|
take or enforce any form of security from any other Borrower for such an amount, or in any other way seek to have recourse in respect of such an amount against any asset of any other Borrower; or
|
|
(c)
|
set off such an amount against any sum due from it to any other Borrower; or
|
|
(d)
|
prove or claim for such an amount in any liquidation, administration, arrangement or similar procedure involving any other Borrower or other Security Party; or
|
|
(e)
|
exercise or assert any combination of the foregoing.
|
|
28.5
|
Borrower’s required action.
If during the Security Period, the Agent, by notice to a Borrower, requires it to take any action referred to in paragraphs (a) to (d) of Clause 28.4, in relation to any
other Borrower, that Borrower shall take that action as soon as practicable after receiving the Agent’s notice.
|
|
28.6
|
Release of Conversion Borrowers.
Each Conversion Borrower shall be released from its obligations under this Loan Agreement and the other Finance Documents to which it is a party on the Transfer Date in relation
to the FSO which is owned by that Conversion Borrower subject to the Borrowers requesting such release by notice to the Agent in writing and to the Agent being satisfied as to the following conditions:
|
|
(a)
|
the relevant FSO has been delivered to the site under the Service Contract for that FSO in accordance with the provisions of that Service Contract;
|
|
(b)
|
the conditions precedent to be provided to the Agent pursuant to Clause 9.1(c), and as described in Part C of Schedule 3, have all be satisfied;
|
|
(c)
|
no Potential Event of Default or Event of Default has occurred and is continuing.
|
|
29.1
|
Rights cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to each Creditor Party are:
|
|
(b)
|
may be exercised as often as appears expedient; and
|
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
|
29.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions
of that Finance Document or of the provisions of any other Finance Document.
|
64
|
29.3
|
Counterparts.
A Finance Document may be executed in any number of counterparts.
|
|
29.4
|
Third party rights.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
|
30.1
|
English law.
This Agreement shall be governed by, and construed in accordance with, English law.
|
|
30.2
|
Exclusive English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.
|
|
30.3
|
Choice of forum for the exclusive benefit of the Creditor Parties.
Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
|
(a)
|
to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and
|
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
Neither Borrower shall commence any proceedings in any country other than England in relation to a matter which arises out of or in connection
with this Agreement.
|
30.4
|
Process agent.
Each Borrower irrevocably appoints Euronav (UK) Agencies Ltd. at its registered office for the time being, presently at Moreau House, 3
rd
Floor,
116 Brompton Road, London, SW3 1JJ, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.
|
|
30.5
|
Creditor Party rights unaffected.
Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with
regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
|
30.6
|
Meaning of “proceedings”.
In this Clause 30, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure.
|
|
THIS
|
AGREEMENT
has been entered into on the date stated at the beginning of this
|
65
SCHEDULE 1
A LENDERS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Commitment
(US Dollars)
|
|
|
|
|
|
|
BNP Paribas
|
|
Karl Johansgate 7
0102 Oslo
Norway
|
|
|
60,000,000
|
|
|
|
|
|
|
Danish Ship Finance A/S (Danmarks Skibskredit A/S)
|
|
Sankt Annae Plads 3
1250 Copenhagen K
Denmark
|
|
|
25,000,000
|
|
|
|
|
|
|
Deutsche Shiffsbank Aktiengesellschaft
|
|
Domshof 17
28195 Bremen
Germany
|
|
|
25,000,000
|
|
|
|
|
|
|
Dexia Bank Belgium SA/NV
|
|
Boulevard Pacheco 44
B-1000 Brussels
Belgium
|
|
|
30,000,000
|
|
|
|
|
|
|
Fokus Bank (being the Norwegian branch of Danske Bank A/S)
|
|
Sondregate 15
No-7011 Trondheim
Norway
|
|
|
65,000,000
|
|
|
|
|
|
|
Fortis Bank S.A./N.V., UK Branch
|
|
5 Aldermanbury Square
London EC2V 7HR
England
|
|
|
65,000,000
|
|
|
|
|
|
|
ING Bank N.V.
|
|
Bijlmerplein 888
1102 MG
Amsterdam
The Netherlands
|
|
|
65,000,000
|
|
|
|
|
|
|
Landesbank Hessen-Thüringen Girozentrale
|
|
420 Fifth Avenue
New York
NY 10018
USA
|
|
|
15,000,000
|
|
|
|
|
|
|
Nordea Bank Norge ASA
|
|
Middelthuns gate 17
P.O. Box 1166,
Sentrum
0107 Oslo
Norway
|
|
|
50,000,000
|
|
|
|
|
|
|
Scotiabank (Ireland) Limited
|
|
I.F.S.C. House
Custom House Quay
Dublin 1
Ireland
|
|
|
35,000,000
|
|
|
|
|
|
|
Sumitomo Mitsui Banking Corporation, Brussels Branch
|
|
Avenue des Arts 58
Box 18
1000 Brussels
Belgium
|
|
|
65,000,000
|
|
66
B SWAP BANKS
|
|
|
|
|
Swap Bank
|
|
Office
|
|
|
|
|
BNP Paribas S.A.
|
|
10 Harewood Avenue
London
NW1 6AA
|
|
|
|
|
Danske Bank A/S
|
|
2-12 Holmens Kanal
DK 1092 Copenhagen K
Denmark
|
|
|
|
|
Deutsche Schiffsbank Aktiengesellschaft
|
|
Domshof 17
28195 Bremen
Germany
|
|
|
|
|
Fortis Bank S.A./N.V.
|
|
Montagne du Parc, 3
1000 Brussels
Belgium
|
|
|
|
|
ING Bank N.V.
|
|
Bijlmerplein 888
1102 MG
Amsterdam
The Netherlands
|
|
|
|
|
Nordea Bank Finland plc
|
|
2747 Settlement Services
FIN-00020 Nordea
Helsinki
Finland
|
|
|
|
|
The Bank of Nova Scotia
|
|
Capital Markets Group
Scotia Plaza
68th Floor
40 King Street West
Toronto
M5W2X6
Ontario
Canada
|
|
|
|
|
SMBC Capital Markets, Inc
|
|
277 Park Avenue, 5th Floor
New York
New York 10172
USA
|
67
SCHEDULE 2
DRAWDOWN NOTICE
Bijlmerplein 888
1102 MG
Amsterdam
The Netherlands
Attention:
[Loans Administration]
[date]
DRAWDOWN NOTICE
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated [
—
] October 2008 and made between ourselves, as Borrowers, the Lenders, the Swap Banks and
the Arrangers referred to therein, and yourselves as Agent and as Security Trustee in connection with a facility of up to US$500,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
|
2
|
We request to borrow as follows:
|
|
(a)
|
Amount: US$[
—
] representing an advance in relation to Tranche [1] [2] [A] [B];
|
|
(b)
|
Drawdown Date: [
—
];
|
|
(c)
|
[Duration of the first Interest Period shall be [
—
] months;] and
|
|
(d)
|
Payment instructions : account in our name and numbered [
—
] with [
—
] of
[
—
].
|
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
for and on
behalf of
AFRICA CONVERSION CORPORATION
ASIA CONVERSION CORPORATION
TI AFRICA LIMITED
TI
ASIA LIMITED
68
SCHEDULE 3
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents
referred to in Clause 9.1(a) required before service of the first Drawdown Notice.
|
1
|
A duly executed original of each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part B or Part C.
|
|
2
|
Copies of the certificate of incorporation and constitutional documents of each Borrower and each Security Party.
|
|
3
|
Copies of resolutions of directors (and, if required, for the provision of the legal opinions referred to in paragraph 12) of each Borrower and each Security Party (except Euronav) authorising the execution of each of
the Finance Documents to which that Borrower or that Security Party is a party and, in the case of a Borrower, authorising named officers to give the Drawdown Notices and other notices under this Agreement and in the case of each Borrower ratifying
the execution of the Conversion Contract and/or Supervision Contract to which it is a party.
|
|
4
|
The original of any power of attorney under which any Finance Document is executed on behalf of a Borrower or a Security Party.
|
|
5
|
Copies of all consents which any Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document or a Conversion Contract or Service Contract.
|
|
6
|
A valuation of each FSO, addressed to the Agent and the Lenders, stated to be for the purposes of this Agreement and dated not earlier than 30 days before the first Drawdown Date, from an independent London sale and
purchase shipbroker selected by the Agent which shows a market value of not less than $200,000,000 for each FSO.
|
|
7
|
Copies of each of the Conversion Contracts and Service Contracts and of all documents signed or issued by the parties thereto under or in connection with it.
|
|
8
|
Such documentary evidence as the Agent and its legal advisers may require in relation to the due authorisation and execution of the Conversion Contracts and Service Contracts by the parties thereto and of all documents
to be executed pursuant thereto.
|
|
10
|
Copies of the most recent audited financial statements of Maersk which demonstrate to the satisfaction of the Lenders that it is economically viable and it will be able to meet its obligations under the Service
Contracts.
|
|
11
|
Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment.
|
|
12
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands, Hong Kong, Belgium and such other relevant jurisdictions as the Agent may require.
|
|
13
|
The Agent has provided the repayment schedule referred to in Clause 8.1(a).
|
|
14
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
69
PART B
The following are the documents referred to in Clause 9.1(b) required before the first Drawdown Date. The “
FSO
” in this Part B means the
particular FSO to which the Advance relates.
|
1
|
A duly executed original of the Mortgage to be executed by the relevant Conversion Borrower, the Insurance Assignment and Pre Conversion Service Contract Assignment in relation to the FSO and the Shares Security Deeds
(and of each document to be delivered by each of them).
|
|
2
|
Documentary evidence that:
|
|
(a)
|
the FSO is definitively and permanently registered in the name of Asia Conversion or Africa Conversion (as the case may be) under Marshall Islands flag;
|
|
(b)
|
the FSO is in the absolute and unencumbered ownership of Africa Conversion or Asia Conversion, as the case may be, save as contemplated by the Finance Documents;
|
|
(c)
|
the Mortgage (executed by the relevant Conversion Borrower) has been duly registered on Marshall Islands flag as a valid first preferred ship mortgage in accordance with the laws of the Marshall Islands; and
|
|
(d)
|
the FSO is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
|
|
3
|
Documents establishing that the FSO will, as from the first Drawdown Date in relation to Tranche 1A or 2A (as the case may be), be managed by the Approved Manager on terms acceptable to the Lenders, together with:
|
|
(a)
|
a letter of undertaking executed by the Approved Manager in favour of the Agent in the terms required by the Agent agreeing certain matters in relation to the management of the FSO and subordinating the rights of the
Approved Manager against the relevant TI Borrower to the rights of the Creditor Parties under the Finance Documents; and
|
|
(b)
|
copies of the Approved Manager’s Document of Compliance and of the FSOs Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC.
|
|
4
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the Marshall Islands, Hong Kong and Belgium (as the case may be) and such other relevant jurisdictions as the Agent may
require.
|
|
5
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for FSO as the Agent may require.
|
|
6
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
70
PART C
The following are the documents referred to in Clause 9.1(c) required before the second Drawdown Date. The “
FSO
” in this Part C means the
particular FSO to which the Advance relates.
|
1
|
A duly executed original of each Master Agreement, each Master Agreement Assignment, the Mortgage to be executed by the relevant TI Borrower, the General Assignment, the Post Conversion Service Contract Assignment, the
Quiet Enjoyment Letter in relation to the FSO and the Co-ordination Deed (and of each document to be delivered by each of them).
|
|
2
|
Documentary evidence that:
|
|
(a)
|
the FSO has been unconditionally redelivered by the Yard to, and accepted by, the relevant Borrower under the Conversion Contract for that FSO;
|
|
(b)
|
the FSO has been accepted by Maersk in accordance with the Service Contract for service under the Service Contract for that FSO including a certified copy of the signed Notice of Readiness (as defined in the Service
Contract);
|
|
(c)
|
the FSO is definitively and permanently registered in the name of TI Asia under an Approved Flag for FSO 1 (in the case of FSO 1) or TI Africa under Marshall Islands flag (in the case of FSO 2);
|
|
(d)
|
the FSO is in the absolute and unencumbered ownership of TI Africa or TI Asia, as the case may be, save as contemplated by the Finance Documents;
|
|
(e)
|
the FSO maintains the classification referred to in Clause 14.3 free of all overdue recommendations and conditions of such classification society;
|
|
(f)
|
all applicable requirements of any regulatory authority, and all consents, authorisations, licences, approvals and permits required, in connection with the FSO and the Project have been obtained and complied with and
the relevant Borrower is not in breach of any of its obligations under any agreements which it has entered into in relation to the Project in respect of the FSO (which can be confirmed in a certificate supplied by the Borrowers);
|
|
(g)
|
the Mortgage (executed by the relevant TI Borrower) has been duly registered on the Approved Flag for FSO 1 (in the case of FSO 1) or Marshall Islands (in the case of FSO 2) as a valid first preferred or priority (as
the case may be) ship mortgage in accordance with the laws of the relevant Approved Flag; and
|
|
(h)
|
the FSO is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
|
|
3
|
The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Accounts and the Debt Service Revenue Accounts.
|
|
4
|
Evidence satisfactory to the Lenders that the aggregate amount of the Advance in relation to the FSOs, following the making of the Advance, shall not exceed 70 per cent. of the aggregate of the Project Costs.
|
|
5
|
Documents establishing that the FSO will be managed by the Approved Manager on terms acceptable to the Lenders, together with:
|
|
(a)
|
a letter of undertaking executed by the Approved Manager in favour of the Agent in the terms required by the Agent agreeing certain matters in relation to the management of the FSO and subordinating the rights of the
Approved Manager against the relevant TI Borrower to the rights of the Creditor Parties under the Finance Documents; and
|
71
|
(b)
|
copies of the Approved Manager’s Document of Compliance and of the FSOs Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires).
|
|
6
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the law of the Marshall Islands, Hong Kong and Belgium (as the case may be) and such other relevant jurisdictions as the
Agent may require.
|
|
7
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for FSO as the Agent may require.
|
|
8
|
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
|
Each of the documents specified in paragraphs 2, 3, 5 and 8 of Part A and every other copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of a Borrower.
72
SCHEDULE 4
TRANSFER CERTIFICATE
The Transferor
and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
|
To:
|
[Name of Agent] for itself and for and on behalf of each Borrower, each Security Party, the Security Trustee, the Arrangers and each Lender, as defined in the Loan Agreement referred to below.
|
|
1
|
This Certificate relates to a loan agreement (the “
Loan Agreement
”) dated [
—
] October 2008 and made between (i) Africa Conversion Corporation,
Asia Conversion Corporation, TI Africa Limited and TI Asia Limited as Borrowers, (ii) the banks and financial institutions named therein as Lenders, (iii) the banks and financial institutions named therein as Swap Banks, (iv) the
banks and financial institutions named there as Arrangers, (v) ING Bank N.V. as Agent and (vi) ING Bank N.V. as Security Trustee for a loan facility of up to US$500,000,000.
|
|
2
|
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
|
“
Relevant Parties
” means the Agent, each Borrower, each Security Party, the Security Trustee, the Arrangers, each Lender and
each Swap Bank;
“
Transferor
” means [full name] of [lending office]; and
“
Transferee
” means [full name] of [lending office].
|
3
|
The effective date of this Certificate is [
—
]
Provided that
this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
|
|
4
|
The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document
in relation to [
—
] per cent. of its Contribution, which percentage represents $[
—
].
|
|
5
|
By virtue of this Certificate and Clause 25 of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[
—
]] [from [
—
] per cent. of its Commitment, which percentage represents $[
—
]] and the Transferee acquires a Commitment of
$[
—
].]
|
|
6
|
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 25 of the Loan Agreement provides
will become binding on it upon this Certificate taking effect.
|
|
7
|
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in
accordance with Clause 25 of the Loan Agreement.
|
73
|
(a)
|
warrants to the Transferee and each Relevant Party that:
|
|
|
(i)
|
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are in connection with this transaction; and
|
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferor;
|
|
(b)
|
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4 above; and
|
|
(c)
|
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under
this Certificate or for a similar purpose.
|
|
(a)
|
confirms that it has received a copy of the Loan Agreement and each of the other Finance Documents;
|
|
(b)
|
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee, any Lender or any Swap Bank in the event that:
|
|
|
(i)
|
any of the Finance Documents prove to be invalid or ineffective;
|
|
|
(ii)
|
any Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;
|
|
|
(iii)
|
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrowers or Security Party
under the Finance Documents;
|
|
(c)
|
agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee, any Lender or any Swap Bank in the event that this Certificate proves to be invalid or ineffective;
|
|
(d)
|
warrants to the Transferor and each Relevant Party that:
|
|
|
(i)
|
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and
|
|
|
(ii)
|
this Certificate is valid and binding as regards the Transferee; and
|
|
(e)
|
confirms the accuracy of the administrative details set out below regarding the Transferee.
|
|
10
|
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding,
liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and
culpable negligence or dishonesty of the Agent’s or the Security Trustee’s own officers or employees.
|
74
|
11
|
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a
claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee
for the full amount demanded by it.
|
|
|
|
|
|
|
|
[Name of Transferor]
|
|
|
|
[Name of Transferee]
|
|
|
|
|
|
By:
|
|
|
|
By:
|
|
|
|
|
|
Date:
|
|
|
|
Date:
|
|
|
|
|
|
Agent
|
|
|
|
Signed for itself and for and on behalf of itself as Agent and for every other Relevant Party
|
|
|
|
[Name of Agent]
|
|
|
|
|
By:
|
|
|
|
|
|
|
Date:
|
|
|
75
Administrative Details of Transferee
Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Fax:
Account for payments:
|
Note
:
|
This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor’s interest in the security constituted by the Finance Documents in the Transferor’s or
Transferee’s jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.
|
76
SCHEDULE 5
DESIGNATION NOTICE
Bijlmerplein 888
1102 MG
Amsterdam
The Netherlands
Attention:
[Loans Administration]
[
date
]
Dear
Sirs
Loan Agreement dated [
—
] October 2008 made between (i) ourselves as
Borrowers, (ii) the Lenders, (iii) the Swap Banks, (iv) the Lead Arrangers as referred to therein, (v) the Co-Arrangers as referred to therein, and (vi) yourselves as Agent and Security Trustee for a loan facility of up to
US$500,000,000 (the “Loan Agreement”)
We refer to:
|
2.
|
the Master Agreement dated as of [
—
] made between ourselves and [
—
]; and
|
|
3.
|
a Confirmation delivered pursuant to the said Master Agreement dated [
—
] and addressed by [
—
] to us.
|
In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the
Transaction evidenced by it will be designated as a “Designated Transaction” for the purposes of the Loan Agreement and the Finance Documents.
|
|
|
Yours faithfully
|
|
|
|
|
|
for and on behalf of
|
|
[AFRICA CONVERSION CORPORATION
ASIA
CONVERSION CORPORATION
TI AFRICA LIMITED
TI
ASIA LIMITED]
|
|
|
|
[SWAP BANK]
|
77
SCHEDULE 6
MANDATORY COST FORMULA
|
1
|
The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Services Authority (or 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 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 relevant Advance) and will be
expressed as a percentage rate per annum.
|
|
3
|
The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its
notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European
Central Bank in respect of loans made from that lending office.
|
|
4
|
The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
|
|
|
|
|
|
|
|
|
|
|
|
E x
0.01
|
|
per cent. per annum
|
|
|
|
|
|
300
|
|
|
|
Where:
E
is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the
Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.
|
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)
|
“
Fees 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;
|
|
(c)
|
“
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 Fees Rules but taking
into account any applicable discount rate);
|
|
(d)
|
“
Participating Member State
” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to
European Monetary Union; and
|
|
(e)
|
“
Tariff Base
” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
78
|
6
|
If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference 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 Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank
for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
|
7
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:
|
|
(a)
|
the jurisdiction of its lending office; and
|
|
(b)
|
any other information that the Agent may reasonably require for such purpose.
|
Each Lender
shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.
|
8
|
The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender
notifies the Agent to the contrary, each Lender’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 lending office in the same jurisdiction
as its lending 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 Lender and shall be entitled to assume that the information provided by any
Lender or Reference 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 Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and
each Reference 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 Lender 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 Borrowers and the Lenders, 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 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.
|
79
EXECUTION PAGES
80
81
82
83
84
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
Alison Lescure
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
|
SCOTIABANK (IRELAND) LIMITED
|
|
)
|
|
|
|
|
in the presence of:
|
|
Ben James
|
|
)
|
|
|
Alison M. Lescure
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
Attorney - in - fact
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
SWAP BANKS
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
)
|
|
Lisa FREREBAUT
|
|
|
|
for and on behalf of
|
|
|
|
|
|
|
|
BNP PARIBAS S.A.
|
|
Valérie MERCIER
|
|
)
|
|
|
|
|
in the presence of:
|
|
[Illegible]
|
|
)
|
|
|
|
Nikko MAMAN
|
|
|
|
|
|
)
|
|
|
|
Authorised signatory
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
Alison Lescure
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
|
DANSKE BANK A/S
|
|
)
|
|
|
|
|
in the presence of:
|
|
Ben James
|
|
)
|
|
|
Alison M. Lescure
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
Attorney - in - fact
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
Alison Lescure
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
|
DEUTSCHE SCHIFFSBANK
|
|
)
|
|
|
|
|
|
AKTIENGESELLSCHAFT
|
|
)
|
|
|
|
|
in the presence of:
|
|
Ben James
|
|
)
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
Alison M. Lescure
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
Attorney - in - fact
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
|
|
|
|
|
|
Alison Lescure
|
|
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
|
|
)
|
|
|
|
|
|
FORTIS BANK S.A./N.V.
|
|
)
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
Ben James
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
Alison M. Lescure
|
|
|
|
15 Appold Street
|
|
|
|
|
|
Attorney - in - fact
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85
86
|
|
|
|
|
|
|
|
|
|
|
SECURITY TRUSTEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
Alison Lescure
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
|
ING BANK N.V.
|
|
)
|
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
|
Ben James
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
Alison M. Lescure
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
Attorney - in - fact
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87
DRAWDOWN NOTICE
Bijlmerplein 888
1102 MG
Amsterdam
The Netherlands
Attention: Loans
Administration – Reina Kroon
Fax No.: +31 20 5658226
16 October 2008
DRAWDOWN
NOTICE
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated 3 October 2008 and made between ourselves, as Borrowers, the Lenders, the Swap Banks and the Arrangers referred to therein, and yourselves as
Agent and as Security Trustee in connection with a facility of up to US$500,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
|
2
|
We request to borrow as follows:
|
|
(a)
|
Amount: US$66,000,000 of which US$50,000,000 representing an advance in relation to Tranche 1A and US$16,000,0000 representing an advance in relation to Tranche 1B;
|
|
(b)
|
Drawdown Date: 21 October 2008;
|
|
(c)
|
Duration of the first Interest Period shall be 3 (three) months; and
|
|
(d)
|
Payment instructions: account in the name of
Euronav NV
|
Nordea Bank Norge
BIC: NDEANOKK
NO0660190443909
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
|
|
|
|
for and on behalf of
|
|
AFRICA CONVERSION CORPORATION
|
|
ASIA CONVERSION CORPORATION
|
|
TI AFRICA LIMITED
|
|
TI ASIA LIMITED
|
Exhibit 10.9
Private & Confidential
LOAN
AGREEMENT
for a
Loan of up to US$135,000,000
to
FONTVIEILLE
SHIPHOLDING LIMITED
and
MONEGHETTI SHIPHOLDING LIMITED
provided by
THE BANKS
AND FINANCIAL INSTITUTIONS SET OUT IN SCHEDULE 1
Arranger, Agent, Security Agent and Account Bank
BNP PARIBAS (SUISSE) SA
Contents
|
|
|
|
|
|
|
|
|
Clause
|
|
|
|
Page
|
|
|
|
|
|
|
1
|
|
Purpose and definitions
|
|
|
1
|
|
|
|
|
|
|
2
|
|
The Total Commitment and the Advances
|
|
|
16
|
|
|
|
|
|
|
3
|
|
Interest and Interest Periods
|
|
|
18
|
|
|
|
|
|
|
4
|
|
Repayment and prepayment
|
|
|
20
|
|
|
|
|
|
|
5
|
|
Fees, commitment commission and expenses
|
|
|
23
|
|
|
|
|
|
|
6
|
|
Payments and taxes; accounts and calculations
|
|
|
24
|
|
|
|
|
|
|
7
|
|
Representations and warranties
|
|
|
26
|
|
|
|
|
|
|
8
|
|
Undertakings
|
|
|
31
|
|
|
|
|
|
|
9
|
|
Conditions
|
|
|
38
|
|
|
|
|
|
|
10
|
|
Events of Default
|
|
|
39
|
|
|
|
|
|
|
11
|
|
Indemnities
|
|
|
43
|
|
|
|
|
|
|
12
|
|
Unlawfulness and increased costs
|
|
|
45
|
|
|
|
|
|
|
13
|
|
Security, set-off and pro-rata payments
|
|
|
46
|
|
|
|
|
|
|
14
|
|
Operating Accounts
|
|
|
48
|
|
|
|
|
|
|
15
|
|
Assignment, transfer and lending office
|
|
|
48
|
|
|
|
|
|
|
16
|
|
Arranger, Agent and Security Agent
|
|
|
51
|
|
|
|
|
|
|
17
|
|
Notices and other matters
|
|
|
60
|
|
|
|
|
|
|
18
|
|
Governing law and jurisdiction
|
|
|
62
|
|
|
|
|
|
Schedule 1 The Banks and their Commitments
|
|
|
64
|
|
|
|
|
|
Schedule 2 Form of Drawdown Notice
|
|
|
65
|
|
|
|
|
|
Schedule 3 Documents and evidence required as conditions precedent to the Loan being made
|
|
|
66
|
|
|
|
|
|
Schedule 4 Form of Transfer Certificate
|
|
|
77
|
|
|
|
|
|
Schedule 5 Contract Instalment Advances per Ship
|
|
|
82
|
|
|
|
|
|
Schedule 6 Form of Corporate Guarantee
|
|
|
83
|
|
|
|
|
|
Schedule 7 Form of Pre-delivery Security Assignment
|
|
|
84
|
|
|
|
|
|
Schedule 8 Form of Trust Deed
|
|
|
85
|
|
THIS AGREEMENT
is dated 23 April 2008 and made
BETWEEN
:
|
(1)
|
FONTVIEILLE SHIPHOLDING LIMITED
and
MONEGHETTI SHIPHOLDING LIMITED
as joint and several Borrowers;
|
|
(2)
|
BNP PARIBAS (SUISSE) SA
as Arranger, Agent, Security Agent and Account Bank; and
|
|
(3)
|
THE BANKS AND FINANCIAL INSTITUTIONS
whose names and addresses are set out in schedule 1 as Banks.
|
IT IS AGREED
as follows:
|
1
|
Purpose and definitions
|
This Agreement sets out the terms and conditions upon and subject to which the
Banks agree, according to their several obligations, to make available to the Borrowers, jointly and severally, in ten (10) Advances, a loan of up to One hundred and thirty five million Dollars ($135,000,000) for the purpose of financing part
of the construction and acquisition cost of the Ships.
In this Agreement, unless the context otherwise requires:
“
Account Bank
” means BNP Paribas (Suisse) SA of Switzerland, acting for the purposes of this Agreement through its office at
Place de Hollande 2, P.O. Box CH-1211, Geneva, 11 Switzerland (or of such other address as may last have been notified to the other parties to this Agreement pursuant to clause 17.1.3) or such other bank as may be designated by the Agent as the
Account Bank for the purposes of this Agreement and includes its successors in title;
“
Advance
” means each borrowing of a
proportion of the Total Commitment by the Borrowers or (as the context may require) the principal amount of such borrowing, it includes (i) each Fontvieille Contract Instalment Advance, (ii) the Fontvieille Delivery Advance,
(iii) each Moneghetti Contract Instalment Advance and (iv) the Moneghetti Delivery Advance, and:
|
|
(a)
|
in relation to the Fontvieille Ship and the Fontvieille Tranche, means the Fontvieille Advances; or
|
|
|
(b)
|
in relation to the Moneghetti Ship and the Moneghetti Tranche, means the Moneghetti Advances,
|
and “
Advances
” means any or all of them;
“
Agent
” means BNP Paribas (Suisse) SA of Switzerland acting for the purposes of this Agreement through its office at Place de
Hollande 2, P.O. Box CH-1211, Geneva 11, Switzerland (or of such other address as may last have been notified to the other parties to this Agreement pursuant to clause 17.1.3) or such other person as may be appointed as agent by the Banks pursuant
to clause 16.13 and includes its successors in title;
“
Applicable Accounting Principles
” means the most recent and
up-to-date IFRS applicable at any relevant time;
“
Approved Broker
” means each of Arrow Research Ltd. of London, England,
H. Clarkson & Company Ltd. of London, England, Simpson Spence & Young Ltd. of London, England, and Braemer Seascope Valuations Ltd. of London, England and includes their respective successors in title and “
Approved
Brokers
” means any or all of them;
1
“
Arranger
” means BNP Paribas (Suisse) SA of Switzerland acting for the purposes
of this Agreement through its office at Place de Hollande 2, P.O. Box CH-1211, Geneva 11, Switzerland (or of such other address as may last have been notified to the other parties to this Agreement pursuant to clause 17.1.3) and includes its
successors in title;
“
Balloon Instalment
” has, in respect of each Tranche, the meaning ascribed thereto in clause 4.1.1;
“
Banking Day
” means a day on which dealings in deposits in Dollars are carried on in the London Interbank Eurocurrency
Market and (other than Saturday or Sunday) on which banks are open for business in London, Geneva, Athens, Piraeus, Monaco, Antwerp and New York City (or any other relevant place of payment under clause 6);
“
Banks
” means the banks and financial institutions listed in schedule 1 and includes their respective successors in title and
Transferee Banks and “
Bank
” means any of them;
“
Borrowed Money
” means Indebtedness in respect of
(i) money borrowed or raised and debit balances at banks, (ii) any bond, note, loan stock, debenture or similar debt instrument, (iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted (otherwise
than on a non-recourse basis), (v) deferred payments for assets or services acquired, (vi) finance leases and hire purchase contracts, (vii) swaps, forward exchange contracts, futures and other derivatives, (viii) any other
transaction (including without limitation forward sale or purchase agreements) having the commercial effect of a borrowing or raising of money or of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any
person falling within any of (i) to (viii) above;
“
Borrower
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Borrower; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Borrower,
|
and “
Borrowers
”
means any or all of them;
“
Borrowers’ Security Documents
” means, at any relevant time, such of the Security
Documents as shall have been executed by any of the Borrowers at such time;
“
Borrowers’ Shareholders
” means,
together, Euronav HK and the Bretta Guarantor and “
Borrowers’ Shareholder
” means either of them;
“
Bretta
Guarantee
” means the corporate guarantee executed or (as the context may require) to be executed by the Bretta Guarantor in favour of the Security Agent in the form set out in schedule 6;
“
Bretta Guarantor
” means Bretta Tanker Holdings Inc. of Morgan & Morgan, Calle 53, Urbanizacion Marbella, MM6 Tower,
Piso 16, Panama, Republic of Panama and includes its successors in title;
“
Builder
” means Samsung Heavy Industries Co.,
Ltd. of Samsung Life Insurance, Seocho Tower 1321-15, Seocho-Dong, Seocho-Gu, Seoul, Korea and includes their successors in title;
“
Classification
” means, in relation to each Ship, the highest class available for a vessel of her type with the relevant
Classification Society or such other classification as the Agent shall, at the request of a Borrower, have agreed in writing shall be treated as the Classification in relation to such Borrower’s Ship for the purposes of the relevant Ship
Security Documents;
“
Classification Society
” means, in relation to each Ship, American Bureau of Shipping or such other
classification society which the Agent shall, at the request of a Borrower, have agreed in writing shall be treated as the Classification Society in relation to such Borrower’s Ship for the purposes of the relevant Ship Security Documents;
2
“
Code
” means the International Management Code for the Safe Operation of Ships
and for Pollution Prevention constituted pursuant to Resolution A. 741 (18) of the International Maritime Organisation and incorporated into the International Convention on Safety of Life at Sea 1974 (as amended) and includes any amendments or
extensions thereto and any regulation issued pursuant thereto;
“
Commitment
” means, in relation to each Bank, the amount
set out opposite its name in the column headed “Commitment” in schedule 1 and/or, in the case of a Transferee Bank, the amount transferred as specified in the relevant Transfer Certificate, as reduced in each case by any relevant term of
this Agreement;
“
Compulsory Acquisition
” means, in relation to a Ship, requisition for title or other compulsory
acquisition, requisition, appropriation, expropriation, deprivation, forfeiture or confiscation for any reason of that Ship by any Government Entity or other competent authority, whether de jure or de facto, but shall exclude requisition for use or
hire not involving requisition of title;
“
Contract
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Contract; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Contract,
|
and “
Contracts
”
means any or all of them;
“
Contract Assignment Consent and Acknowledgement
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Contract Assignment Consent and Acknowledgement; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Contract Assignment Consent and Acknowledgement,
|
and “
Contract Assignment Consents and Acknowledgements
” means any or all of them;
“
Contract Instalment Advances
”:
|
|
(a)
|
in relation to the Fontvieille Ship and the Fontvieille Tranche, means the Fontvieille Contract Instalment Advances; or
|
|
|
(b)
|
in relation to the Moneghetti Ship and the Moneghetti Tranche, means the Moneghetti Contract Instalment Advances,
|
and “
Contract Instalment Advance
” means any of them;
“
Contract Price
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Contract Price; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Contract Price,
|
and “
Contract
Prices
” means any or all of them;
“
Contribution
” means, in relation to each Bank, the principal amount of the
Loan owing to such Bank at any relevant time;
3
“
Corporate Guarantees
” means, together, the Euronav Guarantee, the Bretta
Guarantee and any other corporate guarantee executed by any other person in favour of the Security Agent as security for the obligations of the Borrowers under this Agreement and “
Corporate Guarantee
” means any of them;
“
Corporate Guarantors
” means, together, the Euronav Guarantor, the Bretta Guarantor and any other person acceptable to the
Banks who may execute or (as the context may require) has executed a Corporate Guarantee and “
Corporate Guarantor
” means any of them;
“
Creditors
” means, together, the Arranger, the Agent, the Security Agent, the Account Bank and the Banks and
“
Creditor
” means any of them;
“
Deed of Covenant
” means;
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Deed of Covenant; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Deed of Covenant,
|
and “
Deeds of
Covenant
” means any or all of them;
“
Default
” means any Event of Default or any event or circumstance which with
the giving of notice or lapse of time or the satisfaction of any other condition (or any combination thereof) would constitute an Event of Default;
“
Delivery Advance
”:
|
|
(a)
|
in relation to the Fontvieille Ship and the Fontvieille Tranche, means the Fontvieille Delivery Advance; or
|
|
|
(b)
|
in relation to the Moneghetti Ship and the Moneghetti Tranche, means the Moneghetti Delivery Advance,
|
and “
Delivery Advances
” means any or all of them;
“
Delivery Date
” means, in relation to each Ship, the date on which such Ship is delivered to the relevant Borrower in
accordance with the relevant Contract;
“
DOC
” means a document of compliance issued to an Operator in accordance with rule
13 of the Code;
“
Dollars
” and “
$
” mean the lawful currency of the United States of America and in
respect of all payments to be made under any of the Security Documents mean funds which are for same day settlement in the New York Clearing House Interbank Payments System (or such other US dollar funds as may at the relevant time be customary for
the settlement of international banking transactions denominated in U.S. dollars);
“
Drawdown Date
” means, in relation to
each Advance, any date, being a Banking Day falling during the Drawdown Period for such Advance, on which the relevant Advance is, or is to be, made available;
“
Drawdown Notice
” means, in relation to each Advance, a notice substantially in the form of schedule 2 in respect of such
Advance;
“
Drawdown Period
” means, in relation to each Advance, the period commencing on the date of this Agreement and
ending on the relevant Termination Date or the period ending on such earlier date (if any) on which (a) the aggregate amount of the Advances is equal to the Total Commitment or (b) the Total Commitment is reduced to zero pursuant to
clauses 4.3, 4.6, 10.2 or 12 or (c) the delivery of the Ship relevant to such Advance takes place under the relevant Contract;
4
“
Earnings
” means, in relation to a Ship, all moneys whatsoever from time to time
due or payable to a Borrower during the Security Period arising out of the use or operation of such Borrower’s Ship including (but without limiting the generality of the foregoing) all freight, hire and passage moneys, income arising out of
pooling arrangements, compensation payable to such Borrower in the event of requisition of such Borrower’s Ship for hire, remuneration for salvage or towage services, demurrage and detention moneys and damages for breach (or payment for
variation or termination) of any charterparty or other contract for the employment of such Borrower’s Ship;
“
Encumbrance
” means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, trust
arrangement or security interest or other encumbrance of any kind securing any obligation of any person or any type of preferential arrangement (including without limitation title transfer and/or retention arrangements having a similar effect);
“
Environmental Affiliate
” means any agent or employee of any Borrower or any other Relevant Party or any person having a
contractual relationship with any Borrower or any other Relevant Party in connection with any Relevant Ship or its operation or the carriage of cargo and/or passengers thereon and/or the provision of goods and/or services on or from any Relevant
Ship;
“
Environmental Approval
” means any consent, authorisation, licence or approval of any governmental or public body
or authorities or courts applicable to any Relevant Ship or its operation or the carriage of cargo and/or passengers thereon and/or the provision of goods and/or services on or from any Relevant Ship required under any Environmental Law;
“
Environmental Claim
” means any and all enforcement, clean-up, removal or other governmental or regulatory actions or orders
instituted or completed pursuant to any Environmental Law or any Environmental Approval together with claims made by any third party relating to damage, contribution, loss or injury, resulting from any actual or threatened emission, spill, release
or discharge of a Pollutant from any Relevant Ship;
“
Environmental Laws
” means all national, international and state
laws, rules, regulations, treaties and conventions applicable to any Relevant Ship pertaining to the pollution or protection of human health or the environment including, without limitation, the carriage of Pollutants and actual or threatened
emissions, spills, releases or discharges of Pollutants;
“
Euronav Guarantee
” means the corporate guarantee executed or
(as the context may require) to be executed by the Euronav Guarantor in favour of the Security Agent in the form set out in schedule 6;
“
Euronav Guarantor
” means Euronav N.V. of de Gerlachekaai 20, B-2000 Antwerp, Belgium and includes its successors in title;
“
Euronav HK
” means Euronav Hong Kong Limited of Hong Kong and includes its successors in title;
“
Event of Default
” means any of the events or circumstances described in clause 10.1;
“
Fee Letter
” means the fee letter of even date herewith executed or (as the context may require) to be executed between (inter
alios) the Borrowers, the Corporate Guarantors, the Manager, the Agent and the Arranger;
“
First Repayment Date
” means, in
relation to each Tranche (and subject to clause 6.3), the date falling three (3) months after the Drawdown Date of the Delivery Advance relevant to such Tranche;
“
Flag State
” means such state or territory designated in writing by the Majority Banks, at the request of a Borrower, as being
the “
Flag State
” of such Borrower’s Ship for the purposes of the relevant Ship Security Documents;
“
Fontvieille Advances
” means, together, the Fontvieille Contract Instalment Advances and the Fontvieille Delivery Advance and
“
Fontvieille Advance
” means any of them;
5
“
Fontvieille Borrower
” means Fontvieille Shipholding Limited of Room 3206, 32
nd
floor, Lippo Centre, Tower Two, No. 89 Queensway, Hong Kong and includes its successors in title;
“
Fontvieille Contract
” means the shipbuilding contract dated 16 April 2008 made between the Fontvieille Borrower and the
Builder, as amended by an Addendum No. 1 dated 16 April 2008 and as may be further amended and supplemented from time to time, relating to the construction and sale by the Builder, and the purchase by the Fontvieille Borrower, of the
Fontvieille Ship;
“
Fontvieille Contract Assignment Consent and Acknowledgement
” means the acknowledgement of notice of,
and consent to, the assignment in respect of the Fontvieille Contract given or (as the context may require) to be given by the Builder in the form scheduled to the Fontvieille Pre-delivery Security Assignment;
“
Fontvieille Contract Instalment Advance
” means, in relation to the Fontvieille Ship, each of the four (4) Advances of
the Fontvieille Tranche in the amount of up to $13,500,000, in the case of the first such Advance, and up to $6,750,000, in the case of each of the second, third and fourth such Advances, each made or (as the context may require) to be made
available to the Borrowers to finance in part the payment of an instalment of the Fontvieille Contract Price falling due before the Delivery Date of the Fontvieille Ship, in each case as set out in more detail in schedule 5 and “
Fontvieille
Contract Instalment Advances
” means any or all of them;
“
Fontvieille Contract Price
” means the purchase price
for the Fontvieille Ship under the Fontvieille Contract, being Ninety million seven hundred fifty thousand Dollars ($90,750,000) or such other lesser sum in Dollars as may be payable by the Fontvieille Borrower to the Builder pursuant to the
Fontvieille Contract as the purchase price for the Fontvieille Ship thereunder;
“
Fontvieille Deed of Covenant
” means the
deed of covenant and/or the general assignment collateral to the Fontvieille Mortgage executed or (as the context may require) to be executed by the Fontvieille Borrower in favour of the Security Agent and/or any other Creditors in such form as the
Agent (acting on the instructions of the Majority Banks in their sole discretion) may require;
“
Fontvieille Delivery
Advance
” means an Advance of up to $33,750,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing part of the final instalment of the Fontvieille Contract Price falling due on the
Delivery Date of the Fontvieille Ship;
“
Fontvieille Management Agreement
” means the agreement made or (as the context may
require) to be made between the Fontvieille Borrower and the Manager providing (
inter alia
) for the Manager to manage the Fontvieille Ship;
“
Fontvieille Mortgage
” means the first priority or (as the case may be) preferred mortgage of the Fontvieille Ship executed or
(as the context may require) to be executed by the Fontvieille Borrower in favour of the Security Agent and/or any other Creditors in such form as the Agent (acting on the instructions of the Majority Banks in their sole discretion) may require and
the Borrowers may agree;
“
Fontvieille Operating Account
” means a Dollar account of the Fontvieille Borrower opened or (as
the context may require) to be opened with the Account Bank and includes any sub-accounts thereof and any other account designated in writing by the Agent to be a Fontvieille Operating Account for the purposes of this Agreement;
“
Fontvieille Operating Account Pledge
” means the first priority pledge executed or (as the context may require) to be executed
between the Fontvieille Borrower and the Security Agent in respect of the Fontvieille Operating Account in such form as the Agent (acting on the instructions of the Majority Banks in their sole discretion) may require;
“
Fontvieille Pre-delivery Security Assignment
” means the assignment of the Fontvieille Contract and the Fontvieille Refund
Guarantees executed or (as the context may require) to be executed by the Fontvieille Borrower in favour of the Security Agent in the form set out in schedule 7;
6
“
Fontvieille Refund Guarantee
” means the letter of guarantee to be issued by The
Korea Development Bank as Refund Guarantor in favour of the Fontvieille Borrower in respect of the Builder’s obligations under the Fontvieille Contract and any further guarantee(s) to be issued by a Refund Guarantor in respect of such
obligations pursuant to any agreement supplemental to the Fontvieille Contract, and any extensions, renewals or replacements thereto or thereof, in each case in form and substance acceptable to the Agent (acting on the instructions of the Majority
Banks in their sole discretion) and “
Fontvieille Refund Guarantees
” means any or all of them;
“
Fontvieille Refund
Guarantee Assignment Consent and Acknowledgement
” means, in relation to each Fontvieille Refund Guarantee, an acknowledgement of notice of, and consent to, the assignment in respect of that Fontvieille Refund Guarantee given or (as the
context may require) to be given by a Refund Guarantor, in the form scheduled to the Fontvieille Pre-delivery Security Assignment (but subject to any changes requested by the relevant Refund Guarantor and agreed by the Agent) and
“
Fontvieille Refund Guarantee Assignment Consents and Acknowledgements
” means any or all of them;
“
Fontvieille
Ship
” means the 158,000 dwt crude oil tanker known on the date of this Agreement and during construction as Hull No. 1856 at the Builder’s yard, to be constructed and sold by the Builder to the Fontvieille Borrower pursuant to the
Fontvieille Contract and to be registered on its Delivery Date in the ownership of the Fontvieille Borrower through the relevant Registry under the laws and flag of the relevant Flag State;
“
Fontvieille Tranche
” means a tranche of the Total Commitment and the Loan of up to Sixty seven million five hundred thousand
Dollars ($67,500,000) to be drawn down in five (5) Advances (being the Fontvieille Advances) or (as the context may require) the principal amount thereof outstanding at any relevant time;
“
Government Entity
” means and includes (whether having a distinct legal personality or not) any national or local government
authority, board, commission, department, division, organ, instrumentality, court or agency and any association, organisation or institution of which any of the foregoing is a member or to whose jurisdiction any of the foregoing is subject or in
whose activities any of the foregoing is a participant;
“
Indebtedness
” means any obligation for the payment or repayment
of money, whether as principal or as surety and whether present or future, actual or contingent;
“
Insurances
” means, in
relation to a Ship, all policies and contracts of insurance (which expression includes all entries of that Ship in a protection and indemnity or war risks association) which are from time to time during the Security Period in place or taken out or
entered into by or for the benefit of the relevant Borrower (whether in the sole name of such Borrower, or in the joint names of such Borrower and the Security Agent and/or any other Creditor or otherwise) in respect of such Borrower’s Ship and
her Earnings or otherwise howsoever in connection with such Ship and all benefits thereof (including claims of whatsoever nature and return of premiums);
“
Interest Payment Date
” means the last day of an Interest Period;
“
Interest Period
” means, in relation to any Advance or Tranche, each period for the calculation of interest in respect of such
Advance or, as the case may be, Tranche ascertained in accordance with clauses 3.2 and 3.3;
“
ISPS Code
” means the
International Ship and Port facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organization now set out in Chapter XI-2 of the International Convention for the Safety of Life at Sea 1974 (as amended) as
adopted by a Diplomatic conference of the International Maritime Organisation on Maritime Security in December 2002 and includes any amendments or extensions thereto and any regulation issued pursuant thereto;
7
“
ISSC
” means an International Ship Security Certificate issued in respect of a
Ship pursuant to the ISPS Code;
“
LIBOR
” means, in relation to a particular period;
|
|
(a)
|
the rate for deposits of Dollars for a period equivalent to such period at or around 11:00 a.m. on the Quotation Date for such period as displayed on Reuters page LIBOR 01 (British Bankers’ Association Interest
Settlement Rates) (or such other page as may replace such page LIBOR 01 on such system or on any other system of the information vendor for the time being designated by the British Bankers’ Association to calculate the BBA Interest Settlement
Rate (as defined in the British Bankers’ Association’s Recommended Terms and Conditions (“
BBAIRS
” terms) dated August, 2006 (as amended) for Dollars); or
|
|
|
(b)
|
if on such date no such rate is displayed, LIBOR for such period shall be the rate (rounded upward if necessary to one sixteenth (1/16th) of one per cent) quoted to the Agent by the Reference Bank at the request of
the Agent as the Reference Bank’s offered rate for deposits in Dollars in an amount comparable with the amount in relation to which LIBOR is to be determined and for a period equal to the relevant period to prime banks in the London Interbank
Market at or about 11:00 a.m. on the Quotation Date for such period;
|
“
Liquid Assets
” means cash in hand or
in bank accounts in the name of the Borrowers or any of them (including the Operating Accounts) which are free from Encumbrances (other than the Encumbrances created by the Security Documents);
“
Loan
” means the aggregate principal amount owing to the Banks under this Agreement at any relevant time;
“
Majority Banks
” means at any relevant time Banks (i) the aggregate of whose Contributions exceeds Fifty point one zero
per cent (50.10%) of the Loan or (ii) (if no principal amounts are outstanding under this Agreement) the aggregate of whose Commitments exceeds Fifty point one zero per cent (50.10%) of the Total Commitment;
“
Management Agreement
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Management Agreement; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Management Agreement,
|
and
“
Management Agreements
” means any or all of them;
“
Manager
” means Euronav N.V. of de Gerlachekaai 20,
B-2000 Antwerp, Belgium or any other person appointed by a Borrower, with the prior written consent of the Agent (such consent not to be unreasonably withheld and the request for which to be promptly responded to), as the manager of such
Borrower’s Ship and includes its successors in title;
“
Manager’s Undertakings
” means, collectively, the
manager’s undertakings and assignments executed or (as the context may require) to be executed by the Manager in favour of the Security Agent and/or any other Creditor in respect of each of the Ships each in such form as the Agent (acting on
the instructions of the Majority Banks in their sole discretion) may require in and, singly, each a “
Manager’s Undertaking
”;
“
Margin
” means One point one zero per cent (1.10%) per annum;
“
Moneghetti Advances
” means, together, the Moneghetti Contract Instalment Advances and the Moneghetti Delivery Advance and
“
Moneghetti Advance
” means any of them;
8
“
Moneghetti Borrower
” means Moneghetti Shipholding Limited of Room 3206, 32
nd
floor, Lippo Centre, Tower Two, No. 89 Queensway, Hong Kong and includes its successors in title;
“
Moneghetti Contract
” means the shipbuilding contract dated 16 April 2008 made between the Moneghetti Borrower and the
Builder, as amended by an addendum No. 1 dated 16 April 2008 and as may be further amended and supplemented from time to time, relating to the construction and sale by the Builder, and the purchase by the Moneghetti Borrower, of the
Moneghetti Ship;
“
Moneghetti Contract Assignment Consent and Acknowledgement
” means the acknowledgement of notice of, and
consent to, the assignment in respect of the Moneghetti Contract given or (as the context may require) to be given by the Builder in the form scheduled to the Moneghetti Pre-delivery Security Assignment;
“
Moneghetti Contract Instalment Advance
” means, in relation to the Moneghetti Ship, each of the four (4) Advances of the
Moneghetti Tranche in the amount of up to $13,500,000, in the case of the first such Advance, and up to $6,750,000, in the case of each of the second, third and fourth such Advances, each made or (as the context may require) to be made available to
the Borrowers to finance in part the payment of an instalment of the Moneghetti Contract Price falling due before the Delivery Date of the Moneghetti Ship, in each case as set out in more detail in schedule 5 and “
Moneghetti Contract
Instalment Advances
” means any or all of them;
“
Moneghetti Contract Price
” means the purchase price for the
Moneghetti Ship under the Moneghetti Contract, being Ninety million seven hundred fifty thousand Dollars ($90,750,000) or such other lesser sum in Dollars as may be payable by the Moneghetti Borrower to the Builder pursuant to the Moneghetti
Contract as the purchase price for the Moneghetti Ship thereunder;
“
Moneghetti Deed of Covenant
” means the deed of
covenant and/or the general assignment collateral to the Moneghetti Mortgage executed or (as the context may require) to be executed by the Moneghetti Borrower in favour of the Security Agent and/or any other Creditors in such form as the Agent
(acting on the instructions of the Majority Banks in their sole discretion) may require;
“
Moneghetti Delivery Advance
”
means an Advance of up to $33,750,000 made or (as the context may require) to be made available to the Borrowers for the purpose of financing part of the final instalment of the Moneghetti Contract Price falling due on the Delivery Date of the
Moneghetti Ship;
“
Moneghetti Management Agreement
” means the agreement made or (as the context may require) to be made
between the Moneghetti Borrower and the Manager providing (
inter alia
) for the Manager to manage the Moneghetti Ship;
“
Moneghetti Mortgage
” means the first priority or (as the case may be) preferred mortgage of the Moneghetti Ship executed or
(as the context may require) to be executed by the Moneghetti Borrower in favour of the Security Agent and/or any other Creditors in such form as the Agent (acting on the instructions of the Majority Banks in their sole discretion) may require and
the Borrowers may agree;
“
Moneghetti Operating Account
” means a Dollar account of the Moneghetti Borrower opened or (as
the context may require) to be opened with the Account Bank and includes any sub-accounts thereof and any other account designated in writing by the Agent to be a Moneghetti Operating Account for the purposes of this Agreement;
“
Moneghetti Operating Account Pledge
” means the first priority pledge executed or (as the context may require) to be executed
between the Moneghetti Borrower and the Security Agent in respect of the Moneghetti Operating Account in such form as the Agent (acting on the instructions of the Majority Banks in their sole discretion) may require;
9
“
Moneghetti Pre-delivery Security Assignment
” means the assignment of the
Moneghetti Contract and the Moneghetti Refund Guarantees executed or (as the context may require) to be executed by the Moneghetti Borrower in favour of the Security Agent in the form set out in schedule 7;
“
Moneghetti Refund Guarantee
” means the letter of guarantee to be issued by The Korea Development Bank as Refund Guarantor in
favour of the Moneghetti Borrower in respect of the Builder’s obligations under the Moneghetti Contract and any further guarantee(s) to be issued by a Refund Guarantor in respect of such obligations, pursuant to any agreement supplemental to
the Moneghetti Contract, and any extensions, renewals or replacements thereto or thereof, in each case in form and substance acceptable to the Agent (acting on the instructions of the Majority Banks in their sole discretion) and “
Moneghetti
Refund Guarantees
” means any or all of them;
“
Moneghetti Refund Guarantee Assignment Consent and
Acknowledgement
” means, in relation to each Moneghetti Refund Guarantee, an acknowledgement of notice of, and consent to, the assignment in respect of that Moneghetti Refund Guarantee given or (as the context may require) to be given by a
Refund Guarantor, in the form scheduled to the Moneghetti Pre-delivery Security Assignment (but subject to any changes requested by the relevant Refund Guarantor and agreed by the Agent) and “
Moneghetti Refund Guarantee Assignment Consents
and Acknowledgements
” means any or all of them;
“
Moneghetti Ship
” means the 158,000 dwt crude oil tanker known
on the date of this Agreement and during construction as Hull No. 1857 at the Builder’s yard, to be constructed and sold by the Builder to the Moneghetti Borrower pursuant to the Moneghetti Contract and to be registered on its Delivery
Date in the ownership of the Moneghetti Borrower through the relevant Registry under the laws and flag of the relevant Flag State;
“
Moneghetti Tranche
” means a tranche of the Total Commitment and the Loan of up to Sixty seven million five hundred thousand
Dollars ($67,500,000) to be drawn down in five (5) Advances (being the Moneghetti Advances) or (as the context may require) the principal amount thereof outstanding at any relevant time;
“
month
” means a period beginning in one calendar month and ending in the next calendar month on the day numerically
corresponding to the day of the calendar month on which it started, provided that (a) if the period started on the last Banking Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Banking Day
in such next calendar month and (b) if such numerically corresponding day is not a Banking Day, the period shall end on the next following Banking Day in the same calendar month but if there is no such Banking Day it shall end on the preceding
Banking Day and “
months
” and “
monthly
” shall be construed accordingly;
“
Mortgage
”
means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Mortgage; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Mortgage,
|
and “
Mortgages
”
means any or all of them;
“
Mortgaged Ship
” means, at any relevant time, any Ship which is at such time subject to a
Mortgage and/or the Earnings, Insurances and Requisition Compensation of which are subject to an Encumbrance pursuant to the relevant Ship Security Documents and a Ship shall, for the purposes of this Agreement, be deemed to be a Mortgaged Ship as
from whichever shall be the earlier of (a) the Drawdown Date of the Delivery Advance for that Ship and (b) the date that the Mortgage of that Ship shall have been executed and registered in accordance with this Agreement until whichever shall be the
earlier of (i) the payment in full of the amount required to be paid by the Agent pursuant to clause 4.3 following the sale or Total Loss of such Ship and (ii) the date on which all moneys owing under the Security Documents have been repaid in full;
10
“
Operating Account
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Operating Account; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Operating Account,
|
and “
Operating
Accounts
” means any or all of them;
“
Operating Account Pledge
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Operating Account Pledge; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Operating Account Pledge,
|
and
“
Operating Account Pledges
” means any or all of them;
“
Operator
” means any person who is from time to
time during the Security Period concerned in the operation of a Ship and falls within the definition of “
Company
” set out in rule 1.1.2 of the Code;
“
Permitted Encumbrance
” means any Encumbrance in favour of the Creditors or any of them created pursuant to the Security
Documents and Permitted Liens;
“
Permitted Liens
” means, in relation to a Ship, any lien on that Ship for master’s,
officer’s or crew’s wages outstanding in the ordinary course of trading, any lien for salvage, any ship repairer’s or outfitter’s possessory lien for a sum not (except with the prior written consent of the Agent) exceeding
$4,000,000, and any lien arising by operation of law or in the ordinary course of trading of that Ship;
“
Pollutant
” means
and includes pollutants, contaminants, toxic substances, oil as defined in the United States Oil Pollution Act of 1990 and all hazardous substances as defined in the United States Comprehensive Environmental Response, Compensation and Liability Act
1980;
“
Pre-delivery Security Assignment
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Pre-delivery Security Assignment; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Pre-delivery Security Assignment,
|
and
“
Pre-delivery Security Assignments
” means any or all of them;
“
Quarterly Debt Service
” means, on any
relevant day, the sum determined by the Agent in its sole discretion to be the total amount of principal and interest that will fall due under this Agreement in the three (3) month period commencing on such day;
“
Quotation Date
” means, in relation to any period for which LIBOR is to be determined under this Agreement, the date on which
quotations would customarily be provided by leading banks in the London Interbank Market for deposits in the relevant currency for delivery on the first day of that period;
“
Reference Bank
” means, in relation to LIBOR, the principal Geneva office of BNP Paribas (Suisse) SA or any other Bank
appointed as a Reference Bank pursuant to clause 16.21;
“
Refund Guarantee
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, any Fontvieille Refund Guarantee; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, any Moneghetti Refund Guarantee,
|
11
and “
Refund Guarantees
” means any or all of them;
“
Refund Guarantee Assignment Consent and Acknowledgement
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, any Fontvieille Refund Guarantee Assignment Consent and Acknowledgement; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, any Moneghetti Refund Guarantee Assignment Consent and Acknowledgement,
|
and “
Refund Guarantee Assignment Consents and Acknowledgements
” means any or all of them;
“
Refund Guarantor
” means, in relation to each Refund Guarantee, The Korea Development Bank, Corporate Banking Dept. 1 of 16-3
Yeouido-dong, Yeongdeungpo-gu, Seoul 150-973, Korea and/or any other bank or financial institution acceptable to the Agent in its sole discretion and appointed by the Builder to issue that Refund Guarantee and includes their respective successors in
title and “
Refund Guarantors
” means any or all of them;
“
Registry
” means, in relation to a Ship, such
registrar, commissioner or representative of the relevant Flag State who is duly authorised and empowered to register such Ship, the relevant Borrower’s title to such Ship and the relevant Mortgage under the laws and flag of the relevant Flag
State;
“
Regulatory Agency
” means the Government Entity or other organisation in a Flag State which has been designated by
the Government of that Flag State to implement and/or administer and/or enforce the provisions of the Code;
“
Related
Company
” of a person means any Subsidiary of such person, any company or other entity of which such person is a Subsidiary and any Subsidiary of any such company or entity;
“
Relevant Jurisdiction
” means any jurisdiction in which or where any Security Party is incorporated, resident, domiciled, has
a permanent establishment, carries on, or has a place of business or is otherwise effectively connected;
“
Relevant Party
”
means any of the Borrowers, any other Security Party and their respective Related Companies;
“
Relevant Ship
” means the
Ships and any other vessel from time to time (whether before or after the date of this Agreement) owned, managed or crewed by, or chartered to, any Relevant Party;
“
Repayment Dates
” means, in respect of each Tranche (and subject to clause 6.3), the First Repayment Date in respect of such
Tranche and each of the dates falling at three (3) monthly intervals after such First Repayment Date up to and including the earlier of (a) the date falling one hundred and seventeen (117) months after such First Repayment Date and
(b) 28 February 2021;
“
Requisition Compensation
” means, in relation to a Ship, all sums of money or other
compensation from time to time payable during the Security Period by reason of the Compulsory Acquisition of such Ship;
“
Security
Agent
” means BNP Paribas (Suisse) SA acting for the purposes of this Agreement through its offices at Place de Hollande 2, P.O. Box CH-1211, Geneva 11, Switzerland (or of such other address as may last have been notified to the other
parties to this Agreement pursuant to clause 17.1.3) or such other person as may be appointed as security agent and trustee by the Banks and the Agent pursuant to clause 16.14 and includes its successors in title;
“
Security Documents
” means this Agreement, the Fee Letter, the Mortgages, the Deeds of Covenant, the Operating Account
Pledges, the Manager’s Undertakings, the Corporate
12
Guarantees, the Pre-delivery Security Assignments, the Contract Assignment Consents and Acknowledgements, the Refund Guarantee Assignment Consents and Acknowledgements and any other documents as
may have been or shall from time to time after the date of this Agreement be executed to guarantee and/or secure all or any part of the Loan, interest thereon and other moneys from time to time owing by the Borrowers or any other Security Party
pursuant to this Agreement or any other Security Documents (whether or not any such document also secures moneys from time to time owing pursuant to any other document or agreement);
“
Security Party
” means each Borrower, the Manager, each Corporate Guarantor or any other person who may at any time be a party
to any of the Security Documents (other than the Creditors);
“
Security Period
” means the period commencing on the date
hereof and terminating upon discharge of the security created by the Security Documents by payment of all monies payable thereunder;
“
Security Requirement
” means the amount in Dollars (as certified by the Agent whose certificate shall, in the absence of
manifest error, be conclusive and binding on the Borrowers and the Creditors) which is, at any relevant time, One hundred and twenty per cent (120%) of the Loan at such time;
“
Security Value
” means the amount in Dollars (as certified by the Agent whose certificate shall, in the absence of manifest
error and/or gross negligence, be conclusive and binding on the Borrowers and the Creditors) which is, at any relevant time, the aggregate of (a) the market value of the Mortgaged Ships as most recently determined in accordance with clause
8.2.2 and (b) the market value of any additional security for the time being actually provided to the Creditors or any of them pursuant to clause 8.2;
“
Ship
”:
|
|
(a)
|
in relation to the Fontvieille Borrower and/or the Fontvieille Tranche (or any Advance thereof), means the Fontvieille Ship; or
|
|
|
(b)
|
in relation to the Moneghetti Borrower and/or the Moneghetti Tranche (or any Advance thereof), means the Moneghetti Ship,
|
and “
Ships
” means any or all of them;
“
Ship Security Documents
”:
|
|
(a)
|
in relation to the Fontvieille Ship, means the Fontvieille Mortgage, the Fontvieille Deed of Covenant and the Manager’s Undertaking in respect of the Fontvieille Ship; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, means the Moneghetti Mortgage, the Moneghetti Deed of Covenant and the Manager’s Undertaking in respect of the Moneghetti Ship;
|
“
SMC
” means a safety management certificate issued in respect of a Ship in accordance with rule 13 of the Code;
“
Subsidiary
” of a person means any company or entity directly or indirectly controlled by such person, and for this purpose
“
control
” means either the ownership of more than fifty per cent (50%) of the voting share capital (or equivalent rights of ownership) of such company or entity or the power to direct its policies and management, whether by
contract or otherwise;
“
Taxes
” includes all present and future taxes, levies, imposts, duties, fees or charges of
whatever nature together with interest thereon and penalties in respect thereof and “
Taxation
” shall be construed accordingly;
13
“
Termination Date
” means:
|
|
(a)
|
in relation to the Fontvieille Tranche (and each Advance thereof), 31 August 2010; or
|
|
|
(b)
|
in relation to the Moneghetti Tranche (and each Advance thereof), 15 August 2011,
|
and, in
relation to a Tranche, in the event of arbitration proceedings commencing in connection with the Contract relevant to such Tranche (other than as a result of the relevant Borrower’s default under the Contract), with the prior written consent of
the Agent (acting on the instructions of ail the Banks) the day falling 365 days after the commencement of such arbitration proceedings (if later than the relevant deadline referred to in paragraphs (a) and (b) above), or such other later
day may be agreed in writing by the Agent (acting on the instructions of all the Banks);
“
Total Commitment
” means, at any
relevant time, the aggregate of all the Banks’ Commitments at such time;
“
Total Loss
” means, in relation to a Ship:
|
|
(a)
|
the actual, constructive, compromised or arranged total loss of such Ship; or
|
|
|
(b)
|
the Compulsory Acquisition of such Ship; or
|
|
|
(c)
|
the hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of such Ship (other than where the same amounts to the Compulsory Acquisition of such Ship) by any Government Entity, or by persons
acting or purporting to act on behalf of any Government Entity, unless such Ship be released and restored to the relevant Borrower (or, if prior to the delivery of such Ship to such Borrower, to the Builder) from such hijacking, theft, condemnation,
capture, seizure, arrest, detention or confiscation within ninety (90) days after the occurrence thereof;
|
“
Tranche
” means:
|
|
(a)
|
in relation to the Fontvieille Ship, the Fontvieille Tranche; or
|
|
|
(b)
|
in relation to the Moneghetti Ship, the Moneghetti Tranche,
|
and “
Tranches
”
means any or all of them;
“
Transfer Certificate
” means a certificate in substantially the form set out in schedule 4;
“
Transferee Bank
” has the meaning ascribed thereto in clause 15.3;
“
Transferor Bank
” has the meaning ascribed thereto in clause 15.3;
“
Trust Deed
” means a trust deed in the form, or substantially in the form, set out in schedule 8;
“
Trust Property
” means (i) the security, powers, rights, titles, benefits and interests (both present and future) constituted
by and conferred on the Security Agent under or pursuant to the Security Documents (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to the Security
Agent in the Security Documents), (ii) all moneys, property and other assets paid or transferred to or vested in the Security Agent or any agent of the Security Agent or any receiver or received or recovered by the Security Agent or any agent of the
Security Agent or any receiver pursuant to, or in connection with, any of the Security Documents whether from any Security Party or any other person and (iii) all moneys, investments, property and other assets at any time representing or deriving
from any of the foregoing, including all interest, income and other sums at any time received or receivable by the Security Agent or any agent of the Security Agent or any receiver in respect of the same (or any part thereof); and
14
“
Underlying Documents
” means, together, the Contracts, the Refund Guarantees and
the Management Agreements and “
Underlying Document
” means any of them.
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement.
|
1.4
|
Construction of certain terms
|
In this Agreement, unless the context otherwise requires:
|
1.4.1
|
references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules;
|
|
1.4.2
|
references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended in
accordance with terms thereof, or, as the case may be, with the agreement of the relevant parties;
|
|
1.4.3
|
references to a “
regulation
” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any agency, authority, central bank
or government department or any self-regulatory or other national or supra-national authority;
|
|
1.4.4
|
words importing the plural shall include the singular and vice versa;
|
|
1.4.5
|
references to a time of day are to Geneva time;
|
|
1.4.6
|
references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
|
|
1.4.7
|
references to a “
guarantee
” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a
default by any other person to pay any Indebtedness and “
guaranteed
” shall be construed accordingly; and
|
|
1.4.8
|
references to any enactment shall be deemed to include references to such enactment as re-enacted, amended or extended.
|
Where this Agreement or any other Security Document provides for any
matter to be determined by reference to the opinion of the Majority Banks or to be subject to the consent or request of the Majority Banks or for any action to be taken on the instructions in writing of the Majority Banks, such opinion, consent,
request or instructions shall (as between the Banks) only be regarded as having been validly given or issued by the Majority Banks if all the Banks shall have received prior notice of the matter on which such opinion, consent, request or
instructions are required to be obtained and the relevant majority of such Banks shall have given or issued such opinion, consent, request or instructions but so that (as between the Borrowers and the Banks) the Borrowers shall be entitled (and
bound) to assume that such notice shall have been duly received by each relevant Bank and that the relevant majority shall have been obtained to constitute Majority Banks whether or not this is in fact the case.
For the purposes of the definition of “
Majority
Banks
” in clause 1.2, references to the Commitment of a Bank shall, if the Total Commitment has, at any relevant time, been reduced to zero, be deemed to be a reference to the Commitment of that Bank immediately prior to such reduction to
zero.
15
|
2
|
The Total Commitment and the Advances
|
The Banks, relying upon each of the representations and warranties in
clause 7, agree to lend to the Borrowers, jointly and severally, upon and subject to the terms of this Agreement, the principal sum of up to One hundred and thirty Five million Dollars ($135,000,000) in ten (10) Advances comprising two
(2) Tranches, namely, the Fontvieille Tranche and the Moneghetti Tranche. The obligation of each Bank under this Agreement shall be to contribute that proportion of each Advance which, as at the Drawdown Date of such Advance, its Commitment
bears to the Total Commitment.
The obligations of the Banks under this Agreement are several
according to their respective Commitments and/or Contributions; the failure of any Bank to perform such obligations shall not relieve any other Creditor or any Borrower of any of their respective obligations or liabilities under this Agreement nor
shall any Creditor be responsible for the obligations of any other Creditor (except for its own obligations, if any, as a Bank) under this Agreement.
Notwithstanding any other term of this Agreement (but without
prejudice to the provisions of this Agreement relating to or requiring action by the Majority Banks) the interests of the Creditors are several and the amount due to any Creditor is a separate and independent debt. Each Creditor shall have the right
to protect and enforce its rights arising out of this Agreement and it shall not be necessary for any other Creditor to be joined as an additional party in any proceedings for this purpose.
Subject to the terms and conditions of this Agreement, each Advance shall be
made to the Borrowers following receipt by the Agent from the Borrowers of a Drawdown Notice not later than 10:00 a.m. (London time) on the third Banking Day before the date, which shall be a Banking Day falling within the Drawdown Period for such
Advance, on which the Borrowers propose such Advance is made. A Drawdown Notice shall be effective on actual receipt by the Agent and, once given, shall, subject as provided in clause 3.6.1, be irrevocable (unless otherwise agreed by the Banks).
|
2.5
|
Timing and limitation of Advances
|
|
2.5.1
|
The aggregate amount of the Loan shall not exceed the lower of:
|
|
|
(a)
|
One hundred and thirty five million Dollars ($135,000,000); and
|
|
|
(b)
|
the amount in Dollars equal to seventy five per cent (75%) of the aggregate market values of the Ships as determined by the valuations of the Ships obtained in accordance with schedule 3, Part 4,
|
and each Advance shall, subject to the following provisions of this clause 2.5, be for such amount as is specified in the Drawdown Notice for
that Advance.
|
2.5.2
|
The aggregate amount of each Tranche shall not exceed the lower of:
|
|
|
(a)
|
Sixty seven million five hundred thousand Dollars ($67,500,000); and
|
|
|
(b)
|
seventy per cent (75%) of the Contract Price of the Ship relevant to such Tranche; and
|
|
|
(c)
|
the amount in Dollars equal to seventy five per cent (75%) of the market value of the Ship relevant to such Tranche as determined by the valuations of that Ship obtained in accordance with schedule 3, Part 4.
|
16
|
2.5.3
|
The aggregate amount of the four (4) Contract Instalment Advances for each Ship shall not exceed the lower of (1) Thirty three million seven hundred and fifty thousand Dollars ($33,750,000) and
(2) seventy five per cent (75%) of the aggregate of the first four (4) instalments of the Contract Price for that Ship, and:
|
|
|
(a)
|
the first Contract Instalment Advance for a Ship shall not exceed the lower of (i) Thirteen million five hundred thousand Dollars ($13,500,000) and (ii) seventy five per cent (75%) of the first instalment
of the Contract Price for that Ship;
|
|
|
(b)
|
each of the second, the third and the fourth Contract Instalment Advance for a Ship shall not exceed the lower of (i) Six million seven hundred and fifty thousand Dollars ($6,750,000) and (ii) seventy five per
cent (75%) of the instalment of the Contract Price for that Ship specified in the second column of schedule 5 opposite the relevant Contract Instalment Advance; and
|
|
|
(c)
|
each Contract Instalment Advance for a Ship:
|
|
|
(i)
|
shall be applied in or towards payment to the Builder of part of the relevant instalment of the Contract Price for that Ship specified in the second column of schedule 5 opposite the relevant Contract Instalment
Advance;
|
|
|
(ii)
|
shall be made when such instalment has become due and payable, as specified in more detail in the third column of schedule 5 opposite the relevant Contract Instalment Advance; and
|
|
|
(iii)
|
shall be paid by the Agent to the Builder, unless the relevant Borrower has already paid such instalment to the Builder when it was due, in which case the relevant Contract Instalment Advance shall be advanced to the
Borrowers directly.
|
|
2.5.4
|
Each Delivery Advance:
|
|
|
(a)
|
shall not exceed the lower of:
|
|
|
(i)
|
Thirty three million seven hundred and fifty thousand Dollars ($33,750,000);
|
|
|
(ii)
|
seventy five per cent (75%) of the fifth instalment of the Contract Price for that Ship;
|
|
|
(iii)
|
the amount in Dollars which, when added to the aggregate amount of the Contract Instalment Advances for the relevant Ship actually drawn down, will produce a figure equal to seventy five per cent (75%) of the
Contract Price for that Ship;
|
|
|
(iv)
|
the amount in Dollars which, when added to the aggregate amount of the Contract Instalment Advances for the relevant Ship actually drawn down, will produce a figure equal to seventy five per cent (75%) of the
market value of that Ship determined in accordance with the valuation of such Ship obtained pursuant to schedule 3, Part 4; and
|
|
|
(v)
|
the amount in Dollars which, when added to the aggregate amount of the Contract Instalment Advances for the relevant Ship actually drawn down, will produce a total figure of Sixty seven million five hundred thousand
Dollars ($67,500,000);
|
|
|
(b)
|
shall be applied in or towards payment to the Builder of part of the final instalment of the Contract Price for the relevant Ship;
|
17
|
|
(c)
|
shall be made on the Delivery Date of the relevant Ship when the final instalment of the relevant Contract Price has become due and payable; and
|
|
|
(d)
|
shall be paid by the Agent to the Builder, unless the relevant Borrower has already paid such instalment to the Builder when due, in which case the relevant Delivery Advance shall be advanced to the Borrowers directly.
|
Upon receipt of a Drawdown Notice complying with the terms of this
Agreement, the Agent shall promptly notify each Bank and each Bank shall make available to the Agent its portion of the relevant Advance for payment by the Agent in accordance with clause 6.2. The Borrowers acknowledge that payment of any Advance or
part thereof to the Builder or the Borrowers or any of them (as the case may be) in accordance with clause 6.2 shall satisfy the obligation of the Banks to lend that Advance to the Borrowers under this Agreement.
|
2.7
|
Termination of Total Commitment
|
Any part of the Total Commitment in respect of a
Tranche which remains undrawn and uncancelled by the relevant Termination Date shall thereupon be automatically cancelled.
|
2.8
|
Application of proceeds
|
Without prejudice to the Borrowers’ obligations under
clause 8.1.3, no Creditor shall have any responsibility for the application of the proceeds of the Loan or any part thereof by the Borrowers.
|
3
|
Interest and Interest Periods
|
The Borrowers shall pay interest on each Tranche in respect of
each Interest Period relating thereto on each Interest Payment Date (or, in the case of Interest Periods of more than three (3) months, by instalments, the first instalment three (3) months from the commencement of the Interest Period and
the subsequent instalments at intervals of three (3) months or, if shorter, the period from the date of the preceding instalment until the Interest Payment Date relative to such Interest Period) at the rate per annum determined by the Agent to
be the aggregate of (a) the Margin and (b) LIBOR for such Interest Period.
|
3.2
|
Selection of Interest Periods
|
The Borrowers may by notice received by the Agent not
later than 10:00 a.m. (London time) on the third Banking Day before the beginning of each Interest Period specify whether such Interest Period shall have a duration of three (3) months, six (6) months, nine (9) months, twelve
(12) months or such other period (shorter than twelve (12) months) as the Borrowers may select and the Agent (acting on the instructions of the Majority Banks) may agree.
|
3.3
|
Determination of Interest Periods
|
Every Interest Period shall be of the duration
specified by the Borrowers pursuant to clause 3.2 but so that:
|
3.3.1
|
the first Interest Period in respect of each Advance shall commence on the date on which such Advance is drawn down and each subsequent Interest Period shall commence on the last day of the previous Interest Period for
such Advance;
|
|
3.3.2
|
the first Interest Period in respect of each Advance in respect of a Ship (after the first Advance to be drawn down in respect of such Ship) shall end on the same day as the then current Interest Period for the Tranche
for such Ship and, on the last day of such Interest Period, such Advances shall be consolidated into, and shall thereafter constitute, the Tranche in respect of such Ship;
|
18
|
3.3.3
|
if any Interest Period in respect of a Tranche would otherwise overrun a Repayment Date for such Tranche, then, in the case of the last Repayment Date for such Tranche, such Interest Period shall end on such Repayment
Date, and in the case of any other Repayment Date or Repayment Dates for such Tranche, the relevant Tranche shall be divided into parts so that there is one part in the amount of the repayment instalment or instalments due on each Repayment Date for
such Tranche falling during that Interest Period and having an Interest Period ending on the relevant Repayment Date and another part in the amount of the balance of the relevant Tranche having an Interest Period ascertained in accordance with
clause 3.2 and the other provisions of this clause 3.3; and
|
|
3.3.4
|
if the Borrowers fail to specify the duration of an Interest Period in accordance with the provisions of clause 3.2 and this clause 3.3 such Interest Period shall have a duration of three (3) months or such other
period as shall comply with this clause 3.3.
|
If the Borrowers fail to pay any sum (including, without limitation,
any sum payable pursuant to this clause 3.4) on its due date for payment under any of the Security Documents, the Borrowers shall pay interest on such sum on demand from the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Agent pursuant to this clause 3.4. The period beginning on such due date and ending on such date of payment shall be divided into successive periods of not more than three (3) months as selected by the
Agent each of which (other than the first, which shall commence on such due date) shall commence on the last day of the preceding such period. The rate of interest applicable to each such period shall be the aggregate (as determined by the Agent) of
(a) two per cent (2%) per annum, (b) the Margin and (c) LIBOR for such period. Such interest shall be due and payable on the last day of each such period as determined by the Agent and each such day shall, for the purposes of
this Agreement, be treated as an Interest Payment Date, provided that if such unpaid sum is an amount of principal which became due and payable by reason of a declaration by the Agent under clause 10.2.2 or a prepayment pursuant to clauses 4.3,
8.2.1(a) or 12.1, on a date other than an Interest Payment Date relating thereto, the first such period selected by the Agent shall be of a duration equal to the period between the due date of such principal sum and such Interest Payment Date and
interest shall be payable on such principal sum during such period at a rate of two per cent (2%) above the rate applicable thereto immediately before it shall have become so due and payable. If, for the reasons specified in clause 3.6.1, the
Agent is unable to determine a rate in accordance with the foregoing provisions of this clause 3.4, each Bank shall promptly notify the Agent of the cost of funds to such Bank and interest on any sum not paid on its due date for payment shall be
calculated at a rate determined by the Agent to be two per cent (2%) per annum above the aggregate of the Margin and the cost of funds to such Bank.
|
3.5
|
Notification of Interest Periods and interest rate
|
The Agent shall notify the Borrowers
and the Banks promptly of the duration of each Interest Period and of each rate of interest (or, as the case may be default interest) determined by it under this clause 3.
|
3.6
|
Market disruption; non-availability
|
|
3.6.1
|
If and whenever, at any time prior to the commencement of any Interest Period:
|
|
|
(a)
|
the Agent shall have determined (which determination shall, in the absence of manifest error or gross negligence, be conclusive) that adequate and fair means do not exist for ascertaining LIBOR during such Interest
Period; or
|
|
|
(b)
|
the Reference Bank does not supply the Agent with a quotation for the purposes of calculating LIBOR (where such a quotation is required having regard to paragraph (b) of the definition of “LIBOR” in
clause 1.2); or
|
19
|
|
(c)
|
the Agent shall have received notification from Banks with Contributions aggregating not less than one-third (
1
⁄
3
rd) of the
Loan (or, prior to the Drawdown Date of the first Advance to be drawn down from Banks with Commitments aggregating not less than one-third (
1
⁄
3
rd) of the
Total Commitment), that deposits in Dollars are not available to such Banks in the London Interbank Market in the ordinary course of business in sufficient amounts to fund the Loan or part thereof or their Contributions for such Interest Period or
that LIBOR does not accurately reflect the cost to such Banks of obtaining such deposits,
|
the Agent shall forthwith give
notice (a “
Determination Notice
”) thereof to the Borrowers and to each of the Banks. A Determination Notice shall contain particulars of the relevant circumstances giving rise to its issue. After the giving of any Determination
Notice the undrawn amount of the Total Commitment shall not be borrowed until notice to the contrary is given to the Borrowers by the Agent.
|
3.6.2
|
During the period of ten (10) days after any Determination Notice has been given by the Agent under clause 3.6.1, each Bank shall certify an alternative basis (the “
Alternative Basis
”) for
maintaining its Contribution. The Alternative Basis may at the relevant Bank’s sole and unfettered discretion include (without limitation) alternative interest periods, alternative currencies or alternative rates of interest but shall include a
margin above the cost of funds to such Bank equivalent to the Margin. The Agent shall calculate the arithmetic mean of the Alternative Bases provided by the relevant Banks (the “
Substitute Basis
”) and certify the same to the
Borrowers and the Banks. The Substitute Basis so certified shall be binding upon the Borrowers, and shall take effect in accordance with its terms from the date specified in the Determination Notice until such time as the Agent notifies the
Borrowers that none of the circumstances specified in clause 3.6.1 continues to exist whereupon the normal interest rate fixing provisions of this Agreement shall apply. If the Borrowers do not agree with the Substitute Basis, they are entitled to
prepay the Loan in full in accordance with clause 4.2 and the provisions of clauses 4.4 and 4.5 shall apply to any such prepayment.
|
|
4
|
Repayment and prepayment
|
|
4.1.1
|
The Borrowers shall repay each Tranche by forty (40) repayment instalments, one such instalment to be repaid on each of the Repayment Dates for such Tranche. Subject to the provisions of this Agreement, the amount
of each of the first to thirty ninth repayment instalments (inclusive) for each Tranche shall be $950,000, and the amount of the fortieth and final repayment instalment for each Tranche shall be $30,450,000 (comprising a repayment instalment of
$950,000 and a balloon payment of $29,500,000 (each such balloon payment in relation to a Tranche, the “
Balloon Instalment
” for that Tranche)).
|
|
4.1.2
|
If the Total Commitment in respect of any Advance relating to a Ship is not drawn down in full, the amount of the repayments instalments in respect of the Tranche for such Ship (including the relevant Balloon
Instalment) shall be reduced proportionately.
|
The Borrowers may prepay any Tranche in whole or part (such part
being in an amount of Five hundred thousand Dollars ($500,000) or any larger sum which is an integral multiple of Five hundred thousand Dollars ($500,000)) on any Interest Payment Date relating to the part of the Tranche to be repaid without premium
or penalty.
|
4.3
|
Prepayment on Total Loss, sale and transfer
|
|
4.3.1
|
Before first drawdown - Ships/Contracts
|
On a Ship becoming a Total Loss or on the Contract for
a Ship being assigned, transferred or novated to and in favour of any person, in each case before any Contract Instalment Advance for such Ship is drawn down, the obligation of the Banks to advance any Advance for such Ship (or part thereof) shall
immediately cease and the Total Commitment shall be reduced by the amount of the Tranche for such Ship.
20
|
4.3.2
|
After first drawdown but prior to Delivery - Contracts
|
Upon the Contract for a Ship being
assigned, transferred or novated to and in favour of any person, in each case after any Contract Instalment Advance for such Ship has been drawn down but prior to the drawing of the Delivery Advance for such Ship, the obligation of the Banks to
advance any other Advance (or part thereof) for such Ship shall immediately cease, the Total Commitment shall be reduced accordingly and the Borrowers shall prepay the outstanding Contract Instalment Advances for such Ship in full.
|
4.3.3
|
Sale and Total Loss of Ships
|
|
|
(a)
|
If a Ship is sold in accordance with the relevant Security Documents, or becomes a Total Loss, then the Borrowers shall, on the Disposal Reduction Date for such Ship, prepay the Tranche relevant to such Ship in full
(subject to clause 4.3.3(b)).
|
|
|
(b)
|
Notwithstanding paragraph (a) above, if a Ship is sold in accordance with the relevant Security Documents, or becomes a Total Loss and an Event of Default shall have occurred and be continuing, then the Borrowers
shall, on the Disposal Reduction Date for such Ship, prepay such proportion of the Loan as the Banks may require in their absolute discretion.
|
|
4.3.4
|
Consent to sale of Ship
|
Each Borrower may enter into any agreement to sell its Ship (whether
before or after delivery thereof to such Borrower by the Builder) without the prior written consent of the Agent or the other Creditors, if the Borrowers undertake in writing to the Agent that the Borrowers will, upon completion of such sale, comply
with their prepayment obligations under this clause 4.3 and any other amounts payable under clause 4.4 as a result of such sale.
For the purposes of this clause 4.3:
|
|
(a)
|
“
Disposal Reduction Date
” means:
|
|
|
(i)
|
in relation to a Ship which has become a Total Loss, its Total Loss Reduction Date; and
|
|
|
(ii)
|
in relation to a Ship which is sold in accordance with the provisions of the relevant Security Documents, the date of completion of such sale (and immediately prior to such completion) by the transfer of title to such
Ship to the purchaser in exchange for payment of the relevant purchase price; and
|
|
|
(b)
|
“
Total Loss Reduction Date
” means:
|
|
|
(i)
|
in relation to a Mortgaged Ship which has become a Total Loss, the date which is the earlier of:
|
|
|
(A)
|
the date falling one hundred and eighty (180) days after that on which such Mortgaged Ship became a Total Loss; and
|
|
|
(B)
|
the date upon which the relevant insurance proceeds are or Requisition Compensation is, received by the relevant Borrower (or the relevant Creditors, as such Borrower’s assignees pursuant to the relevant Ship
Security Documents); or
|
21
|
|
(ii)
|
in relation to a Ship which has become a Total Loss during construction under the Contract, the date which is the earlier of:
|
|
|
(A)
|
the date falling one hundred and eighty (180) days after that on which such Ship became a Total Loss; and
|
|
|
(B)
|
the date upon which the relevant refund is received by the relevant Borrower (or the relevant Creditors, as such Borrower’s assignees pursuant to the relevant Pre-delivery Security Assignment).
|
For the purpose of this Agreement, a Total Loss in respect of a Ship shall be
deemed to have occurred:
|
|
(a)
|
in the case of an actual total loss of a Ship, on the actual date and at the time such Ship was lost or, if such date is not known, on the date on which such Ship was last reported;
|
|
|
(b)
|
in the case of a constructive total loss of a Ship, upon the date and at the time notice of abandonment of such Ship is given to the insurers of such Ship for the time being;
|
|
|
(c)
|
in the case of a compromised or arranged total loss of a Ship, on the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the insurers of such Ship;
|
|
|
(d)
|
in the case of Compulsory Acquisition of a Ship, on the date upon which the relevant requisition of title or other compulsory acquisition of such Ship occurs; and
|
|
|
(e)
|
in the case of hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation of a Ship (other than where the same amounts to Compulsory Acquisition of such Ship) by any Government Entity, or by
persons purporting to act on behalf of any Government Entity, which deprives the relevant Borrower (or, if prior delivery of the Ship to such Borrower, the Builder) of the use of such Ship for more than ninety (90) days, upon the expiry of the
period of ninety (90) days after the date upon which the relevant hijacking, theft, condemnation, capture, seizure, arrest, detention or confiscation occurred.
|
|
4.3.7
|
Application of Total Loss and sale proceeds
|
Any insurance moneys or Requisition Compensation
or proceeds of sale received by the Security Agent or any other Creditors (as the case may be) in respect of such Total Loss or sale of a Mortgaged Ship under the relevant Ship Security Documents, shall be applied in or towards making any prepayment
and paying any other moneys required under clauses 4.3 and 4.4 and provided no Event of Default has occurred and is continuing, the balance (if any) shall be paid to the Borrowers.
|
4.4
|
Amounts payable on prepayment
|
Any prepayment of all or part of the Loan under this
Agreement shall be made together with:
|
4.4.1
|
accrued interest on the amount to be prepaid to the date of such prepayment;
|
|
4.4.2
|
any additional amount payable under clauses 6.6 or 12.2; and
|
|
4.4.3
|
all other sums payable by the Borrowers to the Creditors under this Agreement or any of the other Security Documents including, without limitation, any accrued commitment commission payable under clause 5.1 and any
amounts payable under clause 11.
|
22
|
4.5
|
Notice of prepayment; reduction of repayment instalments
|
|
4.5.1
|
No prepayment may be effected under clause 4.2 unless the Borrowers shall have given the Agent at least five (5) Banking Days’ prior written notice of their intention to make such prepayment. Every notice of
prepayment shall be effective only on actual receipt by the Agent, shall be irrevocable (unless otherwise agreed by the Agent), shall specify the Tranche and the amount thereof to be prepaid and shall oblige the Borrowers to make such prepayment on
the date specified.
|
|
4.5.2
|
Any amount prepaid pursuant to clause 4.2 in respect of a Tranche shall be applied in reducing the repayment instalments (including the relevant Balloon Instalment) of the relevant Tranche under clause 4.1.1
proportionately.
|
|
4.5.3
|
Any amount prepaid pursuant to clause 4.3.3(b) shall be applied in reducing such Tranches, and in such manner, as the Banks may require in their absolute discretion.
|
|
4.5.4
|
Any amount prepaid pursuant to clause 8.2.1(a) shall be applied in prepayment of all Tranches proportionately as between them and in reduction of the repayment instalments (including the Balloon Instalments) of each
Tranche under clause 4.1.1 proportionately.
|
|
4.5.5
|
The Borrowers may not prepay the Loan or any part thereof save as expressly provided in this Agreement. No amount prepaid under this Agreement may be re-borrowed.
|
|
4.6
|
Cancellation of Commitments
|
The Borrowers may at any time during the relevant Drawdown
Period by notice to the Agent (effective only on actual receipt) cancel, with effect from a date not less than ten (10) days after the receipt by the Agent of such notice, the whole or any part (being Five hundred thousand Dollars ($500,000) or
any larger sum which is an integral multiple of Five hundred thousand Dollars ($500,000)) of the Total Commitment which is then available for drawing but has not then been borrowed or requested in a Drawdown Notice. Any such notice of cancellation,
once given, shall be irrevocable, shall specify the Advance(s) and the amount thereof to be cancelled and upon such cancellation taking effect the Commitment of each Bank shall be reduced proportionately.
|
5
|
Fees, commitment commission and expenses
|
The Borrowers shall pay to the Agent:
|
5.1.1
|
for the account of each Bank, on each of the dates falling at three (3) monthly intervals after the earlier of (a) the date of this Agreement and (b) 31 May 2008 until the last day of the latest
Drawdown Period to elapse, and on such day, commitment commission computed from the earlier of (a) the date of this Agreement and (b) 31 May 2008 (in the case of the first payment of commission) and from the due date of the preceding
payment of commission (in the case of each subsequent payment), at the rate of zero point four zero per cent (0.40%) per annum on the daily undrawn amount of such Bank’s Commitment; and
|
|
5.1.2
|
for the account of the Agent, an annual agency fee of such amount and payable at such time and in such manner as specified in the Fee Letter;
|
The fees and commitment commission referred to in clause 5.1 shall be payable by the Borrowers to the Agent, whether or not any part of the
Total Commitment is ever advanced and shall be, in each case, non-refundable.
23
The Borrowers shall pay to the Agent on a full indemnity basis on demand all
expenses (including legal, printing and out-of-pocket expenses):
|
5.2.1
|
reasonably incurred by the Creditors or any of them in connection with the negotiation, preparation, execution and, where relevant, registration of the Security Documents (including, for the avoidance of doubt, any
expenses incurred by the Creditors or any of them in connection with the legal opinions obtained pursuant to schedule 3) and of any amendment or extension of or the granting of any waiver or consent under, any of the Security Documents and the
syndication of the Loan; and
|
|
5.2.2
|
incurred by the Creditors or any of them in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under, any of the Security Documents, or otherwise in respect of the
moneys owing under any of the Security Documents,
|
together with interest at the rate referred to in clause 3.4 from the date
on which such expenses were incurred to the date of payment (as well after as before judgment).
All fees and expenses payable pursuant to this clause 5 shall be paid
together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by the Creditors or any of them under this Agreement shall, on delivery of the value added tax
invoice, be paid in addition to any sum agreed to be paid hereunder.
|
5.4
|
Stamp and other duties
|
The Borrowers shall pay all stamp, documentary, registration or
other like duties or taxes (including any duties or taxes payable by any of the Creditors) imposed on or in connection with any of the Underlying Documents, the Security Documents or the Loan and shall indemnify the Creditors or any of them against
any liability arising by reason of any delay or omission by the Borrowers to pay such duties or taxes.
|
6
|
Payments and taxes; accounts and calculations
|
|
6.1
|
No set-off or counterclaim
|
The Borrowers acknowledge that in performing their
obligations under this Agreement, the Banks will be incurring liabilities to third parties in relation to the funding of amounts to the Borrowers, such liabilities matching the liabilities of the Borrowers to the Banks and that it is reasonable for
the Banks to be entitled to receive payments from the Borrowers gross on the due date in order that each of the Banks is put in a position to perform its matching obligations to the relevant third parties. Accordingly, all payments to be made by the
Borrowers under any of the Security Documents shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 6.6, free and clear of any deductions or withholdings, in Dollars on the due date to such account
at such bank and in such place as the Agent may from time to time specify for this purpose. Save as otherwise provided in this Agreement or any relevant Security Documents, such payments shall be for the account of all Banks and the Agent shall
distribute such payments in like funds as are received by the Agent to the Banks rateably in accordance with their respective Commitment (if prior to the first drawdown) or Contribution (if following the first drawdown).
All sums to be advanced by the Banks to the Borrowers under this
Agreement shall be remitted in Dollars on the Drawdown Date for the relevant Advance to the account of the Agent at such bank as the Agent may have notified to the Banks and shall be paid by the Agent on such date in like funds as are received by
the Agent to the account specified in the Drawdown Notice for such Advance.
24
When any payment under any of the Security Documents would otherwise
be due on a day which is not a Banking Day, the due date for payment shall be extended to the next following Banking Day unless such Banking Day falls in the next calendar month in which case payment shall be made on the immediately preceding
Banking Day.
All interest and other payments of an annual nature under any of the
Security Documents shall accrue from day to day and be calculated on the basis of actual days elapsed and a three hundred and sixty (360) days year.
|
6.5
|
Certificates conclusive
|
Any certificate or determination of the Agent as to any rate of
interest or any other amount pursuant to and for the purposes of any of the Security Documents shall, in the absence of manifest error or gross negligence, be conclusive and binding on the Borrowers and on the Banks.
|
6.6
|
Grossing-up for Taxes - by the Borrowers
|
If at any time the Borrowers or any of them
are required to make any deduction or withholding in respect of Taxes from any payment due under any of the Security Documents for the account of any Creditor or if the Agent or the Security Agent is required to make any deduction or withholding
from a payment to another Creditor or withholding in respect of Taxes from any payment due under any of the Security Documents, the sum due from the Borrowers or any of them in respect of such payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or withholding, the relevant Creditor receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding), a net sum equal to the sum which it
would have received had no such deduction or withholding been required to be made and the Borrowers shall indemnify each Creditor against any losses or costs incurred by it by reason of any failure of the Borrowers or any of them to make any such
deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Borrowers shall promptly deliver to the Agent any receipts, certificates or other proof evidencing the amounts (if any) paid or
payable in respect of any deduction or withholding as aforesaid.
Each Bank shall maintain, in accordance with its usual practice, an
account evidencing the amounts from time to time lent by, owing to and paid to it under the Security Documents. The Agent and/or the Security Agent shall maintain a control account (being, in the case of any Mortgage which is in statutory form, the
“Account Current” referred to in such Mortgage) showing the Loan and other sums owing by the Borrowers under the Security Documents and all payments in respect thereof being made from time to time. The control account shall, in the absence
of manifest error, be conclusive as to the amount from time to time owing by the Borrowers under the Security Documents.
|
6.8
|
Agent may assume receipt
|
Where any sum is to be paid under the Security Documents to
the Agent or, as the case may be, the Security Agent for the account of another person, the Agent or, as the case may be, the Security Agent may assume that the payment will be made when due and the Agent or, as the case may be, the Security Agent
may (but shall not be obliged to) make such sum available to the person so entitled. If it proves to be the case that such payment was not made to the Agent or, as the case may be, the Security Agent, then the person to whom such sum was so made
available shall on request refund such sum to the Agent or, as the case may be, the Security Agent together with interest thereon sufficient to compensate the Agent or, as the case may be, the Security Agent for the cost of making available such sum
up to the date of such repayment
25
and the person by whom such sum was payable shall indemnify the Agent or, as the case may be, the Security Agent for any and all loss or expense which the Agent or, as the case may be, the
Security Agent may sustain or incur as a consequence of such sum not having been paid on its due date.
If, on any date on which a payment is due to be made by the Borrowers
under any of the Security Documents, the amount received by the Agent from the Borrowers falls short of the total amount of the payment due to be made by the Borrowers on such date then, without prejudice to any rights or remedies available to the
Agent, the Security Agent and the Banks under any of the Security Documents, the Agent shall apply the amount actually received from the Borrowers in or towards discharge of the obligations of the Borrowers under the Security Documents in the
following order, notwithstanding any appropriation made, or purported to be made, by the Borrowers:
|
6.9.1
|
first, in or towards payment, on a pro-rata basis, of any unpaid costs and expenses of the Agent and the Security Agent under any of the Security Documents;
|
|
6.9.2
|
secondly, in or towards payment, on a pro rata basis, of any fees and accrued commitment commission payable to the Arranger, the Agent or any of the other Creditors under, or in relation to, the Security Documents which
remain unpaid;
|
|
6.9.3
|
thirdly, in or towards payment to the Banks, on a pro rata basis, of any accrued interest which shall have become due under any of the Security Documents but remains unpaid;
|
|
6.9.4
|
fourthly, in or towards payment to the Banks, on a pro rata basis, of any principal amount which shall have become due but remains unpaid;
|
|
6.9.5
|
fifthly, in or towards payment to the Banks, on a pro rata basis, for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the
Loan repaid;
|
|
6.9.6
|
sixthly, in or towards payment to the relevant person of any other sum which shall have become due under any of the Security Documents but remains unpaid (and, if more than one such sum so remains unpaid, on a pro rata
basis); and
|
|
6.9.7
|
seventhly (but subject to the provisions of each Manager’s Undertaking), in or towards payment of any fees and expenses owing by any of the Borrowers to the Manager pursuant to the relevant Management Agreement.
|
The order of application set out in clauses 6.9.2 to 6.9.6 may be varied by the Agent if the Majority Banks so direct,
without any reference to, or consent or approval from, the Borrowers.
|
7
|
Representations and warranties
|
|
7.1
|
Continuing representations and warranties
|
The Borrowers jointly and severally represent
and warrant to each Creditor that:
each of the Borrowers is duly incorporated and validly existing in good
standing, under the laws of Hong Kong as a limited liability company and has power to carry on its businesses as they are now being conducted and to own its’ property and other assets;
each of the Borrowers has power to execute, deliver and perform its
obligations under the Underlying Documents and the relevant Borrowers’ Security Documents to which it is or is to
26
be a party and to borrow the Total Commitment; all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same and no
limitation on the powers of any Borrower to borrow will be exceeded as a result of borrowing the Loan;
|
7.1.3
|
Binding obligations
|
the Underlying Documents and the Security Documents constitute or will,
when executed, constitute valid and legally binding obligations of the relevant Borrowers enforceable in accordance with their respective terms;
|
7.1.4
|
No conflict with other obligations
|
the execution and delivery of, the performance of their
obligations under, and compliance with the provisions of, the Underlying Documents and the Security Documents by the relevant Borrowers will not (i) contravene any existing applicable law, statute, rule or regulation or any judgment, decree or
permit to which any of the Borrowers is subject, (ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Borrowers is a party or is subject or by
which it or any of its property is bound, (iii) contravene or conflict with any provision of the constitutional documents of any of the Borrowers or (iv) result in the creation or imposition of or oblige any of the Borrowers to create any
Encumbrance (other than a Permitted Encumbrance) on any of the undertakings, assets, rights or revenues of any of the Borrowers;
no litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of any of the Borrowers, threatened against any of the Borrowers which could have a material adverse effect on the management, operations, results of operations, business, properties, performance, prospects,
assets, condition (financial or otherwise) of any of the Borrowers;
|
7.1.6
|
No filings required
|
save for the registration of the Mortgages in the relevant register under
the laws of the relevant Flag State through the relevant Registry, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of any of the Underlying Documents or any of the Security Documents that they or any
other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or charge be paid in any Relevant Jurisdiction on or in
relation to any of the Underlying Documents or the Security Documents and each of the Underlying Documents and the Security Documents is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
the choice of English law to govern the Underlying Documents and the Security
Documents (other than the Mortgages and the Operating Account Pledges), the choice of (i) the law of the relevant Flag State to govern each Mortgage and (ii) Swiss law to govern the Operating Account Pledges, and the submissions by the
Borrowers to the non-exclusive jurisdiction of the English courts or (as the case may be) the Swiss courts, are valid and binding;
neither the Borrowers nor any of their respective assets is entitled to immunity
on the grounds of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement); and
27
every consent, authorisation, licence or approval of, or registration with
or declaration to, governmental or public bodies or authorities or courts required by any Borrower to authorise, or required by any Borrower in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of each
of the Underlying Documents and each of the Security Documents to which it is or is to be a party or the performance by each Borrower of its obligations under the Security Documents or the Underlying Documents to which it is or is to be a party has
been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed in, or in connection with, any of the same.
|
7.2
|
Initial representations and warranties
|
The Borrowers jointly and severally further
represent and warrant to each Creditor that:
the obligations of each Borrower under this Agreement are direct, general and
unconditional obligations of such Borrower and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of such Borrower except for obligations which are mandatorily preferred by operation of law and not
by contract;
|
7.2.2
|
No default under other Indebtedness
|
none of the Borrowers is (nor would with the giving of
notice or lapse of time or the satisfaction of any other condition or combination thereof be) in breach of or in default under any agreement relating to Indebtedness to which it is a party or by which it may be bound; and
the information, exhibits and reports furnished by or on behalf of any Security
Party to the Creditors or any of them in connection with the negotiation and preparation of the Security Documents are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been
made to verify the facts and statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading;
|
7.2.4
|
No withholding Taxes
|
in the Borrowers’ opinion, no Taxes are imposed by withholding or
otherwise on any payment to be made by any Security Party under the Underlying Documents or the Security Documents to which such Security Party is or is to be a party or are imposed on or by virtue of the execution or delivery by the Security
Parties of the Underlying Documents or the Security Documents or any other document or instrument to be executed or delivered under any of the Security Documents;
no Default has occurred and is continuing;
|
7.2.6
|
No Default under Contracts or Refund Guarantees
|
no Borrower is in default of any of its
obligations under the relevant Contract or any of its obligations upon the performance or observance of which depends the continued liability of any Refund Guarantor in accordance with the terms of any Refund Guarantee relating to such
Borrower’s Ship;
28
|
7.2.7
|
No Encumbrance in respect of pre-delivery security
|
no Borrower has previously charged,
encumbered or assigned the benefit of any of its rights, title and interest in or to the relevant Contract or any Refund Guarantee relating to such Borrower’s Ship and such benefit and all such rights, title and interest are freely assignable
and chargeable in the manner contemplated by the Security Documents;
each Ship will, on the Drawdown Date of the Delivery Advance relevant to such Ship,
be:
|
|
(a)
|
in the absolute ownership of the relevant Borrower who will, on and after such Drawdown Date, be the sole, legal and beneficial owner of such Ship;
|
|
|
(b)
|
registered through the offices of the relevant Registry as a ship under the laws and flag of the relevant Flag State;
|
|
|
(c)
|
operationally seaworthy and in every way fit for service; and
|
|
|
(d)
|
classed with the relevant Classification free of all requirements and recommendations of the relevant Classification Society except for items which are customarily outstanding on delivery of newbuildings for practical
reasons;
|
except as otherwise notified by the Borrower to the Agent and approved
by the Agent in writing, on or before the Drawdown Date of the Delivery Advance relevant to a Ship, there will not be any agreement or arrangement whereby the Earnings of such Ship may be shared with any other person;
|
7.2.10
|
Freedom from Encumbrances
|
no Ship, nor its Earnings, Insurances or Requisition Compensation
nor the Operating Accounts nor any other properties or rights which are, or are to be, the subject of any of the Security Documents nor any part thereof will be, on the Drawdown Date of the Delivery Advance relevant to such Ship, subject to any
Encumbrance (other than any Permitted Encumbrances);
|
7.2.11
|
Compliance with Environmental Laws and Approvals
|
except as may already have been disclosed by
the Borrowers in writing to, and acknowledged in writing by, the Agent:
|
|
(a)
|
the Borrowers and the other Relevant Parties and, to the best of the Borrowers’ knowledge and belief, their respective Environmental Affiliates have complied with the provisions of all Environmental Laws;
|
|
|
(b)
|
the Borrowers and the other Relevant Parties and, to the best of the Borrowers’ knowledge and belief, their respective Environmental Affiliates have obtained all Environmental Approvals and are in compliance with
all such Environmental Approvals; and
|
|
|
(c)
|
neither the Borrowers nor any other Relevant Party nor, to the best of the Borrowers’ knowledge and belief, any of their respective Environmental Affiliates has received notice of any Environmental Claim that the
Borrowers or any other Relevant Party or any such Environmental Affiliate is not in compliance with any Environmental Law or any Environmental Approval;
|
29
|
7.2.12
|
No Environmental Claims
|
except as may already have been disclosed by the Borrowers in writing
to, and acknowledged in writing by, the Agent, there is no Environmental Claim pending or, to the best of the Borrowers’ knowledge and belief, threatened against any of the Borrowers or any of the Ships or any other Relevant Party or any other
Relevant Ship or to the best of the Borrowers’ knowledge and belief any of their respective Environmental Affiliates;
|
7.2.13
|
No potential Environmental Claims
|
except as may already have been disclosed by the Borrowers
in writing to, and acknowledged in writing by, the Agent, there has been no emission, spill, release or discharge of a Pollutant from any of the Ships or any other Relevant Ship owned by, managed or crewed by or chartered to the Borrowers nor, to
the best of the Borrowers’ knowledge and belief, from any Relevant Ship owned by, managed or crewed by or chartered to any other Relevant Party which could give rise to an Environmental Claim;
|
7.2.14
|
No material adverse change
|
there has been no material adverse change in the management,
operations, results of operations, business, properties, performance, prospects, assets or condition (financial or otherwise) of any of the Borrowers or any other Relevant Party, from that described by or on behalf of the Borrowers to the Creditors
or any of them in the negotiation of this Agreement;
|
7.2.15
|
Copies true and complete
|
the copies or originals of the Underlying Documents delivered or to
be delivered to the Agent pursuant to clause 9.1 are, or will when delivered be, true and complete copies or, as the case may be, originals of such documents; and such documents constitute valid and binding obligations of the parties thereto
enforceable in accordance with their respective terms and there have been no amendments or variations thereof or defaults thereunder;
on the Drawdown Date of the Delivery Advance for a Ship, the relevant Borrower shall
have a valid and current ISSC in respect of that Ship and such Ship shall be in compliance with the ISPS Code;
|
7.2.17
|
Borrowers’ own account
|
in relation to the borrowing by each Borrower of the Loan, the
performance and discharge of its obligations and liabilities under the Security Documents and the transactions and other arrangements effected or contemplated by this Agreement, each Borrower is acting for its own account and that the foregoing will
not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented by any relevant regulatory authority or otherwise to combat “money laundering” (as defined in
Article 1 of the Directive (91/308/EEC) of the Council of the European Communities (as amended));
|
|
(a)
|
none of the Borrowers is unable, nor admits nor has admitted its inability, to pay its debts or has suspended making payments on any of its debts; and
|
|
|
(b)
|
none of the Borrowers 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;
and
|
30
on the date of this Agreement:
|
|
(a)
|
50% of the shares in each of the Borrowers is legally and beneficially owned by Euronav HK and the remaining 50% of the shares in each Borrower is legally and beneficially owned by the Bretta Guarantor;
|
|
|
(b)
|
the Bretta Guarantor is legally and ultimately beneficially owned by such person or persons, and in such percentages, as have been disclosed by or on behalf of the Borrowers or any other Security Party to the Agent
and/or the Arranger in the negotiation of this Agreement;
|
|
|
(c)
|
Euronav HK is a wholly-owned direct Subsidiary of the Euronav Guarantor; and
|
|
|
(d)
|
on the date of this Agreement 27.95% of the shares in the Euronav Guarantor is legally and beneficially owned by Saverco NV of Belgium and 20.49% of the shares in the Euronav Guarantor is legally and beneficially owned
by Tanklog Holdings Ltd of Cyprus.
|
|
7.3
|
Repetition of representations and warranties
|
On and as of each Drawdown Date and on
each Interest Payment Date, the Borrowers shall:
|
|
(a)
|
be deemed to repeat the representations and warranties in clauses 7.1 and 7.2 (except that the representation of clause 7.2.19 shall not be deemed repeated at any time after the date of this Agreement and that the other
representations of clause 7.2 shall not be deemed repeated on the Interest Payment Dates) as if made with reference to the facts and circumstances existing on such day; and
|
|
|
(b)
|
be deemed to further represent and warrant to each of the Creditors that the then latest audited financial statements delivered to the Agent by the Borrowers (if any) have been prepared in accordance with the Applicable
Accounting Principles which have been consistently applied and present fairly and accurately the combined financial position of the Borrowers as at the end of the financial period to which the same relate and the combined results of the operations
of the Borrowers for the financial period to which the same relate and, as at the end of such financial period, neither of the Borrowers had any significant liabilities (contingent or otherwise) or any unrealised or anticipated losses which are not
disclosed by, or reserved against or provided for in, such financial statements.
|
The Borrowers jointly and severally undertake with each Creditor that, from the
date of this Agreement and so long as any moneys are owing under any of the Security Documents and while all or any part of the Total Commitment remains outstanding, each Borrower will:
|
|
(a)
|
promptly inform the Agent of any occurrence of which it becomes aware which might adversely affect the ability of the Borrower to perform its obligations under any of the Security Documents or the Underlying Documents
to which it is or is to be a party and, without limiting the generality of the foregoing, will inform the Agent of any Default forthwith upon becoming aware thereof and will from time to time, if so requested by the Agent (acting reasonably),
confirm to the Agent in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing; and
|
31
|
|
(b)
|
promptly inform the Agent of any occurrence of which it becomes aware which might adversely affect the ability or rights of any Borrower to make any claims under the Contract or any Refund Guarantee relating to such
Borrower’s Ship or which might reduce or release any of the obligations of the Builder under such Contract or of the relevant Refund Guarantor under such Refund Guarantee (as the case may be);
|
|
8.1.2
|
Consents and licences
|
without prejudice to clauses 7.1 and 9, obtain or cause to be obtained,
maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or authorities
or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all the obligations of the Security Parties under each of the Security
Documents and the Underlying Documents;
use the Loan or, as the case may be, the Advances for the benefit of the
Borrowers and exclusively for the purposes specified in clauses 1.1 and 2.5;
ensure that its obligations under this Agreement shall, without prejudice to the
provisions of clause 8.3, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract;
|
8.1.5
|
Financial statements and valuations
|
prepare or cause to be prepared:
|
|
(a)
|
combined financial statements of the Borrowers in accordance with the Applicable Accounting Principles consistently applied in respect of each financial year (starting with the financial year ending on 31 December
2010) and cause the same to be reported on by their respective auditors and, if requested the Agent, unaudited combined financial statements of the Borrowers for each financial half-year (starting with the financial half-year ending on 30 June
2010) on the same basis as the annual statements, and deliver as many copies of the same as the Agent may reasonably require, as soon as practicable, but not later than one hundred and eighty (180) days (in the case of the audited financial
statements) or ninety (90) days in the case of the unaudited financial statements) after the end of the financial period for which they relate;
|
|
|
(b)
|
consolidated financial statements of each Corporate Guarantor and its respective Subsidiaries in accordance with the Applicable Accounting Principles consistently applied in respect of each financial year (starting from
the financial year ending on 31 December 2008 but, in the case of the Bretta Guarantor, 31 December 2010) and cause the same to be reported on by their respective auditors and deliver as many copies of the same as the Agent may reasonably
require, as soon as practicable, but not later than one hundred and eighty (180) days after the end of the financial year to which they relate; and
|
|
|
(c)
|
at the same time as the Borrowers provide the Agent with combined financial statements of the Borrowers pursuant to paragraph (a) above, provide the Agent with valuations of each Ship made (at the cost of the
Borrowers) in the manner specified in clause 8.2.2;
|
|
8.1.6
|
Provision of further information
|
provide the Agent with such financial or other information
concerning any Borrower, the Bretta Guarantor and their respective affairs (including, without limitation, their activities,
32
financial standing, Indebtedness, operations, the performance of the Ships or any other vessels and information on the realised and budgeted operating expenses and cash flow forecasts) as the
Agent or any Bank (acting through the Agent) may from time to time require;
|
8.1.7
|
Obligations under Security Documents
|
and will procure that each of the other Security Parties
will, duly and punctually perform each of the obligations expressed to be assumed by it under the Security Documents and the Underlying Documents to which it is a party;
|
8.1.8
|
Compliance with Code
|
and will procure that any Operator will, comply with and ensure that the
Ships and any Operator complies with the requirements of the Code, including (but not limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the Security Period;
|
8.1.9
|
Withdrawal of DOC and SMC
|
and will procure that any Operator will, immediately inform the
Agent if there is any threatened or actual withdrawal of such Operator’s DOC or the SMC in respect of any of the Ships;
|
8.1.10
|
Issuance of DOC and SMC
|
and will procure that any Operator will, promptly inform the Agent
upon the issue to any of the Borrowers or any Operator of a DOC and to any of the Ships of an SMC or the receipt by any of the Borrowers or any Operator of notification that its application for the same has been refused;
|
8.1.11
|
ISPS Code compliance
|
and will procure that the Manager or any Operator will:
|
|
(a)
|
from the Drawdown Date of the Delivery Advance relevant to a Ship and at all times thereafter, maintain a valid and current ISSC in respect of that Ship;
|
|
|
(b)
|
immediately notify the Agent in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC in respect of a Ship; and
|
|
|
(c)
|
procure that, from the Drawdown Date of the Delivery Advance relevant to a Ship and at all times thereafter, that Ship complies with the ISPS Code;
|
provided it has first obtained the consent of the Security Agent or any other
Creditors in accordance with the relevant Ship Security Documents and/or clause 8.5 (such consent not to be unreasonably withheld and the request for which to be promptly responded to), (a) deliver to the Agent, a certified copy of each time
charter or other contract of employment of its Ship with a tenor (including any options to extend) exceeding twelve (12) months, forthwith after its execution, (b) forthwith on the Agent’s request execute (i) a specific
assignment of any such time charter or other contract of employment in favour of the Security Agent in a form acceptable to the Agent in its sole discretion and (ii) any notice of assignment required in connection therewith in a form acceptable
to the Agent in its sole discretion, and promptly procure the acknowledgement of any such notice of assignment by the relevant charterer in a form acceptable to the Agent in its sole discretion, and (c) pay all legal and other costs incurred by
any Creditor in connection with any such specific assignments, forthwith following the Agent’s demand;
33
ensure that the Borrowers maintain from the date falling twenty four
(24) months after the earlier of (a) the latest Termination Date and (b) the second Delivery Advance to be drawn down, and at all times thereafter, Liquid Assets in an amount of no less than the Quarterly Debt Service
Provided
however that
the Borrowers shall ensure that such Liquid Assets accumulate to such level gradually and progressively from the Delivery Date of each Ship;
|
8.1.14
|
Know your customer information
|
deliver to the Agent such documents and evidence as the Agent
shall from time to time require relating to the verification of identity and knowledge of the Agent’s or any Bank’s customers and the compliance by the Agent or any Bank with all necessary “know your customer” or similar checks,
always on the basis of applicable laws and regulations or the Agent’s or any Bank’s own internal guidelines, in each case as such laws, regulations or internal guidelines apply from time to time; and
|
8.1.15
|
Compliance with laws and regulations - Taxes
|
comply with the terms and conditions of all laws,
regulations, agreements, licences and concessions material to the carrying on of their respective businesses and will pay any and all Taxes owing by it in any jurisdiction at the time they are due.
|
8.2
|
Security value maintenance
|
If, at any time after the earlier of (i) the Drawdown Date of the
second Delivery Advance to be drawn down and (ii) the latest Termination Date, the Security Value shall be less than the Security Requirement, the Agent (acting on the instructions of the Majority Banks) shall give notice to the Borrowers
requiring that such deficiency be remedied and then the Borrowers shall either:
|
|
(a)
|
prepay within a period of thirty (30) days of the date of receipt by the Borrowers of the Agent’s said notice such sum in Dollars as will result in the Security Requirement after such prepayment (taking into
account any other repayment of the Loan made between the date of the notice and the date of such prepayment) being equal to the Security Value; or
|
|
|
(b)
|
within thirty (30) days of the date of receipt by the Borrowers of the Agent’s said notice constitute to the satisfaction of the Agent such further security for the Loan as shall be acceptable to the Banks
having a value for security purposes (as determined by the Agent in its reasonable discretion) at the date upon which such further security shall be constituted which, when added to the Security Value, shall not be less than the Security Requirement
as at such date.
|
The provisions of clauses 4.4 and 4.5 shall apply to prepayments under clause 8.2.1(a).
|
8.2.2
|
Valuation of Mortgaged Ships
|
Each Mortgaged Ship shall, for the purposes of this Agreement, be
valued in Dollars as and when the Agent (acting on the instructions of the Majority Banks) shall require (and at least twice every calendar year) by an Approved Broker selected by the Borrowers or, failing such selection by the Borrowers, appointed
by the Agent in its discretion. Each such valuation shall be made without, unless required by the Agent after an Event of Default has occurred, physical inspection, and on the basis of a sale for prompt delivery for cash at arm’s length, on
normal commercial terms, as between a willing buyer and a willing seller, without taking into account the benefit or detriment of any charterparty or other engagement concerning the relevant Mortgaged Ship. Such valuation shall constitute the value
of such Mortgaged Ship for the purposes of this clause 8.2.
34
The value of each Mortgaged Ship determined in accordance with the provisions of this clause
8.2.2 shall be binding upon the parties hereto until such time as any further such valuation shall be obtained.
The Borrowers jointly and severally undertake with the Creditors to supply to the
Agent and to any Approved Brokers such information concerning the relevant Mortgaged Ship and its condition as Approved Brokers may require for the purpose of making any such valuation.
All costs in connection with the Agent obtaining up to two (2) valuations of each
of the Mortgaged Ships referred to in clause 8.1.5(c) or in clause 8.2.2 per calendar year, any valuation referred to in schedule 3, Part 4, and any valuation either of any additional security for the purposes of ascertaining the Security Value
at any time or necessitated by the Borrowers electing to constitute additional security pursuant to clause 8.2.1(b), shall be borne by the Borrowers Provided however that if a Default shall have occurred, the cost of any and all such valuations of
any Mortgaged Ship referred to in clauses 8.1.5(c) or 8.2.2 shall be borne by the Borrowers.
|
8.2.5
|
Valuation of additional security
|
For the purposes of this clause 8.2, the market value of any
additional security provided or to be provided to the Creditors or any of them shall be determined by the Agent in its reasonable discretion.
|
8.2.6
|
Documents and evidence
|
In connection with any additional security provided in accordance with
this clause 8.2, the Agent shall be entitled to receive such evidence and documents of the kind referred to in schedule 3 as may in the Agent’s reasonable opinion be appropriate and such favourable legal opinions as the Agent shall in its
absolute discretion require.
|
8.3
|
Negative undertakings
|
The Borrowers jointly and severally undertake with each Creditor
that, from the date of this Agreement and so long as any moneys are owing under the Security Documents and while all or any part of the Total Commitment remains outstanding, they will not, without the prior written consent of the Agent (acting on
the instructions of the Majority Banks):
permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise
or be created or extended over all or any part of their respective present or future undertakings, assets, rights or revenues to secure or prefer any present or future Indebtedness or other liability or obligation of any person;
merge or consolidate with any other person or enter into any demerger, amalgamation
or corporate reconstruction or redomiciliation of any type;
sell, transfer, abandon, lend or otherwise dispose of or cease to exercise direct
control over any part of their present or future undertaking, assets, rights or revenues (otherwise than by transfers, sales or disposals for full consideration in the ordinary course of business) whether by one or a series of transactions related
or not;
35
undertake any business other than the ownership and operation of the Ships;
acquire any further assets other than the Ships and rights arising under
contracts entered into by or on behalf of the Borrowers in the ordinary course of their businesses of owning, operating and chartering the Ships;
incur any obligations except for obligations arising under the Underlying
Documents or the Security Documents or contracts entered into in the ordinary course of their business of owning, operating and chartering the Ships;
incur any Borrowed Money except for Borrowed Money pursuant to the Security
Documents
Provided however that
each Borrower, subject to no Event of Default having occurred and subsisting, shall be entitled to borrow money from its shareholders or from its Related Companies if such borrowings are fully subordinated to
the rights of the Creditors under the Security Documents;
|
8.3.8
|
Repayment of borrowings
|
repay or prepay the principal of, or pay interest on or any other sum
in connection with any of their Borrowed Money except for Borrowed Money pursuant to the Security Documents
Provided however that
each Borrower, subject to no Event of Default having occurred and continuing, shall be entitled to repay to its
shareholders or any of its Related Companies any Borrowed Money borrowed from them in accordance with clause 8.3.7;
issue any guarantees or indemnities or otherwise become directly or contingently
liable for the obligations of any person, firm, or corporation except (a) pursuant to the Security Documents and (b) for guarantees or indemnities from time to time required in the ordinary course by any protection and indemnity or war
risks association with which a Ship is entered, guarantees required to procure the release of such Ship from any arrest, detention, attachment or levy or guarantees or undertakings required for the salvage of such Ship;
make any loans or grant any credit (save for normal trade credit in the ordinary course
of business) to any person or agree to do so;
permit any Indebtedness of any Borrower to any person (other than the Creditors
pursuant to the Security Documents) to be guaranteed by any person (save for guarantees or indemnities from time to time required in the ordinary course by any protection and indemnity or war risks association with which a Ship is entered,
guarantees required to procure the release of such Ship from any arrest, detention, attachment or levy or guarantees or undertakings required for the salvage of such Ship);
|
8.3.12
|
Share capital and distribution
|
purchase or otherwise acquire for value any shares of their
capital or distribute any of their present or future assets, undertakings, rights or revenues to any of their shareholders, or declare or pay any dividends to their shareholders if an Event of Default shall have occurred and be subsisting at the
time of declaration or payment of such dividends or would occur as a result thereof;
36
form or acquire any Subsidiaries;
|
8.3.14
|
Intra-Group transaction
|
enter into any transactions, agreements or arrangements (with a value
in excess of $250,000) with any of their Related Companies or any other Relevant Party other than on an arm’s length basis and for full value and consideration; or
appoint any manager of a Ship other than the Manager.
|
8.4
|
Pre-delivery positive undertakings
|
The Borrowers hereby jointly and severally undertake
and agree with each Creditor that they will:
|
8.4.1
|
Conveyance on default
|
where any Ship is (or is to be) sold in exercise of any power contained
in the relevant Pre- delivery Security Assignment or otherwise conferred on the Security Agent or any other Creditor, procure that the relevant Borrower shall execute, forthwith upon request by the Agent, such form of conveyance of such Ship as the
Agent may require;
not later than thirty (30) days prior to the Delivery Date of a Ship, obtain
the Agent’s written approval of the Flag State for such Ship;
immediately upon delivery of a Ship under the relevant Contract, procure that the
relevant Borrower shall execute, and procure the registration of, the Mortgage for such Ship under the laws and flag of the relevant Flag State; and
ensure that the supervision of the construction of each Ship is carried out by the
Manager or persons appointed by it.
|
8.5
|
Pre-delivery negative undertaking
|
The Borrowers hereby jointly and severally further
undertake and agree with each Creditor that they will not, without the prior written consent of the Agent acting on the instructions of the Majority Banks (such consent not to be unreasonably withheld) and then, if such consent is given, only
subject to such conditions as the Agent (acting on the instructions of the Majority Banks) may impose, let or agree to let any Ship:
|
8.5.1
|
on demise charter for any period; or
|
|
8.5.2
|
by any time or consecutive voyage charter for a term which exceeds or which by virtue of any optional extensions therein contained may exceed twenty four (24) months’ duration; or
|
|
8.5.3
|
on terms whereby more than two (2) months’ hire (or the equivalent) is payable in advance.
|
37
|
9.1
|
Documents and evidence
|
The obligation of each Bank to make its Commitment available shall be subject to
the condition that the Agent or its duly authorised representative shall have received, not later than two (2) Banking Days before the date of this Agreement, the documents and evidence specified in Part 1 of schedule 3, in form and substance
satisfactory to the Agent.
|
9.1.2
|
First Contract Instalment Advances
|
The obligation of the Banks to make available the first
Contract Instalment Advance in respect of any Ship shall be subject to the condition that the Agent or its duly authorised representative shall have received, on or prior to the drawdown of the first Contract Instalment Advance for such Ship, the
documents and evidence specified in Part 2 of schedule 3 in respect of such Ship, in form and substance satisfactory to the Agent.
|
9.1.3
|
Second, third and fourth Contract Instalment Advances
|
The obligation of the Banks to make
available any of the second, the third or the fourth Contract Instalment Advance in respect of any Ship shall be subject to the condition that the Agent or its duly authorised representative shall have received, on or prior to the drawdown of the
relevant Contract Instalment Advance for such Ship, the documents and evidence specified in Part 3 of schedule 3 in respect of such Ship and such Advance, in form and substance satisfactory to the Agent.
The obligation of the Banks to make available the Delivery Advance in
respect of any Ship shall be subject to the condition that the Agent or its duly authorised representative shall have received, on or prior to the drawdown of the Delivery Advance for such Ship, the documents and evidence specified in Part 4 of
schedule 3 in respect of such Ship, in form and substance satisfactory to the Agent.
|
9.2
|
General conditions precedent
|
The obligation of the Banks to make any Advance available
shall be subject to the further conditions that, at the time of the giving of the Drawdown Notice for such Advance, and at the time of the making of such Advance:
|
9.2.1
|
the representations and warranties contained in (a) clauses 7.1, 7.2 and 7.3(b) of this Agreement and (b) clause 4 of each Corporate Guarantee, are true and correct on and as of each such time as if each was
made with respect to the facts and circumstances existing at such time; and
|
|
9.2.2
|
no Default shall have occurred and be continuing or would result from the making of the relevant Advance.
|
|
9.3
|
Waiver of conditions precedent
|
The conditions specified in this clause 9 are inserted
solely for the benefit of the Banks and may be waived by the Agent (acting on the instructions of the Majority Banks) in whole or in part and with or without conditions.
|
9.4
|
Further conditions precedent
|
Not later than five (5) Banking Days prior to each
Drawdown Date and not later than five (5) Banking Days prior to each Interest Payment Date, the Agent (acting on the instructions of the
38
Majority Banks) may request and the Borrowers shall, not later than two (2) Banking Days prior to such date, deliver to the Agent on such request further relevant certificates and/or
favourable opinions as to any or all of the matters which are the subject of clauses 7, 8, 9 and 10.
There shall be an Event of Default if:
|
10.1.1
|
Non-payment
: any Security Party fails to pay any sum payable by it under any of the Security Documents at the time, in the currency and in the manner stipulated in the Security Documents or the Underlying
Documents (and so that, for this purpose, sums payable on demand shall be treated as having been paid at the stipulated time if paid within three (3) Banking Days of demand); or
|
|
10.1.2
|
Breach of Insurance and certain other obligations
: any of the Borrowers or, as the context may require, the Manager or any other person fails to obtain and/or maintain the Insurances for any of the Mortgaged
Ships or if any insurer in respect of such Insurances cancels the Insurances or disclaims liability by reason, in either case, of mis-statement in any proposal for the Insurances or for any other failure or default on the part of any of the
Borrowers or any other person or any of the Borrowers commits any breach of or omits to observe any of the obligations or undertakings expressed to be assumed by them under clauses 8.1.13, 8.2 or 8.3 or 8.4 or 8.5 or any of the Corporate Guarantors
commits any breach of or omits to observe any of the obligations or undertakings expressed to be assumed by it under clause 5.2 of the relevant Corporate Guarantee; or
|
|
10.1.3
|
Breach of other obligations
: any Security Party commits any breach of or omits to observe any of its obligations or undertakings expressed to be assumed by it under any of the Security Documents (other than those
referred to in clauses 10.1.1, 10.1.2 and 10.1.3 above) and, in respect of any such breach or omission which in the opinion of the Agent (following consultation with the Banks) is capable of remedy, such action as the Agent (acting on the
instructions of the Majority Banks) may require shall not have been taken within thirty (30) days of the Agent notifying the relevant Security Party of such default and of such required action; or
|
|
10.1.4
|
Misrepresentation
: any representation or warranty made or deemed to be made or repeated by or in respect of any Security Party in or pursuant to any of the Security Documents or in any notice, certificate or
statement referred to in or delivered under any of the Security Documents is or proves to have been incorrect or misleading in any material respect; or
|
|
10.1.5
|
Cross-default
: any Indebtedness of any Security Party or any other Relevant Party is not paid when due or any Indebtedness of any Security
Party or any other Relevant Party becomes (whether by declaration or automatically in accordance with the relevant agreement or instrument constituting the same) due and payable prior to the date when it would otherwise have become due (unless as a
result of the exercise by the relevant Security Party or any other Relevant Party of a voluntary right of prepayment), or any creditor of any Security Party or any other Relevant Party becomes entitled to declare any such Indebtedness due and
payable or any facility or commitment available to any Security Party or any other Relevant Party relating to Indebtedness is withdrawn, suspended or cancelled by reason of any default (however described) of the person concerned unless the relevant
Security Party or other Relevant Party shall have satisfied the Agent that such withdrawal, suspension or cancellation will not affect or prejudice in any way the relevant Security Party’s or other Relevant Party’s ability to pay its debts
as they fall due and fund its commitments, or any guarantee given by any Security Party or other Relevant Party in respect of Indebtedness is not honoured when due and called upon
Provided however that
it shall not be an Event of Default if
any of the foregoing events shall have occurred in respect of Indebtedness of a Corporate Guarantor (other that the Bretta Guarantor) and/or its Subsidiaries and (a) the amount or aggregate amount at any one time of all Indebtedness of such
Corporate Guarantor and/or its Subsidiaries in respect of which such event shall have occurred and be
|
39
|
|
continuing is less than $15,000,000 (or the equivalent in any other currency in which the same is denominated or payable) or (b) any such foregoing event shall cease to exist within 30 days
after the day it occurred; or
|
|
10.1.6
|
Legal process
: any final and non-appealable judgment or order made against any Security Party or other Relevant Party is not stayed or complied with within seven (7) days or a creditor attaches or takes
possession of, or a distress, execution, sequestration or other process is levied or enforced upon or sued out against, any of the undertakings, assets, rights or revenues of any Security Party or other Relevant Party and is not discharged within
seven (7) days; or
|
|
10.1.7
|
Insolvency
: any Security Party or other Relevant Party or the Refund Guarantor is unable or admits inability to pay its debts as they fall due; suspends making payments on any of its debts or announces an
intention to do so; becomes insolvent; has assets the value of which is less than the value of its liabilities (taking into account contingent and prospective liabilities); or suffers the declaration of a moratorium in respect of any of its
Indebtedness; or
|
|
10.1.8
|
Reduction or loss of capital
: a meeting is convened by any Security Party or other Relevant Party (except the Euronav Guarantor) for the purpose of passing any resolution to purchase, reduce or redeem any of its
share capital; or
|
|
10.1.9
|
Winding up
: any corporate action, legal proceedings or other procedure or step is taken for the purpose of winding up any Security Party or other Relevant Party or the Refund Guarantor or an order is made or
resolution passed for the winding up of any Security Party or other Relevant Party or the Refund Guarantor or a notice is issued convening a meeting for the purpose of passing any such resolution; or
|
|
10.1.10
|
Administration
: any petition is presented, notice given or other step is taken for the purpose of the appointment of an administrator of any Security Party or other Relevant Party or the Refund Guarantor or the
Agent believes that any such petition or other step is imminent or an administration order is made in relation to any Security Party or other Relevant Party or the Refund Guarantor; or
|
|
10.1.11
|
Appointment of receivers and managers
: any administrative or other receiver is appointed of any Security Party or other Relevant Party or the Refund Guarantor or any part of its assets and/or undertaking or any
other steps are taken to enforce any Encumbrance over all or any part of the assets of any Security Party or other Relevant Party or the Refund Guarantor; or
|
|
10.1.12
|
Compositions
: any corporate action, legal proceedings or other procedures or steps are taken, or negotiations commenced, by any Security Party or other Relevant Party or the Refund Guarantor or by any of its
creditors with a view to the general readjustment or rescheduling of all or part of its indebtedness or to proposing any kind of composition, compromise or arrangement involving such company and any of its creditors; or
|
|
10.1.13
|
Analogous proceedings
: there occurs, in relation to any Security Party or other Relevant Party or the Refund Guarantor, in any country or territory in which any of them carries on business or to the jurisdiction
of whose courts any part of their assets is subject, any event which, in the reasonable opinion of the Agent, appears in that country or territory to correspond with, or have an effect equivalent or similar to, any of those mentioned in clauses
10.1.6 to 10.1.12 (inclusive) or any Security Party or other Relevant Party or the Refund Guarantor otherwise becomes subject, in any such country or territory, to the operation of any law relating to insolvency, bankruptcy or liquidation; or
|
|
10.1.14
|
Cessation of business
: any Security Party or other Relevant Party or any other Relevant Party or the Refund Guarantor suspends or ceases or threatens to suspend or cease to carry on its business; or
|
|
10.1.15
|
Seizure
: all or a material part of the undertaking, assets, rights or revenues of, or shares or other ownership interests in, any Security Party or other Relevant Party or the Refund Guarantor are seized,
nationalised, expropriated or compulsorily acquired by or under the authority of any government; or
|
40
|
10.1.16
|
Invalidity
: any of the Security Documents and the Underlying Documents shall at any time and for any reason become invalid or unenforceable or otherwise cease to remain in full force and effect, or if the
validity or enforceability of any of the Security Documents and the Underlying Documents shall at any time and for any reason be contested by any Security Party or other Relevant Party which is a party thereto, or if any such Security Party or
Relevant Party shall deny that it has any, or any further, liability thereunder; or
|
|
10.1.17
|
Unlawfulness
: it becomes impossible or unlawful at any time for any Security Party, to fulfil any of the covenants and obligations expressed to be assumed by it in any of the Security Documents or the Underlying
Documents or for a Creditor to exercise the rights or any of them vested in it under any of the Security Documents or the Underlying Documents or otherwise; or
|
|
10.1.18
|
Repudiation
: any Security Party repudiates any of the Security Documents or does or causes or permits to be done any act or thing evidencing an intention to repudiate any of the Security Documents; or
|
|
10.1.19
|
Encumbrances enforceable
: any Encumbrance (other than Permitted Liens) in respect of any of the property (or part thereof) which is the subject of any of the Security Documents becomes enforceable; or
|
|
10.1.20
|
Material adverse change
: there occurs, in the opinion of the Agent (following consultation with the Banks), a change in the management, operations, results of operations, business, properties, performance,
prospects, assets, condition (financial or otherwise) of any of the Borrowers or any other Security Party or other Relevant Party, from that described by or on behalf of any Borrower or any other Security Party to the Creditors or any of them in the
negotiation of this Agreement, which change materially and adversely affects the ability of any Security Party to perform its respective obligations and liabilities to the Creditors; or
|
|
10.1.21
|
Arrest
: any Ship is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim or otherwise taken from the possession
of the relevant Borrower and the relevant Borrower shall fail to procure the release of such Ship within a period of seven (7) days thereafter; or
|
|
10.1.22
|
Registration
: the registration of any Ship under the laws and flag of the relevant Flag State is cancelled or terminated without the prior written consent of the Majority Banks or the registration of such Ship is
not renewed at least forty-five (45) days prior to the expiry of such registration; or
|
|
10.1.23
|
Unrest
: the Flag State of any Ship becomes involved in hostilities or civil war or there is a seizure of power in the Flag State of any Ship by unconstitutional means if, in any such case, such event could in the
opinion of the Agent reasonably be expected to have a material adverse effect on the security constituted by any of the Security Documents and the relevant Borrower has failed within thirty (30) days from receiving notice from the Agent to this
effect to (a) delete its Ship from its existing Flag State and (b) re-register its Ship under another Flag State approved by the Banks in their reasonable discretion through a relevant Registry and (c) re-execute in favour of the
Creditors or any of them a new mortgage, deed of covenant and/or general assignment over or in respect of that Ship in a form similar to the Ship Security Documents for such Ship, and any other documents requested by the Agent in its absolute
discretion, in each case, at the Borrowers’ cost and expense; or
|
|
10.1.24
|
Environment
: any Borrower and/or any other Relevant Party and/or any of their respective Environmental Affiliates fails to comply with any Environmental Law or any Environmental Approval or any of the Ships or
any other Relevant Ship is involved in any incident which gives rise or may give rise to an Environmental Claim which could, in the opinion of the Agent, reasonably be expected to have a material adverse effect (a) on the business, assets,
operations, property or financial condition of any of the Borrowers or any Security Party or any of their respective Environmental Affiliates or (b) on the security constituted by any of the Security Documents or the enforceability of that
security in accordance with its terms; or
|
41
|
10.1.25
|
P&I
: any Borrower or the Manager or any other person fails or omits to comply with any requirements of the protection and indemnity association or other insurer with which a Ship is entered for insurance or
insured against protection and indemnity risks (including oil pollution risks) to the effect that any cover (including, without limitation, any cover in respect of liability for Environmental Claims arising in jurisdictions where such Ship operates
or trades) is or may be liable to cancellation, qualification or exclusion at any time; or
|
|
|
(a)
|
Euronav HK ceases to be a wholly-owned Subsidiary of the Euronav Guarantor; or
|
|
|
(b)
|
there is any change in the legal and/or ultimate beneficial ownership of any of the shares in the Euronav Guarantor from that existing on the date of this Agreement, which results in any person, or persons acting in
concert (other Saverco NV of Belgium) (i) becoming at any relevant time the legal and/or beneficial owners of more than 50% of the total issued share capital of the Euronav Guarantor or (ii) having the right or the ability to control,
either directly or indirectly, the affairs of the Euronav Guarantor or the composition of the majority of the board of directors (or equivalent) of the Euronav Guarantor (and “
control
” shall have the meaning given to it in the
definition of “
Subsidiary
” in clause 1.2); or
|
|
|
(c)
|
there is any change in the legal and/or beneficial ownership of any of the shares of any of the Borrowers from that existing on the date of this Agreement as specified in clause 7.2.19,
Provided however that
the
transfer of all of the shares of a Borrower’s Shareholder in a Borrower to the other Borrower’s Shareholder, shall not constitute an Event of Default if (i) the Borrowers have notified the Agent of such proposed transfer and
(ii) the Borrowers and any other Security Parties have executed and delivered to the Agent any documents (including, without limitation, a supplemental agreement to this Agreement) and evidence of the type referred to in schedule 3, which the
Agent may require or deem necessary or desirable in its reasonable opinion in respect of, or as a result of, such transfer and (iii) such transfer of shares from one Borrower’s Shareholder to the other Borrower’s Shareholder shall not
take effect prior to the Borrowers complying with the requirements of paragraph (ii) above; or
|
|
10.1.27
|
Termination or variation of Contracts
: any Contract is terminated or rescinded for any reason whatsoever without the prior written consent of the Agent; or any Contract is frustrated; or any Contract is varied in
any manner not permitted by or pursuant to the relevant Pre-delivery Security Assignment; or
|
|
10.1.28
|
Termination of Refund Guarantees
: any Refund Guarantee is repudiated, cancelled, rescinded or otherwise terminated or expires (other than by the return of such Refund Guarantee by the relevant Borrower to the
Builder and/or any Refund Guarantor following the delivery of the relevant Ship under the relevant Contract); or
|
|
10.1.29
|
Non-Delivery of Ship or non-drawing of Delivery Advance
: any Ship is not delivered to, and accepted by, the relevant Borrower under the relevant Contract or the Delivery Advance for such Ship is not drawn down,
in either case, on or before the Termination Date for the relevant Delivery Advance; or
|
|
10.1.30
|
Payments under Refund Guarantees
: any claim made under any Refund Guarantee is not paid within the time-limit provided therein following a demand being made thereunder, and whether or not such claim has been
referred to arbitration pursuant to the relevant Refund Guarantee; or
|
|
10.1.31
|
Operating Accounts
: moneys are withdrawn from any of the Operating Accounts other than in accordance with clause 14; or
|
42
|
10.1.32
|
Licenses, etc
: any license, authorisation, consent or approval at any time necessary to enable any Security Party to comply with its obligations under the Security Documents or the Underlying Documents is revoked
or withheld or modified or is otherwise not granted or fails to remain in full force and effect or if any exchange control or other law or regulation shall exist which would make any transaction under the Security Documents or the Underlying
Documents or the continuation thereof, unlawful or would prevent the performance by any Security Party of any term of any of the Security Documents or the Underlying Documents; or
|
|
10.1.33
|
Material events
: any other event occurs or circumstance arises which, in the reasonable opinion of the Agent (following consultation with the Banks), is likely materially and adversely to affect either
(i) the ability of any Security Party to perform all or any of its obligations under or otherwise to comply with the terms of any of the Security Documents or any of the Underlying Documents or (ii) the security created by any of the
Security Documents,
|
Provided however that
there shall not be an Event of Default under (a) clause 10.1.28
or (b) solely by reason of any of the events or circumstances described in clauses 10.1.7 and 10.1.9- 10.1.15 (inclusive) taking place with respect to the Refund Guarantor, if within sixty (60) days of the earlier of (i) the date when
the Borrowers or any of them becomes aware that the relevant event or the relevant circumstances have occurred or started to exist and (ii) the date when the Agent notifies the Borrowers in writing that the relevant event or the relevant
circumstances have occurred or exist, the Borrowers have constituted to the satisfaction of the Agent (and at the cost and expense of the Borrowers) such further security for the Loan as shall be required by, and acceptable to, the Banks in their
absolute discretion (including, without limitation, assignment in favour of the Security Agent of substitute refund guarantees issued by substitute refund guarantors acceptable to the Banks in their absolute discretion).
The Agent may, and if so requested by the Majority Banks shall, without
prejudice to any other rights of the Banks, at any time after the occurrence of an Event of Default which is subsisting by notice to the Borrowers declare that:
|
10.2.1
|
the obligation of each Bank to make available its Commitment shall be terminated, whereupon the Total Commitment shall be reduced to zero forthwith; and/or
|
|
10.2.2
|
the Loan and all interest and commitment commission accrued and all other sums payable under the Security Documents have become due and payable, whereupon the same shall, immediately or in accordance with the terms of
such notice, become due and payable.
|
If, pursuant to clause 10.2.2, the Agent declares the Loan to be due and
payable on demand, the Agent may (and if so instructed by the Majority Banks shall) by written notice to the Borrowers (a) call for repayment of the Loan on such date as may be specified whereupon the Loan shall become due and payable on the
date so specified together with all interest accrued and all other sums payable under this Agreement or (b) withdraw such declaration with effect from the date specified in such notice.
|
11.1
|
Miscellaneous indemnities
|
The Borrowers shall on demand indemnify each Creditor,
without prejudice to any of such Creditor’s other rights under any of the Security Documents, against any loss (including loss of Margin) or expense which such Creditor shall certify as sustained or incurred by it as a consequence of:
|
11.1.1
|
any default in payment of any sum under any of the Security Documents when due;
|
43
|
11.1.2
|
the occurrence of any other Event of Default;
|
|
11.1.3
|
any prepayment or reduction of a Tranche or part thereof being made under clauses 4.3, 8.2.1(a) or 12.1 or any other repayment or prepayment of a Tranche or part thereof being made otherwise than on an Interest Payment
Date relating to the part of the Tranche prepaid or repaid; or
|
|
11.1.4
|
any Advance not being made for any reason (excluding any default by the Agent or any Bank) after the Drawdown Notice for such Advance has been given,
|
including, in any such case, but not limited to, any loss or expense sustained or incurred by the relevant Creditor in maintaining or funding
its Contribution or, as the case may be, its Commitment (or any part thereof) or in liquidating or re-employing deposits from third parties acquired to effect or maintain its Contribution or, as the case may be, its Commitment (or any part thereof)
or any other amount owing to such Creditor.
If any sum due from any of the Borrowers under any of the Security
Documents or any order or judgment given or made in relation thereto has to be converted from the currency (the “
first currency
”) in which the same is payable under the relevant Security Document or under such order or judgment into
another currency (the “
second currency
”) for the purpose of (a) making or filing a claim or proof against the Borrowers or any of them, (b) obtaining an order or judgment in any court or other tribunal or
(c) enforcing any order or judgment given or made in relation to any of the Security Documents, the Borrowers shall indemnify and hold harmless each Creditor from and against any loss suffered as a result of any difference between (i) the
rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the relevant Creditor may in the ordinary course of business purchase the
first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof. The Creditors shall give the Borrowers 2 days’ notice prior to making a conversion from
the first currency into the second currency referred to above. Any amount due from the Borrowers under this clause 11.2 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect
of any of the Security Documents and the term “
rate of exchange
” includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
|
11.3
|
Environmental indemnity
|
The Borrowers shall indemnify each Creditor on demand and hold
it harmless from and against all costs, expenses, payments, charges, losses, demands, liabilities, actions, proceedings (whether civil or criminal), penalties, fines, damages, judgements, orders, sanctions or other outgoings of whatever nature which
may be suffered, incurred or paid by, or made or asserted against such Creditor at any time, whether before or after the repayment in full of principal and interest under this Agreement, relating to, or arising directly or indirectly in any manner
or for any cause or reason whatsoever out of an Environmental Claim made or asserted against such Creditor if such Environmental Claim would not have been, or been capable of being, made or asserted against such Creditor if it had not entered into
any of the Security Documents and/or exercised any of its rights, powers and discretions thereby conferred and/or performed any of its obligations thereunder and/or been involved in any of the transactions contemplated by the Security Documents.
|
11.4
|
Central Bank or European Central Bank reserve requirements indemnity
|
The Borrowers
shall on demand promptly indemnify each Bank against any cost incurred or loss suffered by such Bank as a result of its complying with the minimum reserve requirements of the European Central Bank and/or with respect to maintaining required reserves
with the relevant national Central Bank to the extent that such compliance relates to such Bank’s Commitment and/or Contribution or deposits obtained by it to fund the whole or part of its Contribution and to the extent such cost or loss is not
recoverable by such Bank under clause 12.2.
44
|
12
|
Unlawfulness and increased costs
|
If it is or becomes contrary to any law or regulation for any Bank to
contribute to an Advance or to maintain its Commitment or fund the Loan, such Bank shall promptly, through the Agent, give notice to the Borrowers whereupon (a) such Bank’s Contribution shall be reduced to zero and (b) the Borrowers
shall be obliged to prepay such Bank’s Commitment either (i) forthwith or (ii) on a future specified date not being earlier than the latest date permitted by the relevant law or regulation together with interest accrued to the date of
prepayment and all other sums payable by the Borrowers under this Agreement.
If the result of any change in, or in the interpretation or application
of, or the introduction of, any law or any regulation, request or requirement (whether or not having the force of law, but, if not having the force of law, with which a Bank or, as the case may be, its holding company habitually complies), including
(without limitation) those relating to Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits and special deposits, is to:
|
12.2.1
|
subject any Bank to Taxes or change the basis of Taxation of any Bank with respect to any payment under any of the Security Documents (other than Taxes or Taxation on the overall net income, profits or gains of such
Bank imposed in the jurisdiction in which its principal or lending office under this Agreement is located); and/or
|
|
12.2.2
|
increase the cost to, or impose an additional cost on, any Bank or its holding company in making or keeping such Bank’s Commitment available or maintaining or funding all or part of such Bank’s Contribution;
and/or
|
|
12.2.3
|
reduce the amount payable or the effective return to any Bank under any of the Security Documents; and/or
|
|
12.2.4
|
reduce any Bank’s or its holding company’s rate of return on its overall capital by reason of a change in the manner in which it is required to allocate capital resources to such Bank’s obligations under
any of the Security Documents; and/or
|
|
12.2.5
|
require any Bank or its holding company to make a payment or forgo a return on or calculated by reference to any amount received or receivable by such Bank under any of the Security Documents; and/or
|
|
12.2.6
|
require any Bank or its holding company to incur or sustain a loss (including a loss of future potential profits) by reason of being obliged to deduct all or part of its Commitment or the Loan from its capital for
regulatory purposes,
|
then and in each such case (subject to clause 12.3):
|
|
(a)
|
such Bank shall notify the Borrowers in writing of such event promptly upon its becoming aware of the same; and
|
|
|
(b)
|
the Borrowers shall on demand made at any time whether or not such Bank’s Contribution has been repaid, pay to the Agent for the account of such Bank the amount which such Bank specifies (in a certificate setting
forth the basis of the computation of such amount but not including any matters which such Bank or its holding company regards as confidential) is required to compensate such Bank and/or (as the case may be) its holding company for such liability to
Taxes, cost, reduction, payment, forgone return or loss.
|
45
For the purposes of this clause 12.2 “
holding company
” means the company or
entity (if any) within the consolidated supervision of which a Bank is included.
Nothing in clause 12.2 shall entitle any Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or additional cost, reduction, payment, foregone return or loss to the extent that the same is the subject of an additional payment under clause 6.6.
|
13
|
Security, set-off and pro-rata payments
|
|
13.1
|
Application of moneys
|
All moneys received by the Agent and/or the Security Agent under
or pursuant to any of the Security Documents and expressed to be applicable in accordance with the provisions of this clause 13.1, shall be applied in the following manner:
|
13.1.1
|
first, in or towards payment of all unpaid costs and expenses which may be owing to the Agent and/or the Security Agent or either of them under any of the Security Documents;
|
|
13.1.2
|
secondly, in or towards payment of any unpaid fees and commitment commission payable to the Creditors or any of them;
|
|
13.1.3
|
thirdly, in or towards payment of any arrears of interest owing in respect of the Loan or any part thereof;
|
|
13.1.4
|
fourthly, in or towards repayment of the Loan (whether the same is due and payable or not);
|
|
13.1.5
|
fifthly, in or towards payment to any Bank for any loss suffered by reason of any such payment in respect of principal not being effected on an Interest Payment Date relating to the part of the Loan repaid;
|
|
13.1.6
|
sixthly, in or towards payment to any Creditor of any other sums owing to it under any of the Security Documents;
|
|
13.1.7
|
seventhly (but subject to the provisions of each Manager’s Undertaking), in or towards payment of any fees and expenses owing by any of the Borrowers to the Manager pursuant to the relevant Management Agreement;
and
|
|
13.1.8
|
eighthly, the surplus (if any) shall be paid to the Borrowers or to whomsoever else may be entitled to receive such surplus.
|
|
13.2.1
|
The Borrowers authorise each Creditor (without prejudice to any of such Creditor’s rights at law, in equity or otherwise), at any time after the occurrence of an Event of Default which is subsisting, and without
notice to the Borrowers, to apply any credit balance to which the Borrowers or any of them is then entitled standing upon any account of the Borrowers or any of them with any branch of such Creditor in or towards satisfaction of any sum due and
payable from the Borrowers or any of them to such Creditor under any of the Security Documents. For this purpose, each Creditor is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be
necessary to effect such application.
|
|
13.2.2
|
No Creditor shall be obliged to exercise any right given to it by this clause 13.2. Each Creditor shall notify the Borrowers through the Agent forthwith upon the exercise or purported exercise of any right of set-off
giving full details in relation thereto and the Agent shall inform the other Creditors.
|
|
13.2.3
|
Nothing in this clause 13.2 shall be effective to create a charge or other security interest.
|
46
|
13.3.1
|
If at any time any Bank (the “
Recovering Bank
”) receives or recovers any amount owing to it by the Borrowers under this Agreement by direct payment, set-off or in any manner other than by payment
through the Agent pursuant to clauses 6.1 or 6.9 (not being a payment received from a Transferee Bank or a sub-participant in such Bank’s Contribution or any other payment of an amount due to the Recovering Bank for its sole account pursuant to
clauses 3.6, 5, 6.6, 11.1, 11.2, 12.1, or 12.2), the Recovering Bank shall, within two (2) Banking Days of such receipt or recovery (a “
Relevant Receipt
”) notify the Agent of the amount of the Relevant Receipt. If the Relevant
Receipt exceeds the amount which the Recovering Bank would have received if the Relevant Receipt had been received by the Agent and distributed pursuant to clause 6.1 or 6.9 (as the case may be) then:
|
|
|
(a)
|
within two (2) Banking Days of demand by the Agent, the Recovering Bank shall pay to the Agent an amount equal (or equivalent) to the excess;
|
|
|
(b)
|
the Agent shall treat the excess amount so paid by the Recovering Bank as if it were a payment made by the Borrowers and shall distribute the same to the Banks (other than the Recovering Bank) in accordance with clause
6.9; and
|
|
|
(c)
|
as between the Borrowers and the Recovering Bank the excess amount so redistributed shall be treated as not having been paid but the obligations of the Borrowers to the other Banks shall, to the extent of the amount so
re-distributed to them, be treated as discharged.
|
|
13.3.2
|
If any part of the Relevant Receipt subsequently has to be wholly or partly refunded by the Recovering Bank (whether to a liquidator or otherwise) each Bank to which any part of such Relevant Receipt was so
re-distributed shall on request from the Recovering Bank repay to the Recovering Bank such Bank’s pro-rata share of the amount which has to be refunded by the Recovering Bank.
|
|
13.3.3
|
Each Bank shall on request supply to the Agent such information as the Agent may from time to time request for the purposes of this clause 13.3.
|
|
13.3.4
|
Notwithstanding the foregoing provisions of this clause 13.3, no Recovering Bank shall be obliged to share any Relevant Receipt which it receives or recovers pursuant to legal proceedings taken by it to recover any sums
owing to it under this Agreement with any other party which has a legal right to, but does not, either join in such proceedings or commence and diligently pursue separate proceedings to enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Bank are instituted by it without prior notice having been given to such party through the Agent).
|
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 13.3 shall not release any other Recovering Bank from any of its obligations or liabilities under clause 13.3.
The provisions of this clause 13 shall not, and shall not be construed so as
to, constitute a charge by a Bank over all or any part of a sum received or recovered by it in the circumstances mentioned in clause 13.3.
The Borrowers jointly and severally undertake with each Creditor that
the Security Documents shall both at the date of execution and delivery thereof and so long as any moneys are owing
47
under any of the Security Documents be valid and binding obligations of the respective parties thereto and rights of each Bank enforceable in accordance with their respective terms and that they
will, at their expense, execute, sign, perfect and do, and will procure the execution, signing, perfecting and doing by each of the other Security Parties of, any and every such further assurance, document, act or thing as in the reasonable opinion
of the Majority Banks may be necessary or desirable for perfecting the security contemplated or constituted by the Security Documents.
In the event of any conflict between this Agreement and any of the other
Borrowers’ Security Documents, the provisions of this Agreement shall prevail.
The Borrowers jointly and severally undertake with each Creditor that they
will:
|
14.1.1
|
on or before the Drawdown Date of the first Advance to be drawn down, open each of the Operating Accounts; and
|
|
14.1.2
|
procure that all moneys payable to each Borrower in respect of the Earnings of such Borrower’s Ship shall, unless and until the Agent (acting on the instructions of the Majority Banks) directs to the contrary
pursuant to the provisions of the relevant Deed of Covenant, be paid to the such Borrower’s Operating Account.
|
|
14.2
|
Operating Accounts: withdrawals
|
Unless and until the Agent (acting on the instructions
of the Majority Banks) shall direct to the contrary following the occurrence of an Event of Default which is subsisting, each Borrower may withdraw moneys from its Operating Account at any time.
|
14.3
|
Application of Operating Accounts
|
At any time after the occurrence of an Event of
Default which is subsisting, the Agent may (and on the instructions of the Majority Banks shall), without notice to the Borrowers, instruct the Account Bank to apply all moneys then standing to the credit of the Operating Accounts or any of them
(together with interest from time to time accruing or accrued thereon) in or towards satisfaction of any sums due to the Creditors or any of them under the Security Documents in the manner specified in clause 13.1.
|
14.4
|
Pledging of Operating Accounts
|
The Operating Accounts and all amounts from time to time
standing to the credit thereof shall be subject to the security constituted and the rights conferred by the Operating Account Pledges.
|
15
|
Assignment, transfer and lending office
|
This Agreement shall be binding upon, and enure for the benefit of,
the Creditors and the Borrowers and their respective successors in title.
|
15.2
|
No assignment by Borrowers
|
No Borrower may assign or transfer any of its rights or
obligations under this Agreement.
48
Any Bank (the “
Transferor Bank
”) may at any time,
with the prior written consent of the Borrowers (such consent not to be unreasonably withheld and the request for which to be promptly responded to) and the Agent, cause all or any part of its rights, benefits and/or obligations under this Agreement
and the Security Documents to be transferred to any other bank or financial institution (a “
Transferee Bank
”) by delivering to the Agent a Transfer Certificate duly completed and duly executed by the Transferor Bank and the
Transferee Bank. No such transfer is binding on, or effective in relation to, the Borrowers or the Agent unless (i) it is effected or evidenced by a Transfer Certificate which complies with the provisions of this clause 15.3 and is signed by or
on behalf of the Transferor Bank, the Transferee Bank and the Agent (on behalf of itself, the Borrowers and the other Creditors) and (ii) such transfer of rights under the other Security Documents has been effected and registered. The consent
of the Borrowers referred to above shall not be required in respect of a transfer (the Borrowers consenting to such transfer by the execution of this Agreement) if the relevant Transferee Bank is a Related Company of the relevant Transferor Bank.
Upon signature of any such Transfer Certificate by the Agent, which signature shall be effected as promptly as is practicable after such Transfer Certificate has been delivered to the Agent, and subject to the terms of such Transfer Certificate,
such Transfer Certificate shall have effect as set out below.
The following further provisions shall have effect in relation to any
Transfer Certificate:
|
15.3.1
|
a Transfer Certificate may be in respect of a Bank’s rights in respect of all, or part of, its Commitment and shall be in respect of the same proportion of its Contribution;
|
|
15.3.2
|
a Transfer Certificate shall only be in respect of rights and obligations of the Transferor Bank in its capacity as a Bank and shall not transfer its rights and obligations as the Agent, or in any other capacity, as the
case may be and such other rights and obligations may only be transferred in accordance with any applicable provisions of this Agreement;
|
|
15.3.3
|
a Transfer Certificate shall take effect in accordance with English law as follows:
|
|
|
(a)
|
to the extent specified in the Transfer Certificate, the Transferor Bank’s payment rights and all its other rights (other than those referred to in clause 15.3.2 above) under this Agreement are assigned to the
Transferee Bank absolutely, free of any defects in the Transferor Bank’s title and of any rights or equities which the Borrowers had against the Transferor Bank;
|
|
|
(b)
|
the Transferor Bank’s Commitment is discharged to the extent specified in the Transfer Certificate;
|
|
|
(c)
|
the Transferee Bank becomes a Bank with a Contribution and/or a Commitment of the amounts specified in the Transfer Certificate;
|
|
|
(d)
|
the Transferee Bank becomes bound by all the provisions of this Agreement and the Security Documents which are applicable to the Banks generally, including those about pro-rata sharing and the exclusion of liability on
the part of, and the indemnification of, the Arranger, the Agent and the Security Agent and to the extent that the Transferee Bank becomes bound by those provisions, the Transferor Bank ceases to be bound by them;
|
|
|
(e)
|
an Advance or part of an Advance which the Transferee Bank makes after the Transfer Certificate comes into effect ranks in point of priority and security in the same way as it would have ranked had it been made by the
Transferor Bank, assuming that any defects in the Transferor Bank’s title and any rights or equities of any Security Party against the Transferor Bank had not existed; and
|
|
|
(f)
|
the Transferee Bank becomes entitled to all the rights under this Agreement which are applicable to the Banks generally, including but not limited to those relating to the Majority Banks and those under clauses 3.6, 5
and 12 and to the extent that the Transferee Bank becomes entitled to such rights, the Transferor Bank ceases to be entitled to them;
|
49
|
15.3.4
|
the rights and equities of the Borrowers or of any other Security Party referred to above include, but are not limited to, any right of set-off and any other kind of cross-claim; and
|
|
15.3.5
|
the Borrowers, the Account Bank, the Security Agent, the Arranger and the Banks hereby irrevocably authorise and instruct the Agent to sign any such Transfer Certificate on their behalf and undertake not to withdraw,
revoke or qualify such authority or instruction at any time. Promptly upon its signature of any Transfer Certificate, the Agent shall notify the Borrowers, the Transferor Bank and the Transferee Bank.
|
|
15.4
|
Reliance on Transfer Certificate
|
|
15.4.1
|
The Agent shall be entitled to rely on any Transfer Certificate believed by it to be genuine and correct and to have been presented or signed by the persons by whom it purports to have been presented or signed, and
shall not be liable to any of the parties to this Agreement and the Security Documents for the consequences of such reliance.
|
|
15.4.2
|
The Agent shall at all times during the continuation of this Agreement maintain a register in which it shall record the name, Commitments, Contributions and administrative details (including the lending office) from
time to time of the Banks holding a Transfer Certificate and the date at which the transfer referred to in such Transfer Certificate held by each Bank was transferred to such Bank, and the Agent shall make the said register available for inspection
by any Bank or any Borrower during normal banking hours upon receipt by the Agent of reasonable prior notice requesting the Agent to do so.
|
|
15.4.3
|
The entries on the said register shall, in the absence of manifest error, be conclusive in determining the identities of the Commitments, the Contributions and the Transfer Certificates held by the Banks from time to
time and the principal amounts of such Transfer Certificates and may be relied upon by the Agent and the other Security Parties for all purposes in connection with this Agreement and the Security Documents.
|
|
15.5
|
Transfer fees and expenses
|
If any Bank causes the transfer of all or any part of its
rights, benefits and/or obligations under the Security Documents, such Bank shall bear and/or pay to the Agent on demand all costs, fees and expenses (including, but not limited to, legal fees and expenses), and all value added tax thereon, verified
by the Agent as having been incurred by the Agent and/or any other Creditor in connection with such transfer.
|
15.6
|
Documenting transfers
|
If any Bank assigns all or any part of its rights or transfers
all or any part of its rights, benefits and/or obligations as provided in clause 15.3, the Borrowers jointly and severally undertake, immediately on being requested to do so by the Agent and at the cost of the Transferor Bank, to enter into, and
procure that the other Security Parties shall (at the cost of the Transferor Bank) enter into, such documents as may be necessary or desirable to transfer to the Transferee Bank all or the relevant part of such Bank’s interest in the Security
Documents and all relevant references in this Agreement to such Bank shall thereafter be construed as a reference to the Transferor Bank and/or its Transferee Bank (as the case may be) to the extent of their respective interests.
A Bank may sub-participate all or any part of its rights and/or
obligations under the Security Documents with the prior consent of the Borrowers (such consent not to be unreasonably withheld and the request for which to be promptly responded to).
50
Each Bank shall lend through its office at the address specified in
schedule 1 or, as the case may be, in any relevant Transfer Certificate or through any other office of such Bank selected from time to time by it through which such Bank wishes to lend for the purposes of this Agreement. If the office through which
a Bank is lending is changed pursuant to this clause 15.8, such Bank shall notify the Agent promptly of such change and the Agent shall notify the Borrowers, the Security Agent, the Account Bank and the other Banks.
|
15.9
|
Disclosure of information
|
A Bank may, with the prior consent of the Borrowers (such
consent not to be unreasonably withheld and the request for which to be promptly responded to), disclose to a prospective assignee, transferee or to any other person who may propose entering into contractual relations with such Bank in relation to
this Agreement such information about the Borrowers and/or the other Security Parties as such Bank shall consider appropriate.
|
16
|
Arranger, Agent and Security Agent
|
|
16.1
|
Appointment of the Agent
|
Each of the Banks irrevocably appoints the Agent as its agent
for the purposes of this Agreement and such of the Security Documents to which it may be appropriate for the Agent to be party. By virtue of such appointment, each of the Banks hereby authorises the Agent:
|
16.1.1
|
to execute such documents as may be approved by the Majority Banks for execution by the Agent; and
|
|
16.1.2
|
(whether or not by or through employees or agents) to take such action on such Bank’s behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Agent by this
Agreement and/or any other Security Document, together with such powers and discretions as are reasonably incidental thereto.
|
Any action taken by the Agent under or in relation to this
Agreement or any of the other Security Documents whether with requisite authority or on the basis of appropriate instructions, received from the Banks (or as otherwise duly authorised) shall be binding on all the Banks.
The Agent shall:
|
16.3.1
|
promptly notify each Bank of the contents of each notice, certificate or other document received by it from the Borrowers under or pursuant to clauses 8.1.1, 8.15 and 8.1.6; and
|
|
16.3.2
|
(subject to the other provisions of this clause 16) take (or instruct the Security Agent to take) such action or, as the case may be, refrain from taking (or authorise the Security Agent to refrain from taking) such
action with respect to the exercise of any of its rights, remedies, powers and discretions as agent, as the Majority Banks may direct.
|
The Agent may:
|
16.4.1
|
in the exercise of any right, remedy, power or discretion in relation to any matter, or in any context, not expressly provided for by this Agreement or any of the other Security Documents, act or, as the case may be,
refrain from acting (or authorise the Security Agent to act or refrain from acting) in accordance with the instructions of the Banks, and shall be fully protected in so doing;
|
51
|
16.4.2
|
unless and until it shall have received directions from the Majority Banks, take such action or, as the case may be, refrain from taking such action (or authorise the Security Agent to take or refrain from taking such
action) in respect of a Default of which the Agent has actual knowledge as it shall deem advisable in the best interests of the Banks (but shall not be obliged to do so);
|
|
16.4.3
|
refrain from acting (or authorise the Security Agent to refrain from acting) in accordance with any instructions of the Banks to institute any legal proceedings arising out of or in connection with this Agreement or any
of the other Security Documents until it and/or the Security Agent has been indemnified and/or secured to its satisfaction against any and all costs, expenses or liabilities (including legal fees) which it would or might incur as a result;
|
|
16.4.4
|
deem and treat (i) each Bank as the person entitled to the benefit of the Contribution of such Bank for all purposes of this Agreement unless and until a notice shall have been filed with the Agent pursuant to
clause 15.3 and shall have become effective, and (ii) the office set opposite the name of each of the Banks in schedule 1 as such Bank’s lending office, unless and until a written notice of change of lending office shall have been received
by the Agent and the Agent may act upon any such notice unless and until the same is superseded by a further such notice;
|
|
16.4.5
|
rely as to matters of fact which might reasonably be expected to be within the knowledge of any Security Party upon a certificate signed by any director or officer of the relevant Security Party on behalf of the
relevant Security Party; and
|
|
16.4.6
|
do anything which is in its opinion necessary or desirable to comply with any law or regulation in any jurisdiction.
|
|
16.5
|
No liability of Arranger or Agent
|
Neither the Arranger nor the Agent nor any of their
respective employees and agents shall:
|
16.5.1
|
be obliged to make any enquiry as to the use of any of the proceeds of the Loan unless (in the case of the Agent) so required in writing by a Bank, in which case the Agent shall promptly make the appropriate request to
the Borrowers; or
|
|
16.5.2
|
be obliged to make any enquiry as to any breach or default by the Borrowers or any of them or any other Security Party in the performance or observance of any of the provisions of this Agreement or any of the other
Security Documents or as to the existence of a Default unless (in the case of the Agent) the Agent has actual knowledge thereof or has been notified in writing thereof by a Bank, in which case the Agent shall promptly notify the Banks of the
relevant event or circumstance; or
|
|
16.5.3
|
be obliged to enquire whether or not any representation or warranty made by the Borrowers or any of them or any other Security Party pursuant to this Agreement or any of the other Security Documents is true; or
|
|
16.5.4
|
be obliged to do anything (including, without limitation, disclosing any document or information) which would, or might in its opinion, be contrary to any law or regulation or be a breach of any duty of confidentiality
or otherwise be actionable or render it liable to any person; or
|
|
16.5.5
|
be obliged to account to any Bank for any sum or the profit element of any sum received by it for its own account; or
|
|
16.5.6
|
be obliged to institute any legal proceedings arising out of or in connection with this Agreement or any of the other Security Documents other than on the instructions of the Majority Banks; or
|
52
|
16.5.7
|
be liable to any Bank for any action taken or omitted under or in connection with this Agreement or any of the other Security Documents unless caused by its gross negligence or wilful misconduct.
|
For the purposes of this clause 16, neither the Arranger nor the Agent shall be treated as having actual knowledge of any matter of which the
corporate finance or any other division outside the agency or loan administration department of the Arranger or the person for the time being acting as the Agent may become aware in the context of corporate finance, advisory or lending activities
from time to time undertaken by the Arranger or, as the case may be, the Agent for any Security Party or any other person which may be a trade competitor of any Security Party or may otherwise have commercial interests similar to those of any
Security Party.
|
16.6
|
Non-reliance on Arranger or Agent
|
Each Bank acknowledges that it has not relied on any
statement, opinion, forecast or other representation made by the Arranger or the Agent to induce it to enter into this Agreement or any of the other Security Documents and that it has made and will continue to make, without reliance on the Arranger
or the Agent and based on such documents as it considers appropriate, its own appraisal of the creditworthiness of the Security Parties and its own independent investigation of the financial condition, prospects and affairs of the Security Parties
in connection with the making and continuation of such Bank’s Commitment or Contribution under this Agreement. Neither the Arranger nor the Agent shall have any duty or responsibility, either initially or on a continuing basis, to provide any
Bank with any credit or other information with respect to any Security Party whether coming into its possession before the making of the Loan or at any time or times thereafter other than as provided in clause 16.3.1.
|
16.7
|
No responsibility on Arranger or Agent for Borrowers’ performance
|
Neither the
Arranger nor the Agent shall have any responsibility or liability to any Bank:
|
16.7.1
|
on account of the failure of any Security Party to perform its obligations under any of the Security Documents; or
|
|
16.7.2
|
for the financial condition of any Security Party; or
|
|
16.7.3
|
for the completeness or accuracy of any statements, representations or warranties in any of the Security Documents or any document delivered under any of the Security Documents; or
|
|
16.7.4
|
for the execution, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of any of the Security Documents or of any certificate, report or other document executed or delivered under
any of the Security Documents; or
|
|
16.7.5
|
to investigate or make any enquiry into the title of the Borrowers or any other Security Party to the Ships or any other security or any part thereof; or
|
|
16.7.6
|
for the failure to register any of the Security Documents with any official or regulatory body or office or elsewhere; or
|
|
16.7.7
|
for taking or omitting to take any other action under or in relation to any of the Security Documents or any aspect of any of the Security Documents; or
|
|
16.7.8
|
on account of the failure of the Security Agent to perform or discharge any of its duties or obligations under the Security Documents; or
|
|
16.7.9
|
otherwise in connection with this Agreement or its negotiation or for acting (or, as the case may be, refraining from acting) in accordance with the instructions of the Banks.
|
53
|
16.8
|
Reliance on documents and professional advice
|
Each of the Arranger and the Agent shall
be entitled to rely on any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person and shall be entitled to rely as to legal or other professional matters on opinions and
statements of any legal or other professional advisers selected or approved by it (including those in the Arranger’s or, as the case may be, the Agent’s employment).
Each of the Arranger and the Agent may, without any liability to account
to the Banks, accept deposits from, lend money to, and generally engage in any kind of banking or other business with, and provide advisory or other services to, any Security Party or any of its Related Companies or any of the Banks as if it were
not the Arranger or, as the case may be, the Agent.
|
16.10
|
Rights of Agent as Bank; no partnership
|
With respect to its own Commitment and
Contribution (if any) the Agent shall have the same rights and powers under the Security Documents as any other Bank and may exercise the same as though it were not performing the duties and functions delegated to it under this Agreement and the
term “
Banks
” shall, unless the context clearly otherwise indicates, include the Agent in its individual capacity as a Bank. This Agreement shall not and shall not be construed so as to constitute a partnership between the parties or
any of them.
|
16.11
|
Amendments and waivers
|
|
16.11.1
|
Subject to clause 16.11.2, the Agent may, with the consent of the Majority Banks (or if and to the extent expressly authorised by the other provisions of any of the Security Documents) and, if so instructed by the
Majority Banks, shall:
|
|
|
(a)
|
agree (or authorise the Security Agent to agree) amendments or modifications to any of the Security Documents with the Borrowers and/or any other Security Party; and/or
|
|
|
(b)
|
vary or waive breaches of, or defaults under, or otherwise excuse performance of, any provision of any of the other Security Documents by the Borrowers and/or any other Security Party (or authorise the Security Agent to
do so).
|
Any such action so authorised and effected by the Agent shall be documented in such manner as the Agent shall (with
the approval of the Majority Banks) determine, shall be promptly notified to the Banks by the Agent and (without prejudice to the generality of clause 16.2) shall be binding on the Banks.
|
16.11.2
|
Except with the prior written consent of the Banks, the Agent shall have no authority on behalf of the Banks to agree (or authorise the Security Agent to agree) with the Borrowers and/or any other Security Party any
amendment or modification to any of the Security Documents or to grant (or authorise the Security Agent to grant) waivers in respect of breaches or defaults or to vary or excuse (or authorise the Security Agent to vary or excuse) performance of or
under any of the Security Documents by the Borrowers or any of them and/or any other Security Party, if the effect of such amendment, modification, waiver or excuse would be to:
|
|
|
(b)
|
postpone the due date or reduce the amount of any payment of principal, interest or other amount payable by any Security Party under any of the Security Documents;
|
|
|
(c)
|
change the currency in which any amount is payable by any Security Party under any of the Security Documents;
|
|
|
(d)
|
increase any Bank’s Commitment;
|
54
|
|
(e)
|
extend any Termination Date;
|
|
|
(f)
|
change any provision of any of the Security Documents which expressly or implied requires the approval or consent of all the Banks such that the relevant approval or consent may be given otherwise than with the sanction
of all the Banks;
|
|
|
(g)
|
change the order of distribution under clauses 6.9 and 13.1;
|
|
|
(h)
|
change this clause 16.11;
|
|
|
(i)
|
change the definition of “
Majority Banks
” in clause 1.2; or
|
|
|
(j)
|
release any Security Party from the security constituted by any Security Document (except as required by the terms thereof or by law) or change the terms and conditions upon which such security or guarantee may be, or
is required to be, released.
|
|
16.12
|
Reimbursement and indemnity by Banks
|
Each Bank shall reimburse the Agent (rateably in
accordance with such Bank’s Commitment or, if after the first drawdown, Contribution) to the extent that the Agent is not reimbursed by the Borrowers, for the costs, charges and expenses incurred by the Agent which are expressed to be payable
by the Borrowers under clause 5.1 including (in each case) the fees and expenses of legal or other professional advisers. Each Bank shall on demand indemnify the Agent (rateably in accordance with such Bank’s Commitment or, if after the first
drawdown, Contribution) against all liabilities, damages, costs and claims whatsoever incurred by the Agent in connection with any of the Security Documents or the performance of its duties under any of the Security Documents or any action taken or
omitted by the Agent under any of the Security Documents, unless such liabilities, damages, costs or claims arise from the Agent’s own gross negligence or wilful misconduct.
|
16.13
|
Retirement of Agent
|
|
16.13.1
|
The Agent may, having given to the Borrowers and each of the Banks not less than fifteen (15) days’ notice of its intention to do so, retire from its appointment as Agent under this Agreement, provided that no
such retirement shall take effect unless there has been appointed by the Banks as a successor agent:
|
|
|
(a)
|
a Related Company of the Agent nominated by the Agent which the Banks hereby irrevocably and unconditionally agree to appoint or, failing such nomination,
|
|
|
(b)
|
a Bank nominated by the Majority Banks or, failing such a nomination,
|
|
|
(c)
|
any reputable and experienced bank or financial institution nominated by the retiring Agent.
|
Any corporation into which the retiring Agent may be merged or converted or any corporation with which the Agent may be consolidated or any
corporation resulting from any merger, conversion, amalgamation, consolidation or other reorganisation to which the Agent shall be a party shall, to the extent permitted by applicable law, be the successor Agent under this Agreement and the other
Security Documents without the execution or filing of any document or any further act on the part of any of the parties to this Agreement and the other Security Documents save that notice of any such merger, conversion, amalgamation, consolidation
or other reorganisation shall forthwith be given to each Security Party and the Banks. Prior to any such successor being appointed, the Agent agrees to consult with the Borrowers as to the identity of the proposed successor and to take account of
any reasonable objections which the Borrowers may raise to such successor being appointed.
|
16.13.2
|
Upon any such successor as aforesaid being appointed, the retiring Agent shall be discharged from any further obligation under the Security Documents
(but shall continue to have the benefit of this clause 16 in respect of any action it has taken or refrained from taking
|
55
|
|
prior to such discharge) and its successor and each of the other parties to this Agreement shall have the same rights and obligations among themselves as they would have had if such successor had
been a party to this Agreement in place of the retiring Agent. The retiring Agent shall (at the expense of the Borrowers) provide its successor with copies of such of its records as its successor reasonably requires to carry out its functions under
the Security Documents.
|
|
16.14
|
Appointment and retirement of Security Agent
|
Each of the Banks and the Agent irrevocably appoints the Security Agent as its
security agent and trustee for the purposes of this Agreement and the Security Documents to which the Security Agent is or is to be a party, in each case on the terms set out in this Agreement. By virtue of such appointment, each of the Banks and
the Agent hereby authorises the Security Agent (whether or not by or through employees or agents) to take such action on its behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Security Agent by
this Agreement and/or the Security Documents to which the Security Agent is or is intended to be a party, together with such powers and discretions as are reasonably incidental thereto.
Without prejudice to clause 16.13, the Security Agent may, having given to the
Borrowers and each of the Banks not less than fifteen (15) days’ notice of its intention to do so, retire from its appointment as Security Agent under this Agreement and any Trust Deed, provided that no such retirement shall take effect
unless there has been appointed by the Banks and the Agent as a successor security agent and trustee:
|
|
(a)
|
a Related Company of the Security Agent nominated by the Security Agent which the Agent and the Banks hereby irrevocably and unconditionally agree to appoint or, failing such nomination,
|
|
|
(b)
|
a bank or trust corporation nominated by the Majority Banks or, failing such a nomination,
|
|
|
(c)
|
any bank or trust corporation nominated by the retiring Security Agent,
|
and, in any case, such
successor security agent and trustee shall have duly accepted such appointment by delivering to the Agent (i) written confirmation (in a form acceptable to the Agent) of such acceptance agreeing to be bound by this Agreement in the capacity of
Security Agent as if it had been an original party to this Agreement and (ii) a duly executed Trust Deed.
Any corporation into which
the retiring Security Agent may be merged or converted or any corporation with which the Security Agent may be consolidated or any corporation resulting from any merger, conversion, amalgamation, consolidation or other reorganisation to which the
Security Agent shall be a party shall, to the extent permitted by applicable law, be the successor Security Agent under this Agreement, any Trust Deed and the other Security Documents referred to in clause 16.14.1 without the execution or filing of
any document or any further act on the part of any of the parties to this Agreement, any Trust Deed and the other Security Documents save that notice of any such merger, conversion, amalgamation, consolidation or other reorganisation shall forthwith
be given to each Security Party and the Banks. Prior to any such successor being appointed, the Security Agent agrees to consult with the Borrowers as to the identity of the proposed successor and to take account of any reasonable objections which
the Borrowers may raise to such successor being appointed.
Upon any such successor as aforesaid being appointed, the retiring Security
Agent shall be discharged from any further obligation under the Security Documents (but shall continue to have the benefit of this clause 16 in respect of any action it has taken or refrained from taking
56
prior to such discharge) and its successor and each of the other parties to this Agreement shall have the same rights and obligations among themselves as they would have had if such successor had
been a party to this Agreement in place of the retiring Security Agent. The retiring Security Agent shall (at the expense of the Borrowers) provide its successor with copies of such of its records as its successor reasonably requires to carry out
its functions under the Security Documents.
|
16.15
|
Powers and duties of the Security Agent
|
|
16.15.1
|
The Security Agent shall have no duties, obligations or liabilities to any of the Banks and the Agent beyond those expressly stated in any of the Security Documents. Each of the Agent and the Banks hereby authorises the
Security Agent to enter into and execute:
|
|
|
(a)
|
each of the Security Documents to which the Security Agent is or is intended to be a party; and
|
|
|
(b)
|
any and all such other Security Documents as may be approved by the Agent in writing (acting on the instructions of the Majority Banks) for entry into by the Security Agent,
|
and, in each and every case, to hold any and all security thereby created upon trust for the Banks and the Agent in the manner contemplated by
this Agreement.
|
16.15.2
|
Subject to clause 16.15.3 the Security Agent may, with the prior consent of the Majority Banks communicated in writing by the Agent, concur with any of the Security Parties to:
|
|
|
(a)
|
amend, modify or otherwise vary any provision of the Security Documents to which the Security Agent is or is intended to be a party; or
|
|
|
(b)
|
waive breaches of, or defaults under, or otherwise excuse performance of, any provision of the Security Documents to which the Security Agent is or is intended to be a party.
|
Any such action so authorised and effected by the Security Agent shall be promptly notified to the Banks and the Agent by the Security Agent
and shall be binding on the other Creditors.
|
16.15.3
|
The Security Agent shall not concur with any Security Party with respect to any of the matters described in clause 16.11.2 without the consent of the Banks communicated in writing by the Agent.
|
|
16.15.4
|
The Security Agent shall (subject to the other provisions of this clause 16) take such action or, as the case may be, refrain from taking such action, with respect to any of its rights, powers and discretions as
security agent and trustee, as the Agent may direct. Subject as provided in the foregoing provisions of this clause, unless and until the Security Agent shall have received such instructions from the Agent, the Security Agent may, but shall not be
obliged to, take (or refrain from taking) such action under or pursuant to the Security Documents referred to in clause 16.14.1 as the Security Agent shall deem advisable in the best interests of the Creditors provided that (for the avoidance of
doubt), to the extent that this clause might otherwise be construed as authorising the Security Agent to take, or refrain from taking, any action of the nature referred to in clause 16.15.2 - and for which the prior consent of the Banks is expressly
required under clause 16.15.3 - clauses 16.15.2 and 16.15.3 shall apply to the exclusion of this clause.
|
|
16.15.5
|
None of the Banks nor the Agent shall have any independent power to enforce any of the Security Documents referred to in clause 16.14.1 or to exercise any rights, discretions or powers or to grant any consents or
releases under or pursuant to such Security Documents or any of them or otherwise have direct recourse to the security and/or guarantees constituted by such Security Documents or any of them except through the Security Agent.
|
|
16.15.6
|
For the purpose of this clause 16, the Security Agent may, rely and act in reliance upon any information from time to time furnished to the Security
Agent by the Agent (whether pursuant to clause 16.15.7 or otherwise) unless and until the same is superseded by further such
|
57
|
|
information, so that the Security Agent shall have no liability or responsibility to any party as a consequence of placing reliance on and acting in reliance upon any such information unless the
Security Agent has actual knowledge that such information is inaccurate or incorrect.
|
|
16.15.7
|
Without prejudice to the foregoing each of the Agent and the Banks (whether directly or through the Agent) shall provide the Security Agent with such written information as it may reasonably require for the purpose of
carrying out its duties and obligations under the Security Documents referred to in clause 16.14.1.
|
|
16.15.8
|
Each Bank shall reimburse the Security Agent (rateably in accordance with such Bank’s Commitment or, if after the first drawdown, Contribution), to the extent that the Security Agent is not reimbursed by the
Borrowers, for the costs, charges and expenses incurred by the Agent which are expressed to be payable by the Borrowers under clause 5.2 including (in each case) the fees and expenses of legal or other professional advisers. Each Bank shall on
demand indemnify the Security Agent (rateably in accordance with such Bank’s Commitment or, if after the first drawdown, Contribution) against all liabilities, damages, costs and claims whatsoever incurred by the Security Agent in connection
with any of the Security Documents or the performance of its duties under any of the Security Documents or any action taken or omitted by the Security Agent under any of the Security Documents, unless such liabilities, damages, costs or claims arise
from the Security Agent’s own gross negligence or wilful misconduct.
|
|
16.16.1
|
The trusts constituted or evidenced in or by this Agreement and the Trust Deed shall remain in full force and effect until whichever is the earlier of:
|
|
|
(a)
|
the expiration of a period of eighty (80) years from the date of this Agreement; and
|
|
|
(b)
|
receipt by the Security Agent of confirmation in writing by the Agent that there is no longer outstanding any Indebtedness (actual or contingent) which is secured or guaranteed or otherwise assured by or under any of
the Security Documents,
|
and the parties to this Agreement declare that the perpetuity period applicable to this Agreement
and the trusts declared by the Trust Deed shall for the purposes of the Perpetuities and Accumulations Act 1964 be the period of eighty (80) years from the date of this Agreement.
|
16.16.2
|
In its capacity as trustee in relation to the Security Documents specified in clause 16.14.1, the Security Agent shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law
(and to the extent not inconsistent with the provisions of any of those Security Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Agent
by any of those Security Documents.
|
|
16.16.3
|
It is expressly declared that, in its capacity as trustee in relation to the Security Documents specified in clause 16.14.1, the Security Agent shall be entitled to invest moneys forming part of the security and which,
in the opinion of the Security Agent, may not be paid out promptly following receipt in the name or under the control of the Security Agent in any of the investments for the time being authorised by law for the investment by trustees of trust moneys
or in any other property or investments whether similar to the aforesaid or not or by placing the same on deposit in the name or under the control of the Security Agent as the Security Agent may think fit without being under any duty to diversify
its investments and the Security Agent may at any time vary or transpose any such property or investments for or into any others of a like nature and shall not be responsible for any loss due to depreciation in value or otherwise of such property or
investments. Any investment of any part or all of the security may, at the discretion of the Security Agent, be made or retained in the names of nominees.
|
58
|
16.17
|
Independent action by Creditors
|
None of the Creditors shall enforce, exercise any
rights, remedies or powers or grant any consents or releases under or pursuant to, or otherwise have a direct recourse to the security and/or guarantees constituted by any of the Security Documents without the prior written consent of the Majority
Banks but, Provided such consent has been obtained, it shall not be necessary for any other Creditor to be joined as an additional party in any proceedings for this purpose.
|
16.18
|
Common Agent and Security Agent
|
The Agent and the Security Agent have entered into the
Security Documents in their separate capacities (a) as agent for the Banks under and pursuant to this Agreement (in the case of the Agent) and (b) as security agent and trustee for the Banks and the Agent under and pursuant to this
Agreement, to hold the guarantees and/or security created by the Security Documents specified in clause 16.14.1 on the terms set out in such Security Documents (in the case of the Security Agent). However, from time to time the Agent and the
Security Agent may be the same entity. When the Agent and the Security Agent are the same entity and any Security Document provides for the Agent to communicate with or provide instructions to the Security Agent (and vice versa), it will not be
necessary for there to be any such formal communications or instructions on those occasions.
|
16.19
|
Co-operation to achieve agreed priorities of application
|
The Banks and the Agent shall
co-operate with each other and with the Security Agent and any receiver under the Security Documents in realising the property and assets subject to the Security Documents and in ensuring that the net proceeds realised under the Security Documents
after deduction of the expenses of realisation are applied in accordance with clause 13.1 (unless otherwise expressly provided for in any such Security Document).
|
16.20
|
Prompt distribution of proceeds
|
Moneys received by any of the Creditors (whether from a
receiver or otherwise) pursuant to the exercise of (or otherwise by virtue of the existence of) any rights and powers under or pursuant to any of the Security Documents shall (after providing for all costs, charges, expenses and liabilities and
other payments ranking in priority) be paid to the Agent for distribution (in the case of moneys so received by any of the Creditors other than the Agent or the Security Agent) and shall be distributed by the Agent or, as the case may be, the
Security Agent (in the case of moneys so received by the Agent or, as the case may be, the Security Agent) in each case in accordance with clause 13.1. The Agent or, as the case may be, the Security Agent shall make each such application and/or
distribution as soon as is practicable after the relevant moneys are received by, or otherwise become available to, the Agent or, as the case may be, the Security Agent save that (without prejudice to any other provision contained in any of the
Security Documents) the Agent or, as the case may be, the Security Agent (acting on the instructions of the Majority Banks) or any receiver may credit any moneys received by it to a suspense account for so long and in such manner as the Agent or
such receiver may from time to time determine with a view to preserving the rights of the Agent and/or the Security Agent and/or the Account Bank and/or the Arranger and/or the Banks or any of them to provide for the whole of their respective claims
against the Borrowers or any other person liable.
|
16.21
|
Change of Reference Bank
|
If the Reference Bank ceases to provide quotations to the
Agent for the purposes of determining LIBOR the Agent may, acting on the instructions of the Majority Banks, terminate the appointment of the Reference Bank and appoint another Bank acceptable to the Borrowers to replace it as a Reference Bank.
59
|
17
|
Notices and other matters
|
Every notice, request, demand or other communication under this Agreement or
(unless otherwise provided therein) under any of the other Security Documents shall:
|
17.1.1
|
be in writing delivered personally or by first-class prepaid letter (airmail if available) or facsimile transmission or other means of telecommunication in permanent written form;
|
|
17.1.2
|
be deemed to have been received, subject as otherwise provided in the relevant Security Document, in the case of a letter, when delivered personally or three (3) days after it has been put in to the post and, in
the case of a facsimile transmission or other means of telecommunication in permanent written form, at the time of despatch (provided that if the date of despatch is not a business day in the country of the addressee or if the time of despatch is
after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day); and
|
|
|
(a)
|
if to the Borrowers or any of them at:
|
|
|
|
|
|
Fax no:
|
|
+32 32 47 5699
|
|
Attn:
|
|
Finance Director
|
|
|
(b)
|
if to the Arranger and/or Agent and/or the Account Bank and/or the Security Agent at:
|
|
|
|
|
|
Fax No:
|
|
+41 58 212 7650
|
|
Attn:
|
|
Shipping Dept/Greek Desk
|
|
|
(c)
|
if to a Bank, to its address or fax number specified in schedule 1 or in any relevant Transfer Certificate,
|
or to such other address and/or numbers as is notified by one party to the other parties under this Agreement.
|
17.2
|
Notices through the Agent
|
Every notice, request, demand or other communication under
this Agreement or (unless otherwise provided therein) any other Security Document to be given by the Borrowers or any of them to any other party, shall be given to the Agent for onward transmission as appropriate and if it is to be given to the
Borrowers it shall (except otherwise provided in the Security Documents) be given to the Agent.
|
17.3
|
No implied waivers, remedies cumulative
|
No failure or delay on the part of a Creditor
to exercise any power, right or remedy under any of the Security Documents shall operate as a waiver thereof, nor shall any single or partial exercise by such Creditor of any power, right or remedy preclude any other or further exercise thereof or
the exercise of any other power, right or remedy. The remedies provided in the Security Documents are cumulative and are not exclusive of any remedies provided by law.
60
All certificates, instruments and other documents to be delivered
under or supplied in connection with any of the Security Documents shall be in the English language or shall be accompanied by a certified English translation upon which the Creditors or any of them shall be entitled to rely.
|
17.5
|
Borrowers’ obligations
|
Notwithstanding anything to the contrary contained in any of the Security
Documents, the agreements, obligations and liabilities of the Borrowers herein contained are joint and several and shall be construed accordingly. Each of the Borrowers agrees and consents to be bound by the Security Documents to which it is, or is
to be, a party notwithstanding that the other Borrower which are intended to sign or to be bound may not do so or be effectually bound and notwithstanding that any of the Security Documents may be invalid or unenforceable against the other Borrower,
whether or not the deficiency is known to any of the Creditors.
|
17.5.2
|
Borrowers as principal debtors
|
Each Borrower acknowledges and confirms that it is a principal
and original debtor in respect of all amounts which may become payable by the Borrowers in accordance with the terms of this Agreement or any of the other Security Documents and agrees that the Creditors may also continue to treat it as such,
whether or not any Creditor is or becomes aware that such Borrower is or has become a surety for the other Borrower.
The Borrowers hereby agree jointly and severally to keep the Creditors fully
indemnified on demand against all damages, losses, costs and expenses arising from any failure of any Borrower to perform or discharge any purported obligation or liability of the other Borrower which would have been the subject of this Agreement or
any other Security Document had it been valid and enforceable and which is not or ceases to be valid and enforceable against the other Borrower on any ground whatsoever, whether or not known to a Creditor including, without limitation, any irregular
exercise or absence of any corporate power or lack of authority of, or breach of duty by, any person purporting to act on behalf of the other Borrower (or any legal or other limitation, whether under the Limitation Acts or otherwise or any
disability or death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding up, administration, receivership, amalgamation, reconstruction or any other incapacity of any person whatsoever (including, in the case of a
partnership, a termination or change in the composition of the partnership) or any change of name or style or constitution of any Security Party).
|
17.5.4
|
Liability unconditional
|
None of the obligations or liabilities of the Borrowers under this
Agreement or any other Security Document shall be discharged or reduced by reason of:
|
|
(a)
|
the death, bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding up, administration, receivership, amalgamation, reconstruction or other incapacity of any person whatsoever (including, in the
case of a partnership, a termination or change in the composition of the partnership) or any change of name or style or constitution of any Borrower or any other person liable;
|
|
|
(b)
|
the Agent (acting on the instructions of the Majority Banks) granting any time, indulgence or concession to, or compounding with, discharging,
releasing or varying the liability of, any Borrower or any other person liable or renewing, determining, varying or
|
61
|
|
increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting, varying any compromise, arrangement or settlement or
omitting to claim or enforce payment from any Borrower or any other person liable; or
|
|
|
(c)
|
anything done or omitted which but for this provision might operate to exonerate the Borrowers or any of them.
|
|
17.5.5
|
Recourse to other security
|
The Creditors shall not be obliged to make any claim or demand or
to resort to any Security Document or other means of payment now or hereafter held by or available to it for enforcing this Agreement or any of the Security Documents against any Borrower or any other person liable and no action taken or omitted by
any Creditor in connection with any such Security Document or other means of payment will discharge, reduce, prejudice or affect the liability of the Borrowers under this Agreement and the Security Documents to which any of them is, or is to be, a
party.
|
17.5.6
|
Waiver of Borrowers’ rights
|
Each Borrower agrees with each Creditor that, from the date
of this Agreement and so long as any moneys are owing under any of the Security Documents and while all or any part of the Total Commitment remains outstanding, it will not, without the prior written consent of the Agent (acting on the instructions
of the Majority Banks):
|
|
(a)
|
exercise any right of subrogation, reimbursement and indemnity against the other Borrower or any other person liable under the Security Documents;
|
|
|
(b)
|
demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to such Borrower from the other Borrower or from any other person liable or demand or accept any guarantee, indemnity or other
assurance against financial loss or any document or instrument created or evidencing an Encumbrance in respect of the same or dispose of the same;
|
|
|
(c)
|
take any steps to enforce any right against the other Borrower or any other person liable in respect of any such moneys; or
|
|
|
(d)
|
claim any set-off or counterclaim against the other Borrower or any other person liable or claiming or proving in competition with any Creditor in the liquidation of the other Borrower or any other person liable or have
the benefit of, or share in, any payment from or composition with, the other Borrower or any other person liable or any other Security Document now or hereafter held by any Creditor for any moneys owing under this Agreement or for the obligations or
liabilities of any other person liable but so that, if so directed by the Agent, it will prove for the whole or any part of its claim in the liquidation of the other Borrower or other person liable on terms that the benefit of such proof and all
money received by it in respect thereof shall be held on trust for the Banks and applied in or towards discharge of any moneys owing under this Agreement in such manner as the Agent (acting on the instructions of the Majority Banks) shall deem
appropriate.
|
|
18
|
Governing law and jurisdiction
|
This Agreement is governed by, and shall be construed in accordance with, English
law.
|
18.2
|
Submission to jurisdiction
|
The Borrowers jointly and severally agree, for the benefit
of each Creditor, that any legal action or proceedings arising out of or in connection with this Agreement against the Borrowers or any
62
of them or any of their assets may be brought in the English courts. Each of the Borrowers irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates,
appoints and empowers Unisea Maritime Ltd. at present of 14 Heafort Place, London SW1A 7DH, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to
such jurisdiction shall not (and shall not be construed so as to) limit the right of a Creditor to take proceedings against the Borrowers or any of them in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one
or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree
that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which the Borrowers or any of them may have against any Creditor arising out of or in connection with this Agreement.
|
18.3
|
Contracts (Rights of Third Parties) Act 1999
|
No term of this Agreement is enforceable
under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
IN WITNESS
whereof the parties to this
Agreement have caused this Agreement to be duly executed on the date first above written.
63
Schedule 1
The Banks and their Commitments
|
|
|
|
|
|
|
|
|
[ILLEGIBLE]
|
|
|
|
|
|
|
BNP Paribas (Suisse) SA
|
|
Lending Office
Place de Hollande 2
P.O. Box CH-1211
Geneva, 11
Switzerland
Address for Notices
Place de Hollande 2
P.O. Box CH-1211
Geneva, 11
Switzerland
Fax No: +41 58 212 7678
Attn:
Shipping Dept/Greek Desk
|
|
|
70,000,000
|
|
|
|
|
|
|
Alpha Bank A.E.
|
|
Lending Office
89 Akti Miaouli
185 38 Piraeus
Greece
Address for Notices
89 Akti Miaouli
185 38 Piraeus
Greece
Fax No: +30 210 429 0348
Attn:
Shipping Division, Branch 960
|
|
|
65,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commitment
|
|
|
135,000,000
|
|
|
|
|
|
|
|
|
|
64
Schedule 2
Form of Drawdown Notice
(referred to in clause 2.4)
To: BNP Paribas
(Suisse) SA
Place de Hollande 2
P.O. Box CH-1211
Geneva 11
Switzerland
(as Agent)
[
—
] 200[
—
]
U.S.$135,000,000 Loan - Loan Agreement dated [
—
] 2008 (the “Loan Agreement”)
We refer to the Loan Agreement and hereby give you notice that we wish to draw down the [
—
] [
—
] Advance[s] namely $[
—
] on [
—
] 200[
—
] and
select [a first Interest Period in respect thereof of [
—
] months] [the first interest period in respect hereof to expire on [
—
] 200[
—
]]. The funds should be credited to
[name and number of account]
with
[details of bank in New York City]
.
We confirm that:
|
(a)
|
no event or circumstance has occurred and is continuing which constitutes a Default;
|
|
(b)
|
the representations and warranties contained in (i) clauses 7.1, 7.2 and 7.3(b) of the Loan Agreement and (ii) clause 4 of each Corporate Guarantee, are true and correct at the date hereof as if made with
respect to the facts and circumstances existing at such date;
|
|
(c)
|
the borrowing to be effected by the drawdown of such Advance[s] will be within our corporate powers, has been validly authorised by appropriate corporate action and will not cause any limit on our borrowings (whether
imposed by statute, regulation, agreement or otherwise) to be exceeded;
|
|
(d)
|
there has been no material adverse change in the management, operations, results of operations, business, properties, performance, prospects, assets, condition (financial or otherwise) of any of the Borrowers or any
other Relevant Party from that described by us or by any other Security Party to the Creditors or any of them in the negotiation of the Loan Agreement; and
|
|
(e)
|
such Advance[s] shall be used for our own benefit and exclusively for the purposes specified in clauses 1.1 and 2.5 of the Loan Agreement.
|
Words and expressions defined in the Loan Agreement shall have the same meanings where used herein.
|
|
|
For and on behalf of
|
|
FONTVIEILLE SHIPHOLDING LIMITED
|
|
|
|
|
|
For and on behalf of
|
|
MONEGHETTI SHIPHOLDING LIMITED
|
|
|
65
Schedule 3
Documents and evidence required as conditions precedent to the Loan being made
(referred to in clause 9.1)
Part 1
|
1
|
Constitutional documents
|
Copies, certified by an officer of each Security Party as
true, complete and up to date copies of all documents which contain or establish or relate to the constitution of that Security Party;
|
2
|
Corporate authorisations
|
copies of resolutions of the directors and stockholders of
each Security Party approving such of the Underlying Documents and the Security Documents to which such Security Party is, or is to be, party and authorising the signature, delivery and performance of such Security Party’s obligations
thereunder, certified (in a certificate dated no earlier than the date of this Agreement) by an officer of such Security Party as:
|
|
(a)
|
being true and correct;
|
|
|
(b)
|
being duly passed at meetings of the directors of such Security Party and of the stockholders of such Security Party duly convened and held;
|
|
|
(c)
|
not having been amended, modified or revoked; and
|
|
|
(d)
|
being in full force and effect,
|
together with originals or certified copies of any powers of
attorney issued by any Security Party pursuant to such resolutions Provided however that in respect of the Euronav Guarantor, a power of attorney duly executed by two members of the board of directors for and on behalf of the Euronav Guarantor shall
be sufficient for the purposes of this paragraph 2;
copies of the signatures of the persons who have been authorised on
behalf of each Security Party (other than the Euronav Guarantor) to sign such of the Underlying Documents and the Security Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of
drawing, under or in connection with the Security Documents, certified (in a certificate dated no earlier than the date of this Agreement) by an officer of such Security Party as being the true signatures of such persons;
|
4
|
Certificate of incumbency
|
a list of directors and officers of each Security Party
specifying the names and positions of such persons, certified (in a certificate dated no earlier than to the date of this Agreement) by an officer of such Security Party to be true, complete and up to date;
|
5
|
Borrowers’ consents and approvals
|
a certificate (dated no earlier than the date of
this Agreement) from an officer of each of the Borrowers that no consents, authorisations, licences or approvals are necessary for that Borrower to authorise or are required by that Borrower in connection with the borrowing by that Borrower of the
Loan pursuant to this Agreement or the execution, delivery and performance of that Borrower’s Security Documents;
66
|
6
|
Other consents and approvals
|
a certificate (dated no earlier than the date of this
Agreement) from an officer of each Security Party (other than the Borrowers and the Euronav Guarantor) that no consents, authorisations, licences or approvals are necessary for such Security Party to guarantee and/or grant security for the borrowing
by the Borrowers of the Total Commitment pursuant to this Agreement and execute, deliver and perform the Security Documents insofar as such Security Party is a party thereto;
a copy, certified (in a certificate dated no earlier than five
(5) Banking Days prior to the date of this Agreement) as a true and complete copy by an officer of the relevant Borrower of each of the Contracts;
such documentation and other evidence as is requested by any Bank
(through the Agent) in order for such Bank to carry out and be satisfied with the results of all necessary “know your client” or other checks which each such Bank is required to carry out under any applicable law or legislation or by any
regulatory or financial services authority (including in the European Union or the U.S.A.), in relation to the transactions contemplated by this Agreement and to the identity of any parties to this Agreement (other than the Creditors) and their
directors, officers, shareholders and ultimate beneficial owners and any account signatories (including two (2) certified copies of identification forms of individuals);
the Fee Letter, the Corporate Guarantees, the Pre-delivery Security
Assignments, the Contract Assignment Consents and Acknowledgements and the Operating Account Pledges, each duly executed;
evidence that the Operating Accounts have been opened and duly
completed mandate forms in respect thereof have been delivered to the Agent;
evidence that the arrangement fee due under clause 5.1 has been paid in full;
such statutory forms duly signed by the Borrowers and the other
Security Parties as may be required by the Agent to perfect the security contemplated by the Security Documents to be executed under this Part 1;
an opinion of JSM, special legal advisers on matters of Hong Kong law
to the Agent;
an opinion of Kim & Chang, special legal advisers on matters of
Korean law to the Agent.
an opinion of Linklaters LLP, special legal advisers on matters of
Belgian law to the Agent.
67
an opinion of Conyers, Dill & Pearman, special legal advisers
on matters of Bermuda law to the Agent.
|
17
|
Borrowers’ process agent
|
a letter from each Borrower’s agent for receipt of
service of proceedings referred to in clause 18.2 accepting its appointment under the said clause and under each of the other Security Documents referred to in this Part 1 and in which it is or is to be appointed as such Borrower’s agent; and
|
18
|
Security Parties’ process agent
|
a letter from each Security Party’s agent for
receipt of service of proceedings referred to in each of the Security Documents referred to in this Part 1 and to which such Security Party is a party accepting its appointment under each such Security Document.
68
Part 2
The Drawdown Notice in respect of the relevant first Contract
Instalment Advance for a Ship duly executed;
evidence that the conditions precedent set out in Part 1 of
schedule 3 remain fully satisfied;
|
|
(a)
|
the original Refund Guarantee in respect of the instalment of the Contract Price for the Ship relevant to such first Contract Instalment Advance, duly issued; and
|
|
|
(b)
|
the Refund Guarantee Assignment Consent and Acknowledgement in respect of such Refund Guarantee, duly executed;
|
evidence satisfactory to the Agent that neither the Builder nor any other
party who may have a claim pursuant to the relevant Contract, has any claims against the Ship relevant to such first Contract Instalment Advance or the relevant Borrower and that there have been no breaches of the terms of such Contract Agreement or
any Refund Guarantee in respect of the Ship relevant to such first Contract Instalment Advance or any default thereunder;
|
5
|
No variations to Contract or Refund Guarantee
|
evidence that there have been no
amendments or variations agreed to the relevant Contract or any Refund Guarantee in respect of the Ship relevant to such first Contract Instalment Advance and that no action has been taken by the Builder which might in any way render such Contract,
or any such Refund Guarantee inoperative or unenforceable, in whole or in part;
evidence that there is no Encumbrance of any kind created or permitted
by any person on or relating to the Contract or any Refund Guarantee in respect of the Ship relevant to such first Contract Instalment Advance other than Permitted Encumbrances;
evidence that any fees and commissions payable from the Borrowers
to the Creditors pursuant to the terms of clause 5.1 or any other provision of the Security Documents have been paid in full;
evidence (accompanying the relevant Drawdown Notice) that such part of the first
instalment of the Contract Price of the Ship relevant to such first Contract Instalment Advance, as is not being funded by such Advance, has been deposited (not later than the Drawdown Date of such Advance) in the relevant Operating Account for
further payment to the Builder (or in case the relevant Borrower has already paid such first instalment to the Builder when it was due, evidence of such payment);
69
an invoice from the Builder demanding the payment of the first
instalment of the Contract Price relevant to such first Contract Instalment Advance and a receipt from the Builder evidencing payment of such first instalment in full;
an opinion of Kim & Chang, legal advisers on matters of Korean
law to the Agent;
any such further opinion as may be required by the Agent; and
|
12
|
Further conditions precedent
|
such other conditions precedent as may be required by the
Agent.
70
Part 3
The Drawdown Notice in respect of the relevant second, third or fourth
Contract Instalment Advance (as the case may be) duly executed;
evidence that the conditions precedent set out in Parts 1 and 2 of
schedule 3 remain fully satisfied;
evidence satisfactory to the Agent that neither the Builder nor any other
party who may have a claim pursuant to the relevant Contract has any claims against the Ship relevant to such Contract Instalment Advance or the relevant Borrower and that there have been no breaches of the terms of such Contract or any Refund
Guarantee in respect of the Ship relevant to such Contract Instalment Advance or any default thereunder;
|
4
|
No variations to Contract or Refund Guarantee
|
evidence that there have been no
amendments or variations agreed to the relevant Contract or any Refund Guarantee in respect of the Ship relevant to such Contract Instalment Advance and that no action has been taken by the Builder which might in any way render such Contract, or any
such Refund Guarantee inoperative or unenforceable, in whole or in part;
evidence that there is no Encumbrance of any kind created or permitted
by any person on or relating to the Contract or any Refund Guarantee in respect of the Ship relevant to such Contract Instalment Advance other than Permitted Encumbrances;
evidence that any fees and commissions payable from the Borrowers
to the Creditors pursuant to the terms of clause 5.1 or any other provision of the Security Documents have been paid in full;
evidence (accompanying the relevant Drawdown Notice) that such part of the
second, third or fourth instalment (as the case may be) of the Contract Price of the Ship relevant to such Advance, as is not being funded pursuant to this Agreement, has been deposited (not later than the Drawdown Date of such Advance) in the
relevant Operating Account for further payment to the Builder;
an invoice from the Builder demanding the payment of the second,
third or fourth instalment (as the case may be) of the Contract Price of the Ship relevant to such Advance and a receipt from the Builder evidencing payment of such instalment in full;
71
evidence from the Classification Society that the keel laying of
such Ship has been carried out (in the case of the third Contract Instalment Advance for such Ship) or that the launching of such Ship has been carried out (in the case of the fourth Contract Instalment Advance for such Ship), in each case to its
satisfaction;
any such further opinion as may be required by the Agent; and
|
11
|
Further conditions precedent
|
such other conditions as may be required by the Agent.
72
Part 4
The Drawdown Notice in respect of the relevant Delivery Advance duly
executed;
evidence that the conditions precedent set out in Parts 1, 2 and 3
of schedule 3 remain fully satisfied;
|
3
|
Updated corporate authorisations/certificates of incumbency
|
a list of directors and
officers of each Security Party (other than the Builder and the Refund Guarantors) specifying the names and positions of such persons and copies of the signatures of the persons who have been authorised on behalf of each such Security Party to sign
such of the Security Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of drawing, under or in connection with the Security Documents, certified (in a certificate dated no earlier
than five (5) Banking Days prior to the relevant Drawdown Date) by an officer of such Security Party to be, in the case of the list of directors, true, complete and up to date and, in the case of the specimen signatures, true signatures of such
persons or a certificate by an officer of such Security Party that the list provided in respect of the Security Party pursuant to paragraph 4 of Part 1 of this schedule and that the specimen signatures provided in respect of the Security Party
pursuant to paragraph 3 of Part 1 of this schedule remain true, complete and up to date;
evidence that the Ship relevant to such Advance:
|
|
(i)
|
Registration and Encumbrances
|
is registered in the name of the relevant Borrower
through the relevant Registry under the laws and flag of the relevant Flag State and that such Ship and its Earnings, Insurances and Requisition Compensation are free of Encumbrances; and
maintains the relevant Classification free of all requirements and
recommendations of the relevant Classification Society; and
is insured in accordance with the provisions of the relevant Ship Security
Documents and all requirements of the Security Documents in respect of such insurance have been complied with (including without limitation, confirmation from the protection and indemnity association or other insurer with which such Ship is, or is
to be, entered for insurance or insured against protection and indemnity risks (including oil pollution risks) that any necessary declarations required by the association or insurer for the removal of any oil pollution exclusion have been made and
that any such exclusion does not apply to such Ship);
73
evidence satisfactory to the Agent that neither the Builder nor any other
person who may have a claim pursuant to the relevant Contract have any claims against the Ship relevant to such Delivery Advance or the relevant Borrower and that there have been no breaches of the terms of the relevant Contract or any Refund
Guarantee in respect of such Ship or any default thereunder;
|
6
|
Title and no Encumbrances
|
evidence that the transfer of title to the Ship relevant to
such Delivery Advance from the Builder to the relevant Borrower has been duly recorded with the relevant Registry and there are no Encumbrances (other than Permitted Encumbrances);
payment of any fees and commissions due from the Borrowers to any
of the Creditors pursuant to the terms of clause 5.1 or any other provision of the Security Documents;
|
8
|
Equity and additional cost
|
evidence that such part of the final instalment of the
Contract Price of the Ship relevant to such Delivery Advance, as is not being funded pursuant to this Agreement and any cost incurred by the relevant Borrower in addition to the Contract Price, if any, has been deposited (not later than the Drawdown
Date of such Delivery Advance) in the relevant Operating Account for further payment to the Builder;
|
9
|
Commercial invoice and receipt
|
|
|
(a)
|
a commercial invoice or any other similar document addressed by the Builder to the relevant Borrower in respect of the full amount of the Contract Price of the Ship relevant to such Delivery Advance and in respect of
such Ship; and;
|
|
|
(b)
|
a receipt from the Builder or any other similar evidence, evidencing the payment of the full amount of the Contract Price of the Ship relevant to such Delivery Advance;
|
copies, certified by a person acceptable to the Agent, of the bill
of sale, the builder’s certificate and the protocol of delivery and acceptance in respect of the Ship relevant to such Delivery Advance, each duly executed;
the Operating Account Pledge, the Mortgage, the Deed of Covenant and
the Manager’s Undertaking in respect of the Ship relevant to such Delivery Advance, each duly executed and delivered;
duly executed notices of assignment in the forms prescribed by
the Ship Security Documents for the Ship relevant to such Delivery Advance;
evidence that the Mortgage in respect of the Ship relevant to
such Delivery Advance has been registered against such Ship through the relevant Registry under the laws and flag of the relevant Flag State;
74
|
14
|
Borrowers’ process agent
|
a letter from the agent of the Borrower owning the Ship
relevant to such Delivery Advance, for receipt of service of proceedings referred to in each of the relevant Ship Security Documents in which it is or is to be appointed as such Borrower’s agent, accepting its appointment thereunder;
|
15
|
Manager’s process agent
|
a letter from the Manager’s agent for receipt of
service of proceedings referred to in the Manager’s Undertaking for the Ship relevant to such Delivery Advance, accepting its appointment thereunder;
such statutory forms duly signed by the Borrowers and the other
Security Parties as may be required by the Agent to perfect the security contemplated by the Security Documents referred to in this Part 4;
an opinion from insurance consultants to the Agent (at the cost of
the Borrowers), on the insurances effected or to be effected in respect of the Ship relevant to such Delivery Advance, upon and following the Drawdown Date of such Delivery Advance;
|
18
|
Certified Management Agreement
|
a copy, certified (in a certificate dated no earlier
than five (5) Banking Days prior to the Drawdown Date of such Delivery Advance) as a true and complete copy by an officer of the relevant Borrower, of the relevant Management;
a valuation of the Ship relevant to such Delivery Advance (dated not earlier
than thirty (30) days prior to the Drawdown Date of such Advance) made (at the cost of the Borrowers) on the basis and in the manner specified in clause 8.2.2.
|
20
|
DOC and application for SMC
|
a certified copy of the DOC issued to the Operator of the
Ship relevant to such Delivery Advance and either (i) a certified copy of the SMC for such Ship or (ii) evidence satisfactory to the Agent that the Operator has applied to the relevant Regulatory Agency for an SMC for such Ship to be
issued pursuant to the Code within any time limit required or recommended by such Regulatory Agency;
|
|
(a)
|
evidence satisfactory to the Agent that the Ship relevant to such Delivery Advance is subject to a ship security plan which complies with the ISPS Code; and
|
|
|
(b)
|
a copy, certified (in a certificate dated no earlier than five (5) Banking Days prior to the Drawdown Date of such Delivery Advance) as a true and complete copy by an officer of the relevant Borrower of the ISSC
for such Ship (or an application in respect thereof);
|
an opinion of JSM, special legal advisers on matters of Hong Kong law
to the Agent;
75
an opinion of legal advisers to the Agent on matters of the laws of
the Flag State for the Ship relevant to such Delivery Advance;
such further opinions as the Agent may require; and
|
25
|
Further conditions precedent
|
such further conditions precedent as the Agent may
require.
76
Schedule 4
Form of Transfer Certificate
(refer to in clause 15.3)
TRANSFER CERTIFICATE
Banks are
advised not to employ Transfer Certificates or otherwise to assign or transfer interests in the Loan Agreement without further ensuring that the transaction complies with all applicable laws and regulations, including the Financial Services and
Markets Act 2000 and regulations made thereunder and similar statutes which may be in force in other jurisdictions
|
To:
|
BNP PARIBAS (SUISSE) SA
as agent on its own behalf and on behalf of the Borrowers, the Banks, the Account Bank, the Security Agent and the Arranger defined in the Loan Agreement referred to below.
|
[Date]
Attention: [
—
]
This certificate (“
Transfer Certificate
”) relates to a loan agreement dated [
—
] (the “
Loan Agreement
”) and made between Fontvieille Shipholding Limited and Moneghetti Shipholding Limited (together the “
Borrowers
”), (2) the banks and
financial institutions defined therein as banks (the “
Banks
”) and (3) BNP Paribas (Suisse) SA as Arranger, Agent, Security Agent and Account Bank, in relation to a loan of up to One hundred and thirty five million Dollars
($135,000,000). Terms defined in the Loan Agreement shall, unless otherwise defined herein, have the same meanings when used herein.
In this Certificate:
the “
Transferor
” means [
full name
] of [
lending office
]; and
the “
Transferee
” means [
full name
] of [
lending office
].
|
1
|
The Transferor with full title guarantee assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as a Bank under or by virtue of the Loan Agreement and all
the Security Documents in relation to [ ] per centum ([ ]%) of the [Contribution] [Commitment] of the Transferor (or its predecessors in title), details of which are set out below:
|
|
|
|
|
|
|
|
|
|
Date of Advance[s]
|
|
Amount of Advance[s]
|
|
Transferor’s
[Contribution]
[Commitment]
to Advance[s]
|
|
Maturity Date
|
|
|
|
|
|
|
|
|
|
2
|
By virtue of this Transfer Certificate and clause 15 of the Loan Agreement, the Transferor is discharged [entirely from its [Contribution] [Commitment], which amounts to
$[ ]].
|
|
3
|
The Transferee hereby requests the Agent (on behalf of itself, the Borrowers, the Account Bank, the Security Agent, the Arranger and the Banks) to accept the executed copies of this Transfer Certificate as being
delivered pursuant to and for the purposes of clause 15.3 of the Loan Agreement so as to take effect in accordance with the terms thereof on [date of transfer].
|
77
|
4.1
|
confirms that it has received a copy of the Loan Agreement and the other Security Documents together with such other documents and information as it has required in connection with the transaction contemplated thereby;
|
|
4.2
|
confirms that it has not relied and will not hereafter rely on the Transferor, the Agent, the Account Bank, the Arranger, the Banks or the Security Agent to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of the Loan Agreement, any of the Security Documents or any such documents or information;
|
|
4.3
|
agrees that it has not relied and will not rely on the Transferor, the Agent, the Account Bank, the Arranger, the Banks or the Security Agent to assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the Borrowers, or any other Security Party (save as otherwise expressly provided therein);
|
|
4.4
|
warrants that it has power and authority to become a party to the Loan Agreement and has taken all necessary action to authorise execution of this Transfer Certificate and to obtain all necessary approvals and consents
to the assumption of its obligations under the Loan Agreement and the Security Documents; and
|
|
4.5
|
if not already a Bank, appoints (i) the Agent to act as its agent and (ii) the Security Agent to act as its security agent and trustee, as provided in the Loan Agreement and the Security Documents and agrees
to be bound by the terms of the Loan Agreement and the Security Documents.
|
|
5.1
|
warrants to the Transferee that it has full power to enter into this Transfer Certificate and has taken all corporate action necessary to authorise it to do so;
|
|
5.2
|
warrants to the Transferee that this Transfer Certificate is binding on the Transferor under the laws of England, the country in which the Transferor is incorporated and the country in which its lending office is
located; and
|
|
5.3
|
agrees that it will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under this Transfer Certificate or for a
similar purpose.
|
|
6
|
The Transferee hereby undertakes with the Transferor and each of the other parties to the Loan Agreement and the other Security Documents that it will perform in accordance with its terms all those obligations which by
the terms of the Loan Agreement and the other Security Documents will be assumed by it after delivery of the executed copies of this Transfer Certificate to the Agent and satisfaction of the conditions (if any) subject to which this Transfer
Certificate is expressed to take effect.
|
|
7
|
By execution of this Transfer Certificate on their behalf by the Agent and in reliance upon the representations and warranties of the Transferee, the Borrowers, the Agent, the Security Agent, the Arranger, the Account
Bank and the Banks accept the Transferee as a party to the Loan Agreement and the Security Documents with respect to all those rights and/or obligations which by the terms of the Loan Agreement and the Security Documents will be assumed by the
Transferee (including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent, the Account Bank, the Arranger and the Security Agent as provided by the Loan Agreement) after delivery of the
executed copies of this Transfer Certificate to the Agent and satisfaction of the conditions (if any) subject to which this Transfer Certificate is expressed to take effect.
|
78
|
8
|
None of the Transferor, the Agent, the Security Agent, the Account Bank, the Arranger or the Banks:
|
|
8.1
|
makes any representation or warranty nor assumes any responsibility with respect to the legality, validity, effectiveness, adequacy or enforceability of the Loan Agreement or any of the Security Documents or any
document relating thereto; or
|
|
8.2
|
assumes any responsibility for the financial condition of the Borrowers or any of them or any other Security Party or any party to any such other document or for the performance and observance by the Borrowers or any of
them or any other Security Party or any party to any such other document (save as otherwise expressly provided therein) and any and all such conditions and warranties, whether express or implied by law or otherwise, are hereby excluded (except as
aforesaid).
|
|
9
|
The Transferor and the Transferee each undertake that they will on demand fully indemnify the Agent in respect of any claim, proceeding, liability or expense which relates to or results from this Transfer Certificate or
any matter concerned with or arising out of it unless caused by the Agent’s gross negligence or wilful misconduct, as the case may be.
|
|
10
|
The agreements and undertakings of the Transferee in this Transfer Certificate are given to and for the benefit of and made with each of the other parties to the Loan Agreement and the Security Documents.
|
|
11
|
This Transfer Certificate is governed by, and shall be construed in accordance with, English law.
|
|
|
|
|
|
|
|
|
|
|
|
Transferor
|
|
|
|
Transferee
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
|
|
Dated:
|
|
|
|
|
|
Dated:
|
|
|
Agent
Agreed for
and on behalf of itself as Agent, the Borrowers, the Security Agent, the Account Bank, the Arranger and the Banks.
|
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
|
|
|
By:
|
|
|
|
|
|
|
Dated:
|
|
|
79
Note:
The execution of this Transfer Certificate alone may not transfer a proportionate
share of the Transferor’s interest in the security constituted by the Security Documents in the Transferor’s or Transferee’s jurisdiction. It is the responsibility of the Transferee to ascertain whether any other documents are
required to perfect a transfer of such a share in the Transferor’s interest in such security in any such jurisdiction and, if so, to seek appropriate advice and arrange for execution of the same.
80
The Schedule
Outstanding Contribution: $
—
Commitment $
—
Portion Transferred:
—
%
Administrative Details of Transferee
Name of
Transferee:
Lending Office:
Contact Person:
(Loan Administration Department)
Telephone:
Telefax No:
Contact Person:
(Credit Administration Department)
Telephone:
Telefax No:
[Account for payments:]
81
Schedule 5
Contract Instalment Advances per Ship
|
|
|
|
|
|
|
[ILLEGIBLE]
|
|
[ILLEGIBLE]
|
|
[ILLEGIBLE]
|
|
|
|
|
|
first Contract Instalment Advance
|
|
first instalment
|
|
Upon the later of (a) the date of the relevant Contract and (b) three (3) days after the receipt by the Borrower of the first Refund Guarantee under the relevant Contract
|
|
|
|
|
|
second Contract Instalment Advance
|
|
second instalment
|
|
On the date falling twelve (12) calendar months after the date of the relevant Contract
|
|
|
|
|
|
third Contract Instalment Advance
|
|
third instalment
|
|
On the date when the keel of the relevant Ship has been laid
|
|
|
|
|
|
fourth Contract Instalment Advance
|
|
fourth instalment
|
|
On the date when the relevant Ship has been launched
|
82
Schedule 6
Form of Corporate Guarantee
83
Private & Confidential
Dated 23 April 2008
and
|
|
|
|
|
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
(2)
|
CORPORATE GUARANTEE
Contents
|
|
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
|
1
|
|
Interpretation
|
|
|
1
|
|
|
|
|
|
|
2
|
|
Guarantee
|
|
|
2
|
|
|
|
|
|
|
3
|
|
Payments and Taxes
|
|
|
5
|
|
|
|
|
|
|
4
|
|
Representations and warranties
|
|
|
7
|
|
|
|
|
|
|
5
|
|
Undertakings
|
|
|
9
|
|
|
|
|
|
|
6
|
|
Set-off
|
|
|
11
|
|
|
|
|
|
|
7
|
|
Benefit of this Guarantee
|
|
|
11
|
|
|
|
|
|
|
8
|
|
Notices and other matters
|
|
|
12
|
|
|
|
|
|
|
9
|
|
Law and jurisdiction
|
|
|
13
|
|
THIS GUARANTEE
is dated 23 April 2008 and made
BETWEEN:
|
(1)
|
CERES SHIPPING LTD.
of Bermuda (the “
Guarantor
”); and
|
|
(2)
|
BNP PARIBAS (SUISSE) SA
, as security agent and trustee for and on behalf of the Secured Creditors (the “
Security Agent
”).
|
WHEREAS
:
|
(A)
|
by a loan agreement dated 23 April 2008 (the “
Agreement
”) made between (1) Fontvieille Shipholding Limited and Moneghetti Shipholding Limited as joint and several borrowers (the
“
Borrowers
”), (2) BNP Paribas (Suisse) SA as arranger, agent (in such capacity the “
Agent
”), Security Agent and account bank and (3) the banks and financial institutions referred to in schedule 1 to the
Agreement as lenders (the “
Banks
” and, together with the Agent, the “
Secured Creditors
”), the Banks agreed (
inter alia
) to make available to the Borrowers, upon the terms and conditions therein contained, a
loan of up to One hundred and thirty five million Dollars ($135,000,000);
|
|
(B)
|
pursuant to clause 16.14 of the Agreement, each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a trust deed dated 23 April 2008 and executed by the
Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Guarantee for and on behalf of itself and the Secured Creditors; and
|
|
(C)
|
the execution and delivery of this Guarantee is one of the conditions to each Bank making its Commitment available under the Agreement.
|
IT IS AGREED
as follows:
In this Guarantee, unless the context otherwise requires or unless
otherwise defined in this Guarantee, words and expressions defined in the Agreement and used in this Guarantee shall have the same meanings where used in this Guarantee.
In this Guarantee, unless the context otherwise requires:
“
Agent
” includes its successors in title and its replacements;
“
Applicable Accounting Principles
” means the most recent and up-to-date IFRS applicable at any relevant time;
“
Banks
” includes their respective successors in title and Transferee Banks;
“
Borrowed Money
” means Indebtedness in respect of (i) money borrowed or raised and debit balances at banks, (ii) any
bond, note, loan stock, debenture or similar debt instrument, (iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted (otherwise than on a non-recourse basis), (v) deferred payments for assets or
services acquired, (vi) finance leases and hire purchase contracts, (vii) swaps, forward exchange contracts, futures and other derivatives, (viii) any other transaction (including without limitation forward sale or purchase
agreements) having the commercial effect of a borrowing or raising of money or of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any person falling within any of (i) to (viii) above;
1
“
Collateral Instruments
” means notes, bills of exchange, certificates of deposit
and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or
be responsible directly or indirectly for, any indebtedness or liabilities of the Borrowers or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest of any kind;
“
Guarantee
” includes each separate or
independent stipulation or agreement by the Guarantor contained in this Guarantee;
“
Guaranteed Liabilities
” means all
moneys, obligations and liabilities expressed to be guaranteed by the Guarantor in clause 2.1;
“
Guarantor
” includes
the successors in title of the Guarantor;
“
Incapacity
” means, in relation to a person, the bankruptcy, insolvency,
liquidation, dissolution, winding-up, administration, receivership, amalgamation, reconstruction or other incapacity of that person whatsoever (and, in the case of a partnership, includes the termination or change in the composition of the
partnership);
“
Relevant Jurisdiction
” means any jurisdiction in which or where the Guarantor is incorporated, resident,
domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected; and
“
Security Agent
” includes the successors in title and replacements of the Security Agent.
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Guarantee.
|
1.4
|
Construction of certain terms
|
Clause 1.4 of the Agreement shall apply to this Guarantee
as if set out herein.
In consideration of the Banks making or continuing loans or advances
to, or otherwise giving credit or granting banking facilities or accommodation or granting time to, the Borrowers or any of them pursuant to the Agreement, the Guarantor hereby guarantees to pay to the Security Agent, for the account of the Secured
Creditors, on demand by the Security Agent all moneys and discharge all obligations and liabilities now or hereafter due, owing or incurred by the Borrowers or any of them to the Secured Creditors or any of them under or pursuant to the Agreement
and the other Security Documents or any of them, when the same become due for payment or discharge whether by acceleration or otherwise, and whether such moneys, obligations or liabilities are express or implied, present, future or contingent, joint
or several, incurred as principal or surety, originally owing to the Secured Creditors or any of them or purchased or otherwise acquired by any of them, denominated in Dollars or in any other currency, or incurred on any banking account or in any
other manner whatsoever provided always that the Guarantor’s total and several liability under this clause 2.1 shall not exceed fifty per cent (50%) of the total amount of principal, interest, fees, commissions, costs and expenses and all
other amounts of whatsoever nature owing by the Borrowers under the Agreement and the other Security Documents at any relevant time.
Such
liabilities shall, without limitation, include interest (as well after as before judgment) to date of payment at such rates and upon such terms as may from time to time be agreed,
2
commission, fees and other charges and ail legal and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Secured Creditors or any of them in
relation to any such moneys, obligations or liabilities or generally in respect of the Borrowers, the Guarantor or any Collateral Instrument.
|
2.2
|
Guarantor as principal debtor; indemnity
|
As a separate and independent stipulation, the
Guarantor agrees that if any purported obligation or liability of the Borrowers or any of them which would have been the subject of this Guarantee had it been valid and enforceable is not or ceases to be valid or enforceable against the Borrowers or
any of them on any ground whatsoever whether or not known to the Security Agent and/or the Secured Creditors or any of them (including, without limitation, any irregular exercise or absence of any corporate power or lack of authority of, or breach
of duty by, any person purporting to act on behalf of the Borrowers or any of them or any legal or other limitation, whether under the Limitation Acts or otherwise or any disability or Incapacity or any change in the constitution of the Borrowers or
any of them) the Guarantor shall nevertheless be liable to the Security Agent in respect of that purported obligation or liability as if the same were fully valid and enforceable and the Guarantor were the principal debtor in respect thereof
provided always that the Guarantor’s total and several liability under this clause 2.2 shall not exceed fifty per cent (50%) of the total amount of principal, interest, fees, commissions, costs and expenses and all other amounts of
whatsoever nature owing by the Borrowers under the Agreement and the other Security Documents at any relevant time. The Guarantor hereby agrees to keep the Security Agent fully indemnified on demand against all damages, losses, costs and expenses
arising from any failure of the Borrowers or any of them to perform or discharge any such purported obligation or liability, subject always to the fifty per cent (50%) limitation referred above in this clause 2.2.
|
2.3
|
Statements of account conclusive
|
Any statement of account, signed as correct by an
officer of the Security Agent, showing the amount of the Guaranteed Liabilities shall, in the absence of manifest error, be binding on and conclusive against the Guarantor.
|
2.4
|
No security taken by Guarantor
|
The Guarantor warrants that it has not taken or
received, and undertakes that until all the Guaranteed Liabilities of the Borrowers have been paid or discharged in full, it will not take or receive, the benefit of any security from the Borrowers or any of them or any other person in respect of
its obligations under this Guarantee.
Subject to the fifty per cent (50%) limitation referred to in clause 2.1
and clause 2.2, the Guarantor agrees to pay interest on each amount demanded of it under this Guarantee from the date of such demand until payment (as well after as before judgment) at the rate specified in clause 3.4 of the Agreement which shall
apply to this Guarantee
mutatis mutandis
. Such interest shall be compounded at the end of each period determined for this purpose by the Security Agent in the event of it not being paid when demanded but without prejudice to any Secured
Creditor’s right to require payment of such interest.
|
2.6
|
Continuing security and other matters
|
This Guarantee shall:
|
2.6.1
|
secure the ultimate balance from time to time owing to the Secured Creditors or any of them by the Borrowers or any of them and shall be a continuing security, notwithstanding any settlement of account or other matter
whatsoever;
|
|
2.6.2
|
be in addition to any present or future Collateral Instrument, right or remedy held by or available to the Security Agent or any of the Secured Creditors; and
|
3
|
2.6.3
|
not be in any way prejudiced or affected by the existence of any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by
the Security Agent or any of the Secured Creditors dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or indulgence or compounding with any other person liable.
|
|
2.7
|
Liability unconditional
|
The liability of the Guarantor shall not be affected nor shall
this Guarantee be discharged or reduced by reason of:
|
2.7.1
|
the Incapacity or any change in the name, style or constitution of the Borrowers or any of them or any other person liable;
|
|
2.7.2
|
the Security Agent or any of the Secured Creditors granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, the Borrowers or any of them or any other
person liable or renewing, determining, varying or increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting or varying any compromise, arrangement or settlement or
omitting to claim or enforce payment from the Borrowers or any of them or any other person liable; or
|
|
2.7.3
|
any act or omission which would not have discharged or affected the liability of the Guarantor had it been a principal debtor instead of a guarantor or by anything done or omitted which but for this provision might
operate to exonerate the Guarantor.
|
|
2.8
|
Collateral Instruments
|
Neither the Security Agent nor any of the Secured Creditors
shall be obliged to make any claim or demand on the Borrowers or any of them or to resort to any Collateral Instrument or other means of payment now or hereafter held by or available to it before the Security Agent enforcing this Guarantee and no
action taken or omitted by the Security Agent or any of the Secured Creditors in connection with any such Collateral Instrument or other means of payment shall discharge, reduce, prejudice or affect the liability of the Guarantor under this
Guarantee nor shall the Security Agent or any of the Secured Creditors be obliged to apply any moneys or other property received or recovered in consequence of any enforcement or realisation of any such Collateral Instrument or other means of
payment in reduction of the Guaranteed Liabilities.
|
2.9
|
Waiver of Guarantor’s rights
|
Until all the Guaranteed Liabilities have been paid,
discharged or satisfied in full (and notwithstanding payment of a dividend in any liquidation or under any compromise or arrangement) the Guarantor agrees that, without the prior written consent of the Security Agent (acting on the instructions of
the Majority Banks), it will not:
|
2.9.1
|
exercise its rights of subrogation, reimbursement and indemnity against the Borrowers or any of them or any other person liable;
|
|
2.9.2
|
demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to the Guarantor from the Borrowers or any of them or from any other person liable or demand or accept any Collateral Instrument in
respect of the same or dispose of the same;
|
|
2.9.3
|
take any step to enforce any right against the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities; or
|
|
2.9.4
|
claim any set-off or counterclaim against the Borrowers or any of them or any other person liable or claim or prove in competition with the Security
Agent or any of the Secured Creditors in the liquidation of the Borrowers or any of them or any other person liable or have the benefit of, or share in, any payment from or composition with the Borrowers or any of them or any other person liable or
any other Collateral instrument now or hereafter held by
|
4
|
|
the Security Agent or any of the Secured Creditors for any Guaranteed Liabilities or for the obligations or liabilities of any other person liable but so that, if so directed by the Security
Agent, it will prove for the whole or any part of its claim in the liquidation of the Borrowers or any of them or any other person liable on terms that the benefit of such proof and of all money received by it in respect thereof shall be held on
trust for the Security Agent and applied in or towards discharge of the Guaranteed Liabilities in such manner as the Security Agent shall deem appropriate.
|
Any moneys received in connection with this Guarantee (whether before
or after any Incapacity of any of the Borrowers or the Guarantor) may be placed to the credit of a suspense account with a view to preserving the rights of the Security Agent or any of the Secured Creditors to prove for the whole of its claims
against the Borrowers or any of them or any other person liable or may be applied in or towards satisfaction of such of the Guaranteed Liabilities as the Security Agent may from time to time conclusively determine in its absolute discretion.
|
2.11
|
Settlements conditional
|
Any release, discharge or settlement between the Guarantor and
the Security Agent or any of the Secured Creditors shall be conditional upon no security, disposition or payment to the Security Agent or any of the Secured Creditors by the Borrowers or any of them or any other person liable being void, set aside
or ordered to be refunded pursuant to any enactment or law relating to bankruptcy, liquidation, administration or insolvency or for any other reason whatsoever and if such condition shall not be fulfilled the Security Agent shall be entitled to
enforce this Guarantee subsequently as if such release, discharge or settlement had not occurred and any such payment had not been made.
|
2.12
|
Guarantor to deliver up certain property
|
If, contrary to clauses 2.4 or 2.9, the
Guarantor takes or receives the benefit of any security or receives or recovers any money or other property, such security, money or other property shall be held on trust for the Security Agent and shall be delivered to the Security Agent on demand.
|
2.13
|
Retention of this Guarantee
|
The Security Agent shall be entitled to retain this
Guarantee after as well as before the payment or discharge of all the Guaranteed Liabilities for such period as the Security Agent may determine but in any event for no longer than thirty six (36) months after the payment and discharge in full
of the Guaranteed Liabilities.
|
3.1
|
No set off or counterclaim
|
All payments to be made by the Guarantor under this
Guarantee shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 3.2, free and clear of any deductions or withholdings, in Dollars on the due date to such account of the Security Agent as it may
specify in writing to the Guarantor.
|
3.2
|
Grossing up for Taxes
|
If at any time the Guarantor is required to make any deduction or
withholding in respect of Taxes from any payment due under this Guarantee for the account of the Security Agent (or if the Security Agent is required to make any such deduction or withholding from a payment to a Secured Creditor of moneys received
under this Guarantee), the sum due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Security Agent or, as the case may be, such Secured
Creditor receives on the due date for such payment (and retains, free from any liability
5
in respect of such deduction or withholding) a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made and the Guarantor shall
indemnify the Security Agent against any losses or costs incurred by it by reason of any failure of the Guarantor to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The
Guarantor shall promptly deliver to the Security Agent any receipts, certificates or other proof evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
If the Security Agent receives for its own account a repayment or credit in
respect of tax on account for which the Guarantor made an increased payment under clause 3.2, it shall pay to the Guarantor a sum equal to the repayment or credit received, provided always that:
|
3.3.1
|
the Security Agent can do so without prejudicing the retention of the amount of such repayment or credit and without prejudice to the right of the Security Agent to obtain any other relief or allowance which may be
available to it;
|
|
3.3.2
|
the Security Agent shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a number of transactions;
|
|
3.3.3
|
nothing in this clause shall entitle the Guarantor to enquire about the Security Agent’s tax affairs or oblige the Security Agent to arrange its tax affairs in any particular manner, to disclose any information
regarding its tax affair and computations, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;
|
|
3.3.4
|
nothing in this clause shall oblige the Security Agent to make a payment which exceeds any repayment or credit in respect of tax on account of which the Guarantor has made an increased payment under clause 3.2; and
|
|
3.3.5
|
any allocation or determination made by the Security Agent under or in connection with this clause shall be binding on the Guarantor.
|
If any sum due from the Guarantor under this Guarantee or any order
or judgment given or made in relation hereto has to be converted from the currency (the “
first currency
”) in which the same is payable under this Guarantee or under such order or judgment into another currency (the “
second
currency
”) for the purpose of (a) making or filing a claim or proof against the Guarantor, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to this Guarantee,
the Guarantor shall indemnify and hold harmless the Security Agent from and against any loss suffered as a result of any difference between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into
the second currency and (ii) the rate or rates of exchange at which the Security Agent may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof. The Security Agent will give two (2) days’ notice to the Guarantor prior to proceeding to any such conversion from the first currency to the second currency. Any amount due from the Guarantor under
this clause 3.4 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Guarantee and the term “
rate of exchange
” includes any premium and costs of
exchange payable in connection with the purchase of the first currency with the second currency.
6
|
4
|
Representations and warranties
|
|
4.1
|
Continuing representations and warranties
|
The Guarantor represents and warrants to the
Security Agent that:
the Guarantor is duly incorporated and validly existing in good standing
under the laws of Bermuda as a limited liability company and has power to carry on its business as it is now being conducted and to own its property and other assets;
the Guarantor has power to execute, deliver and perform its obligations under
this Guarantee; all necessary corporate, shareholder (if required by law) and other action has been taken to authorise the execution, delivery and performance of the same;
|
4.1.3
|
Binding obligations
|
this Guarantee constitutes valid and legally binding obligations of the
Guarantor enforceable in accordance with its terms;
|
4.1.4
|
No conflict with other obligations
|
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, this Guarantee by the Guarantor will not:
|
|
(i)
|
contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Guarantor is subject; or
|
|
|
(ii)
|
conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Guarantor is a party or is subject or by which it or any of its property is
bound; or
|
|
|
(iii)
|
contravene or conflict with any provision of the constitutional documents of the Guarantor; or
|
|
|
(iv)
|
result in the creation or imposition of or oblige the Guarantor to create any Encumbrance on any of the undertakings, assets, rights or revenues of the Guarantor;
|
no litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of the Guarantor, threatened against the Guarantor which could have a material adverse effect on the management, operations, results of operations, business, properties, performance, prospects, assets, condition
(financial or otherwise) of the Guarantor;
|
4.1.6
|
No filings required
|
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of this Guarantee that it or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or
charge be paid in any Relevant Jurisdiction on or in relation to this Guarantee and this Guarantee is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
7
the choice of English law to govern this Guarantee and the submission by the
Guarantor to the non-exclusive jurisdiction of the English courts are valid and binding;
neither the Guarantor nor any of its assets is entitled to immunity on the grounds
of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement);
every consent, authorisation, licence or approval of, or registration with
or declaration to, governmental or public bodies or authorities or courts required by the Guarantor to authorise, or required by the Guarantor in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this
Guarantee or the performance by the Guarantor of its obligations under this Guarantee has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed
in, or in connection with, this Guarantee;
the Guarantor is legally and ultimately beneficially owned by such person or
persons, and in such percentages, as have been disclosed by or on behalf of the Borrowers or any other Security Party to the Agent and/or the Arranger in the negotiation of the Agreement and/or this Guarantee; and
|
|
(a)
|
the Guarantor is not unable, nor admits nor has admitted its inability, to pay its debts nor has suspended making payments on any of its debts; and
|
|
|
(b)
|
the Guarantor has not, by reason of actual or anticipated financial difficulties commenced, or intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Indebtedness.
|
|
4.2
|
Initial representations and warranties
|
The Guarantor further represents and warrants to
the Security Agent that:
the obligations of the Guarantor under this Guarantee are direct, general and
unconditional obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of the Guarantor except for obligations which are mandatorily preferred by operation of law and not
by contract;
|
4.2.2
|
No default under other Indebtedness
|
the Guarantor is not (nor would with the giving of notice
or lapse of time or the satisfaction of any other condition or combination thereof be) in breach of or in default under any agreement relating to Indebtedness to which it is a party or by which it may be bound;
the information, exhibits and reports furnished by the Guarantor to the Creditors
or any of them in connection with the negotiation and preparation of this Guarantee are true and accurate in all material respects and not misleading, do not omit material facts and all
8
reasonable enquiries have been made to verify the facts and statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading;
|
4.2.4
|
No withholding Taxes
|
no Taxes are imposed by withholding or otherwise on any payment to be
made by the Guarantor under this Guarantee or are imposed on or by virtue of the execution or delivery by the Guarantor of this Guarantee or any other document or instrument to be executed or delivered under this Guarantee;
no Default has occurred and is continuing; and
|
4.2.6
|
No material adverse change
|
to the best of the Guarantor’s knowledge, there has been no
material adverse change in the management, operations, results of operations, business, properties, prospects, assets, condition (financial or otherwise) of the Guarantor from that described by or on behalf of the Guarantor or any other Security
Party to the Creditors or any of them in the negotiation of the Agreement and/or this Guarantee.
|
4.3
|
Repetition of representations and warranties
|
On and as of each Drawdown Date and
(except in relation to the representations and warranties in clause 4.2) on each Interest Payment Date, the Guarantor shall:
|
4.3.1
|
be deemed to repeat the representations and warranties in clauses 4.1 and 4.2 as if made with reference to the facts and circumstances existing on such day; and
|
|
4.3.2
|
be deemed to further represent and warrant to the Security Agent that the then latest audited financial statements delivered to the Security Agent under this Guarantee (if any) have been prepared in accordance with the
Applicable Accounting Principles which have been consistently applied and present fairly and accurately the consolidated financial position of the Guarantor and its Subsidiaries as at the end of the financial period to which the same relate and the
consolidated results of the operations of the Guarantor and its Subsidiaries for the financial period to which the same relate and, as at the end of such financial period, neither the Guarantor nor any of its Subsidiaries had any significant
liabilities (contingent or otherwise) or any unrealised or anticipated losses which are not disclosed by, or reserved against or provided for in, such financial statements.
|
The Guarantor undertakes with the Security Agent that, from the date of this
Guarantee and so long as any moneys are owing under any of the Security Documents (except where the Guarantor has discharged in full the Guaranteed Liabilities) and while all or any part of the Total Commitment remains outstanding, it will:
promptly inform the Security Agent of any occurrence of which it becomes
aware which might adversely affect its ability to perform its obligations under this Guarantee and, without limiting the generality of the foregoing, will inform the Security Agent of any Default forthwith upon becoming aware thereof and will from
time to time, if so reasonably requested by the Security Agent, confirm to the Security Agent in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing;
9
|
5.1.2
|
Consents and licences
|
without prejudice to clauses 4.1 of this Guarantee, obtain or cause to
be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all the obligations of the Guarantor under this Guarantee;
ensure that its obligations under this Guarantee shall, without prejudice to the
provisions of clause 5.2, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract;
|
5.1.4
|
Financial statements
|
prepare or cause to be prepared consolidated financial statements of the
Guarantor and its Subsidiaries in accordance with the Applicable Accounting Principles consistently applied in respect of each financial year (starting with the financial year ending on 31 December 2008) and cause the same to be reported on by
their auditors and deliver as many copies of the same as the Security Agent may reasonably require as soon as practicable but not later than one hundred and eighty (180) days after the end of the financial year to which they relate;
|
5.1.5
|
Know your customer information
|
deliver to the Agent such documents and evidence as the Agent
shall from time to time require relating to the verification of identity and knowledge of the Agent’s or any Bank’s customers and the compliance by the Agent or any Bank with all necessary “know your customer” or similar checks,
always on the basis of applicable laws and regulations or the Agent’s or any Bank’s own internal guidelines, in each case as such laws, regulations or internal guidelines apply from time to time; and
|
5.1.6
|
Provision of further information
|
provide the Security Agent with such financial or other
information concerning the Guarantor, its Subsidiaries and their respective affairs (including, without limitation, their activities, financial standing, operations and information on the realised and budgeted operating expenses and cash flow
forecasts) as the Security Agent may from time to time reasonably require.
|
5.2
|
Negative undertakings
|
The Guarantor undertakes with the Security Agent that, from the
date of this Guarantee and so long as any moneys are owing under the Security Documents (except where the Guarantor has discharged in full the Guaranteed Liabilities) and while all or any part of the Total Commitment remains outstanding, it will
not, without the prior written consent of the Security Agent (acting on the instructions of the Majority Banks):
merge or consolidate with any other person or enter into any demerger, amalgamation
or corporate reconstruction or redomiciliation of any type; or
undertake any business other than that conducted by it on the date of this
Guarantee.
10
The Guarantor authorises the Security Agent, at any time after the occurrence
of an Event of Default which is subsisting, to apply any credit balance to which the Guarantor is then entitled on any account of the Guarantor with the Security Agent at any of its branches in or towards satisfaction of any sum then due and payable
from the Guarantor to the Security Agent under this Guarantee. For this purpose the Security Agent is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application.
The Security Agent shall not be obliged to exercise any right given to it by this clause 6. The Security Agent shall notify the Guarantor and the Secured Creditors forthwith upon the exercise or purported exercise of any right of set-off giving full
details in relation thereto.
|
7
|
Benefit of this Guarantee
|
This Guarantee shall be binding upon the Guarantor and its
successors in title and shall enure for the benefit of the Security Agent and its successors in title and/or replacements. The Guarantor expressly acknowledges and accepts the provisions of clause 16 of the Agreement and agrees that any person who
replaces the Security Agent in accordance with such clause shall be entitled to the benefit of this Guarantee.
|
7.2
|
Changes in constitution or reorganisation of Secured Creditors
|
For the avoidance of
doubt and without prejudice to the provisions of clause 7.1, this Guarantee shall remain binding on the Guarantor notwithstanding any change in the constitution of any of the Secured Creditors or the Security Agent or its absorption in, or
amalgamation with, or the acquisition of all or part of its undertaking or assets by, any other person, or any reconstruction or reorganisation of any kind, to the intent that this Guarantee shall remain valid and effective in all respects in favour
of any successor in title or replacement of the Security Agent (which replacement shall have been appointed pursuant to clause 16 of the Agreement) in the same manner as if such successor in title or replacement had been named in this Guarantee as a
party instead of, or in addition to, the Security Agent.
|
7.3
|
No assignment by Guarantor
|
The Guarantor may not assign or transfer any of its rights
or obligations under this Guarantee.
|
7.4
|
Disclosure of information
|
The Security Agent may, with the prior consent of the
Guarantor (such consent not to be unreasonably withheld and the request for which to be promptly responded to), disclose to a prospective replacement of the Security Agent or a Transferee Bank or to any other person who may propose entering into
contractual relations with the Security Agent in relation to the Agreement such information about the Guarantor as the Security Agent shall consider appropriate.
11
|
8
|
Notices and other matters
|
Clauses 17.1 and 17.2 of the Agreement shall apply to this Guarantee as if set
out herein and every notice, request, demand or other communication under this Guarantee shall be sent:
|
|
|
|
|
|
|
8.1.1
|
|
if to the Guarantor at:
|
|
|
|
|
|
|
Ceres Shipping Ltd.
|
|
|
|
69 Akti Miaouli
|
|
|
|
Piraeus 185 37
|
|
|
|
Greece
|
|
|
|
|
|
|
|
Fax:
|
|
0030210 4283538
|
|
|
|
Attention:
|
|
Mrs Elly Eleftheriou
|
|
|
|
|
|
|
|
8.1.2
|
|
if to the Security Agent at:
|
|
|
|
|
|
|
BNP Paribas (Suisse) SA
Place de
Hollande 2
|
|
|
|
P.O. Box CH-1211
|
|
|
|
Geneva, 11
|
|
|
|
Switzerland
|
|
|
|
|
|
|
|
Fax:
|
|
+41 58 212 7650
|
|
|
|
Attention:
|
|
Shipping Dept/Greek Desk
|
or to such other address or facsimile number as is notified by the Guarantor or the Security Agent to the other
party to this Guarantee.
|
8.2
|
No implied waivers, remedies cumulative
|
No failure or delay on the part of the Security
Agent to exercise any power, right or remedy under this Guarantee shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any power, right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. The remedies provided in this Guarantee are cumulative and are not exclusive of any remedies provided by law.
All certificates, instruments and other documents to be delivered
under or supplied in connection with this Guarantee shall be in the English language or shall be accompanied by a certified English translation upon which the Security Agent shall be entitled to rely.
The Guarantor agrees to be bound by this Guarantee notwithstanding
that any other person intended to execute or to be bound by any other guarantee or assurance under or pursuant to the Agreement may not do so or may not be effectually bound and notwithstanding that such other guarantee or assurance may be
determined or be or become invalid or unenforceable against any other person, whether or not the deficiency is known to the Security Agent or any of the Secured Creditors.
The Guarantor agrees to reimburse the Security Agent on demand for all legal
and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Security Agent in relation to the enforcement of this Guarantee against the Guarantor.
If, at any time, any provision of this Guarantee is or becomes
illegal, invalid or unenforceable in any respect under any law or jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision in any other respect or under
the law of any other jurisdiction will be affected or impaired in any way.
12
This Guarantee is governed by and shall be construed in accordance with English
law.
|
9.2
|
Submission to jurisdiction
|
The Guarantor agrees for the benefit of the Security Agent
that any legal action or proceedings arising out of or in connection with this Guarantee against the Guarantor or any of its assets may be brought in the English courts, irrevocably and unconditionally submits to the jurisdiction of such courts and
irrevocably designates, appoints and empowers Unisea Maritime Ltd. at present of 14 Heafort Place, London SW1A 7DH, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or
proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the Guarantor in the courts of any other competent jurisdiction, nor shall the taking
of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The Guarantor further agrees that only the courts of England and not those of any other state shall have
jurisdiction to determine any claim which the Guarantor may have against the Security Agent arising out of or in connection with this Guarantee.
|
9.3
|
Contracts (Rights of Third Parties) Act 1999
|
No term of this Guarantee is enforceable
under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Guarantee.
IN WITNESS
whereof the
parties to this Guarantee have caused this Guarantee to be duly executed as a deed on the date first above written.
13
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
CERES SHIPPING LTD.
|
|
)
|
|
Attorney-in-Fact
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
)
|
|
Attorney-in-Fact
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation:
|
|
|
|
|
14
Private & Confidential
Dated 23 April 2008
|
|
|
|
|
|
|
|
|
BRETTA TANKER HOLDINGS INC.
|
|
(1)
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
(2)
|
CORPORATE GUARANTEE
Contents
|
|
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
|
1
|
|
Interpretation
|
|
|
1
|
|
|
|
|
|
|
2
|
|
Guarantee
|
|
|
2
|
|
|
|
|
|
|
3
|
|
Payments and Taxes
|
|
|
5
|
|
|
|
|
|
|
4
|
|
Representations and warranties
|
|
|
7
|
|
|
|
|
|
|
5
|
|
Undertakings
|
|
|
9
|
|
|
|
|
|
|
6
|
|
Set-off
|
|
|
11
|
|
|
|
|
|
|
7
|
|
Benefit of this Guarantee
|
|
|
11
|
|
|
|
|
|
|
8
|
|
Notices and other matters
|
|
|
12
|
|
|
|
|
|
|
9
|
|
Law and jurisdiction
|
|
|
13
|
|
THIS GUARANTEE
is dated 23 April 2008 and made
BETWEEN:
|
(1)
|
BRETTA TANKER HOLDINGS INC.
of Panama (the “
Guarantor
”); and
|
|
(2)
|
BNP PARIBAS (SUISSE) SA
, as security agent and trustee for and on behalf of the Secured Creditors (the “
Security Agent
”).
|
WHEREAS
:
|
(A)
|
by a loan agreement dated 23 April 2008 (the “
Agreement
”) made between (1) Fontvieille Shipholding Limited and Moneghetti Shipholding Limited as joint and several borrowers (the
“
Borrowers
”), (2) BNP Paribas (Suisse) SA as arranger, agent (in such capacity the “
Agent
”), Security Agent and account bank and (3) the banks and financial institutions referred to in schedule 1 to the
Agreement as lenders (the “
Banks
” and, together with the Agent, the “
Secured Creditors
”), the Banks agreed (
inter alia
) to make available to the Borrowers, upon the terms and conditions therein contained, a
loan of up to One hundred and thirty five million Dollars ($135,000,000);
|
|
(B)
|
pursuant to clause 16.14 of the Agreement, each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a trust deed dated 23 April 2008 and executed by the
Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Guarantee for and on behalf of itself and the Secured Creditors; and
|
|
(C)
|
the execution and delivery of this Guarantee is one of the conditions to each Bank making its Commitment available under the Agreement.
|
IT IS AGREED
as follows:
In this Guarantee, unless the context otherwise requires or unless
otherwise defined in this Guarantee, words and expressions defined in the Agreement and used in this Guarantee shall have the same meanings where used in this Guarantee.
In this Guarantee, unless the context otherwise requires:
“
Agent
” includes its successors in title and its replacements;
“
Applicable Accounting Principles
” means the most recent and up-to-date IFRS applicable at any relevant time;
“
Banks
” includes their respective successors in title and Transferee Banks;
“
Borrowed Money
” means Indebtedness in respect of (i) money borrowed or raised and debit balances at banks, (ii) any bond,
note, loan stock, debenture or similar debt instrument, (iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted (otherwise than on a non-recourse basis), (v) deferred payments for assets or services acquired, (vi)
finance leases and hire purchase contracts, (vii) swaps, forward exchange contracts, futures and other derivatives, (viii) any other transaction (including without limitation forward sale or purchase agreements) having the commercial effect of a
borrowing or raising of money or of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any person falling within any of (i) to (viii) above;
1
“
Collateral Instruments
” means notes, bills of exchange, certificates of deposit
and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or
be responsible directly or indirectly for, any indebtedness or liabilities of the Borrowers or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest of any kind;
“
Guarantee
” includes each separate or
independent stipulation or agreement by the Guarantor contained in this Guarantee;
“
Guaranteed Liabilities
” means all
moneys, obligations and liabilities expressed to be guaranteed by the Guarantor in clause 2.1;
“
Guarantor
” includes
the successors in title of the Guarantor;
“
Incapacity
” means, in relation to a person, the bankruptcy, insolvency,
liquidation, dissolution, winding-up, administration, receivership, amalgamation, reconstruction or other incapacity of that person whatsoever (and, in the case of a partnership, includes the termination or change in the composition of the
partnership);
“
Relevant Jurisdiction
” means any jurisdiction in which or where the Guarantor is incorporated, resident,
domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected; and
“
Security Agent
” includes the successors in title and replacements of the Security Agent.
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Guarantee.
|
1.4
|
Construction of certain terms
|
Clause 1.4 of the Agreement shall apply to this Guarantee
as if set out herein.
In consideration of the Banks making or continuing loans or advances
to, or otherwise giving credit or granting banking facilities or accommodation or granting time to, the Borrowers or any of them pursuant to the Agreement, the Guarantor hereby guarantees to pay to the Security Agent, for the account of the Secured
Creditors, on demand by the Security Agent all moneys and discharge all obligations and liabilities now or hereafter due, owing or incurred by the Borrowers or any of them to the Secured Creditors or any of them under or pursuant to the Agreement
and the other Security Documents or any of them, when the same become due for payment or discharge whether by acceleration or otherwise, and whether such moneys, obligations or liabilities are express or implied, present, future or contingent, joint
or several, incurred as principal or surety, originally owing to the Secured Creditors or any of them or purchased or otherwise acquired by any of them, denominated in Dollars or in any other currency, or incurred on any banking account or in any
other manner whatsoever provided always that the Guarantor’s total and several liability under this clause 2.1 shall not exceed fifty per cent (50%) of the total amount of principal, interest, fees, commissions, costs and expenses and all
other amounts of whatsoever nature owing by the Borrowers under the Agreement and the other Security Documents at any relevant time.
Such
liabilities shall, without limitation, include interest (as well after as before judgment) to date of payment at such rates and upon such terms as may from time to time be agreed,
2
commission, fees and other charges and all legal and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Secured Creditors or any of them in
relation to any such moneys, obligations or liabilities or generally in respect of the Borrowers, the Guarantor or any Collateral Instrument.
|
2.2
|
Guarantor as principal debtor; indemnity
|
As a separate and independent stipulation, the
Guarantor agrees that if any purported obligation or liability of the Borrowers or any of them which would have been the subject of this Guarantee had it been valid and enforceable is not or ceases to be valid or enforceable against the Borrowers or
any of them on any ground whatsoever whether or not known to the Security Agent and/or the Secured Creditors or any of them (including, without limitation, any irregular exercise or absence of any corporate power or lack of authority of, or breach
of duty by, any person purporting to act on behalf of the Borrowers or any of them or any legal or other limitation, whether under the Limitation Acts or otherwise or any disability or Incapacity or any change in the constitution of the Borrowers or
any of them) the Guarantor shall nevertheless be liable to the Security Agent in respect of that purported obligation or liability as if the same were fully valid and enforceable and the Guarantor were the principal debtor in respect thereof
provided always that the Guarantor’s total and several liability under this clause 2.2 shall not exceed fifty per cent (50%) of the total amount of principal, interest, fees, commissions, costs and expenses and all other amounts of
whatsoever nature owing by the Borrowers under the Agreement and the other Security Documents at any relevant time. The Guarantor hereby agrees to keep the Security Agent fully indemnified on demand against all damages, losses, costs and expenses
arising from any failure of the Borrowers or any of them to perform or discharge any such purported obligation or liability, subject always to the fifty per cent (50%) limitation referred above in this clause 2.2.
|
2.3
|
Statements of account conclusive
|
Any statement of account, signed as correct by an
officer of the Security Agent, showing the amount of the Guaranteed Liabilities shall, in the absence of manifest error, be binding on and conclusive against the Guarantor.
|
2.4
|
No security taken by Guarantor
|
The Guarantor warrants that it has not taken or
received, and undertakes that until all the Guaranteed Liabilities of the Borrowers have been paid or discharged in full, it will not take or receive, the benefit of any security from the Borrowers or any of them or any other person in respect of
its obligations under this Guarantee.
Subject to the fifty per cent (50%) limitation referred to in clause 2.1
and clause 2.2, the Guarantor agrees to pay interest on each amount demanded of it under this Guarantee from the date of such demand until payment (as well after as before judgment) at the rate specified in clause 3.4 of the Agreement which shall
apply to this Guarantee
mutatis mutandis
. Such interest shall be compounded at the end of each period determined for this purpose by the Security Agent in the event of it not being paid when demanded but without prejudice to any Secured
Creditor’s right to require payment of such interest.
|
2.6
|
Continuing security and other matters
|
This Guarantee shall:
|
2.6.1
|
secure the ultimate balance from time to time owing to the Secured Creditors or any of them by the Borrowers or any of them and shall be a continuing security, notwithstanding any settlement of account or other matter
whatsoever;
|
|
2.6.2
|
be in addition to any present or future Collateral Instrument, right or remedy held by or available to the Security Agent or any of the Secured Creditors; and
|
3
|
2.6.3
|
not be in any way prejudiced or affected by the existence of any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by
the Security Agent or any of the Secured Creditors dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or indulgence or compounding with any other person liable.
|
|
2.7
|
Liability unconditional
|
The liability of the Guarantor shall not be affected nor shall
this Guarantee be discharged or reduced by reason of:
|
2.7.1
|
the Incapacity or any change in the name, style or constitution of the Borrowers or any of them or any other person liable;
|
|
2.7.2
|
the Security Agent or any of the Secured Creditors granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, the Borrowers or any of them or any other
person liable or renewing, determining, varying or increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting or varying any compromise, arrangement or settlement or
omitting to claim or enforce payment from the Borrowers or any of them or any other person liable; or
|
|
2.7.3
|
any act or omission which would not have discharged or affected the liability of the Guarantor had it been a principal debtor instead of a guarantor or by anything done or omitted which but for this provision might
operate to exonerate the Guarantor.
|
|
2.8
|
Collateral Instruments
|
Neither the Security Agent nor any of the Secured Creditors
shall be obliged to make any claim or demand on the Borrowers or any of them or to resort to any Collateral Instrument or other means of payment now or hereafter held by or available to it before the Security Agent enforcing this Guarantee and no
action taken or omitted by the Security Agent or any of the Secured Creditors in connection with any such Collateral Instrument or other means of payment shall discharge, reduce, prejudice or affect the liability of the Guarantor under this
Guarantee.
|
2.9
|
Waiver of Guarantor’s rights
|
Until all the Guaranteed Liabilities have been paid,
discharged or satisfied in full (and notwithstanding payment of a dividend in any liquidation or under any compromise or arrangement) the Guarantor agrees that, without the prior written consent of the Security Agent (acting on the instructions of
the Majority Banks), it will not:
|
2.9.1
|
exercise its rights of subrogation, reimbursement and indemnity against the Borrowers or any of them or any other person liable;
|
|
2.9.2
|
demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to the Guarantor from the Borrowers or any of them or from any other person liable or demand or accept any Collateral Instrument in
respect of the same or dispose of the same;
|
|
2.9.3
|
take any step to enforce any right against the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities; or
|
|
2.9.4
|
claim any set-off or counterclaim against the Borrowers or any of them or any other person liable or claim or prove in competition with the Security
Agent or any of the Secured Creditors in the liquidation of the Borrowers or any of them or any other person liable or have the benefit of, or share in, any payment from or composition with the Borrowers or any of them or any other person liable or
any other Collateral Instrument now or hereafter held by the Security Agent or any of the Secured Creditors for any Guaranteed Liabilities or for the obligations or liabilities of any other person liable but so that, if so directed by the Security
Agent, it will prove for the whole or any part of its claim in the liquidation of the Borrowers or
|
4
|
|
any of them or any other person liable on terms that the benefit of such proof and of all money received by it in respect thereof shall be held on trust for the Security Agent and applied in or
towards discharge of the Guaranteed Liabilities in such manner as the Security Agent shall deem appropriate.
|
Any moneys received in connection with this Guarantee (whether before
or after any Incapacity of any of the Borrowers or the Guarantor) may be placed to the credit of a suspense account with a view to preserving the rights of the Security Agent or any of the Secured Creditors to prove for the whole of its claims
against the Borrowers or any of them or any other person liable or may be applied in or towards satisfaction of such of the Guaranteed Liabilities as the Security Agent may from time to time conclusively determine in its absolute discretion.
|
2.11
|
Settlements conditional
|
Any release, discharge or settlement between the Guarantor and
the Security Agent or any of the Secured Creditors shall be conditional upon no security, disposition or payment to the Security Agent or any of the Secured Creditors by the Borrowers or any of them or any other person liable being void, set aside
or ordered to be refunded pursuant to any enactment or law relating to bankruptcy, liquidation, administration or insolvency or for any other reason whatsoever and if such condition shall not be fulfilled the Security Agent shall be entitled to
enforce this Guarantee subsequently as if such release, discharge or settlement had not occurred and any such payment had not been made.
|
2.12
|
Guarantor to deliver up certain property
|
If, contrary to clauses 2.4 or 2.9, the
Guarantor takes or receives the benefit of any security or receives or recovers any money or other property (but excluding any dividends paid by a Borrower to the Guarantor, if such payment is permitted by the terms of the Agreement), such security,
money or other property shall be held on trust for the Security Agent and shall be delivered to the Security Agent on demand.
|
2.13
|
Retention of this Guarantee
|
The Security Agent shall be entitled to retain this
Guarantee after as well as before the payment or discharge of all the Guaranteed Liabilities for such period as the Security Agent may determine but in any event for no longer than thirty six (36) months after the payment and discharge in full
of the Guaranteed Liabilities.
|
3.1
|
No set off or counterclaim
|
All payments to be made by the Guarantor under this
Guarantee shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 3.2, free and clear of any deductions or withholdings, in Dollars on the due date to such account of the Security Agent as it may
specify in writing to the Guarantor.
|
3.2
|
Grossing up for Taxes
|
If at any time the Guarantor is required to make any deduction or
withholding in respect of Taxes from any payment due under this Guarantee for the account of the Security Agent (or if the Security Agent is required to make any such deduction or withholding from a payment to a Secured Creditor of moneys received
under this Guarantee), the sum due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Security Agent or, as the case may be, such Secured
Creditor receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding) a net sum equal to the sum which it would have
5
received had no such deduction or withholding been required to be made and the Guarantor shall indemnify the Security Agent against any losses or costs incurred by it by reason of any failure of
the Guarantor to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Guarantor shall promptly deliver to the Security Agent any receipts, certificates or other proof
evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
If the Security Agent receives for its own account a repayment or credit in
respect of tax on account for which the Guarantor made an increased payment under clause 3.2, it shall pay to the Guarantor a sum equal to the repayment or credit received, provided always that:
|
3.3.1
|
the Security Agent can do so without prejudicing the retention of the amount of such repayment or credit and without prejudice to the right of the Security Agent to obtain any other relief or allowance which may be
available to it;
|
|
3.3.2
|
the Security Agent shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a number of transactions;
|
|
3.3.3
|
nothing in this clause shall entitle the Guarantor to enquire about the Security Agent’s tax affairs or oblige the Security Agent to arrange its tax affairs in any particular manner, to disclose any information
regarding its tax affair and computations, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;
|
|
3.3.4
|
nothing in this clause shall oblige the Security Agent to make a payment which exceeds any repayment or credit in respect of tax on account of which the Guarantor has made an increased payment under clause 3.2; and
|
|
3.3.5
|
any allocation or determination made by the Security Agent under or in connection with this clause shall be binding on the Guarantor.
|
If any sum due from the Guarantor under this Guarantee or any order
or judgment given or made in relation hereto has to be converted from the currency (the “
first currency
”) in which the same is payable under this Guarantee or under such order or judgment into another currency (the “
second
currency
”) for the purpose of (a) making or filing a claim or proof against the Guarantor, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to
this Guarantee, the Guarantor shall indemnify and hold harmless the Security Agent from and against any loss suffered as a result of any difference between (i) the rate of exchange used for such purpose to convert the sum in question from the
first currency into the second currency and (ii) the rate or rates of exchange at which the Security Agent may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof. The Security Agent will give two (2) days’ notice to the Guarantor prior to proceeding to any such conversion from the first currency to the second currency.
Any amount due from the Guarantor under this clause 3.4 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Guarantee and the term “
rate of
exchange
” includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
6
|
4
|
Representations and warranties
|
|
4.1
|
Continuing representations and warranties
|
The Guarantor represents and warrants to the
Security Agent that:
the Guarantor is duly incorporated and validly existing in good standing
under the laws of Panama as a limited liability company and has power to carry on its business as it is now being conducted and to own its property and other assets;
the Guarantor has power to execute, deliver and perform its obligations under
this Guarantee; all necessary corporate, shareholder (if required by law) and other action has been taken to authorise the execution, delivery and performance of the same;
|
4.1.3
|
Binding obligations
|
this Guarantee constitutes valid and legally binding obligations of the
Guarantor enforceable in accordance with its terms;
|
4.1.4
|
No conflict with other obligations
|
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, this Guarantee by the Guarantor will not:
|
|
(i)
|
contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Guarantor is subject; or
|
|
|
(ii)
|
conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Guarantor is a party or is subject or by which it or any of its property is
bound; or
|
|
|
(iii)
|
contravene or conflict with any provision of the constitutional documents of the Guarantor; or
|
|
|
(iv)
|
result in the creation or imposition of or oblige the Guarantor to create any Encumbrance on any of the undertakings, assets, rights or revenues of the Guarantor;
|
no litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of the Guarantor, threatened against the Guarantor or any of its Subsidiaries which could have a material adverse effect on the management, operations, results of operations, business, properties, performance,
prospects, assets, condition (financial or otherwise) of the Guarantor or any of its Subsidiaries;
|
4.1.6
|
No filings required
|
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of this Guarantee that it or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or
charge be paid in any Relevant Jurisdiction on or in relation to this Guarantee and this Guarantee is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
7
the choice of English law to govern this Guarantee and the submission by the
Guarantor to the non-exclusive jurisdiction of the English courts are valid and binding;
neither the Guarantor nor any of its assets is entitled to immunity on the grounds
of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement);
every consent, authorisation, licence or approval of, or registration with
or declaration to, governmental or public bodies or authorities or courts required by the Guarantor to authorise, or required by the Guarantor in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this
Guarantee or the performance by the Guarantor of its obligations under this Guarantee has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed
in, or in connection with, this Guarantee;
the Guarantor is legally and ultimately beneficially owned by such person or
persons, and in such percentages, as have been disclosed by or on behalf of the Borrowers or any other Security Party to the Agent and/or the Arranger in the negotiation of the Agreement and/or this Guarantee; and
|
|
(a)
|
neither the Guarantor nor any of its Subsidiaries is unable, or admits or has admitted its inability, to pay its debts or has suspended making payments on any of its debts; and
|
|
|
(b)
|
neither the Guarantor nor any of its Subsidiaries has by reason of actual or anticipated financial difficulties commenced, or intends to commence, negotiations with one or more of its creditors with a view to
rescheduling any of its Indebtedness.
|
|
4.2
|
Initial representations and warranties
|
The Guarantor further represents and warrants to
the Security Agent that:
the obligations of the Guarantor under this Guarantee are direct, general and
unconditional obligations of the Guarantor and rank at least pari passu with all other present and future unsecured and unsubordinated Indebtedness of the Guarantor except for obligations which are mandatorily preferred by operation of law and not
by contract;
|
4.2.2
|
No default under other Indebtedness
|
the Guarantor is not (nor would with the giving of notice
or lapse of time or the satisfaction of any other condition or combination thereof be) in breach of or in default under any agreement relating to Indebtedness to which it is a party or by which it may be bound;
the information, exhibits and reports furnished by the Guarantor to the Creditors
or any of them in connection with the negotiation and preparation of this Guarantee are true and accurate in all material respects and not misleading, do not omit material facts and all
8
reasonable enquiries have been made to verify the facts and statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading;
|
4.2.4
|
No withholding Taxes
|
no Taxes are imposed by withholding or otherwise on any payment to be
made by the Guarantor under this Guarantee or are imposed on or by virtue of the execution or delivery by the Guarantor of this Guarantee or any other document or instrument to be executed or delivered under this Guarantee;
no Default has occurred and is continuing; and
|
4.2.6
|
No material adverse change
|
to the best of the Guarantor’s knowledge, there has been no
material adverse change in the management, operations, results of operations, business, properties, prospects, assets, condition (financial or otherwise) of the Guarantor or any of its Subsidiaries from that described by or on behalf of the
Guarantor or any other Security Party to the Creditors or any of them in the negotiation of the Agreement and/or this Guarantee.
|
4.3
|
Repetition of representations and warranties
|
On and as of each Drawdown Date and
(except in relation to the representations and warranties in clause 4.2) on each Interest Payment Date, the Guarantor shall:
|
4.3.1
|
be deemed to repeat the representations and warranties in clauses 4.1 and 4.2 as if made with reference to the facts and circumstances existing on such day; and
|
|
4.3.2
|
be deemed to further represent and warrant to the Security Agent that the then latest audited financial statements delivered to the Security Agent under this Guarantee (if any) have been prepared in accordance with the
Applicable Accounting Principles which have been consistently applied and present fairly and accurately the consolidated financial position of the Guarantor and its Subsidiaries as at the end of the financial period to which the same relate and the
consolidated results of the operations of the Guarantor and its Subsidiaries for the financial period to which the same relate and, as at the end of such financial period, neither the Guarantor nor any of its Subsidiaries had any significant
liabilities (contingent or otherwise) or any unrealised or anticipated losses which are not disclosed by, or reserved against or provided for in, such financial statements.
|
The Guarantor undertakes with the Security Agent that, from the date of this
Guarantee and so long as any moneys are owing under any of the Security Documents and while all or any part of the Total Commitment remains outstanding, it will:
promptly inform the Security Agent of any occurrence of which it becomes
aware which might adversely affect the ability of any Security Party to perform its obligations under any of the Security Documents or the Underlying Documents and, without limiting the generality of the foregoing, will inform the Security Agent of
any Default forthwith upon becoming aware thereof and will from time to time, if so reasonably requested by the Security Agent, confirm to the Security Agent in writing that, save as otherwise stated in such confirmation, no Default has occurred and
is continuing;
9
|
5.1.2
|
Consents and licences
|
without prejudice to clauses 4.1 of this Guarantee, obtain or cause to
be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all the obligations of the Guarantor under this Guarantee;
ensure that its obligations under this Guarantee shall, without prejudice to the
provisions of clause 5.2, at all times rank at least pari passu with all its other present and future unsecured and unsubordinated Indebtedness with the exception of any obligations which are mandatorily preferred by law and not by contract;
|
5.1.4
|
Financial statements
|
prepare or cause to be prepared consolidated financial statements of the
Guarantor and its Subsidiaries in accordance with the Applicable Accounting Principles consistently applied in respect of each financial year (starting with the financial year ending on 31 December 2008) and cause the same to be reported on by
their auditors and deliver as many copies of the same as the Security Agent may reasonably require as soon as practicable but not later than one hundred and eighty (180) days after the end of the financial year to which they relate;
|
5.1.5
|
Know your customer information
|
deliver to the Agent such documents and evidence as the Agent
shall from time to time require relating to the verification of identity and knowledge of the Agent’s or any Bank’s customers and the compliance by the Agent or any Bank with all necessary “know your customer” or similar checks,
always on the basis of applicable laws and regulations or the Agent’s or any Bank’s own internal guidelines, in each case as such laws, regulations or internal guidelines apply from time to time; and
|
5.1.6
|
Provision of further information
|
provide the Security Agent with such financial or other
information concerning any Borrower, the Guarantor and their respective Related Companies and any other Relevant Parties and their respective affairs (including, without limitation, their activities, financial standing, Indebtedness, operations, the
performance of the Ships or any other vessels and information on the realised and budgeted operating expenses and cash flow forecasts) as the Security Agent may from time to time require.
|
5.2
|
Negative undertakings
|
The Guarantor undertakes with the Security Agent that, from the
date of this Guarantee and so long as any moneys are owing under the Security Documents and while all or any part of the Total Commitment remains outstanding, it will not, without the prior written consent of the Security Agent (acting on the
instructions of the Majority Banks):
permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise
or be created or extended over all or any part of their shares in the Borrowers or either of them;
merge or consolidate with any other person or enter into any demerger, amalgamation
or corporate reconstruction or redomiciliation of any type;
10
sell, transfer, abandon, lend or otherwise dispose of or cease to exercise direct
control over any part of their shares in the Borrowers or either of them whether by one or a series of transactions related or not; or
undertake any business other than that conducted by it on the date of this
Guarantee.
The Guarantor authorises the Security Agent, at any time after the occurrence
of an Event of Default which is subsisting, to apply any credit balance to which the Guarantor is then entitled on any account of the Guarantor with the Security Agent at any of its branches in or towards satisfaction of any sum then due and payable
from the Guarantor to the Security Agent under this Guarantee. For this purpose the Security Agent is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application.
The Security Agent shall not be obliged to exercise any right given to it by this clause 6. The Security Agent shall notify the Guarantor and the Secured Creditors forthwith upon the exercise or purported exercise of any right of set-off giving full
details in relation thereto.
|
7
|
Benefit of this Guarantee
|
This Guarantee shall be binding upon the Guarantor and its
successors in title and shall enure for the benefit of the Security Agent and its successors in title and/or replacements. The Guarantor expressly acknowledges and accepts the provisions of clause 16 of the Agreement and agrees that any person who
replaces the Security Agent in accordance with such clause shall be entitled to the benefit of this Guarantee.
|
7.2
|
Changes in constitution or reorganisation of Secured Creditors
|
For the avoidance of
doubt and without prejudice to the provisions of clause 7.1, this Guarantee shall remain binding on the Guarantor notwithstanding any change in the constitution of any of the Secured Creditors or the Security Agent or its absorption in, or
amalgamation with, or the acquisition of all or part of its undertaking or assets by, any other person, or any reconstruction or reorganisation of any kind, to the intent that this Guarantee shall remain valid and effective in all respects in favour
of any successor in title or replacement of the Security Agent (which replacement shall have been appointed pursuant to clause 16 of the Agreement) in the same manner as if such successor in title or replacement had been named in this Guarantee as a
party instead of, or in addition to, the Security Agent.
|
7.3
|
No assignment by Guarantor
|
The Guarantor may not assign or transfer any of its rights
or obligations under this Guarantee.
|
7.4
|
Disclosure of information
|
The Security Agent may, with the prior consent of the
Guarantor (such consent not to be unreasonably withheld and the request for which to be promptly responded to), disclose to a prospective replacement of the Security Agent or a Transferee Bank or to any other person who may propose entering into
contractual relations with the Security Agent in relation to the Agreement such information about the Guarantor as the Security Agent shall consider appropriate.
11
|
8
|
Notices and other matters
|
Clauses 17.1 and 17.2 of the Agreement shall apply to this Guarantee as if set
out herein and every notice, request, demand or other communication under this Guarantee shall be sent:
|
8.1.1
|
if to the Guarantor at:
|
Bretta Tanker Holdings Inc.
c/o C Transport Maritime S.A.M.
Gildo Pastor Center
7 Rue du
Gabian
98000 Monaco
|
|
|
|
|
Fax:
|
|
+377 9798 2302
|
|
Attention:
|
|
Mr Luigi Pulcini
|
|
8.1.2
|
if to the Security Agent at:
|
BNP Paribas (Suisse) SA
Place de Hollande 2
P.O. Box
CH-1211
Geneva, 11
Switzerland
|
|
|
|
|
Fax:
|
|
+41 58 212 7650
|
|
Attention:
|
|
Shipping Dept/Greek Desk
|
or to such other address or facsimile number as is notified by the Guarantor or the Security Agent to the other
party to this Guarantee.
|
8.2
|
No implied waivers, remedies cumulative
|
No failure or delay on the part of the Security
Agent to exercise any power, right or remedy under this Guarantee shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any power, right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. The remedies provided in this Guarantee are cumulative and are not exclusive of any remedies provided by law.
All certificates, instruments and other documents to be delivered
under or supplied in connection with this Guarantee shall be in the English language or shall be accompanied by a certified English translation upon which the Security Agent shall be entitled to rely.
The Guarantor agrees to be bound by this Guarantee notwithstanding
that any other person intended to execute or to be bound by any other guarantee or assurance under or pursuant to the Agreement may not do so or may not be effectually bound and notwithstanding that such other guarantee or assurance may be
determined or be or become invalid or unenforceable against any other person, whether or not the deficiency is known to the Security Agent or any of the Secured Creditors.
12
The Guarantor agrees to reimburse the Security Agent on demand for all legal
and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Security Agent in relation to the enforcement of this Guarantee against the Guarantor.
If, at any time, any provision of this Guarantee is or becomes
illegal, invalid or unenforceable in any respect under any law or jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision in any other respect or under
the law of any other jurisdiction will be affected or impaired in any way.
This Guarantee is governed by and shall be construed in accordance with English
law.
|
9.2
|
Submission to jurisdiction
|
The Guarantor agrees for the benefit of the Security Agent
that any legal action or proceedings arising out of or in connection with this Guarantee against the Guarantor or any of its assets may be brought in the English courts, irrevocably and unconditionally submits to the jurisdiction of such courts and
irrevocably designates, appoints and empowers Unisea Maritime Ltd. at present of 14 Headfort Place, London SW1 7DH, England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or
proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the Guarantor in the courts of any other competent jurisdiction, nor shall the taking
of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The Guarantor further agrees that only the courts of England and not those of any other state shall have
jurisdiction to determine any claim which the Guarantor may have against the Security Agent arising out of or in connection with this Guarantee.
|
9.3
|
Contracts (Rights of Third Parties) Act 1999
|
No term of this Guarantee is enforceable
under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Guarantee.
IN WITNESS
whereof the
parties to this Guarantee have caused this Guarantee to be duly executed as a deed on the date first above written.
13
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
BRETTA TANKER HOLDINGS INC.
|
|
)
|
|
Attorney-in-Fact
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
)
|
|
Attorney-in-Fact
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation:
|
|
|
|
|
14
Private & Confidential
Dated 23 April 2008
|
|
|
|
|
|
|
|
|
EURONAV N.V.
|
|
(1)
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
(2)
|
CORPORATE GUARANTEE
Contents
|
|
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
|
1
|
|
Interpretation
|
|
|
1
|
|
|
|
|
|
|
2
|
|
Guarantee
|
|
|
2
|
|
|
|
|
|
|
3
|
|
Payments and Taxes
|
|
|
5
|
|
|
|
|
|
|
4
|
|
Representations and warranties
|
|
|
7
|
|
|
|
|
|
|
5
|
|
Undertakings
|
|
|
9
|
|
|
|
|
|
|
6
|
|
Set-off
|
|
|
11
|
|
|
|
|
|
|
7
|
|
Benefit of this Guarantee
|
|
|
11
|
|
|
|
|
|
|
8
|
|
Notices and other matters
|
|
|
11
|
|
|
|
|
|
|
9
|
|
Law and jurisdiction
|
|
|
13
|
|
THIS GUARANTEE
is dated 23 April 2008 and made
BETWEEN:
|
(1)
|
EURONAV N.V.
of Belgium (the “
Guarantor
”); and
|
|
(2)
|
BNP PARIBAS (SUISSE) SA
, as security agent and trustee for and on behalf of the Secured Creditors (the “
Security Agent
”).
|
WHEREAS
:
|
(A)
|
by a loan agreement dated 23 April 2008 (the “
Agreement
”) made between (1) Fontvieille Shipholding Limited and Moneghetti Shipholding Limited as joint and several borrowers (the
“
Borrowers
”), (2) BNP Paribas (Suisse) SA as arranger, agent (in such capacity the “
Agent
”), Security Agent and account bank and (3) the banks and financial institutions referred to in schedule 1 to the
Agreement as lenders (the “
Banks
” and, together with the Agent, the “
Secured Creditors
”), the Banks agreed (
inter alia
) to make available to the Borrowers, upon the terms and conditions therein contained, a
loan of up to One hundred and thirty five million Dollars ($135,000,000);
|
|
(B)
|
pursuant to clause 16.14 of the Agreement, each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a trust deed dated 23 April 2008 and executed by the
Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Guarantee for and on behalf of itself and the Secured Creditors; and
|
|
(C)
|
the execution and delivery of this Guarantee is one of the conditions to each Bank making its Commitment available under the Agreement.
|
IT IS AGREED
as follows:
In this Guarantee, unless the context otherwise requires or unless
otherwise defined in this Guarantee, words and expressions defined in the Agreement and used in this Guarantee shall have the same meanings where used in this Guarantee.
In this Guarantee, unless the context otherwise requires:
“
Agent
” includes its successors in title and its replacements;
“
Applicable Accounting Principles
” means the most recent and up-to-date IFRS applicable at any relevant time;
“
Banks
” includes their respective successors in title and Transferee Banks;
“
Borrowed Money
” means Indebtedness in respect of (i) money borrowed or raised and debit balances at banks, (ii) any
bond, note, loan stock, debenture or similar debt instrument, (iii) acceptance or documentary credit facilities, (iv) receivables sold or discounted (otherwise than on a non-recourse basis), (v) deferred payments for assets or
services acquired, (vi) finance leases and hire purchase contracts, (vii) swaps, forward exchange contracts, futures and other derivatives, (viii) any other transaction (including without limitation forward sale or purchase
agreements) having the commercial effect of a borrowing or raising of money or of any of (ii) to (vii) above and (ix) guarantees in respect of Indebtedness of any person falling within any of (i) to (viii) above;
1
“
Collateral Instruments
” means notes, bills of exchange, certificates of deposit
and other negotiable and non-negotiable instruments, guarantees, indemnities and other assurances against financial loss and any other documents or instruments which contain or evidence an obligation (with or without security) to pay, discharge or
be responsible directly or indirectly for, any indebtedness or liabilities of the Borrowers or any other person liable and includes any documents or instruments creating or evidencing a mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest of any kind;
“
Guarantee
” includes each separate or
independent stipulation or agreement by the Guarantor contained in this Guarantee;
“
Guaranteed Liabilities
” means all
moneys, obligations and liabilities expressed to be guaranteed by the Guarantor in clause 2.1;
“
Guarantor
” includes
the successors in title of the Guarantor;
“
Incapacity
” means, in relation to a person, the bankruptcy, insolvency,
liquidation, dissolution, winding-up, administration, receivership, amalgamation, reconstruction or other incapacity of that person whatsoever (and, in the case of a partnership, includes the termination or change in the composition of the
partnership);
“
Relevant Jurisdiction
” means any jurisdiction in which or where the Guarantor is incorporated, resident,
domiciled, has a permanent establishment, carries on, or has a place of business or is otherwise effectively connected; and
“
Security Agent
” includes the successors in title and replacements of the Security Agent.
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Guarantee.
|
1.4
|
Construction of certain terms
|
Clause 1.4 of the Agreement shall apply to this Guarantee
as if set out herein.
In consideration of the Banks making or continuing loans or advances
to, or otherwise giving credit or granting banking facilities or accommodation or granting time to, the Borrowers or any of them pursuant to the Agreement, the Guarantor hereby guarantees to pay to the Security Agent, for the account of the Secured
Creditors, on demand by the Security Agent all moneys and discharge all obligations and liabilities now or hereafter due, owing or incurred by the Borrowers or any of them to the Secured Creditors or any of them under or pursuant to the Agreement
and the other Security Documents or any of them, when the same become due for payment or discharge whether by acceleration or otherwise, and whether such moneys, obligations or liabilities are express or implied, present, future or contingent, joint
or several, incurred as principal or surety, originally owing to the Secured Creditors or any of them or purchased or otherwise acquired by any of them, denominated in Dollars or in any other currency, or incurred on any banking account or in any
other manner whatsoever provided always that the Guarantor’s total and several liability under this clause 2.1 shall not exceed fifty per cent (50%) of the total amount of principal, interest, fees, commissions, costs and expenses and all
other amounts of whatsoever nature owing by the Borrowers under the Agreement and the other Security Documents at any relevant time.
Such
liabilities shall, without limitation, include interest (as well after as before judgment) to date of payment at such rates and upon such terms as may from time to time be agreed,
2
commission, fees and other charges and all legal and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Secured Creditors or any of them in
relation to any such moneys, obligations or liabilities or generally in respect of the Borrowers, the Guarantor or any Collateral Instrument.
|
2.2
|
Guarantor as principal debtor; indemnity
|
As a separate and independent stipulation, the
Guarantor agrees that if any purported obligation or liability of the Borrowers or any of them which would have been the subject of this Guarantee had it been valid and enforceable is not or ceases to be valid or enforceable against the Borrowers or
any of them on any ground whatsoever whether or not known to the Security Agent and/or the Secured Creditors or any of them (including, without limitation, any irregular exercise or absence of any corporate power or lack of authority of, or breach
of duty by, any person purporting to act on behalf of the Borrowers or any of them or any legal or other limitation, whether under the Limitation Acts or otherwise or any disability or Incapacity or any change in the constitution of the Borrowers or
any of them) the Guarantor shall nevertheless be liable to the Security Agent in respect of that purported obligation or liability as if the same were fully valid and enforceable and the Guarantor were the principal debtor in respect thereof
provided always that the Guarantor’s total and several liability under this clause 2.2 shall not exceed fifty per cent (50%) of the total amount of principal, interest, fees, commissions, costs and expenses and all other amounts of
whatsoever nature owing by the Borrowers under the Agreement and the other Security Documents at any relevant time. The Guarantor hereby agrees to keep the Security Agent fully indemnified on demand against all damages, losses, costs and expenses
arising from any failure of the Borrowers or any of them to perform or discharge any such purported obligation or liability, subject always to the fifty per cent (50%) limitation referred above in this clause 2.2.
|
2.3
|
Statements of account conclusive
|
Any statement of account, signed as correct by an
officer of the Security Agent, showing the amount of the Guaranteed Liabilities shall, in the absence of manifest error, be binding on and conclusive against the Guarantor.
|
2.4
|
No security taken by Guarantor
|
The Guarantor warrants that it has not taken or
received, and undertakes that until all the Guaranteed Liabilities of the Borrowers have been paid or discharged in full, it will not take or receive, the benefit of any security from the Borrowers or any of them or any other person in respect of
its obligations under this Guarantee.
Subject to the fifty per cent (50%) limitation referred to in clause 2.1
and clause 2.2, the Guarantor agrees to pay interest on each amount demanded of it under this Guarantee from the date of such demand until payment (as well after as before judgment) at the rate specified in clause 3.4 of the Agreement which shall
apply to this Guarantee
mutatis mutandis
. Such interest shall be compounded at the end of each period determined for this purpose by the Security Agent in the event of it not being paid when demanded but without prejudice to any Secured
Creditor’s right to require payment of such interest.
|
2.6
|
Continuing security and other matters
|
This Guarantee shall:
|
2.6.1
|
secure the ultimate balance from time to time owing to the Secured Creditors or any of them by the Borrowers or any of them and shall be a continuing security, notwithstanding any settlement of account or other matter
whatsoever;
|
|
2.6.2
|
be in addition to any present or future Collateral Instrument, right or remedy held by or available to the Security Agent or any of the Secured Creditors; and
|
3
|
2.6.3
|
not be in any way prejudiced or affected by the existence of any such Collateral Instrument, rights or remedies or by the same becoming wholly or in part void, voidable or unenforceable on any ground whatsoever or by
the Security Agent or any of the Secured Creditors dealing with, exchanging, varying or failing to perfect or enforce any of the same or giving time for payment or indulgence or compounding with any other person liable.
|
|
2.7
|
Liability unconditional
|
The liability of the Guarantor shall not be affected nor shall
this Guarantee be discharged or reduced by reason of:
|
2.7.1
|
the Incapacity or any change in the name, style or constitution of the Borrowers or any of them or any other person liable;
|
|
2.7.2
|
the Security Agent or any of the Secured Creditors granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, the Borrowers or any of them or any other
person liable or renewing, determining, varying or increasing any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever or concurring in, accepting or varying any compromise, arrangement or settlement or
omitting to claim or enforce payment from the Borrowers or any of them or any other person liable; or
|
|
2.7.3
|
any act or omission which would not have discharged or affected the liability of the Guarantor had it been a principal debtor instead of a guarantor or by anything done or omitted which but for this provision might
operate to exonerate the Guarantor.
|
|
2.8
|
Collateral Instruments
|
Neither the Security Agent nor any of the Secured Creditors
shall be obliged to make any claim or demand on the Borrowers or any of them or to resort to any Collateral Instrument or other means of payment now or hereafter held by or available to it before the Security Agent enforcing this Guarantee and no
action taken or omitted by the Security Agent or any of the Secured Creditors in connection with any such Collateral Instrument or other means of payment shall discharge, reduce, prejudice or affect the liability of the Guarantor under this
Guarantee.
|
2.9
|
Waiver of Guarantor’s rights
|
Until all the Guaranteed Liabilities have been paid,
discharged or satisfied in full (and notwithstanding payment of a dividend in any liquidation or under any compromise or arrangement) the Guarantor agrees that, without the prior written consent of the Security Agent (acting on the instructions of
the Majority Banks), it will not:
|
2.9.1
|
exercise its rights of subrogation, reimbursement and indemnity against the Borrowers or any of them or any other person liable;
|
|
2.9.2
|
demand or accept repayment in whole or in part of any Indebtedness now or hereafter due to the Guarantor from the Borrowers or any of them or from any other person liable or demand or accept any Collateral Instrument in
respect of the same or dispose of the same;
|
|
2.9.3
|
take any step to enforce any right against the Borrowers or any of them or any other person liable in respect of any Guaranteed Liabilities; or
|
|
2.9.4
|
claim any set-off or counterclaim against the Borrowers or any of them or any other person liable or claim or prove in competition with the Security
Agent or any of the Secured Creditors in the liquidation of the Borrowers or any of them or any other person liable or have the benefit of, or share in, any payment from or composition with the Borrowers or any of them or any other person liable or
any other Collateral Instrument now or hereafter held by the Security Agent or any of the Secured Creditors for any Guaranteed Liabilities or for the obligations or liabilities of any other person liable but so that, if so directed by the Security
Agent, it will prove for the whole or any part of its claim in the liquidation of the Borrowers or
|
4
|
|
any of them or any other person liable on terms that the benefit of such proof and of all money received by it in respect thereof shall be held on trust for the Security Agent and applied in or
towards discharge of the Guaranteed Liabilities in such manner as the Security Agent shall deem appropriate.
|
Any moneys received in connection with this Guarantee (whether before
or after any Incapacity of any of the Borrowers or the Guarantor) may be placed to the credit of a suspense account with a view to preserving the rights of the Security Agent or any of the Secured Creditors to prove for the whole of its claims
against the Borrowers or any of them or any other person liable or may be applied in or towards satisfaction of such of the Guaranteed Liabilities as the Security Agent may from time to time conclusively determine in its absolute discretion.
|
2.11
|
Settlements conditional
|
Any release, discharge or settlement between the Guarantor and
the Security Agent or any of the Secured Creditors shall be conditional upon no security, disposition or payment to the Security Agent or any of the Secured Creditors by the Borrowers or any of them or any other person liable being void, set aside
or ordered to be refunded pursuant to any enactment or law relating to bankruptcy, liquidation, administration or insolvency or for any other reason whatsoever and if such condition shall not be fulfilled the Security Agent shall be entitled to
enforce this Guarantee subsequently as if such release, discharge or settlement had not occurred and any such payment had not been made.
|
2.12
|
Guarantor to deliver up certain property
|
If, contrary to clauses 2.4 or 2.9, the
Guarantor takes or receives the benefit of any security or receives or recovers any money or other property (but excluding any dividends paid by any Subsidiary of the Guarantor to the Guarantor, if such payment is not prohibited by the terms of the
Agreement or any other Security Document), such security, money or other property shall be held on trust for the Security Agent and shall be delivered to the Security Agent on demand.
|
2.13
|
Retention of this Guarantee
|
The Security Agent shall be entitled to retain this
Guarantee after as well as before the payment or discharge of all the Guaranteed Liabilities for such period as the Security Agent may determine but in any event for no longer than six (6) months after the payment and discharge in full of the
Guaranteed Liabilities.
|
3.1
|
No set off or counterclaim
|
All payments to be made by the Guarantor under this
Guarantee shall be made in full, without any set-off or counterclaim whatsoever and, subject as provided in clause 3.2, free and clear of any deductions or withholdings, in Dollars on the due date to such account of the Security Agent as it may
specify in writing to the Guarantor.
|
3.2
|
Grossing up for Taxes
|
If at any time the Guarantor is required to make any deduction or
withholding in respect of Taxes from any payment due under this Guarantee for the account of the Security Agent (or if the Security Agent is required to make any such deduction or withholding from a payment to a Secured Creditor of moneys received
under this Guarantee), the sum due from the Guarantor in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Security Agent or, as the case may be, such Secured
Creditor receives on the due date for such payment (and retains, free from any liability in respect of such deduction or withholding) a net sum equal to the sum which it would have
5
received had no such deduction or withholding been required to be made and the Guarantor shall indemnify the Security Agent against any losses or costs incurred by it by reason of any failure of
the Guarantor to make any such deduction or withholding or by reason of any increased payment not being made on the due date for such payment. The Guarantor shall promptly deliver to the Security Agent any receipts, certificates or other proof
evidencing the amounts (if any) paid or payable in respect of any deduction or withholding as aforesaid.
If the Security Agent receives for its own account a repayment or credit in
respect of tax on account for which the Guarantor made an increased payment under clause 3.2, it shall pay to the Guarantor a sum equal to the repayment or credit received, provided always that:
|
3.3.1
|
the Security Agent can do so without prejudicing the retention of the amount of such repayment or credit and without prejudice to the right of the Security Agent to obtain any other relief or allowance which may be
available to it;
|
|
3.3.2
|
the Security Agent shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a number of transactions;
|
|
3.3.3
|
nothing in this clause shall entitle the Guarantor to enquire about the Security Agent’s tax affairs or oblige the Security Agent to arrange its tax affairs in any particular manner, to disclose any information
regarding its tax affair and computations, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;
|
|
3.3.4
|
nothing in this clause shall oblige the Security Agent to make a payment which exceeds any repayment or credit in respect of tax on account of which the Guarantor has made an increased payment under clause 3.2; and
|
|
3.3.5
|
any allocation or determination made by the Security Agent under or in connection with this clause shall be binding on the Guarantor.
|
If any sum due from the Guarantor under this Guarantee or any order
or judgment given or made in relation hereto has to be converted from the currency (the “
first currency
”) in which the same is payable under this Guarantee or under such order or judgment into another currency (the “
second
currency
”) for the purpose of (a) making or filing a claim or proof against the Guarantor, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to
this Guarantee, the Guarantor shall indemnify and hold harmless the Security Agent from and against any loss suffered as a result of any difference between (i) the rate of exchange used for such purpose to convert the sum in question from the
first currency into the second currency and (ii) the rate or rates of exchange at which the Security Agent may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof. The Security Agent will give two (2) days’ notice to the Guarantor prior to proceeding to any such conversion from the first currency to the second currency.
Any amount due from the Guarantor under this clause 3.4 shall be due as a separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect of this Guarantee and the term “
rate of
exchange
” includes any premium and costs of exchange payable in connection with the purchase of the first currency with the second currency.
6
|
4
|
Representations and warranties
|
|
4.1
|
Continuing representations and warranties
|
The Guarantor represents and warrants to the
Security Agent that:
the Guarantor is duly incorporated and validly existing in good standing
under the laws of Belgium as a limited liability company and has power to carry on its business as it is now being conducted and to own its property and other assets;
the Guarantor has power to execute, deliver and perform its obligations under
this Guarantee; all necessary corporate, shareholder (if required by law) and other action has been taken to authorise the execution, delivery and performance of the same;
|
4.1.3
|
Binding obligations
|
this Guarantee constitutes valid and legally binding obligations of the
Guarantor enforceable in accordance with its terms;
|
4.1.4
|
No conflict with other obligations
|
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, this Guarantee by the Guarantor will not:
|
|
(i)
|
contravene any existing applicable law, statute, rule or regulation or any judgment, decree or permit to which the Guarantor is subject; or
|
|
|
(ii)
|
conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which the Guarantor is a party or is subject or by which it or any of its property is
bound; or
|
|
|
(iii)
|
contravene or conflict with any provision of the constitutional documents of the Guarantor; or
|
|
|
(iv)
|
result in the creation or imposition of or oblige the Guarantor to create any Encumbrance on any of the undertakings, assets, rights or revenues of the Guarantor;
|
no litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of the Guarantor, threatened against the Guarantor or any of its Subsidiaries which could have a material adverse effect on the management, operations, results of operations, business, properties, performance,
prospects, assets, condition (financial or otherwise) of the Guarantor or any of its Subsidiaries;
|
4.1.6
|
No filings required
|
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of this Guarantee that it or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration or similar tax or
charge be paid in any Relevant Jurisdiction on or in relation to this Guarantee and this Guarantee is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
7
the choice of English law to govern this Guarantee and the submission by the
Guarantor to the non-exclusive jurisdiction of the English courts are valid and binding;
neither the Guarantor nor any of its assets is entitled to immunity on the grounds
of sovereignty or otherwise from any legal action or proceeding (which shall include, without limitation, suit, attachment prior to judgement, execution or other enforcement);
every consent, authorisation, licence or approval of, or registration with
or declaration to, governmental or public bodies or authorities or courts required by the Guarantor to authorise, or required by the Guarantor in connection with, the execution, delivery, validity, enforceability or admissibility in evidence of this
Guarantee or the performance by the Guarantor of its obligations under this Guarantee has been obtained or made and is in full force and effect and there has been no default in the observance of any of the conditions or restrictions (if any) imposed
in, or in connection with, this Guarantee; and
|
|
(a)
|
neither the Guarantor nor any of its Subsidiaries is unable, or admits or has admitted its inability, to pay its debts or has suspended making payments on any of its debts; and
|
|
|
(b)
|
neither the Guarantor nor any of its Subsidiaries has by reason of actual or anticipated financial difficulties commenced, or intends to commence, negotiations with one or more of its creditors with a view to
rescheduling any of its Indebtedness.
|
|
4.2
|
Initial representations and warranties
|
The Guarantor further represents and warrants to
the Security Agent that:
the obligations of the Guarantor under this Guarantee are direct, general and
unconditional obligations of the Guarantor;
|
4.2.2
|
No default under other Indebtedness
|
the Guarantor is not (nor would with the giving of notice
or lapse of time or the satisfaction of any other condition or combination thereof be) in breach of or in default under any agreement relating to Indebtedness in excess of Fifteen million Dollars ($15,000,000) to which it is a party or by which it
may be bound;
the information, exhibits and reports furnished by the Guarantor to the Creditors
or any of them in connection with the negotiation and preparation of this Guarantee are true and accurate in all material respects and not misleading, do not omit material facts and all reasonable enquiries have been made to verify the facts and
statements contained therein; there are no other facts the omission of which would make any fact or statement therein misleading;
|
4.2.4
|
No withholding Taxes
|
no Taxes are imposed by withholding or otherwise on any payment to be
made by the Guarantor under this Guarantee or are imposed on or by virtue of the execution or delivery by the Guarantor of this Guarantee or any other document or instrument to be executed or delivered under this Guarantee;
8
no Default has occurred and is continuing;
|
4.2.6
|
No material adverse change
|
to the best of the Guarantor’s knowledge, there has been no
material adverse change in the management, operations, results of operations, business, properties, prospects, assets, condition (financial or otherwise) of the Guarantor or any of its Subsidiaries from that described by or on behalf of the
Guarantor or any other Security Party to the Creditors or any of them in the negotiation of the Agreement and/or this Guarantee; and
on the date of this Agreement:
|
|
(a)
|
twenty seven point nine six per cent (27.96%) of the shares in the Guarantor is legally and beneficially owned by Saverco NV of Belgium and twenty point four nine per cent (20.49%) of the shares in the
Guarantor is legally and beneficially owned by Tanklog Holdings Ltd. of Cyprus;
|
|
|
(b)
|
no less than fifty per cent (50%) of the shares in each of the Borrowers is legally owned by Euronav Hong Kong Limited; and
|
|
|
(c)
|
Euronav Hong Kong Limited is a wholly-owned direct Subsidiary of the Guarantor.
|
|
4.3
|
Repetition of representations and warranties
|
On and as of each Drawdown Date and on
each Interest Payment Date, the Guarantor shall:
|
4.3.1
|
be deemed to repeat the representations and warranties in clauses 4.1 and 4.2 (except that the representation of clause 4.2.7 shall not be deemed repeated at any time after the date of this Agreement and that the other
representations of clause 4.2 shall not be deemed repeated on the Interest Payment Dates) as if made with reference to the facts and circumstances existing on such day; and
|
|
4.3.2
|
be deemed to further represent and warrant to the Security Agent that the then latest audited financial statements delivered to the Security Agent under this Guarantee (if any) have been prepared in accordance with the
Applicable Accounting Principles which have been consistently applied and present fairly and accurately the consolidated financial position of the Guarantor and its Subsidiaries as at the end of the financial period to which the same relate and the
consolidated results of the operations of the Guarantor and its Subsidiaries for the financial period to which the same relate and, as at the end of such financial period, neither the Guarantor nor any of its Subsidiaries had any significant
liabilities (contingent or otherwise) or any unrealised or anticipated losses which are not disclosed by, or reserved against or provided for in, such financial statements.
|
The Guarantor undertakes with the Security Agent that, from the date of this
Guarantee and so long as any moneys are owing under any of the Security Documents and while all or any part of the Total Commitment remains outstanding, it will:
promptly inform the Security Agent of any occurrence of which it becomes
aware which might adversely affect the ability of any Security Party to perform its obligations under any of the Security Documents or the Underlying Documents and, without limiting the generality of
9
the foregoing, will inform the Security Agent of any Default forthwith upon becoming aware thereof and will from time to time, if so reasonably requested by the Security Agent, confirm to the
Security Agent in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing;
|
5.1.2
|
Consents and licences
|
without prejudice to clauses 4.1 of this Guarantee, obtain or cause to
be obtained, maintain in full force and effect and comply in all material respects with the conditions and restrictions (if any) imposed in, or in connection with, every consent, authorisation, licence or approval of governmental or public bodies or
authorities or courts and do, or cause to be done, all other acts and things which may from time to time be necessary or desirable under applicable law for the continued due performance of all the obligations of the Guarantor under this Guarantee;
|
5.1.3
|
Financial statements
|
prepare or cause to be prepared consolidated financial statements of the
Guarantor and its Subsidiaries in accordance with the Applicable Accounting Principles consistently applied in respect of each financial year (starting with the financial year ending on 31 December 2008) and cause the same to be reported on by
their auditors and deliver as many copies of the same as the Security Agent may reasonably require as soon as practicable but not later than one hundred and eighty (180) days after the end of the financial year to which they relate; and
|
5.1.4
|
Know your customer information
|
deliver to the Agent such documents and evidence as the Agent
shall from time to time require relating to the verification of identity and knowledge of the Agent’s or any Bank’s customers and the compliance by the Agent or any Bank with all necessary “know your customer” or similar checks,
always on the basis of applicable laws and regulations or the Agent’s or any Bank’s own internal guidelines, in each case as such laws, regulations or internal guidelines apply from time to time.
|
5.2
|
Negative undertakings
|
The Guarantor undertakes with the Security Agent that, from the
date of this Guarantee and so long as any moneys are owing under the Security Documents and while all or any part of the Total Commitment remains outstanding, it will not, without the prior written consent of the Security Agent (acting on the
instructions of the Majority Banks):
permit any Encumbrance (other than a Permitted Encumbrance) to subsist, arise
or be created or extended over all or any part of the shares in the Borrowers or either of them owned on the date of this Agreement by Euronav Hong Kong Limited;
merge or consolidate with any other person or enter into any demerger, amalgamation
or corporate reconstruction or redomiciliation of any type;
permit any sale, transfer or other disposal by Euronav Hong Kong Limited over any
part of the shares in the Borrowers or either of them owned on the date of this Agreement by Euronav Hong Kong Limited, whether by one or a series of transactions related or not; or
10
undertake any business other than that conducted by it on the date of this
Guarantee.
The Guarantor authorises the Security Agent, at any time after the occurrence
of an Event of Default which is subsisting, to apply any credit balance to which the Guarantor is then entitled on any account of the Guarantor with the Security Agent at any of its branches in or towards satisfaction of any sum then due and payable
from the Guarantor to the Security Agent under this Guarantee. For this purpose the Security Agent is authorised to purchase with the moneys standing to the credit of such account such other currencies as may be necessary to effect such application.
The Security Agent shall not be obliged to exercise any right given to it by this clause 6. The Security Agent shall notify the Guarantor and the Secured Creditors forthwith upon the exercise or purported exercise of any right of set-off giving full
details in relation thereto.
|
7
|
Benefit of this Guarantee
|
This Guarantee shall be binding upon the Guarantor and its
successors in title and shall enure for the benefit of the Security Agent and its successors in title and/or replacements. The Guarantor expressly acknowledges and accepts the provisions of clause 16 of the Agreement and agrees that any person who
replaces the Security Agent in accordance with such clause shall be entitled to the benefit of this Guarantee.
|
7.2
|
Changes in constitution or reorganisation of Secured Creditors
|
For the avoidance of
doubt and without prejudice to the provisions of clause 7.1, this Guarantee shall remain binding on the Guarantor notwithstanding any change in the constitution of any of the Secured Creditors or the Security Agent or its absorption in, or
amalgamation with, or the acquisition of all or part of its undertaking or assets by, any other person, or any reconstruction or reorganisation of any kind, to the intent that this Guarantee shall remain valid and effective in all respects in favour
of any successor in title or replacement of the Security Agent (which replacement shall have been appointed pursuant to clause 16 of the Agreement) in the same manner as if such successor in title or replacement had been named in this Guarantee as a
party instead of, or in addition to, the Security Agent.
|
7.3
|
No assignment by Guarantor
|
The Guarantor may not assign or transfer any of its rights
or obligations under this Guarantee.
|
7.4
|
Disclosure of information
|
The Security Agent may, with the prior consent of the
Guarantor (such consent not to be unreasonably withheld and the request for which to be promptly responded to), disclose to a prospective replacement of the Security Agent or a Transferee Bank or to any other person who may propose entering into
contractual relations with the Security Agent in relation to the Agreement such information about the Guarantor as the Security Agent shall consider appropriate.
11
|
8
|
Notices and other matters
|
Clauses 17.1 and 17.2 of the Agreement shall apply to this Guarantee as if set
out herein and every notice, request, demand or other communication under this Guarantee shall be sent:
|
8.1.1
|
if to the Guarantor at:
|
Euronav N.V.
De Gerlachekaai 20
B-2000
Antwerp
Belgium
|
|
|
|
|
Fax:
|
|
+3232 475 699
|
|
Attention:
|
|
Finance Director
|
|
8.1.2
|
if to the Security Agent at:
|
BNP Paribas (Suisse) SA
Place de Hollande 2
P.O. Box
CH-1211
Geneva, 11
Switzerland
|
|
|
|
|
Fax:
|
|
+41 58 212 7650
|
|
Attention:
|
|
Shipping Dept/Greek Desk
|
or to such other address or facsimile number as is notified by the Guarantor or the Security Agent to the other
party to this Guarantee.
|
8.2
|
No implied waivers, remedies cumulative
|
No failure or delay on the part of the Security
Agent to exercise any power, right or remedy under this Guarantee shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any power, right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. The remedies provided in this Guarantee are cumulative and are not exclusive of any remedies provided by law.
All certificates, instruments and other documents to be delivered
under or supplied in connection with this Guarantee shall be in the English language or shall be accompanied by a certified English translation upon which the Security Agent shall be entitled to rely.
The Guarantor agrees to be bound by this Guarantee notwithstanding
that any other person intended to execute or to be bound by any other guarantee or assurance under or pursuant to the Agreement may not do so or may not be effectually bound and notwithstanding that such other guarantee or assurance may be
determined or be or become invalid or unenforceable against any other person, whether or not the deficiency is known to the Security Agent or any of the Secured Creditors.
The Guarantor agrees to reimburse the Security Agent on demand for all legal
and other costs, charges and expenses on a full and unqualified indemnity basis which may be incurred by the Security Agent in relation to the enforcement of this Guarantee against the Guarantor.
If, at any time, any provision of this Guarantee is or becomes
illegal, invalid or unenforceable in any respect under any law or jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision in any other respect or under
the law of any other jurisdiction will be affected or impaired in any way.
12
This Guarantee is governed by and shall be construed in accordance with English
law.
|
9.2
|
Submission to jurisdiction
|
The Guarantor agrees for the benefit of the Security Agent
that any legal action or proceedings arising out of or in connection with this Guarantee against the Guarantor or any of its assets may be brought in the English courts, irrevocably and unconditionally submits to the jurisdiction of such courts and
irrevocably designates, appoints and empowers Euronav (UK) Agencies Ltd. at present of Moreau House, 3
rd
floor, 116 Brompton Road, London SW3 1JJ, England to receive for it and on its behalf,
service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the
Guarantor in the courts of any other competent jurisdiction, nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The Guarantor further agrees
that only the courts of England and not those of any other state shall have jurisdiction to determine any claim which the Guarantor may have against the Security Agent arising out of or in connection with this Guarantee.
|
9.3
|
Contracts (Rights of Third Parties) Act 1999
|
No term of this Guarantee is enforceable
under the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Guarantee.
IN WITNESS
whereof the
parties to this Guarantee have caused this Guarantee to be duly executed as a deed on the date first above written.
13
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
EURONAV N.V.
|
|
)
|
|
Attorney-in-Fact
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
)
|
|
Attorney-in-Fact
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation:
|
|
|
|
|
14
Schedule 7
Form of Pre-delivery Security Assignment
84
Private & Confidential
Dated 2008
|
|
|
|
|
|
|
|
|
|
|
[FONTVIEILLE SHIPHOLDING LIMITED]
|
|
|
|
|
|
|
|
|
|
|
|
|
[MONEGHETTI SHIPHOLDING LIMITED]
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
(2)
|
|
|
PRE-DELIVERY SECURITY ASSIGNMENT
in respect of Hull No. [
—
]
[
—
] at
the yard of Samsung Heavy Industries Co., Ltd.
in Geoje Island
Contents
|
|
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
|
1
|
|
Definitions
|
|
|
1
|
|
|
|
|
|
|
2
|
|
Assignment
|
|
|
3
|
|
|
|
|
|
|
3
|
|
Undertakings
|
|
|
4
|
|
|
|
|
|
|
4
|
|
Continuing security and other matters
|
|
|
6
|
|
|
|
|
|
|
5
|
|
Powers of Security Agent
|
|
|
7
|
|
|
|
|
|
|
6
|
|
Application of moneys
|
|
|
8
|
|
|
|
|
|
|
7
|
|
Remedies cumulative and other provisions
|
|
|
9
|
|
|
|
|
|
|
8
|
|
Costs and indemnity
|
|
|
9
|
|
|
|
|
|
|
9
|
|
Attorney
|
|
|
10
|
|
|
|
|
|
|
10
|
|
Further assurance
|
|
|
10
|
|
|
|
|
|
|
11
|
|
Assignment
|
|
|
11
|
|
|
|
|
|
|
12
|
|
Notices
|
|
|
11
|
|
|
|
|
|
|
13
|
|
Law and jurisdiction
|
|
|
11
|
|
|
|
|
|
Schedule 1 Form of notice of assignment of Contract and acknowledgement
|
|
|
12
|
|
|
|
|
|
Schedule 2 Form of notice of assignment of Refund Guarantees and acknowledgement
|
|
|
15
|
|
THIS DEED OF ASSIGNMENT
is made the day of
2008
BETWEEN
:
|
(1)
|
[FONTVIEILLE SHIPHOLDING LIMITED] [MONEGHETTI SHIPHOLDING LIMITED]
, a company incorporated in Panama whose registered office is at Panama (the “
Buyer
”); and
|
|
(2)
|
BNP PARIBAS (SUISSE) SA
, a company incorporated in Switzerland whose registered office is at Place de Hollande 2, P.O. Box CH-1211, Geneva 11, Switzerland as security agent and trustee for and on behalf of the
Secured Creditors (the “
Security Agent
”).
|
WHEREAS
:
|
(A)
|
the Buyer has entered into a shipbuilding contract dated 16 April 2008 with Samsung Heavy Industries Co., Ltd. of the Republic of Korea (the “
Builder
”) as the same has been amended by an addendum
No. 1 dated 16 April 2008 and as may be further amended and supplemented from time to time (together the “
Contract
”), in relation to the construction and sale by the Builder, and the purchase by the Buyer, of a 158,000 dwt
crude oil tanker to be known during construction as Hull No. [
—
] [
—
] at the Builder’s yard in Geoje Island, Korea (the
“
Ship
”);
|
|
(B)
|
by a loan agreement dated 23 April 2008 (the “
Agreement
”) and made between (1) the Buyer and [
—
] as joint and several borrowers (together
therein and herein referred to as the “
Borrowers
”), (2) BNP Paribas (Suisse) SA as arranger, agent (in such capacity the “
Agent
”), Security Agent and account bank and (3) the banks and financial
institutions referred to in schedule 1 to the Agreement as lenders (the “
Banks
” and, together with the Agent, the “
Secured Creditors
”), the Banks agreed (
inter alia
) to make available to the Borrowers, upon
the terms and conditions therein contained, a loan of up to One hundred and thirty five million Dollars ($135,000,000);
|
|
(C)
|
pursuant to clause 16.14 of the Agreement each of the Secured Creditors has appointed the Security Agent as its security agent and trustee and pursuant to a Trust Deed dated
[
—
] 2008 and executed by the Security Agent (as trustee) in favour of the Secured Creditors, the Security Agent agreed to hold, receive, administer and enforce this Deed for and on behalf of itself
and the Secured Creditors; and
|
|
(D)
|
this Deed is the [Fontvieille] [Moneghetti] Pre-delivery Security Assignment referred to in the Agreement and is supplemental to the Agreement.
|
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED
as follows:
Words and expressions defined in the Agreement shall, unless
otherwise defined in this Deed, or the context otherwise requires, have the same meanings when used in this Deed.
In this Deed, unless the context otherwise requires:
“
Agent
” includes its successors in title and its replacements;
“
Agreement
” means the loan agreement referred to in recital (B) hereto;
“
Assigned Documents
” means:
|
|
(b)
|
the Refund Guarantees;
|
1
“
Assigned Property
” means all of the Buyer’s rights, title, interest and
all its benefits present and future in and under the Assigned Documents and in all moneys payable by the Builder or the Refund Guarantors or any of them to the Buyer thereunder including, without prejudice to the generality of the foregoing, all
claims for damages in respect of any breach by the Builder of the Contract or by a Refund Guarantor of any Refund Guarantee issued by it and all the rights of the Buyer to take delivery of and title to the Ship under the Contract;
“
Banks
” includes their respective successors in title and Transferee Banks;
“
Borrowers
” includes the successors in title of each of the Borrowers;
“
Builder
” includes its respective successors in title;
“
Buyer
” includes the successors in title of the Buyer;
“
Contract
” means the shipbuilding contract referred to in recital (A) hereto;
“
Expenses
” means the aggregate at any relevant time (to the extent that the same have not been received or recovered by the
Security Agent) of:
|
|
(a)
|
all losses, liabilities, costs, charges, expenses, damages and outgoings of whatever nature (including without limitation Taxes, repair costs, registration fees, insurance premiums, commission in connection with any
assignment of the Assigned Property or the sale of the Ship, costs of supervision of construction of the Ship and costs of safeguarding, maintaining and insuring the Ship in the event of her sale after delivery under the Contract) suffered, incurred
or paid by the Security Agent or any Secured Creditor in connection with the exercise of the powers referred to in or granted by the Agreement or this Deed and the other Security Documents or otherwise payable by the Buyer in accordance with clause
8; and
|
|
|
(b)
|
interest on all such losses, liabilities, costs, charges, expenses, damages and outgoings from the date on which the same were suffered, incurred or paid by the Security Agent or any Secured Creditor until the date of
receipt or recovery thereof (whether before or after judgment) at a rate per annum calculated in accordance with clause 3.4 of the Agreement (as conclusively certified by the Agent at the request of the Security Agent);
|
“
Outstanding Indebtedness
” means all sums actually or contingently owing to the Secured Creditors or any of them under the
Agreement, all Expenses and all other sums payable by the Borrowers or any of them to the Secured Creditors, the Security Agent or any of them under or pursuant to the terms of this Deed or any of the other Security Documents;
“
Refund Guarantees
” means, together, the letter of refund guarantee dated
number and issued by The Korea Development Bank as
Refund Guarantor in favour of the Buyer and each of the other letters of guarantee issued or (as the context may require) to be issued by a Refund Guarantor in favour of the Buyer, in each case in respect of the Builder’s obligations under the
Contract and any further guarantee(s) to be issued by any Refund Guarantor in respect of such obligations pursuant to any agreement supplemental to the Contract and any extensions, renewals or replacements thereto or thereof and “
Refund
Guarantee
” means any of them;
“
Refund Guarantor
” means, in relation to each Refund Guarantee, The Korea
Development Bank, Corporate Banking Dept. 1 of 16-3, Yeonido-dong, Yeongdeungpo-gu, Seou 150-973, Korea and/or any other bank or financial institution acceptable to the Agent in its sole discretion and appointed by the Builder to issue that Refund
Guarantee and includes its successors in title and “
Refund Guarantors
” means any or all of them;
“
Security
Agent
” includes the successors in title and replacements of the Security Agent; and
2
“
Security Period
” means the period commencing on the date of this Deed and
terminating upon discharge of the security created by the Security Documents and payment of all moneys payable thereunder.
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Deed.
|
1.4
|
Construction of certain terms
|
Clause 1.4 of the Agreement shall apply to this Deed as
if set out herein.
|
1.5
|
Conflict with Agreement
|
This Deed shall be read together with the Agreement but in case
of any conflict between this Deed and the Agreement, the provisions of the Agreement shall prevail.
By way of security for payment of the Outstanding Indebtedness the Buyer
with full title guarantee hereby assigns and agrees to assign to the Security Agent the Assigned Property provided however that:
|
2.1.1
|
all moneys payable to the Buyer comprised in the Assigned Property (other than moneys described in clause 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.5 or 6.1.6 which shall in all circumstances be payable to the Security Agent)
shall be payable to such account of the Buyer as the Agent shall from time to time agree in writing, and shall be at the disposal of the Buyer until such time as a Default shall occur and is subsisting and the Security Agent shall direct to the
contrary whereupon the Buyer shall forthwith, and the Security Agent may at any time thereafter, instruct the persons from whom such moneys are then payable to pay the same to the Security Agent or as it may direct and any such moneys then in the
hands of the Buyer’s agents shall be deemed to have been received by them for the use and on behalf of the Security Agent and the other Secured Creditors;
|
|
2.1.2
|
unless and until a Default shall occur and is subsisting and the Security Agent shall have given notice to the Buyer that the Security Agent intends to enforce its rights under this Deed, the Buyer shall be entitled to
exercise all its rights under the Assigned Documents (subject as provided in this Deed) in all respects as if the foregoing assignment had not been made;
|
|
2.1.3
|
the Security Agent shall be under no obligation to implement any of the Assigned Documents unless the Security Agent sees fit to do so;
|
|
2.1.4
|
if the Security Agent sees fit to implement any of the Assigned Documents and if the Security Agent makes any payments in respect of or relating to the Contract (including any payments made by the Security Agent in
addition to any such amount or amounts as the Security Agent is obliged to pay pursuant to the terms of the Agreement) all moneys so expended by the Security Agent for the purpose aforesaid shall on demand be repaid by the Buyer to the Security
Agent together with interest thereon (as well after as before judgment) at the rate referred to in clause 3.4 of the Agreement from the time of such expenditure until payment (such interest to accrue due from day to day and to be calculated on the
basis of actual days elapsed and a year of three hundred and sixty (360) days) and until so repaid shall be charged on the property hereby assigned; and
|
|
2.1.5
|
upon the earlier of (a) the drawdown of the Delivery Advance in respect of the Ship and provided no Default shall have occurred and be continuing and (b) the last day of the Security Period, the Security Agent
shall, at the request and cost of the Buyer, re-assign the Assigned Property to the Buyer or as it may direct.
|
3
The Buyer hereby covenants and undertakes with the Security Agent:
|
2.2.1
|
forthwith after execution and delivery of this Deed, to give written notice to (i) the Builder and (ii) the relevant Refund Guarantor in respect of the letter of guarantee number
, dated and issued by The Korea Development Bank in
favour of the Buyer, in each case in the form of the notices set out in schedules 1 and 2 respectively; and
|
|
2.2.2
|
in respect of each Refund Guarantee issued after the date of this Deed, forthwith after its issuance to give written notice to the relevant Refund Guarantor in the form of the notice set out in schedule 2,
|
and, in each such case, to use its best endeavours to procure that each of the Builder and the relevant Refund Guarantor
signs and delivers to the Security Agent the form of acknowledgement attached to the relevant notice which it receives promptly by fax copy, with the original to follow.
|
3.1
|
Positive undertakings
|
The Buyer hereby undertakes and agrees with the Security Agent
that throughout the Security Period it will:
|
3.1.1
|
Document of title to the Ship
|
give irrevocable instructions to the Builder to hold the Ship
and the builder’s certificate and any other document of title to the Ship to the order and at the disposal of the Security Agent and ensure that the Builder complies with such instructions;
|
3.1.2
|
Performance of Contract
|
duly and punctually observe and perform all the conditions and
obligations imposed on it by the Contract;
|
3.1.3
|
Performance by Builder
|
use its best endeavours to ensure that the Builder observes and
performs all conditions and obligations imposed on it by the Contract and take all steps within its power to ensure that the Builder proceeds with the construction of the Ship with due diligence and despatch;
|
3.1.4
|
Progress of construction
|
upon the request of the Security Agent, advise the Security Agent of
the progress of construction of the Ship and supply the Security Agent with such other information as the Security Agent may reasonably require and the Buyer may have regarding the Ship and the materials allocated or appropriated to the Ship, the
Assigned Documents, the Assigned Property or otherwise relating to the construction of the Ship;
|
3.1.5
|
Arbitration under Contract
|
in the event that any party to the Contract resorts to arbitration
as provided in [Article XII] of the Contract, immediately upon becoming aware of the same, notify the Security Agent in writing that such arbitration has been initiated, advise the Security Agent in writing of the
4
identity of the appointed arbitrators and upon termination of the arbitration notify the Security Agent in writing to that effect and supply the Security Agent with a copy of the arbitration
award and, if not in English, a certified English translation thereof;
|
3.1.6
|
Enforcement of Buyer’s rights
|
do or permit to be done each and every act or thing which
the Security Agent may from time to time require to be done for the purpose of enforcing the Buyer’s rights under or pursuant to the Assigned Documents and allow the name of the Buyer to be used as and when required by the Security Agent for
that purpose; and
|
3.1.7
|
Notification of rejection of Ship etc.
|
if either the Builder or any Refund Guarantor or (with
the prior written consent of the Security Agent given pursuant to clause 3.2) the Buyer cancels, rescinds, repudiates or otherwise terminates any of the Assigned Documents or (with the prior written consent of the Security Agent given pursuant to
clause 3.2) rejects the Ship or purports to do so or if the Ship shall become a Total Loss or partial loss or shall be damaged, notify the Security Agent immediately upon becoming aware of the same.
|
3.2
|
Negative undertakings
|
The Buyer hereby further undertakes and agrees with the Security
Agent that throughout the Security Period it will not without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose):
sell, assign or otherwise dispose of or create or grant or permit to subsist any
Encumbrance over, or relating to, any of the Assigned Property other than this Deed;
sell or agree to sell the Ship or any share or interest therein, subject as permitted
under clause 4.3.4 of the Agreement;
|
3.2.3
|
Creation of Encumbrances
|
create or agree to create or permit to subsist any Encumbrance over
the Ship (or any share or interest therein) other than Encumbrances created or to be created pursuant to this Deed or the Agreement;
|
3.2.4
|
Variation of Refund Guarantees; releases and waivers of Refund Guarantees
|
agree to any
variation of any Refund Guarantee or release any Refund Guarantor from any of its obligations under any Refund Guarantee issued by it or waive any breach of any Refund Guarantor’s obligations thereunder or consent to any such act or omission of
any Refund Guarantor as would otherwise constitute such breach;
|
3.2.5
|
Variations of Contract; releases and waivers of Contract
|
agree to any material variation of
the Contract or agree to any substantial variation of the specification of the Ship (and for the purpose of this paragraph (a) any such variation which, together with any previous or subsequent variations, will lead to the fixed price of the
Ship (namely, $90,750,000) being altered by an amount greater than five per cent (5%) of the said fixed price or (b) any such variation which will alter the intended type and commercial use of the Ship or alter the milestones for payment,
will constitute a material variation of the Contract or (as the case may be) a substantial variation of the specifications of the Ship) or release the Builder from any of its obligations under the Contract or waive any breach of the Builder’s
obligations thereunder or consent to any such act or omission of the Builder as would otherwise constitute such breach;
5
without prejudice to clause 3.2.5, agree to any variation of the Contract or the
specification of the Ship which would delay the time for delivery of the Ship by more than ninety (90) days after the scheduled delivery date thereof as at the date of this Deed;
|
3.2.7
|
Assignment of Earnings
|
assign or agree to assign otherwise than to the Security Agent the
future earnings of the Ship or any part thereof except pursuant to the Ship Security Documents relevant to the Ship; and
|
3.2.8
|
Rejection and cancellation
|
either exercise or fail to exercise any right which the Buyer may
have to reject the Ship or cancel or rescind or otherwise terminate the Contract provided always that any such rejection of the Ship or cancellation, rescission or other termination of the Contract by the Buyer after such consent is given shall be
without responsibility on the part of the Security Agent who shall be under no liability whatsoever to the extent that such rejection, rescission, cancellation or termination is thereafter adjudged to constitute a repudiation or other breach of the
Contract by the Buyer.
|
4
|
Continuing security and other matters
|
|
4.1
|
It is declared and agreed that:
|
|
4.1.1
|
Continuing security
|
the security created by this Deed shall be held by the Security Agent as a
continuing security for the payment of the Outstanding Indebtedness and the performance and observance of and compliance with all of the covenants, terms and conditions in the Security Documents contained, express or implied and that the security so
created shall not be satisfied by any intermediate payment or satisfaction of any part of the amount hereby and thereby secured (or by any settlement of accounts between the Buyer or any other person who may be liable to the Secured Creditors in
respect of the Outstanding Indebtedness or any part thereof and the Security Agent or the Secured Creditors or any of them);
|
4.1.2
|
Security additional
|
the security so created shall be in addition to, and shall not in any way
prejudice or affect and may be enforced by the Security Agent without prior recourse to the security created by any of the other Security Documents or by any deposit of documents, or any guarantee, lien, bill, note, mortgage or other security now or
hereafter held by the Security Agent or any Secured Creditor, or any right or remedy of the Security Agent or any Secured Creditor thereunder and shall not in any way be prejudiced or affected thereby or by the invalidity or unenforceability
thereof, or by the Security Agent or any Secured Creditor releasing, modifying or refraining from perfecting or enforcing any of the same, or granting time or indulgence or compounding with any person liable;
all the rights, remedies and powers vested in the Security Agent hereunder
shall be an addition to, and not a limitation of, any and every other right, power or remedy vested in the Security Agent or any Secured Creditor under the Agreement, this Deed, the other Security Documents or at law and that all the powers so
vested in the Secured Creditors and/or the Security Agent may be exercised from time to time and as often as they may deem expedient;
6
the Security Agent shall not be obliged to make any enquiry as to the nature or
sufficiency of any payment received by it under this Deed or to make any claim or take any action to collect any moneys hereby assigned or to enforce any rights or benefits hereby assigned to the Security Agent or to which the Security Agent may at
any time be entitled under this Deed; and
the Buyer shall remain liable to perform all the obligations assumed by it in
relation to the Assigned Property and the Security Agent shall be under no obligation of any kind whatsoever in respect thereof or be under any liability whatsoever in the event of any failure by the Buyer to perform its obligations in respect
thereof.
|
5
|
Powers of Security Agent
|
The Security Agent shall, without prejudice to its other rights,
powers and remedies hereunder or under any of the other Security Documents, be entitled (but not bound) at any time, and as often as may be necessary, to take any such action as it may in its discretion think fit for the purpose of protecting or
maintaining the security created by this Deed and all Expenses attributable thereto shall be payable by the Buyer on demand.
Without prejudice to the provisions of clause 5.1 or the generality
of the powers and remedies vested in the Security Agent by virtue of the assignment herein contained, upon the happening of any Event of Default (whether or not the Agent shall have given any notice in accordance with the provisions of clause 10.2
of the Agreement), the Security Agent shall become forthwith entitled, as and when it may see fit, to exercise in relation to the Assigned Property or any part thereof all or any of the rights, powers and remedies possessed by it as assignee of the
Assigned Property (whether at law, by virtue of this Deed or otherwise) and in particular (without limiting the generality of the foregoing):
|
5.2.1
|
to implement the Contract and take delivery and possession of the Ship as the Security Agent may see fit;
|
|
5.2.2
|
to agree with the Builder to determine the Contract on such terms and conditions as the Security Agent and the Builder may mutually agree;
|
|
5.2.3
|
to assign all the Assigned Property or to sell the Ship on or after its delivery under the Contract or otherwise and upon such terms (including free of or subject to any charter) as the Security Agent shall in its
absolute discretion determine and with power, where the Security Agent purchases the Ship and/or takes an assignment of the Assigned Property, to make payment of the price by making an equivalent reduction in the amount of the Outstanding
Indebtedness in the manner referred to in clause 6.1;
|
|
5.2.4
|
to undertake the further supervision of the construction of the Ship;
|
|
5.2.5
|
to collect, recover, compromise and give a good discharge for all claims then outstanding or thereafter arising in respect of the Assigned Property or any part thereof and moneys payable to the Buyer or any damages
recoverable by the Buyer under the Assigned Documents in connection therewith and to take over or institute (if necessary using the name of the Buyer) all such proceedings in connection therewith as the Security Agent in its absolute discretion
thinks fit;
|
7
|
5.2.6
|
to implement the Refund Guarantees or any of them and to agree with any of the Refund Guarantors any compromise of the obligations of such Refund Guarantor or grant any release or discharge of such Refund Guarantor;
|
|
5.2.7
|
following delivery of the Ship to manage, insure, maintain and repair the Ship and to employ, sail or lay up the Ship in such manner and for such period as the Security Agent, in its absolute discretion, deems
expedient, accounting only for net profits arising from any such employment; and
|
|
5.2.8
|
to recover from the Buyer on demand all Expenses incurred or paid by the Security Agent in connection with the exercise of the powers (or any of them) referred to in this clause 5.2.
|
At any time after the happening of any Event of Default which is
subsisting (whether or not the Agent shall have given any notice in accordance with the provisions of clause 10.2 of the Agreement), the Security Agent shall be entitled to exercise its powers of assignment and sale hereunder in such manner and at
such times as the Security Agent in its absolute discretion may determine and the Security Agent shall not in any circumstances be answerable for any loss occasioned by such sale or resulting from postponement thereof unless such loss is caused by
the Security Agent’s gross negligence and/or wilful misconduct.
|
5.4
|
No enquiry by purchaser
|
Upon any assignment or sale of the Contract and/or the Ship or
any share therein or part thereof pursuant to this Deed the purchaser shall not be bound to see or inquire whether the Security Agent’s power of assignment or sale has arisen and the assignment or sale shall be deemed to be within the power of
the Security Agent and the receipt of the Security Agent for the purchase money shall effectively discharge the purchaser who shall not be concerned with the manner of application of the proceeds of sale or be in any way answerable therefor.
|
5.5
|
Security Agent’s rights
|
The Buyer covenants and undertakes with the Security Agent
to do or permit to be done each and every act or thing which the Security Agent may from time to time require to be done for the purpose of enforcing the Security Agent’s rights under this Deed and to allow its name to be used as and when
required by the Security Agent for that purpose.
All moneys received by the Security Agent in respect of;
|
6.1.1
|
any payment under any of the Refund Guarantees;
|
|
6.1.2
|
from the Builder under the Contract (including sums arising from any arbitration award);
|
|
6.1.3
|
the assignment, sale or other disposal of the Assigned Property or the Ship on enforcement of its rights hereunder;
|
|
6.1.4
|
(if the Ship is delivered to the Security Agent (or its nominee)) freights and other earnings of the Ship until the sale or loss of the Ship after such delivery;
|
|
6.1.5
|
the determination, cancellation or rescission or other termination of the Contract;
|
8
|
6.1.6
|
such collections, recoveries or compromises as are referred to in clause 5.2.5; or
|
|
6.1.7
|
otherwise in respect of the Assigned Property,
|
shall be held by it upon trust in the first
place to pay or make good the Expenses and the balance shall be applied in the manner specified in clause 13.1 of the Agreement.
In the event that on application in accordance with clause 6.1, the moneys so
applied are insufficient to pay in full the whole of the Outstanding Indebtedness, the Security Agent and/or the Secured Creditors shall be entitled to collect the shortfall from the Buyer or any other person liable for the time being therefor.
|
7
|
Remedies cumulative and other provisions
|
No failure or delay on the part of the Security Agent to exercise any right,
power or remedy vested in it under the Security Documents or any of them shall operate as a waiver thereof, nor shall any single or partial exercise by the Security Agent of any right, power or remedy nor the discontinuance, abandonment or adverse
determination of any proceedings taken by the Security Agent to enforce any right, power or remedy preclude any other or further exercise thereof or proceedings to enforce the same or the exercise of any other right, power or remedy. Nor shall the
giving by the Security Agent of any consent to any act which by the terms of this Deed requires such consent prejudice the right of the Security Agent to withhold or give consent to the doing of any other similar act. The remedies provided in the
Security Documents are cumulative and are not exclusive of any remedies provided by law.
The Security Agent shall be entitled, at any time and as often as may be
expedient, to delegate all or any of the powers and discretions vested in it by this Deed (including the power vested in it by virtue of clause 9) in such manner, upon such terms and to such persons as the Security Agent in its absolute discretion
may think fit.
|
7.3
|
Security Agent as assignee
|
The Security Agent shall be entitled to do all acts and
things incidental or conducive to the exercise of any of the rights, powers or remedies possessed by it as assignee of the Assigned Property (whether at law, under this Deed or otherwise).
The Buyer shall pay to the Security Agent on demand on a full indemnity basis all
expenses or liabilities of whatsoever nature (including legal fees, fees of insurance advisers, printing, out-of-pocket expenses, stamp duties, registration fees and other duties or charges together with any value added tax or similar tax payable in
respect thereof) incurred by the Security Agent in connection with the enforcement of, or preservation of any rights under, this Deed or otherwise in respect of the Outstanding Indebtedness and the security therefor or in connection with the
preparation, completion, execution or registration of this Deed.
The Buyer hereby agrees and undertakes to indemnify the Security Agent
against all losses, actions, claims, expenses, demands, obligations and liabilities whatsoever and whensoever arising which may now or hereafter be incurred by or threatened or brought against it, or
9
incurred by any manager, agent, officer or employee for whose liability, act or omission the Security Agent may be answerable in respect of, in relation to, or in connection with, anything done
or omitted in the exercise of, or purported exercise of, the powers contained in this Deed or the implementation of the Assigned Documents, or in respect of the design, construction, equipment or use or operation of the Ship or otherwise in
connection herewith or with any part of the Assigned Property or otherwise howsoever in relation to, or in connection with, any of the matters dealt with in any of the Security Documents unless such losses, claims, expenses, liabilities and
obligations are caused by the Security Agent’s gross negligence and/or wilful misconduct.
By way of security, the Buyer hereby irrevocably appoints the
Security Agent to be its attorney generally for and in the name and on behalf of the Buyer and as the act and deed or otherwise of the Buyer to execute, seal and deliver and otherwise perfect and do all such deeds, assurances, agreements,
instruments, acts and things including, without prejudice to the generality of the foregoing, to ask, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due and to become due under or arising out of
any of the Assigned Documents including all amounts already paid by the Buyer to the Builder pursuant to the Contract, to endorse any cheques or other instruments or orders in connection therewith and to file any claims or take any action or
institute any proceedings which to the Security Agent may seem to be necessary or advisable to execute and deliver a bill of sale of the Ship and generally to do any and all such things as the Buyer itself could do in relation to the property hereby
assigned which may be required for the full exercise of all or any of the rights, powers or remedies conferred hereby or which may be deemed proper in or in connection with all or any of the purposes aforesaid. The power hereby conferred shall be a
general power of attorney under the Powers of Attorney Act 1971, and the Buyer ratifies and confirms, and agrees to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the Security Agent may execute or do pursuant
thereto. Provided always that such power shall not be exercisable by or on behalf of the Security Agent until the happening of any Default which is subsisting.
|
9.2
|
Dealings with attorneys
|
The exercise of such power by or on behalf of the Security
Agent shall not put any person dealing with the Security Agent upon any enquiry as to whether any Default has happened, nor shall such person be in any way affected by notice that no such event has happened, and the exercise by the Security Agent of
such power shall be conclusive evidence of its or his right to exercise the same.
The Buyer hereby irrevocably appoints the Security Agent to be its attorney in
the name and on behalf of the Buyer and as the act and deed or otherwise of the Buyer to agree the form of and to do and execute all deeds, instruments, acts and things to file, record, register or enrol this Deed which the Security Agent may in its
discretion consider necessary or advisable, now or in the future, to ensure the legality, validity, enforceability or admissibility in evidence thereof.
The Buyer hereby further undertakes at its own expense from time to
time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the reasonable opinion of the Security Agent may be necessary or desirable for the purpose of more effectually assigning the
Assigned Property or perfecting the security constituted or intended to be constituted by this Deed.
10
Subject to clause 5, the provisions of clause 15 of the Agreement shall
apply
mutatis mutandis
in respect of any assignment of rights or transfer of obligations under this Deed and the rights of each of the Buyer and the Security Agent to effect any assignment of rights or transfer of obligations under this Deed.
The provisions of clauses 17.1 and 17.2 of the Agreement shall apply
mutatis
mutandis
in respect of any certificate, notice, demand or other communication given or made under this Deed save that references therein to the “Borrowers or any of them” shall be construed for the purposes of this Deed as references
to the “Buyer”.
This Deed is governed by, and shall be construed in accordance with, English law.
|
13.2
|
Submission to jurisdiction
|
For the benefit of the Security Agent, the Buyer hereby
irrevocably agrees that any legal action or proceedings arising out of or in connection with this Deed against the Buyer or any of its assets may be brought in the English courts or in the courts of any other jurisdiction chosen by the Security
Agent, each of which shall have jurisdiction to settle any disputes arising out of or in connection with this Deed. The Buyer irrevocably and unconditionally submits to the jurisdiction of such courts, and irrevocably designates, appoints and
empowers [
—
] at present of [
—
], England to receive, for it and on its behalf, service of process issued out of the English courts in any such
legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Security Agent to take proceedings against the Buyer in any other court of competent jurisdiction nor shall the
taking of proceedings by the Security Agent in any one or more jurisdictions preclude the taking of proceedings by the Security Agent in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other State shall have jurisdiction to determine any claim which
the Buyer may have against the Security Agent arising out of or in connection with this Deed.
|
13.3
|
Contracts (Rights of Third Parties) Act 1999
|
No term of this Deed is enforceable under
the provisions of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Deed.
IN WITNESS
whereof this Deed has
been duly executed by way of deed the day and year first above written.
11
Schedule 1
Form of notice of assignment of Contract and acknowledgement
|
|
|
|
|
To:
|
|
Samsung Heavy Industries Co., Ltd.
Samsung Life
Insurance Seocho Tower 1321-15
Seocho-Dong
Seocho-Gu
Seoul
Korea
|
[
—
] 2008
Dear Sirs
Hull No. [
—
] [
—
] (the “Ship”)
We refer to the shipbuilding contract dated 16 April 2008 made between ourselves, [Fontvieille Shipholding Limited] [Moneghetti Shipholding Limited] (the
“
Buyer
”), and you, Samsung Heavy Industries Co., Ltd. (the “
Builder
”), as amended by an addendum No. 1 dated 16 April 2008 and as may be further amended and supplemented from time to time (together the
“
Contract
”), whereby the Builder agreed to design, build, launch, equip, complete, sell and deliver to the Buyer after completion and successful trials one 158,000 dwt crude oil tanker currently known as [
—
] [
—
] and the Buyer agreed to purchase and take delivery of the same.
NOW WE HEREBY GIVE YOU NOTICE:
|
1
|
that by a deed of assignment (the “
Assignment
”) dated [
—
] 2008 and made between the Buyer and BNP Paribas (Suisse) SA of Switzerland acting as
security agent and trustee for itself and certain other banks and financial institutions (the “
Security Agent
”), the Buyer has assigned to the Security Agent all its beneficial interests and all its benefits, right and title in, to
and under the Contract but the Buyer continues to be responsible to the Builder for performance of the Buyer’s obligations thereunder;
|
|
2
|
that the Builder is irrevocably authorised and instructed:
|
|
|
(a)
|
to hold the Ship to the order and at the disposal of the Security Agent (subject only to any lien of the Builder as builder for moneys due to it under the Contract);
|
|
|
(b)
|
to hold the builder’s certificate and any other document of title to the Ship to the order and at the disposal of the Security Agent (subject only to any lien of the Builder as builder for moneys due to it under
the Contract); and
|
|
|
(c)
|
to pay to the Security Agent all sums which the Builder may become due to pay to the Buyer under the Contract (including sums arising from an arbitration award); and
|
12
|
3
|
that the Assignment includes provisions that:
|
|
|
(a)
|
the Buyer will not (without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose)) (i) agree to any material variation of the Contract or
any substantial variation of the specification of the Ship or (ii) either exercise or fail to exercise any right which the Buyer may have to reject the Ship or cancel or rescind or otherwise terminate the Contract; and
|
|
|
(b)
|
the Buyer shall remain liable to perform all its obligations under the Contract and the Security Agent shall be under no obligation of any kind in respect thereof.
|
The Security Agent has agreed that, until such time as the Security Agent may give notice to the contrary, the Buyer or any representative appointed by the
Buyer pursuant to Article [IV.2] of the Contract may continue to superintend the building of the Ship. On such notice being given the Security Agent may (
inter alia
) exercise such right to superintend. This letter does not of course affect
the Builder’s right to be paid by the Buyer for alterations, additions, extra work and materials required or directed by the Buyer in accordance with the terms of the Contract prior to such notice being given to the Builder by the Security
Agent.
The authority and instructions contained in this letter cannot be revoked or varied without the Security Agent’s consent.
Please acknowledge receipt of this notice and confirm your agreement in relation to the matters stated above by signing the enclosed acknowledgement and
return it direct to the Security Agent at the address shown, with a copy to us.
This letter is governed by, and shall be construed in accordance with,
English law.
|
|
|
Yours faithfully
|
|
|
|
|
|
Attorney-in-fact
|
|
For and on behalf of
|
|
[FONTVIEILLE SHIPHOLDING LIMITED]
|
|
[MONEGHETTI SHIPHOLDING LIMITED]
|
13
Acknowledgement and undertaking
|
|
|
|
|
To:
|
|
BNP Paribas (Suisse) SA
Place de Hollande 2
P.O. Box Ch-1211
Geneva 11
Switzerland
|
We acknowledge notice of the fact that [Fontvieille Shipholding Limited] [Moneghetti Shipholding Limited] (the
“
Buyer
”) has by a deed of assignment (the “
Assignment
”) dated [
—
] 2008 assigned to you all its beneficial interest and all its benefits, right and title in, to and
under the shipbuilding contract dated 16 April 2008 made between each of (a) the Buyer and (b) ourselves, Samsung Heavy Industries Co., Ltd. (the “
Builder
”), as amended by an addendum No. 1 dated 16 April
2008 and as it may be further amended and supplemented from time to time (the “
Contract
”), for the construction, sale and purchase of Hull No. [
—
] [
—
] (the “
Ship
”) but that, until such time as you may give notice to us to the contrary, the Buyer or any representative appointed by the Buyer pursuant to Article IV.2 of the Contract
may continue to superintend the building of the Ship and our right to be paid by the Buyer for alterations, additions, extra work and materials required or directed by the Buyer in accordance with the terms of the Contract prior to such notice being
given by you shall not be affected.
In accordance with authority and instructions given to us by the Buyer which cannot be revoked or varied without your
consent, and in consideration of your making available finance to the Buyer to assist in payment of the purchase price of the Ship, we hereby undertake:
|
1
|
to hold the Ship and the builder’s certificate and any other documents of title to the Ship to your order and disposal free from any claim which we may have against the Buyer except our lien as Builder in respect
of money due to us under the Contract;
|
|
2
|
to pay to you all sums which we may become due to pay to the Buyer under the Contract including sums arising from an arbitration award;
|
|
3
|
that should default be made by the Buyer in the due payment of any instalment or instalments of the purchase price or should the Buyer commit any other default by reason whereof we claim a right to terminate the
Contract, we shall forthwith give you notice in writing of such default; and
|
|
4
|
that before exercising any option or right accruing to us on any such default including, without limitation, any right of the Builder to sell the Ship, we shall first give you the option (to be exercised within twenty
one (21) days) of you, or your nominee, making good the default and assuming all the Buyer’s liabilities under the Contract.
|
We
confirm that we have received no notice of any other assignment, charge or disposal by the Buyer of the Contract or the Ship and we hereby agree not to consent or agree to any other assignment of the Contract without your prior written consent and
to advise you forthwith of any such attempted assignment, change or disposal by the Buyer of the Contract or the Ship.
This letter is governed by, and
shall be construed in accordance with, English law.
|
|
|
Yours faithfully
|
|
|
|
|
|
[Attorney-in-fact]
|
|
For and on behalf of
|
|
SAMSUNG HEAVY INDUSTRIES CO., LTD.
|
Dated: [
—
] 2008
14
Schedule 2
Form of notice of assignment of Refund Guarantees and acknowledgement
|
|
|
|
|
To:
|
|
The Korea Development Bank
Corporate Banking
Dept. 1
16-3, Yeonido-dong, Yeongdeungpo-gu
Seou 150-973
Korea
|
[
—
] 2008
Dear Sirs
We refer to the letter of guarantee dated [
—
] no. [
—
] (the “
Refund Guarantee
”) issued by you in respect of the refund obligations of Samsung Heavy Industries Co., Ltd. (the
“
Builder
”) under a shipbuilding contract dated 16 April 2008 made between (a) ourselves, [Fontvieille Shipholding Limited] [Moneghetti Shipholding Limited] and (b) the Builder, as the same has been amended by an
addendum No. 1 dated 16 April 2008 and as may be further amended and supplemented from time to time (together the “
Contract
”), for the construction, sale and purchase of Hull No.
[
—
] [
—
].
NOW WE HEREBY GIVE YOU NOTICE:
|
1
|
that by a deed of assignment (the “
Assignment
”) dated [
—
] 2008 and made between ourselves and BNP Paribas (Suisse) SA of Switzerland, acting as
security agent and trustee for itself and certain other banks and financial institutions (the “
Security Agent
”), we have assigned to the Security Agent all our beneficial interest and all our benefits, right and title in, to and
under the Refund Guarantee and in all moneys payable by you to us under the Refund Guarantee including (but without prejudice to the generality of the foregoing) all claims for damages in respect of any breach by you of the Refund Guarantee;
|
|
2
|
that you are hereby irrevocably authorised and instructed to hold the Refund Guarantee to the order and at the disposal of the Security Agent and to pay to the Security Agent all sums which you may become due to pay to
us under the Refund Guarantee; and
|
|
3
|
that the Assignment includes provisions that we will not, without the previous consent in writing of the Security Agent (and then only subject to such conditions as the Security Agent may impose) agree to any variation
of the Refund Guarantee or release you from any of your obligations thereunder or waive any breach of your obligations thereunder or consent to any such act or omission as would otherwise constitute such breach.
|
The authority and instructions contained in this letter cannot be revoked or varied without the Security Agent’s consent.
Please acknowledge receipt of this notice and confirm your agreement in relation to the matters stated above and that the Refund Guarantee remains in full
force and effect by signing the acknowledgement endorsed on the enclosed duplicate of this notice and returning that duplicate direct to the Security Agent at the address shown, with a copy to us.
15
This letter is governed by, and shall be construed in accordance with, English law.
|
|
|
Yours faithfully
|
|
|
|
|
|
Attorney-in-fact
|
|
For and on behalf of
|
|
[FONTVIEILLE SHIPHOLDING LIMITED]
|
|
[MONEGHETTI SHIPHOLDING LIMITED]
|
16
[on duplicate]
|
|
|
|
|
To:
|
|
BNP Paribas (Suisse) SA
Place de Hollande 2
P.O. Box Ch-1211
Geneva 11
Switzerland
|
We hereby acknowledge receipt of the notice above and agree to act in accordance with the authority and instructions given to
us in that notice.
We confirm that we have received no notice of any other assignment, charge or disposal by the Buyer of the Refund Guarantee.
This letter is governed by, and shall be construed in accordance with, English law.
|
|
|
|
|
For and on behalf of
|
|
THE KOREA DEVELOPMENT BANK
|
[
—
]
Dated: [
—
]
17
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
[FONTVIEILLE SHIPHOLDING LIMITED]
|
|
)
|
|
Attorney-in-Fact
|
|
[MONEGHETTI SHIPHOLDING LIMITED]
|
|
)
|
|
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
)
|
|
Attorney-in-Fact
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
|
|
|
|
Name:
|
|
|
|
|
|
Address:
|
|
|
|
|
|
Occupation
|
|
|
|
|
18
Schedule 8
Form of Trust Deed
THIS DECLARATION
OF TRUST
made by
BNP PARIBAS (SUISSE) SA
(the “
Security Agent
”) is made on [
—
] 2008 and is supplemental to (and made pursuant to the terms of) a loan agreement dated [
—
] 2008 (the “
Agreement
”) and made between (1) Fontvieille Shipholding Limited and Moneghetti Shipholding Limited as joint and several Borrowers, (2)) BNP Paribas (Suisse) SA
as Arranger, Agent and Account Bank, (3) the Security Agent and (4) the banks and financial institutions mentioned in schedule 1 to the Agreement as the Banks. Words and expressions defined in the Agreement shall have the same meaning when
used in this Deed.
NOW THIS DEED WITNESSETH
as follows:
|
1
|
The Security Agent hereby acknowledges and declares that, from the date of this Deed, it holds and shall hold the Trust Property on trust for certain of the other Creditors on the terms and basis set out in the
Agreement.
|
|
2
|
The declaration and acknowledgement contained in paragraph 1 above shall be irrevocable.
|
IN WITNESS
whereof the Security Agent has executed this Deed the day and year first above written.
|
|
|
|
|
|
|
EXECUTED
as a
DEED
|
|
)
|
|
|
|
by
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
)
|
|
Authorised Signatory
|
|
as Security Agent
|
|
)
|
|
|
85
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
|
|
|
|
|
|
FONTVIEILLE SHIPHOLDING LIMITED
|
|
)
|
|
Attorney-in-fact
|
|
as Borrower
|
|
)
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
|
|
|
|
|
|
MONEGHETTI SHIPHOLDING LIMITED
|
|
)
|
|
Attorney-in-fact
|
|
as Borrower
|
|
)
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
|
|
|
|
|
|
BNP PARIBAS (SUISSE) SA
|
|
)
|
|
Attorney-in-fact
|
|
as Arranger, Agent, Security Agent, Account Bank and Bank
|
|
)
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
and by
|
|
)
|
|
Attorney-in-fact
|
|
for and on behalf of
|
|
)
|
|
|
|
ALPHA BANK S.A.
|
|
)
|
|
|
|
|
|
|
|
|
|
|
as Bank
|
|
)
|
|
Authorised Signatory
|
86
Exhibit 10.10
Private & Confidential
Dated
29 June 2012
FIRST SUPPLEMENTAL AGREEMENT
relating to
a Loan of up
to US$135,000,000
to
FONTVIEILLE SHIPHOLDING LIMITED
and
MONEGHETTI
SHIPHOLDING LIMITED
provided by
THE BANKS AND FINANCIAL INSTITUTIONS
set out in schedule 1
Arranger and Account Bank
BNP PARIBAS (SUISSE) SA
Agent and Security Agent
BNP PARIBAS S.A.
Contents
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
1
|
|
Definitions
|
|
2
|
|
|
|
|
|
2
|
|
Consent of the Creditors
|
|
4
|
|
|
|
|
|
3
|
|
Amendments to the Principal Agreement
|
|
5
|
|
|
|
|
|
4
|
|
Representations and warranties
|
|
9
|
|
|
|
|
|
5
|
|
Conditions
|
|
11
|
|
|
|
|
|
6
|
|
Relevant Parties’ confirmations
|
|
11
|
|
|
|
|
|
7
|
|
Expenses
|
|
11
|
|
|
|
|
|
8
|
|
Miscellaneous and notices
|
|
12
|
|
|
|
|
|
9
|
|
Applicable law
|
|
13
|
|
|
|
|
Schedule 1 Names and addresses of the Banks
|
|
14
|
|
|
|
|
Schedule 2 Documents and evidence required as conditions precedent
|
|
15
|
THIS FIRST SUPPLEMENTAL AGREEMENT
is dated 29 June 2012 and made
BETWEEN
:
|
(1)
|
FONTVIEILLE SHIPHOLDING LIMITED
, a company established under the laws of Hong Kong, whose registered office is at Room 3206, 32
nd
floor, Lippo Centre, Tower
Two, No. 89 Queensway, Hong Kong (the “
Fontvieille Borrower
”) and
MONEGHETTI SHIPHOLDING LIMITED
, a company established under the laws of Hong Kong, whose registered office is at Room 3206, 32
nd
floor, Lippo Centre, Tower Two, No. 89 Queensway, Hong Kong (the “
Moneghetti Borrower
” and, together with the Fontvieille Borrower, the “
Borrowers
”) as joint
and several borrowers;
|
|
(2)
|
EURONAV N.V.
, a company established under the laws of the Kingdom of Belgium, whose registered office is at de Gerlachekaai 20, B-2000 Antwerp, Kingdom of Belgium as corporate guarantor (in such capacity the
“
Euronav Guarantor
”) and as commercial manager (in such capacity the “
Commercial Manager
”);
|
|
(3)
|
EURONAV SHIPMANAGEMENT (HELLAS) LTD.
, a corporation incorporated under the laws of the Republic of Liberia, whose registered office is at 80 Broad street, Monrovia, Liberia, with an established office in Greece
under L89/67 situated at 69 Akti Miaouli, 185 37 Piraeus, Greece, as technical manager (the “
Technical Manager
” and together with the Commercial Manager the “
Managers
”);
|
|
(4)
|
BRETTA TANKER HOLDINGS INC.
a company established under the laws of the Republic of Panama, whose registered office is at Morgan & Morgan, Calle 53, Urbanizacion Marbella, MM6 Tower, Piso 16, Panama,
Republic of Panama as corporate guarantor (the “
Bretta Guarantor
” and together with the Euronav Guarantor, the “
Corporate Guarantors
”);
|
|
(5)
|
THE BANKS AND FINANCIAL INSTITUTIONS
whose names and addresses are set out in schedule 1 as banks (together the “
Banks
” and singly each a “
Bank
”);
|
|
(6)
|
BNP PARIBAS (SUISSE) SA
, a company established under the laws of Switzerland, acting for the purposes of this Agreement through its office at Place de Hollande 2, P.O. Box CH-1211, Geneva 11, Switzerland as
arranger and account bank (under each such capacity the “
Arranger
” and the “
Account Bank
”, respectively);
|
|
(7)
|
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
), a company established under the laws of France whose registered office is at 16 Boulevard des Italiens 75009, Paris, France as agent (the
“
Agent
”); and
|
|
(8)
|
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
), a company established under the laws of France whose registered office is at 16 Boulevard des Italiens 75009, Paris, France as security agent
(the “
Security Agent
” and together with the Agent and the Banks the “
Creditors
”).
|
WHEREAS
:
|
(A)
|
this Agreement is supplemental to a loan agreement dated 23 April 2008 made between (1) the Borrowers, (2) the Banks, (3) the
Agent, (4) the Security Agent, (5) the Account Bank and (6) the Arranger as amended and supplemented by a first supplemental letter dated 4 February 2010, a second supplemental letter dated 22 December 2010, an appointment
agreement dated 4 May 2011 and a transfer certificate dated 4 May 2011 (together the “
Principal Agreement
”), relating to a loan facility of up to One hundred and thirty five million Dollars ($135,000,000) of which the
amount of One hundred and twenty three million United States Dollars ($123,000,000) was advanced by the Banks to the Borrowers for the purposes stated therein and of which the principal amount outstanding at the date hereof is One hundred and eleven
million two hundred and twenty thousand and one United States Dollars ($111,220,001). Pursuant to a transfer certificate dated 4 May 2011, BNP Paribas (Suisse) SA as lender has transferred all its rights and obligations under the Principal
Agreement and the other Security Documents to BNP Paribas S.A.. Pursuant to an appointment agreement dated 4 May 2011, made between (inter alios) (1) the Borrowers, (2) the Agent, (3) the Account Bank, (4) BNP Paribas
(Suisse) SA and
|
1
|
|
(5) BNP Paribas S.A., BNP Paribas (Suisse) SA resigned as agent and security agent and BNP Paribas S.A. was appointed as agent and security agent in its place in accordance with clause 16 of the
Principal Agreement;
|
|
(B)
|
each of the Borrowers, the Guarantors and the Managers have requested that the Creditors consent to the following arrangements proposed by the Borrowers:
|
|
|
(a)
|
the temporary reduction of the Security Requirement (as defined in the Principal Agreement) from 120% to 100% for the period commencing on 1 January 2012 and ending on 31 December 2012; and
|
|
|
(b)
|
the revision of the repayment terms of the Loan in the manner set out in this Agreement; and
|
|
(C)
|
this Agreement sets out, inter alia, the terms and conditions upon which the Creditors shall provide their agreement:
|
|
|
(a)
|
to the temporary reduction of the Security Requirement (as defined in the Principal Agreement) from 120% to 100% for the period commencing on 1 January 2012 and ending on 31 December 2012;
|
|
|
(b)
|
to the revision of the repayment terms of the Loan in the manner set out in this Agreement; and
|
|
|
(c)
|
to certain consequential amendments and changes to the Principal Agreement as a result of the above and agreed to by the Borrowers, the Guarantors, the Managers and the Creditors.
|
NOW IT IS HEREBY AGREED
as follows:
Words and expressions defined in the Principal Agreement shall
unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.
In this Agreement, unless the context otherwise requires:
“
Devon
” means the motor vessel
Devon
a 2011 built, grt 81,427 tons, nrt 51,258 tons crude oil tanker, registered
in the ownership of the Moneghetti Borrower under the laws and flag of the relevant Flag State with IMO Number 9516117;
“
Devon
Mortgage
” means the first preferred Greek mortgage of
Devon
dated 5 January 2011, executed by the Moneghetti Borrower in favour of the Banks and the Agent as amended by the Devon Mortgage Addendum and the Devon Mortgage
Transfer;
“
Devon Mortgage Addendum
” means the first mortgage addendum to the Devon Mortgage executed or (as the context
may require) to be executed by the Moneghetti Borrower in favour of the Banks and the Agent in such form as the Agent may require in its sole discretion;
“
Devon Mortgage Transfer
” means the notarial deed of amendment dated 4 May 2011, executed before Christopher Gerard
Higgins of Messrs Saville & Co., a Notary Public of the City of London, which was recorded at the Ship Mortgage Registry of Piraeus on 25 May 2011 pursuant to which BNP Paribas (Suisse) SA of Switzerland assigned absolutely to BNP
Paribas S.A. of France all its rights, title and interest in the Devon Mortgage;
2
“
Eugenie
” means the motor vessel
Eugenie
a 2010 built, grt 81,427
tons, nrt 51,258 tons crude oil tanker, registered in the ownership of the Fontvieille Borrower under the laws and flag of the relevant Flag State with IMO Number 9516105;
“
Eugenie Mortgage
” means the first preferred Greek mortgage of
Eugenie
dated 9 February 2010, executed by the
Fontvieille Borrower in favour of the Banks and the Agent as amended by the Eugenie Mortgage Addenda and the Eugenie Mortgage Transfer;
“
Eugenie Mortgage Addendum
” means the second addendum to the Eugenie Mortgage executed or (as the context may require) to be
executed by the Fontvieille Borrower in favour of the Banks and the Agent in such form as the Agent may require in its sole discretion;
“
Eugenie Mortgage Transfer
” means the notarial deed of amendment dated 4 May 2011 and executed before Christopher Gerard
Higgins of Messrs Saville & Co., a Notary Public of the City of London, which was recorded at the Ship Mortgage Registry of Piraeus on 25 May 2011 pursuant to which BNP Paribas (Suisse) SA of Switzerland assigned absolutely to BNP
Paribas S.A. of France all its rights, title and interest in the Eugenie Mortgage;
“
Effective Date
” means the date, no
later than 5 July 2012, on which the Agent notifies the Borrowers in writing that the Agent has received the documents and evidence specified in clause 5 and schedule 2 in a form and substance satisfactory to it;
“
Loan Agreement
” means the Principal Agreement, as amended and supplemented by this Agreement;
“
Mortgage Addenda
” means, together, the Devon Mortgage Addendum and the Eugenie Mortgage Addendum;
“
Relevant Documents
” means this Agreement, the Mortgage Addenda and any other documents to be executed in connection hereto;
“
Relevant Parties
” means the Borrowers, the Corporate Guarantors and the Managers and any other person (other than the
Creditors) who is a party to a Relevant Document or, where the context so requires or permits, means any or all of them; and
“
Ships
” means, together,
Devon
and
Eugenie
and “
Ship
” means either of them.
References in the Principal Agreement to “this
Agreement
” shall, with effect from the Effective Date and unless the context otherwise requires, be references to the Principal Agreement as amended by this Agreement and words such as “
herein
”,
“
hereof
”, “
hereunder
”, “
hereafter
”, “
hereby
” and “
hereto
”, where they appear in the Principal Agreement, shall be construed accordingly.
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement.
3
|
1.5
|
Construction of certain terms
|
In this Agreement, unless the context otherwise requires:
|
1.5.1
|
references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules;
|
|
1.5.2
|
references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended in
accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties;
|
|
1.5.3
|
references to a “
regulation
” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any agency, authority, central bank
or government department or any self-regulatory or other national or supra-national authority;
|
|
1.5.4
|
words importing the plural shall include the singular and vice versa;
|
|
1.5.5
|
references to a time of day are to London time;
|
|
1.5.6
|
references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
|
|
1.5.7
|
references to a “
guarantee
” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a
default by any other person to pay any Indebtedness and “
guaranteed
” shall be construed accordingly; and
|
|
1.5.8
|
references to any enactment shall be deemed to include references to such enactment as reenacted, amended or extended.
|
|
2
|
Consent of the Creditors
|
The Creditors, relying upon the representations and warranties
on the part of each Relevant Party contained in clause 4, agree with the Borrowers that, with effect on and from the Effective Date and subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality
of the foregoing, fulfilment on or before 5 July 2012 of the conditions contained in clause 5 and schedule 2, the Creditors:
|
|
(a)
|
agree and consent to the temporary reduction of the Security Requirement from 120% to 100% for the period commencing on 1 January 2012 and ending on 31 December 2012 (both inclusive);
|
|
|
(b)
|
the revision of the repayment terms of the Loan in the manner set out in clause 3; and
|
|
|
(c)
|
agree and consent to the amendments of the Principal Agreement on the terms set out in clause 3.
|
4
|
3
|
Amendments to the Principal Agreement
|
The Principal Agreement shall, with effect on and from the Effective Date,
be (and it is hereby) amended in accordance with the following provisions and the Principal Agreement (as so amended) will continue to be binding upon the Creditors and the Borrowers upon such terms (as so amended):
|
3.1.1
|
By deleting the definition of “
Balloon Instalment
” in clause 1.2. of the Principal Agreement and by replacing it with the following new definition of “
Balloon Instalment
”:
|
““
Balloon Instalment
” means, in relation to each Tranche, the balloon payment referred to in clause
4.1.1 in respect of that Tranche;”;
|
3.1.2
|
by deleting the definition of “
Fontvieille Mortgage
” in clause 1.2 of the Principal Agreement in its entirety and by replacing it with the following new definition of “
Fontvieille
Mortgage
”:
|
““
Fontvieille Mortgage
” means the first preferred Greek mortgage of the
Fontvieille Ship dated 9 February 2010, executed by the Fontvieille Borrower in favour of the Banks and the Agent as amended by the Fontvieille Mortgage Addenda and the Fontvieille Mortgage Transfer;”;
|
3.1.3
|
by deleting the definition of “
Moneghetti Mortgage
” in clause 1.2 of the Principal Agreement in its entirety and by inserting in its place the following new definition of “
Moneghetti
Mortgage
”:
|
““
Moneghetti Mortgage
” means the first preferred Greek mortgage of the Moneghetti
Ship dated 5 January 2011, executed by the Moneghetti Borrower in favour of the Banks and the Agent as amended by the Moneghetti Mortgage Addendum and the Moneghetti Mortgage Transfer;”;
|
3.1.4
|
by deleting in clause 1.2 of the Principal Agreement the definition of “
Margin
” and by inserting in its place the following new definition of “
Margin
”:
|
““
Margin
” means:
|
|
(a)
|
in relation to the Fontvieille Tranche:
|
|
|
(i)
|
from the date of this Agreement until 31 December 2011, one point one zero per cent (1.10%) per annum;
|
|
|
(ii)
|
from 1 January 2012 until 31 December 2012 (inclusive) two point five zero per cent (2.50%) per annum;”
|
|
|
(iii)
|
from 1 January 2013 and at all times thereafter, two per cent (2%) per annum;
|
|
|
(b)
|
in relation to the Mongehetti Tranche:
|
|
|
(i)
|
from the date of this Agreement until the Drawdown Date of the Moneghetti Delivery Advance, one point one zero per cent (1.10%) per annum;
|
|
|
(ii)
|
from the day after the Drawdown Date of the Moneghetti Delivery Advance and until 31 December 2011 (inclusive), one point six zero per cent (1.60%) per annum;
|
|
|
(iii)
|
from 1 January 2012 until 31 December 2012 (inclusive), two point five zero per cent (2.50%) per annum;
|
|
|
(iv)
|
from 1 January 2013 and at all times thereafter, two per cent (2%) per annum;”;
|
|
3.1.5
|
by inserting in the correct alphabetical order in clause 1.2 of the Principal Agreement the following new definitions of “
Appointment Agreement
”, “
Effective Date
”, “
First
Supplemental Agreement
” “
First Supplemental Letter
”, “
Fontvieille Mortgage Addenda
”, “
Fontvieille Mortgage Second Addendum
”, “
Fontvieille Mortgage Transfer
”,
“
Moneghetti Mortgage Addendum
”, “
Moneghetti Mortgage Transfer
”, “
Second Supplemental Letter
”, “
Supplemental Agreements
” and “
Transfer Certificate
”:
|
““
Appointment Agreement
” means the appointment agreement dated 4 May 2011, made between (inter
alios) (1) the Borrowers, (2) the Agent, (3) the Account Bank, (4) BNP Paribas
5
(Suisse) SA of Switzerland and (5) BNP Paribas S.A. of France pursuant to which, inter alia, BNP Paribas (Suisse) SA resigned as agent and security agent and BNP Paribas S.A. was appointed
as agent and security agent in accordance with clause 16 of the Loan Agreement;”;
““
Effective Date
” has the
meaning given to “
Effective Date
” in the First Supplemental Agreement;”;
““
First Supplemental
Agreement
” means the agreement dated 29 June 2012 supplemental to this Agreement, made between (1) the Borrowers, (2) the Guarantors, (3) the Managers, (4) the Banks, (5) the Agent, (6) the Arranger,
(7) the Security Agent and (8) the Account Bank;”;
““
First Supplemental Letter
” means the letter
dated 4 February 2010 supplemental to this Agreement addressed by the Agent to and agreed by (inter alios) the Borrowers and the Guarantors;”;
““
Fontvieille Mortgage Addenda
” means, together, the Fontvieille Mortgage Addendum and the Fontvieille Mortgage Second
Addendum;”;
““
Fontvieille Mortgage Second Addendum
” means the second addendum to the Fontvieille Mortgage,
executed or (as the context may require) to be executed by the Fontvieille Borrower in favour of the Banks and the Agent in such form as the Agent may require in its sole discretion pursuant to the terms of the Second Supplemental Agreement;”;
““
Fontvieille Mortgage Transfer
” means the notarial deed of amendment dated 4 May 2011 and executed before
Christopher Gerard Higgins of Messrs Saville & Co., a Notary Public of the City of London, which was recorded at the Ship Mortgage Registry of Piraeus on 25 May 2011 pursuant to which BNP Paribas (Suisse) SA of Switzerland assigned
absolutely to BNP Paribas S.A. of France all its rights, title and interest in the Fontvieille Mortgage;
““
Moneghetti
Mortgage Addendum
” means the addendum to the Moneghetti Mortgage executed or (as the context may require) to be executed by the Moneghetti Borrower in favour of the Banks and the Agent in such form as the Agent may require in its absolute
discretion pursuant to the terms of the Second Supplemental Agreement;”;
““
Moneghetti Mortgage Transfer
” means
the notarial deed of amendment dated 4 May 2011, executed before Christopher Gerard Higgins of Messrs Saville & Co., a Notary Public of the City of London, which was recorded at the Ship Mortgage Registry of Piraeus on 25 May 2011
pursuant to which BNP Paribas (Suisse) SA of Switzerland assigned absolutely to BNP Paribas S.A. of France all its rights, title and interest in the Moneghetti Mortgage;
““
Second Supplemental Letter
” means the letter dated 22 December 2010 supplemental to this Agreement addressed by
the Agent to and agreed by (inter alios) the Borrowers, the Guarantors and the Managers;”;
““
Supplemental
Agreements
” means, together, the First Supplemental Agreement, the First Supplemental Letter, the Second Supplemental Letter, the Appointment Agreement and the Transfer Certificate”;”; and
““
Transfer Certificate
” means the certificate dated 4 May 2011 pursuant to which BNP Paribas (Suisse) SA of
Switzerland as transferor agreed to transfer to BNP Paribas S.A. of France as transferee all its rights, title and interest as a Bank under the Loan Agreement and the Security Documents;”;
|
3.1.6
|
by inserting the words “the Supplemental Agreements,” after the words “this Agreement,” in the definition of “
Security Documents
” in clause 1.2 of the Principal Agreement;
|
6
|
3.1.7
|
by deleting the definition “
Security Requirement
” in clause 1.2 of the Principal Agreement and by replacing it with the following new definition:
|
““
Security Requirement
” means the amount in Dollars (as certified by the Agent whose certificate shall, in the absence of
manifest error, be conclusive and binding on the Borrowers and the Creditors) which is, at any relevant time:
|
|
(a)
|
during the period between 1 January 2012 and 31 December 2012 (inclusive), one hundred per cent (100%) of the Loan at such time; or
|
|
|
(b)
|
at any other time before and after the period referred to in paragraph (a) above, one hundred and twenty per cent (120%) of the Loan at such time;”;
|
|
3.1.8
|
by deleting clause 4.1.1 of the Principal Agreement in its entirety and by inserting in its place the following new clause 4.1.1:
|
“4.1.1 The Borrowers shall repay each Tranche by forty (40) repayment instalments, one such instalment to be repaid on each of the
Repayments Dates for such Tranche as follows:
|
|
(a)
|
The Fontvieille Tranche
|
Subject to the provisions of this Agreement the amount of each of the
first to the ninth repayment instalments (inclusive) for the Fontvieille Tranche shall be $781,111, the amount of each of the tenth to the thirty ninth repayment instalments (inclusive) for the Fontvieille Tranche shall be $1,000,000 and the amount
of the fortieth and final repayment for the Fontvieille Tranche shall be $18,470,001 (comprising a repayment instalment of $1,000,000 and a balloon payment of $17,470,001); and
|
|
(b)
|
The Moneghetti Tranche
|
Subject to the provisions of this Agreement the amount of each of the
first to the fifth repayment instalments (inclusive) for the Moneghetti Tranche shall $950,000, the amount of each of the sixth to thirty ninth repayment instalments (inclusive) for the Moneghetti Tranche shall be $1,000,000 and the amount of the
fortieth and final repayment for the Moneghetti Tranche shall be $28,750,000 (comprising a repayment instalment of $1,000,000 and a balloon payment of $27,750,000);”
|
3.1.9
|
by inserting after clause 8.5 of the Principal Agreement the following new clause 8.6:
|
“8.6 Outstanding Interest
Pursuant to clause 2 of the Supplemental Agreement the Borrowers and the Banks have agreed to the increase of Margin from 1 January 2012
and at all times thereafter. As a result of such increase, the Borrowers are required to pay to the Banks for the period from 1 January 2012 until the Effective Date an additional amount of interest of $355,459.92 (as regards the Fontvieille
Tranche) and of $293,758.75 (as regards the Moneghetti Tranche) and the Borrowers and the Banks hereby agree that such amount is payable by the Borrowers to the Agent (for and on behalf of the Banks) in the following instalments and on the following
dates:
|
|
(a)
|
in respect of the Fontvieille Tranche:
|
|
|
(i)
|
the amount of $177,729.96 on 4 August 2012; and
|
|
|
(ii)
|
the amount of $177,729.96 on 4 November 2012; and
|
|
|
(b)
|
in respect of the Moneghetti Tranche:
|
|
|
(i)
|
the amount of $97,919.25 on 6 July 2012;
|
|
|
(ii)
|
the amount of $97,919.25 on 30 September 2012; and
|
|
|
(iii)
|
the amount of $97,920.25 on 30 December 2012.”;
|
7
|
3.1.10
|
by deleting clause 8.3.12 of the Principal Agreement in its entirety and by inserting in its place the following new clause 8.3.12:
|
“8.3.12 Share capital and distribution
purchase or otherwise acquire for value any shares of their capital or distribute any of their present or future assets, undertakings, rights
or revenues to any of their shareholders, or declare or pay any dividends to their shareholders if an Event of Default shall have occurred and be subsisting at the time of declaration or payment of such dividends or would occur as a result thereof
Provided however
that neither Borrower may or will declare or pay dividends or distributions to its shareholders within the period commencing on 1 January 2012 and ending on 31 December 2012 in any event (and irrespective of whether
an Event of Default has occurred or not during such period or would occur as a result of the same);
|
3.1.11
|
by adding the words “or 8.6” after the words “or 8.5” in clause 10.1.2 of the Principal Agreement;
|
|
3.1.12
|
by deleting in paragraph (b) of clause 17.1.3 of the Principal Agreement the words “and/or Agent” and the words “and/or Security Agent”;
|
|
3.1.13
|
by inserting after paragraph (c) of clause 17.1.3 of the Principal Agreement the following new paragraph (d) and (e);
|
|
|
|
|
|
BNP Paribas S.A.
21 Place du
Marché Saint Honoré
75001 Paris
France
|
|
|
|
|
Fax No.:
|
|
+33 1 42 98 43 17
|
|
Attention:
|
|
Mr. Pierre Masse / Mrs. Murielle Meunier”; and
|
|
|
(e)
|
if to the Security Agent at:
|
|
|
|
|
|
BNP Paribas S.A.
Transportation
Group Middle-Office
ACI: CAT02A1
16, rue de Hanovre
75078 Paris Cedex 02
France
|
|
|
|
|
Fax No.:
|
|
+33 (0) 142 98 43 55
|
|
Email:
|
|
tgmo.shipping@bnpparibas.com”; and
|
8
|
3.1.14
|
by deleting schedule 1 of the Principal Agreement and by inserting in its place the following new schedule 1:
|
|
|
|
|
|
|
|
|
|
Name
|
|
Lending office and contact details
|
|
Commitment ($)
|
|
|
|
|
|
|
BNP Paribas S.A. (as transferee of BNP Paribas (Suisse) SA)
|
|
Lending Office
16 Boulevard des Italiens
75009 Paris
France
Address for Notices
Transportation Group Middle-Office
ACI: CAT02A1
16, rue de Hanovre
75078 Paris Cedex 02
France
Fax: +33 (0) 1 42 98 43 55
E-mail:
tgmo.shipping@bnpparibas.com
|
|
|
70,000,000
|
|
|
|
|
|
|
Alpha Bank A.E.
|
|
Lending Office
89 Akti Miaouli
185 38 Piraeus
Greece
Address for Notices
89 Akti Miaouli
185 38 Piraeus
Greece
Fax No: +30 210 429 0348
Attn: Shipping Division, Branch 960
|
|
|
65,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Commitment
|
|
|
135,000,000
|
|
|
|
|
|
|
|
|
|
|
3.2
|
Continued force and effect
|
Save as amended by this Agreement, the provisions of the
Principal Agreement shall continue in full force and effect and the Principal Agreement and this Agreement shall be read and construed as one instrument.
|
4
|
Representations and warranties
|
|
4.1
|
Primary representations and warranties
|
Each of the Relevant Parties represents and
warrants to the Creditors that:
|
4.1.1
|
Existing representations and warranties
|
the representations and warranties set out in clause 7
of the Principal Agreement and clause 4 of the Corporate Guarantees were true and correct on the date of the Principal Agreement and
9
on the date of each of the Corporate Guarantees, respectively, and are true and correct, including to the extent that they may have been or shall be amended by this Agreement, as if made at the
date of this Agreement with reference to the facts and circumstances existing at such date;
each of the Relevant Parties has power to execute, deliver and perform its
obligations under the Relevant Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken by each of the Relevant Parties to authorise the execution, delivery and performance of the Relevant
Documents to which it is or is to be a party;
|
4.1.3
|
Binding obligations
|
the Relevant Documents to which it is or is to be a party constitute valid
and legally binding obligations of each of the Relevant Parties enforceable in accordance with their terms;
|
4.1.4
|
No conflict with other obligations
|
the execution, delivery and performance of the Relevant
Documents to which it is or is to be a party by each of the Relevant Parties will not (i) contravene any existing law, statute, rule or regulation or any judgment, decree or permit to which any of the Relevant Parties is subject,
(ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Relevant Parties is a party or is subject or by which it or any of its property is bound or
(iii) contravene or conflict with any provision of the memorandum and articles of association or other constitutional documents of any of the Relevant Parties or (iv) result in the creation or imposition of or oblige any of the Relevant
Parties to create any Encumbrance (other than a Permitted Encumbrance) on any of the undertaking, assets, rights or revenues of any of the Relevant Parties;
|
4.1.5
|
No filings required
|
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of any of the Relevant Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration
or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to the Relevant Documents and each of the Relevant Documents is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
the choice of English law to govern the Relevant Documents (other than the
Mortgage Addenda), the choice of the law of the relevant Flag State to govern each Mortgage Addendum and the submission therein by the Relevant Parties to the non-exclusive jurisdiction of the English courts or (as the case may be) the Greek courts
are valid and binding; and
every consent, authorisation, licence or approval of, or registration or
declaration to, governmental or public bodies or authorities or courts required by any of the Relevant Parties in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Relevant Documents to which it is
or will become a party or the performance by any of the Relevant Parties of their respective obligations under the Relevant Documents to which it is a party has been obtained or made and is in full force and effect and there has been no default in
the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same.
10
|
4.2
|
Repetition of representations and warranties
|
Each of the representations and warranties
contained in clause 4.1 of this Agreement, clause 7 of the Principal Agreement and clause 4 of each of the Corporate Guarantees shall be deemed to be repeated by the Relevant Parties on the Effective Date as if made with reference to the facts and
circumstances existing on such day.
|
5.1
|
Documents and evidence
|
The consents and waiver of the Creditors and the other
arrangements referred to in clause 2 shall be subject to the receipt by the Agent or its duly authorised representative, on or before 5 July 2012, of the documents and evidence specified in schedule 2 in form and substance satisfactory to the
Agent.
|
5.2
|
General conditions precedent
|
The consents and waiver of the Creditors and the other
arrangements referred to in clause 2 shall be further subject to:
|
5.2.1
|
the representations and warranties in clause 4 being true and correct on the Effective Date as if each was made with respect to the facts and circumstances existing at such time; and
|
|
5.2.2
|
no Event of Default having occurred and continuing at the time of the Effective Date.
|
|
5.3
|
Waiver of conditions precedent
|
The conditions specified in this clause 5 are inserted
solely for the benefit of the Creditors and may be waived by the Agent (acting on the instructions of the Majority Banks) in whole or in part with or without conditions.
|
6
|
Relevant Parties’ confirmations
|
Each of the Relevant Parties hereby confirms its
consent to the amendments to the Principal Agreement and the consents and waiver of the Creditors and the other arrangements contained in this Agreement and further acknowledges and agrees that:
|
6.1.1
|
each of the Security Documents to which such Relevant Party is a party, and its obligations thereunder, shall remain and continue in full force and effect notwithstanding the said amendments to the Principal Agreement
and the waiver of the Creditors and the other arrangements contained in this Agreement; and
|
|
6.1.2
|
with effect from the Effective Date, references to “the Agreement” or the “Loan Agreement” (or such other equivalent or similar references) in any of the other Security Documents to which such
Relevant Party is a party shall henceforth be references to the Principal Agreement as amended and supplemented by this Agreement and as from time to time hereafter amended and shall also be deemed to include this Agreement and the obligations of
the Borrowers hereunder.
|
The Borrowers jointly and severally agree to pay to the Agent on a full
indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Creditors or any of them:
|
7.1.1
|
in connection with the negotiation, preparation, execution and, where relevant, registration of this Agreement and the other Relevant Documents and of any amendment or extension of or the granting of any waiver or
consent under this Agreement or the other Relevant Documents; and
|
11
|
7.1.2
|
in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under this Agreement or the other Relevant Documents or otherwise in respect of the monies owing and obligations
incurred under this Agreement and the other Relevant Documents,
|
together with interest at the rate and in the manner
referred to in clause 3.4 of the Principal Agreement from the date on which such expenses were incurred to the date of payment (as well after as before judgment).
All expenses payable pursuant to this clause 7 shall be paid together
with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by the Creditors or any of them under this Agreement shall, on delivery of the value added tax invoice,
be paid in addition to any sum agreed to be paid hereunder.
|
7.3
|
Stamp and other duties
|
Each of the Borrowers jointly and severally agree to pay to the
Agent on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes (other than taxes on the overall net income, profits or gains of the Creditors imposed in the jurisdiction in which such
Creditors’ principal or lending office under the Loan Agreement is located) payable by the Creditors or any of them) imposed on or in connection with this Agreement and the other Relevant Documents and shall indemnify the Creditors against any
liability arising by reason of any delay or omission by the Borrowers to pay such duties or taxes.
|
8
|
Miscellaneous and notices
|
The provisions of clause 17 of the Principal Agreement shall extend and apply
to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose any notices to be sent to the Borrowers, the Corporate Guarantors, the Manager or any of them hereunder shall be sent to the
same address as the address indicated for the “Borrowers” in the said clause 17.
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.
|
8.3
|
Borrowers’ obligations
|
Notwithstanding anything to the contrary contained in this
Agreement, the agreements, obligations and liabilities of the Borrowers herein contained are joint and several and shall be construed accordingly. Each of the Borrowers agrees and consents to be bound by this Agreement notwithstanding that the other
Borrower which was intended to sign or be bound may not do so or be effectually bound and notwithstanding that this Agreement may be invalid or unenforceable against the other Borrower whether or not the deficiency is known to the Creditors or any
of them. The Creditors shall be at liberty to release either of the Borrowers from this Agreement and to compound with or otherwise vary the liability or to grant time and indulgence to make other arrangements with either of the Borrowers without
prejudicing or affecting the rights and remedies of the Creditors against the other Borrower.
12
This Agreement and any non-contractual obligations in connection with this
Agreement are governed by and shall be construed in accordance with English law.
|
9.2
|
Submission to jurisdiction
|
Each of the Relevant Parties agrees, for the benefit of the
Creditors, that any legal action or proceedings arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement) against any of the Relevant Parties or any of its assets may be brought in
the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers Unisea Maritime Ltd. at present of 14 Heafort Place, London, SW1A 7DH,
England to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the
Creditors or any of them to take proceedings against any of the Relevant Parties in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not. The parties hereto further agree that only the Courts of England and not those of any other State shall have jurisdiction to determine any claim which any of the Relevant Parties may have against the
Creditors or any of them arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement).
|
9.3
|
Contracts (Rights of Third Parties) Act 1999
|
No term of this Agreement shall be
enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
IN WITNESS
whereof the
parties to this Agreement have caused this Agreement to be duly executed as a deed on the date first above written.
13
Schedule 1
Names and addresses of the Banks
|
|
|
|
|
|
|
Name
|
|
Address for Notices
|
|
|
|
|
BNP Paribas S.A.
(as transferee of
BNP Paribas
(Suisse) SA)
|
|
BNP Paribas S.A.
Transportation
Group Middle-Office
ACI : CAT02A1
16, rue de Hanovre
75078 Paris Cedex 02
France
|
|
|
|
|
|
|
|
Fax:
|
|
+33 (0) 1 42 98 43 55
|
|
|
|
E-mail:
|
|
tgmo.shipping@bnpparibas.com
|
|
|
|
|
Alpha Bank A.E.
|
|
89 Akti Miaouli
18538 Piraeus
Greece
|
|
|
|
|
|
|
|
Fax:
|
|
+30 210 4290348
|
|
|
|
Attn:
|
|
Shipping Division, Branch 960
|
14
Schedule 2
Documents and evidence required as conditions precedent
(referred to in clause 5.1)
|
1
|
Corporate authorisation
|
In relation to each of the Relevant Parties:
|
|
(a)
|
Constitutional documents
|
copies certified by an officer of each Relevant Party, as a
true, complete and up to date copies, of all documents which contain or establish or relate to the constitution of that party or a secretary’s certificate confirming that there have been no changes or amendments to the constitutional documents
certified copies of which were previously delivered to the Agent pursuant to the Principal Agreement;
copies of resolutions of each of its board of directors and, if required,
its shareholders approving such of the Relevant Documents to which it is or is to be a party and the terms and conditions hereof and thereof and authorising the signature, delivery and performance of each such party’s obligations thereunder,
certified by an officer of each such Relevant Party, as:
|
|
(i)
|
being true and correct;
|
|
|
(ii)
|
being duly passed at meetings of the directors or adopted of such Relevant Party and of the shareholders/stockholders of such Relevant Party, each duly convened and held;
|
|
|
(iii)
|
not having been amended, modified or revoked; and
|
|
|
(iv)
|
being in full force and effect,
|
together with originals or certified copies of any powers of
attorney issued by such Relevant Party pursuant to such resolutions; and
|
|
(c)
|
Certificate of incumbency
|
a list of directors and officers of each Relevant Party
specifying the names and positions of such persons, certified by an officer of such Relevant Party to be true, complete and up to date;
a certificate from an officer of each Relevant Party stating that no consents,
authorisations, licences or approvals are necessary for such Relevant Party to authorise, or are required by such Relevant Party or any other party (other than the Creditors) in connection with, the execution, delivery, and performance of the
Relevant Documents to which it is or will be a party;
such legal opinions in relation to the laws of Hong Kong and any other
legal opinions as the Agent shall in its reasonable discretion deem appropriate;
15
the Relevant Documents (together with any other documents to be
executed pursuant thereto), each duly executed;
|
5
|
Mortgage Addenda registration
|
evidence that each of the Mortgage Addenda has been
registered against the relevant Ship through the relevant Registry; and
a letter from each of the Relevant Parties’ agent for receipt of
service of proceedings accepting its appointment under the Relevant Documents in which it is or is to be appointed as such Relevant Party’s process agent.
16
|
|
|
|
|
|
|
|
|
Borrowers
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
FONTVIEILLE SHIPHOLDING LIMITED
in the presence of:
|
|
|
|
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
N.A. MAKRIS
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE LLP
|
|
|
|
|
|
|
|
Address:
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N.
KONTOUDAKI
for and on behalf of
MONEGHETTI SHIPHOLDING
LIMITED
in the presence of:
|
|
|
|
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
N.A. MAKRIS
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE LLP
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security Parties
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by
N. KONTOUDAKI
for and on behalf of
EURONAV
N.V.
,
as Corporate Guarantor
in the presence
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
)
|
|
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
)
|
|
Attorney-in-fact
|
|
|
|
|
)
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
N.A. MAKRIS
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE LLP
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
BRETTA TANKER HOLDINGS INC.
as Corporate Guarantor
in the presence of:
|
|
|
|
)
|
|
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
)
|
|
Attorney-in-fact
|
|
|
|
|
)
|
|
|
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
N.A. MAKRIS
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE LLP
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
EURONAV N.V.
as Commercial Manager
in the presence of:
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
N.A. MAKRIS
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE LLP
|
|
|
|
|
|
|
|
Address:
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
EURONAV SHIPMANAGEMENT (HELLAS)
LTD.
as Technical Manager
in the presence of:
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
N.A. MAKRIS
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE LLP
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arranger, Account Bank, Security Agent
|
|
|
|
|
|
|
SIGNED
by N.A. MAKRIS
for and on behalf of
BNP PARIBAS (SUISSE) SA
as Arranger and Account Bank
|
|
|
|
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by N.A. MAKRIS
for and on behalf of
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
)
as Security
Agent
Creditors
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by C. KOKKINIS
and by K.SOTIRIOV
for and on behalf of
ALPHA BANK A.E.
as Bank
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorised Signatory
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorised Signatory
|
|
|
|
|
|
|
SIGNED
by N.A. MAKRIS
for and on behalf of
BNP PARIBAS S.A.
(as transferee of
BNP PARIBAS (SUISSE) SA
)
as
Bank
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by N.A. MAKRIS
for and on behalf of
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
)
as
Agent
|
|
|
|
)
|
|
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
)
|
|
Attorney-in-fact
|
|
|
|
|
)
|
|
|
|
|
|
|
)
|
|
|
19
Exhibit 10.11
Private & Confidential
Dated
5 June 2013
SECOND SUPPLEMENTAL AGREEMENT
relating to
a Loan of up
to US$135,000,000
to
FONTVIEILLE SHIPHOLDING LIMITED
and
MONEGHETTI
SHIPHOLDING LIMITED
provided by
THE BANKS AND FINANCIAL INSTITUTIONS
set out in schedule 1
Arranger and Account Bank
BNP PARIBAS (SUISSE) SA
Agent and Security Agent
BNP PARIBAS S.A.
Contents
|
|
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
|
1
|
|
Definitions
|
|
|
2
|
|
|
|
|
|
|
2
|
|
Consent of the Creditors
|
|
|
4
|
|
|
|
|
|
|
3
|
|
Amendments to the Principal Agreement
|
|
|
4
|
|
|
|
|
|
|
4
|
|
Representations and warranties
|
|
|
6
|
|
|
|
|
|
|
5
|
|
Conditions
|
|
|
8
|
|
|
|
|
|
|
6
|
|
Relevant Parties’ confirmations
|
|
|
8
|
|
|
|
|
|
|
7
|
|
Fees and Expenses
|
|
|
9
|
|
|
|
|
|
|
8
|
|
Miscellaneous and notices
|
|
|
9
|
|
|
|
|
|
|
9
|
|
Applicable law
|
|
|
10
|
|
|
|
|
|
Schedule 1 Names and addresses of the Banks
|
|
|
11
|
|
|
|
|
|
Schedule 2 Documents and evidence required as conditions precedent
|
|
|
12
|
|
THIS SECOND SUPPLEMENTAL AGREEMENT
is dated 5 June 2013 and made
BETWEEN
:
|
(1)
|
FONTVIEILLE SHIPHOLDING LIMITED
, a company established under the laws of Hong Kong, whose registered office is at Room 3206, 32
nd
floor, Lippo Centre, Tower
Two, No. 89 Queensway, Hong Kong (the “
Fontvieille Borrower
”) and
MONEGHETTI SHIPHOLDING LIMITED
, a company established under the laws of Hong Kong, whose registered office is at Room 3206, 32
nd
floor, Lippo Centre, Tower Two, No. 89 Queensway, Hong Kong (the “
Moneghetti Borrower
” and, together with the Fontvieille Borrower, the “
Borrowers
”) as joint
and several borrowers;
|
|
(2)
|
EURONAV NV
, a company established under the laws of the Kingdom of Belgium, whose registered office is at de Gerlachekaai 20, B-2000 Antwerp, Kingdom of Belgium as corporate guarantor (in such capacity the
“
Euronav Guarantor
”) and as commercial manager (in such capacity the “
Commercial Manager
”);
|
|
(3)
|
EURONAV SHIPMANAGEMENT (HELLAS) LTD.
, a corporation incorporated under the laws of the Republic of Liberia, whose registered office is at 80 Broad street, Monrovia, Liberia, with an established office in Greece
under L89/67 situated at 69 Akti Miaouli, 185 37 Piraeus, Greece, as technical manager (the “
Technical Manager
” and together with the Commercial Manager the “
Managers
”);
|
|
(4)
|
BRETTA TANKER HOLDINGS INC.
a company established under the laws of the Republic of Panama, whose registered office is at Morgan & Morgan, Calle 53, Urbanizacion Marbella, MM6 Tower, Piso 16, Panama,
Republic of Panama as corporate guarantor (the “
Bretta Guarantor
” and, together with the Euronav Guarantor, the “
Corporate Guarantors
” and singly each a “
Corporate Guarantor
’’);
|
|
(5)
|
THE BANKS AND FINANCIAL INSTITUTIONS
whose names and addresses are set out in schedule 1 as banks (together the “
Banks
” and singly each a “
Bank
”);
|
|
(6)
|
BNP PARIBAS (SUISSE) SA
, a company established under the laws of Switzerland, acting for the purposes of this Agreement through its office at Place de Hollande 2, P.O. Box CH-1211, Geneva 11, Switzerland as
arranger and account bank (under each such capacity the “
Arranger
” and the “
Account Bank
”, respectively);
|
|
(7)
|
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
), a company established under the laws of France whose registered office is at 16 Boulevard des Italiens 75009, Paris, France as agent (the
“
Agent
”); and
|
|
(8)
|
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
), a company established under the laws of France whose registered office is at 16 Boulevard des Italiens 75009, Paris, France as security agent
(the “
Security Agent
” and together with the Agent and the Banks the “
Creditors
”).
|
WHEREAS
:
|
(A)
|
this Agreement is supplemental to a loan agreement dated 23 April 2008 made between (1) the Borrowers, (2) the Banks, (3) the Agent, (4) the Security Agent, (5) the Account Bank and
(6) the Arranger as amended and supplemented by a first supplemental letter dated 4 February 2010, a second supplemental letter dated 22 December 2010, an appointment agreement dated 4 May 2011, a transfer certificate dated
4 May 2011 and a first supplemental agreement dated 29 June 2012 (together the “
Principal Agreement
”), relating to a loan facility of up to One hundred and thirty five million Dollars ($135,000,000) of which the amount of
One hundred and twenty three million United States Dollars ($123,000,000) was advanced by the Banks to the Borrowers for the purposes stated therein and of which the principal amount outstanding at the date hereof is One hundred and three million
two hundred and twenty thousand and one United States Dollars ($103,220,001).;
|
|
(B)
|
each of the Borrowers, the Corporate Guarantors and the Managers have requested that the Creditors consent to the temporary reduction of the Security Requirement (as defined in the Principal Agreement) from 120% to 100%
for the period commencing on 1 January 2013 and ending on 31 December 2013; and
|
1
|
(C)
|
this Agreement sets out, inter alia, the terms and conditions upon which the Creditors shall provide their agreement:
|
|
|
(a)
|
to the temporary reduction of the Security Requirement (as defined in the Principal Agreement) from 120% to 100% for the period commencing on 1 January 2013 and ending on 31 December 2013; and
|
|
|
(b)
|
to certain consequential amendments and changes to the Principal Agreement as a result of the above and agreed to by the Borrowers, the Guarantors, the Managers and the Creditors.
|
NOW IT IS HEREBY AGREED
as follows:
Words and expressions defined in the Principal Agreement shall
unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.
In this Agreement, unless the context otherwise requires:
“
Devon
” means the motor vessel
Devon
a 2011 built, grt 81,427 tons, nrt 51,258 tons crude oil tanker, registered
in the ownership of the Moneghetti Borrower under the laws and flag of the relevant Flag State with IMO Number 9516117;
“
Devon
Mortgage
” means the first preferred Greek mortgage of
Devon
dated 5 January 2011, executed by the Moneghetti Borrower in favour of the Banks and the Agent as amended by the Devon Mortgage Addendum and the Devon Mortgage
Transfer;
“
Devon Mortgage Addendum
” means the first mortgage addendum to the Devon Mortgage dated 5 July 2012,
executed by the Moneghetti Borrower in favour of the Banks and the Agent;
“
Devon Mortgage Transfer
” means the notarial
deed of amendment dated 4 May 2011, executed before Christopher Gerard Higgins of Messrs Saville & Co., a Notary Public of the City of London, which was recorded at the Ship Mortgage Registry of Piraeus on 25 May 2011 pursuant to
which BNP Paribas (Suisse) SA of Switzerland assigned absolutely to BNP Paribas S.A. of France all its rights, title and interest in the Devon Mortgage;
“
Devon Second Mortgage Addendum
” means the second mortgage addendum to the Devon Mortgage executed or (as the context may
require) to be executed by the Moneghetti Borrower in favour of the Banks and the Agent in such form as the Agent may require in its sole discretion;
“
Eugenie
” means the motor vessel
Eugenie
a 2010 built, grt 81,427 tons, nrt 51,258 tons crude oil tanker,
registered in the ownership of the Fontvieille Borrower under the laws and flag of the relevant Flag State with IMO Number 9516105;
“
Eugenie Mortgage
” means the first preferred Greek mortgage of
Eugenie
dated 9 February 2010, executed by the
Fontvieille Borrower in favour of the Banks and the Agent as amended by the Eugenie Mortgage Addenda and the Eugenie Mortgage Transfer;
“
Eugenie Mortgage Addenda
” means together the mortgage addendum dated 5 January 2011 to the Eugenie Mortgage and the
Eugenie Second Mortgage Addendum;
2
“
Eugenie Mortgage Transfer
” means the notarial deed of amendment dated
4 May 2011 and executed before Christopher Gerard Higgins of Messrs Saville & Co., a Notary Public of the City of London, which was recorded at the Ship Mortgage Registry of Piraeus on 25 May 2011 pursuant to which BNP Paribas
(Suisse) SA of Switzerland assigned absolutely to BNP Paribas S.A. of France all its rights, title and interest in the Eugenie Mortgage;
“
Eugenie Second Mortgage Addendum
” means the second mortgage addendum to the Eugenie Mortgage dated 5 July 2012 executed
by the Fontvieille Borrower in favour of the Banks and the Agent;
“
Eugenie Third Mortgage Addendum
” means the third
mortgage addendum to the Eugenie Mortgage executed or (as the context may require) to be executed by the Fontvieille Borrower in favour of the Banks and the Agent in such form as the Agent may require in its sole discretion;
“
Effective Date
” means the date, no later than 5 June 2013, on which the Agent notifies the Borrowers in writing that the
Agent has received the documents and evidence specified in clause 5 and schedule 2 in a form and substance satisfactory to it;
“
Loan Agreement
” means the Principal Agreement, as amended and supplemented by this Agreement;
“
Mortgage Addenda
” means, together, the Devon Second Mortgage Addendum and the Eugenie Third Mortgage Addendum;
“
Relevant Documents
” means this Agreement, the Mortgage Addenda and any other documents to be executed in connection hereto;
“
Relevant Parties
” means the Borrowers, the Corporate Guarantors and the Managers and any other person (other than the
Creditors) who is a party to a Relevant Document or, where the context so requires or permits, means any or all of them; and
“
Ships
” means, together,
Devon
and
Eugenie
and “
Ship
” means either of them.
References in the Principal Agreement to “
this
Agreement
” shall, with effect from the Effective Date and unless the context otherwise requires, be references to the Principal Agreement as amended by this Agreement and words such as “
herein
”, “
hereof
”,
“
hereunder
”, “
hereafter
”, “
hereby
” and “
hereto
”, where they appear in the Principal Agreement, shall be construed accordingly.
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement.
|
1.5
|
Construction of certain terms
|
In this Agreement, unless the context otherwise requires:
|
1.5.1
|
references to clauses and schedules are to be construed as references to clauses of, and schedules to, this Agreement and references to this Agreement include its schedules;
|
|
1.5.2
|
references to (or to any specified provision of) this Agreement or any other document shall be construed as references to this Agreement, that provision or that document as in force for the time being and as amended in
accordance with the terms thereof, or, as the case may be, with the agreement of the relevant parties;
|
|
1.5.3
|
references to a “
regulation
” include any present or future regulation, rule, directive, requirement, request or guideline (whether or not having the force of law) of any agency, authority, central bank
or government department or any self-regulatory or other national or supra-national authority;
|
3
|
1.5.4
|
words importing the plural shall include the singular and vice versa;
|
|
1.5.5
|
references to a time of day are to London time;
|
|
1.5.6
|
references to a person shall be construed as references to an individual, firm, company, corporation, unincorporated body of persons or any Government Entity;
|
|
1.5.7
|
references to a “
guarantee
” include references to an indemnity or other assurance against financial loss including, without limitation, an obligation to purchase assets or services as a consequence of a
default by any other person to pay any Indebtedness and “
guaranteed
” shall be construed accordingly; and
|
|
1.5.8
|
references to any enactment shall be deemed to include references to such enactment as re-enacted, amended or extended.
|
|
2
|
Consent of the Creditors
|
The Creditors, relying upon the representations and warranties
on the part of each Relevant Party contained in clause 4, agree with the Borrowers that, with effect on and from the Effective Date and subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality
of the foregoing, fulfilment on or before 5 June 2013 of the conditions contained in clause 5 and schedule 2, the Creditors:
|
2.1
|
agree and consent to the temporary reduction of the Security Requirement from 120% to 100% for the period commencing on 1 January 2013 and ending on 31 December 2013 (both inclusive); and
|
|
2.2
|
agree and consent to the amendments of the Principal Agreement on the terms set out in clause 3.
|
|
3
|
Amendments to the Principal Agreement
|
The Principal Agreement shall, with effect on and from the Effective Date,
be (and it is hereby) amended in accordance with the following provisions and the Principal Agreement (as so amended) will continue to be binding upon the Creditors and the Borrowers upon such terms (as so amended):
|
3.1.1
|
by deleting the definition of “
Fontvieille Mortgage
” in clause 1.2 of the Principal Agreement in its entirety and by replacing it with the following new definition of “
Fontvieille
Mortgage
”:
|
““
Fontvieille Mortgage
” means the first preferred Greek mortgage of the
Fontvieille Ship dated 9 February 2010, executed by the Fontvieille Borrower in favour of the Banks and the Agent as amended by the Fontvieille Mortgage Addenda and the Fontvieille Mortgage Transfer;”;
|
3.1.2
|
by deleting the definition of “
Fontvieille Mortgage Addenda
” in clause 1.2 of the Principal Agreement in its entirety and by replacing it with the following new definition of “
Fontvieille
Mortgage Addenda
”:
|
““
Fontvieille Mortgage Addenda
” means, together, the mortgage addendum
dated 5 January 2011, the Fontvieille Mortgage Second Addendum and the Fontvieille Mortgage Third Addendum;”;
|
3.1.3
|
by deleting the definition of “
Fontvieille Mortgage Second Addendum
” in clause 1.2 of the Principal Agreement in its entirety and by replacing it with the following new definition of
“
Fontvieille Mortgage Second Addendum
”:
|
““
Fontvieille Mortgage Second Addendum
” means
the second mortgage addendum to the Eugenie Mortgage dated 5 July 2012 executed by the Fontvieille Borrower in favour of the Banks and the Agent;”;
4
|
3.1.4
|
by deleting the definition of “
Moneghetti Mortgage
” in clause 1.2 of the Principal Agreement in its entirety and by inserting in its place the following new definition of “
Moneghetti
Mortgage
”:
|
““
Moneghetti Mortgage
” means the first preferred Greek mortgage of the Moneghetti
Ship dated 5 January 2011, executed by the Moneghetti Borrower in favour of the Banks and the Agent as amended by the Moneghetti Mortgage Addenda and the Moneghetti Mortgage Transfer;”;
|
3.1.5
|
by deleting in clause 1.2 of the Principal Agreement the definition of “
Margin
” and by inserting in its place the following new definition of “
Margin
”:
|
““
Margin
” means:
|
|
(a)
|
in relation to the Fontvieille Tranche:
|
|
|
(i)
|
from the date of this Agreement until 31 December 2011, one point one zero per cent (1.10%) per annum;
|
|
|
(ii)
|
from 1 January 2012 until 31 December 2012 (inclusive), two point five zero per cent (2.50%) per annum;
|
|
|
(iii)
|
from 1 January 2013 until 31 December 2013 (inclusive), two point seven five per cent (2.75%) per annum;
|
|
|
(iv)
|
from 1 January 2014 and at all times thereafter, two per cent (2%) per annum;
|
|
|
(b)
|
in relation to the Moneghetti Tranche:
|
|
|
(i)
|
from the date of this Agreement until the Drawdown Date of the Moneghetti Delivery Advance, one point one zero per cent (1.10%) per annum;
|
|
|
(ii)
|
from the day after the Drawdown Date of the Moneghetti Delivery Advance and until 31 December 2011 (inclusive), one point six zero per cent (1.60%) per annum;
|
|
|
(iii)
|
from 1 January 2012 until 31 December 2012 (inclusive), two point five zero per cent (2.50%) per annum;
|
|
|
(iv)
|
from 1 January 2013 until 31 December 2013 (inclusive), two point seven five per cent (2.75%) per annum;
|
|
|
(v)
|
from 1 January 2014 and at all times thereafter, two per cent (2%) per annum;”;
|
|
3.1.6
|
by deleting the definition of “
Supplemental Agreements
” in clause 1.2 of the Principal Agreement in its entirety and by replacing it with the following new definition of “
Supplemental
Agreements
”:
|
““
Supplemental Agreements
” means, together, the First Supplemental Agreement,
the First Supplemental Letter, the Second Supplemental Letter, the Appointment Agreement, the Transfer Certificate and the Second Supplemental Agreement”;”;
|
3.1.7
|
by inserting in the correct alphabetical order in clause 1.2 of the Principal Agreement the following new definitions of “
Fontvieille Mortgage Third Addendum
”, “
Moneghetti Mortgage
Addenda
”, “
Moneghetti Mortgage Second Addendum
” and “
Second Supplemental Agreement
”:
|
““
Fontvieille Mortgage Third Addendum
” means the third addendum to the Fontvieille Mortgage, executed or (as the context
may require) to be executed by the Fontvieille Borrower in favour of the Banks and the Agent in such form as the Agent may require in its sole discretion pursuant to the terms of the Second Supplemental Agreement;”;
5
““
Moneghetti Mortgage Addenda
” means, together, the Moneghetti Mortgage
Addendum and the Moneghetti Mortgage Second Addendum;”;
““
Moneghetti Mortgage Second Addendum
” means the second
addendum to the Moneghetti Mortgage executed or (as the context may require) to be executed by the Moneghetti Borrower in favour of the Banks and the Agent in such form as the Agent may require in its absolute discretion pursuant to the terms of the
Second Supplemental Agreement;”; and
““
Second Supplemental Agreement
” means the agreement dated 5 June
2013 supplemental to this Agreement, made between (1) the Borrowers, (2) the Guarantors, (3) the Managers, (4) the Banks, (5) the Agent, (6) the Arranger, (7) the Security Agent and (8) the Account
Bank.”; and
|
3.1.8
|
by deleting the definition “
Security Requirement
” in clause 1.2 of the Principal Agreement and by replacing it with the following new definition:
|
““
Security Requirement
” means the amount in Dollars (as certified by the Agent whose certificate shall, in the absence of
manifest error, be conclusive and binding on the Borrowers and the Creditors) which is, at any relevant time:
|
|
(a)
|
during the period between 1 January 2012 and 31 December 2013 (inclusive), one hundred per cent (100%) of the Loan at such time; or
|
|
|
(b)
|
at any other time before and after the period referred to in paragraph (a) above, one hundred and twenty per cent (120%) of the Loan at such time;”.
|
|
3.2
|
Continued force and effect
|
Save as amended by this Agreement, the provisions of the
Principal Agreement shall continue in full force and effect and the Principal Agreement and this Agreement shall be read and construed as one instrument.
|
4
|
Representations and warranties
|
|
4.1
|
Primary representations and warranties
|
Each of the Relevant Parties represents and
warrants to the Creditors that:
|
4.1.1
|
Existing representations and warranties
|
the representations and warranties set out in clause 7
of the Principal Agreement and clause 4 of the Corporate Guarantees were true and correct on the date of the Principal Agreement and on the date of each of the Corporate Guarantees, respectively, and are true and correct, including to the extent
that they may have been or shall be amended by this Agreement, as if made at the date of this Agreement with reference to the facts and circumstances existing at such date;
each of the Relevant Parties has power to execute, deliver and perform its
obligations under the Relevant Documents to which it is or is to be a party; all necessary corporate, shareholder and other action has been taken by each of the Relevant Parties to authorise the execution, delivery and performance of the Relevant
Documents to which it is or is to be a party;
6
|
4.1.3
|
Binding obligations
|
the Relevant Documents to which it is or is to be a party constitute valid
and legally binding obligations of each of the Relevant Parties enforceable in accordance with their terms;
|
4.1.4
|
No conflict with other obligations
|
the execution, delivery and performance of the Relevant
Documents to which it is or is to be a party by each of the Relevant Parties will not (i) contravene any existing law, statute, rule or regulation or any judgment, decree or permit to which any of the Relevant Parties is subject,
(ii) conflict with, or result in any breach of any of the terms of, or constitute a default under, any agreement or other instrument to which any of the Relevant Parties is a party or is subject or by which it or any of its property is bound or
(iii) contravene or conflict with any provision of the memorandum and articles of association or other constitutional documents of any of the Relevant Parties or (iv) result in the creation or imposition of or oblige any of the Relevant
Parties to create any Encumbrance (other than a Permitted Encumbrance) on any of the undertaking, assets, rights or revenues of any of the Relevant Parties;
|
4.1.5
|
No filings required
|
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of any of the Relevant Documents that they or any other instrument be notarised, filed, recorded, registered or enrolled in any court, public office or elsewhere in any Relevant Jurisdiction or that any stamp, registration
or similar tax or charge be paid in any Relevant Jurisdiction on or in relation to the Relevant Documents and each of the Relevant Documents is in proper form for its enforcement in the courts of each Relevant Jurisdiction;
the choice of English law to govern the Relevant Documents (other than the
Mortgage Addenda), the choice of the law of the relevant Flag State to govern each Mortgage Addendum and the submission therein by the Relevant Parties to the non-exclusive jurisdiction of the English courts or (as the case may be) the Greek courts
are valid and binding; and
every consent, authorisation, licence or approval of, or registration or
declaration to, governmental or public bodies or authorities or courts required by any of the Relevant Parties in connection with the execution, delivery, validity, enforceability or admissibility in evidence of the Relevant Documents to which it is
or will become a party or the performance by any of the Relevant Parties of their respective obligations under the Relevant Documents to which it is a party has been obtained or made and is in full force and effect and there has been no default in
the observance of any conditions or restrictions (if any) imposed in, or in connection with, any of the same.
|
4.2
|
Repetition of representations and warranties
|
Each of the representations and warranties
contained in clause 4.1 of this Agreement, clause 7 of the Principal Agreement and clause 4 of each of the Corporate Guarantees shall be deemed to be repeated by the Relevant Parties on the Effective Date as if made with reference to the facts and
circumstances existing on such day.
7
|
5.1
|
Documents and evidence
|
The consents and waiver of the Creditors and the other
arrangements referred to in clause 2 shall be subject to the receipt by the Agent or its duly authorised representative, on or before 5 June 2013, of the documents and evidence specified in schedule 2 in form and substance satisfactory to the
Agent.
|
5.2
|
General conditions precedent
|
The consents and waiver of the Creditors and the other
arrangements referred to in clause 2 shall be further subject to:
|
5.2.1
|
the representations and warranties in clause 4 being true and correct on the Effective Date as if each was made with respect to the facts and circumstances existing at such time; and
|
|
5.2.2
|
no Event of Default having occurred and continuing at the time of the Effective Date.
|
|
5.3
|
Waiver of conditions precedent
|
The conditions specified in this clause 5 are inserted
solely for the benefit of the Creditors and may be waived by the Agent (acting on the instructions of the Majority Banks) in whole or in part with or without conditions.
|
6
|
Relevant Parties’ confirmations
|
Each of the Corporate Guarantors hereby confirms its consent to the
amendments to the Principal Agreement and to the consents and the waiver of the Creditors and the other arrangements contained in this Agreement and further acknowledges and agrees that:
|
6.1.1
|
each Corporate Guarantee and any other Security Document to which that Corporate Guarantor is a party and the obligations of that Corporate Guarantor thereunder, shall remain and continue in full force and effect
notwithstanding the said amendments of the Principal Agreement and the consent and the waiver of the Creditors and the other arrangements contained in this Agreement; and
|
|
6.1.2
|
with effect from the Effective Date, references in a Corporate Guarantee and any other Security Document to which that Corporate Guarantor is a party to the “
Agreement
” or the “
Loan
Agreement
” (or such other equivalent or similar references) shall henceforth be references to the Principal Agreement as amended and supplemented by this Agreement and as from time to time hereafter amended, and shall also be deemed to
include this Agreement and the obligations of the Borrowers hereunder.
|
Each of the Relevant Parties hereby confirms its consent to the
amendments to the Principal Agreement and to the consents and the waiver of the Creditors and the other arrangements contained in this Agreement and further acknowledges and agrees that:
|
6.2.1
|
each of the Security Documents to which such Relevant Party is a party, and its obligations thereunder, shall remain and continue in full force and effect notwithstanding the said amendments made to the Principal
Agreement and the consents and the waiver of the Creditors and the other arrangements contained in this Agreement; and
|
|
6.2.2
|
with effect from the Effective Date, references to “
the Agreement
” or the “
the Loan Agreement
” (or such other
equivalent or similar references) in any of the other Security
|
8
|
|
Documents to which such Relevant Party is a party shall henceforth be references to the Principal Agreement, as amended and supplemented by this Agreement and as from time to time hereafter
amended and shall also be deemed to include this Agreement and the obligations of the Borrowers hereunder.
|
The Borrowers shall pay to the Agent for the account of the Banks, pro rata to
their Contributions an upfront amendment fee of $50,000 on the date of this Agreement.
The Borrowers jointly and severally agree to pay to the Agent on a full
indemnity basis on demand all expenses (including legal and out-of-pocket expenses) incurred by the Creditors or any of them:
|
7.2.1
|
in connection with the negotiation, preparation, execution and, where relevant, registration of this Agreement and the other Relevant Documents and of any amendment or extension of or the granting of any waiver or
consent under this Agreement or the other Relevant Documents; and
|
|
7.2.2
|
in contemplation of, or otherwise in connection with, the enforcement of, or preservation of any rights under this Agreement or the other Relevant Documents or otherwise in respect of the monies owing and obligations
incurred under this Agreement and the other Relevant Documents,
|
together with interest at the rate and in the manner
referred to in clause 3.4 of the Principal Agreement from the date on which such expenses were incurred to the date of payment (as well after as before judgment).
All fees and expenses payable pursuant to this clause 7 shall be paid
together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by the Creditors or any of them under this Agreement shall, on delivery of the value added tax
invoice, be paid in addition to any sum agreed to be paid hereunder.
|
7.4
|
Stamp and other duties
|
Each of the Borrowers jointly and severally agree to pay to the
Agent on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes (other than taxes on the overall net income, profits or gains of the Creditors imposed in the jurisdiction in which such
Creditors’ principal or lending office under the Loan Agreement is located) payable by the Creditors or any of them) imposed on or in connection with this Agreement and the other Relevant Documents and shall indemnify the Creditors against any
liability arising by reason of any delay or omission by the Borrowers to pay such duties or taxes.
|
8
|
Miscellaneous and notices
|
The provisions of clause 17 of the Principal Agreement shall extend and apply
to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose any notices to be sent to the Borrowers, the Corporate Guarantors, the Manager or any of them hereunder shall be sent to the
same address as the address indicated for the “
Borrowers
” in the said clause 17.
9
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.
|
8.3
|
Borrowers’ obligations
|
Notwithstanding anything to the contrary contained in this
Agreement, the agreements, obligations and liabilities of the Borrowers herein contained are joint and several and shall be construed accordingly. Each of the Borrowers agrees and consents to be bound by this Agreement notwithstanding that the other
Borrower which was intended to sign or be bound may not do so or be effectually bound and notwithstanding that this Agreement may be invalid or unenforceable against the other Borrower whether or not the deficiency is known to the Creditors or any
of them. The Creditors shall be at liberty to release either of the Borrowers from this Agreement and to compound with or otherwise vary the liability or to grant time and indulgence to make other arrangements with either of the Borrowers without
prejudicing or affecting the rights and remedies of the Creditors against the other Borrower.
This Agreement and any non-contractual obligations in connection with this
Agreement are governed by and shall be construed in accordance with English law.
|
9.2
|
Submission to jurisdiction
|
Each of the Relevant Parties agrees, for the benefit of the
Creditors, that any legal action or proceedings arising out of or in connection with this Agreement (including any non-contractual obligations connected with this Agreement) against any of the Relevant Parties or any of its assets may be brought in
the English courts. Each of the Relevant Parties irrevocably and unconditionally submits to the jurisdiction of such courts and each of the Relevant Parties (other than the Euronav Guarantor, the Technical Manager and the Commercial Manager)
irrevocably designates, appoints and empowers Unisea Maritime Ltd. at present of 14 Heafort Place, London, SW1A 7DH, England and each of the Euronav Guarantor, the Technical Manager and the Commercial Manager irrevocably designates, appoints and
empowers Euronav (UK) Agencies Ltd at present of Moreau House 116 Brompton road, 3rd floor, London SW31JJ, England, each, in each case to receive for it and on its behalf, service of process issued out of the English courts in any such legal action
or proceedings. The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Creditors or any of them to take proceedings against any of the Relevant Parties in the courts of any other competent
jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. The parties hereto further agree that only the Courts of England and not
those of any other State shall have jurisdiction to determine any claim which any of the Relevant Parties may have against the Creditors or any of them arising out of or in connection with this Agreement (including any noncontractual obligations
connected with this Agreement).
|
9.3
|
Contracts (Rights of Third Parties) Act 1999
|
No term of this Agreement shall be
enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
IN WITNESS
whereof the
parties to this Agreement have caused this Agreement to be duly executed as a deed on the date first above written.
10
Schedule 1
Names and addresses of the Banks
|
|
|
|
|
Name
|
|
Address for Notices
|
|
|
|
|
BNP Paribas S.A.
(as
transferee of
BNP Paribas (Suisse)
SA
)
|
|
BNP Paribas S.A.
|
|
|
Transportation Group Middle-Office
|
|
|
ACI: CAT02A1
|
|
|
16, rue de Hanovre
|
|
|
75078 Paris Cedex 02
|
|
|
France
|
|
|
|
|
|
|
Fax: +33 (0) 1 42 98 43 55
|
|
|
|
E-mail: tgmo.shipDing@bnpparibas.com
|
|
|
|
|
Alpha Bank A.E.
|
|
89 Akti Miaouli
|
|
|
|
18538 Piraeus
|
|
|
|
Greece
|
|
|
|
|
|
|
Fax: +30 210 4290348
|
|
|
|
Attn: Shipping Division, Branch 960
|
11
Schedule 2
Documents and evidence required as conditions precedent
(referred to in clause 5.1)
|
1
|
Corporate authorisation
|
In relation to each of the Relevant Parties:
|
|
(a)
|
Constitutional documents
|
copies certified by an officer of each Relevant Party, as a
true, complete and up to date copies, of all documents which contain or establish or relate to the constitution of that party or a secretary’s certificate confirming that there have been no changes or amendments to the constitutional documents
certified copies of which were previously delivered to the Agent pursuant to the Principal Agreement;
copies of resolutions of each of its board of directors and, if required,
its shareholders approving such of the Relevant Documents to which it is or is to be a party and the terms and conditions hereof and thereof and authorising the signature, delivery and performance of each such party’s obligations thereunder,
certified by an officer of each such Relevant Party, as:
|
|
(i)
|
being true and correct;
|
|
|
(ii)
|
being duly passed at meetings of the directors or adopted of such Relevant Party and of the shareholders/stockholders of such Relevant Party, each duly convened and held;
|
|
|
(iii)
|
not having been amended, modified or revoked; and
|
|
|
(iv)
|
being in full force and effect,
|
together with originals or certified copies of any powers of
attorney issued by such Relevant Party pursuant to such resolutions; and
|
|
(c)
|
Certificate of incumbency
|
a list of directors and officers of each Relevant Party
specifying the names and positions of such persons, certified by an officer of such Relevant Party to be true, complete and up to date;
a certificate from an officer of each Relevant Party stating that no consents,
authorisations, licences or approvals are necessary for such Relevant Party to authorise, or are required by such Relevant Party or any other party (other than the Creditors) in connection with, the execution, delivery, and performance of the
Relevant Documents to which it is or will be a party;
such legal opinions as the Agent shall in its reasonable discretion deem
appropriate;
12
the Relevant Documents (together with any other documents to be
executed pursuant thereto), each duly executed;
|
5
|
Mortgage Addenda registration
|
evidence that each of the Mortgage Addenda has been
registered against the relevant Ship through the relevant Registry; and
the Agent has received from the Borrowers a prepayment of the Loan in an
amount of $ 1,000,000, together with irrevocable instructions by the Borrowers that such amount may be applied on or before the Effective Date in full reduction of the repayment instalment of the Loan falling due on 28 June 2013, and the Agent
and the Banks have made such application;
payment by the Borrowers of the amount of US$ 338,502.09 being the
full amount of the interest due and payable to the Banks as a result of the retroactive increase of the Margin under the Loan Agreement with effect from 1 January 2013 (namely for the outstanding balance of the Loan on and after 1 January
2013) for the period between 1 January 2013 and the Effective Date; and
a letter from each of the Relevant Parties’ agent for receipt of
service of proceedings accepting its appointment under the Relevant Documents in which it is or is to be appointed as such Relevant Party’s process agent.
13
|
|
|
|
|
|
|
|
|
|
|
Borrowers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
FONTVIEILLE SHIPHOLDING LIMITED
in the presence of:
|
|
|
|
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
A. KARAGOUNI
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE FULBRIGHT GREECE
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
MONEGHETTI SHIPHOLDING LIMITED
in the presence of:
|
|
|
|
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
A. KARAGOUNI
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE FULBRIGHT GREECE
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security Parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
EURONAV N.V.
,
as Corporate Guarantor
in the presence of:
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
A. KARAGOUNI
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE FULBRIGHT GREECE
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
BRETTA TANKER HOLDINGS INC.
as Corporate Guarantor
in the presence of:
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
A. KARAGOUNI
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE FULBRIGHT GREECE
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
EURONAV NV
as Commercial Manager
in the presence of:
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
A. KARAGOUNI
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE FULBRIGHT GREECE
|
|
|
|
|
|
|
|
Address:
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTED
as a
DEED
by N. KONTOUDAKI
for and on behalf of
EURONAV SHIPMANAGEMENT (HELLAS)
LTD.
as Technical Manager
in the presence of:
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Witness
|
|
A. KARAGOUNI
|
|
|
|
|
|
|
|
Name:
|
|
NORTON ROSE FULBRIGHT GREECE
|
|
|
|
|
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
Occupation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arranger, Account Bank, Security Agent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by A. KARAGOUNI
for and on behalf of
BNP PARIBAS (SUISSE) SA
as Arranger and Account Bank
|
|
|
|
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by A. KARAGOUNI
for and on behalf of
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
)
as Security
Agent
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Creditors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by K. FLOKOS
and by C. ARONI
for and on behalf of
|
|
|
|
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorised Signatory
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALPHA BANK A.E.
as Bank
|
|
|
|
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Authorised Signatory
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by A. KARAGOUNI
for and on behalf of
BNP PARIBAS S.A.
(as transferee of
BNP PARIBAS (SUISSE) SA
)
as
Bank
|
|
|
|
)
)
)
)
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by A. KARAGOUNI
for and on behalf of
BNP PARIBAS S.A.
(as replacement of
BNP PARIBAS (SUISSE) SA
)
as
Agent
|
|
|
|
)
|
|
|
|
|
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
)
|
|
Attorney-in-fact
|
|
|
|
|
)
|
|
|
|
|
|
|
)
|
|
|
16
Exhibit 10.12
Date 23 OCTOBER 2008
FIORANO
SHIPHOLDING LIMITED
as Borrower
– and –
THE BANKS
AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
– and –
THE BANK OF NOVA SCOTIA
as
Agent
and as Security Trustee
LOAN
AGREEMENT
relating to a
facility of up to
US$76,000,000 to finance a newbuilding suezmax
tanker of about 158,000 dwt having Hull No. 1893 at Samsung
Watson, Farley & Williams
London
INDEX
|
|
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
|
1
|
|
INTERPRETATION
|
|
|
1
|
|
|
|
|
|
|
2
|
|
FACILITY
|
|
|
14
|
|
|
|
|
|
|
3
|
|
POSITION OF THE LENDERS
|
|
|
15
|
|
|
|
|
|
|
4
|
|
DRAWDOWN
|
|
|
16
|
|
|
|
|
|
|
5
|
|
INTEREST
|
|
|
17
|
|
|
|
|
|
|
6
|
|
INTEREST PERIODS
|
|
|
19
|
|
|
|
|
|
|
7
|
|
DEFAULT INTEREST
|
|
|
19
|
|
|
|
|
|
|
8
|
|
REPAYMENT AND PREPAYMENT
|
|
|
20
|
|
|
|
|
|
|
9
|
|
CONDITIONS PRECEDENT
|
|
|
22
|
|
|
|
|
|
|
10
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
23
|
|
|
|
|
|
|
11
|
|
GENERAL UNDERTAKINGS
|
|
|
25
|
|
|
|
|
|
|
12
|
|
CORPORATE UNDERTAKINGS
|
|
|
29
|
|
|
|
|
|
|
13
|
|
INSURANCE
|
|
|
30
|
|
|
|
|
|
|
14
|
|
SHIP COVENANTS
|
|
|
33
|
|
|
|
|
|
|
15
|
|
SECURITY COVER
|
|
|
36
|
|
|
|
|
|
|
16
|
|
PAYMENTS AND CALCULATIONS
|
|
|
37
|
|
|
|
|
|
|
17
|
|
APPLICATION OF RECEIPTS
|
|
|
39
|
|
|
|
|
|
|
18
|
|
APPLICATION OF EARNINGS
|
|
|
39
|
|
|
|
|
|
|
19
|
|
EVENTS OF DEFAULT
|
|
|
40
|
|
|
|
|
|
|
20
|
|
FEES AND EXPENSES
|
|
|
44
|
|
|
|
|
|
|
21
|
|
INDEMNITIES
|
|
|
45
|
|
|
|
|
|
|
22
|
|
NO SET-OFF OR TAX DEDUCTION
|
|
|
47
|
|
|
|
|
|
|
23
|
|
ILLEGALITY, ETC
|
|
|
48
|
|
|
|
|
|
|
24
|
|
INCREASED COSTS
|
|
|
48
|
|
|
|
|
|
|
25
|
|
SET-OFF
|
|
|
50
|
|
|
|
|
|
|
26
|
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
VARIATIONS AND WAIVERS
|
|
|
54
|
|
|
|
|
|
|
28
|
|
NOTICES
|
|
|
55
|
|
|
|
|
|
|
29
|
|
SUPPLEMENTAL
|
|
|
57
|
|
|
|
|
|
|
30
|
|
LAW AND JURISDICTION
|
|
|
57
|
|
|
|
|
|
SCHEDULE 1 LENDERS AND COMMITMENTS
|
|
|
59
|
|
|
|
|
|
SCHEDULE 2 DRAWDOWN NOTICE
|
|
|
60
|
|
|
|
|
|
SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS
|
|
|
61
|
|
|
|
|
|
SCHEDULE 4 TRANSFER CERTIFICATE
|
|
|
64
|
|
|
|
|
|
SCHEDULE 5 MANDATORY COST
|
|
|
66
|
|
|
|
|
|
EXECUTION PAGE
|
|
|
69
|
|
THIS AGREEMENT
is made on 23 OCTOBER 2008
BETWEEN
|
(1)
|
FIORANO SHIPHOLDING LIMITED
, a company incorporated in Hong Kong whose registered office is at Room 3206, 32
nd
Floor, Lippo Centre, Tower Two, No. 89
Queensway, Hong Kong (the “
Borrower
”);
|
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as
Lenders
;
|
|
(3)
|
THE BANK OF NOVA SCOTIA
, as
Agent
; and
|
|
(4)
|
THE BANK OF NOVA SCOTIA
, as
Security Trustee
.
|
BACKGROUND
The Lenders have agreed to make available to the Borrower a facility of up to $76,000,000 (comprising Loan Amount A and the Charter Top-Up
Amount) for the purpose of part financing the purchase price of the Ship to be constructed by the Builder for, and purchased by, the Borrower.
IT IS
AGREED
as follows:
|
1.1
|
Definitions.
Subject to Clause 1.5, in this Agreement:
|
“
Account Bank
”
means Scotiabank Europe plc acting through its office at Scotia House, 33 Finsbury Square, London EC2A 1BB, England;
“
Account
Security Deed
” means a deed creating security in respect of the Earnings Account in the Agreed Form;
“
Advance
”
means the principal amount of each borrowing by the Borrower under this Agreement;
“
Agency and Trust Agreement
” means the
agency and trust agreement dated the same date as this Agreement and made between the same parties;
“
Agent
” means The
Bank of Nova Scotia, a company registered in Canada and acting in such capacity through its office at Scotia House, 33 Finsbury Square, London EC2A 1BB, England, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;
“
Agreed Form
” means in relation to any document, that document in the form approved in writing by the Agent (acting with the
instructions of all the Lenders) and mutually agreed with the Borrower or as otherwise approved in accordance with any other approval procedure specified in any relevant provision of any Finance Document;
“
Approved Flag
” means Greek flag or such other flag as the Agent (acting with the authorisation of all the Lenders) may
approve as the flag on which the Ship shall be registered at delivery;
“
Approved Manager
” means Guarantor B or any of its
subsidiaries or any other company incorporated by the Borrower with the prior written consent of the Agent (acting with the authorisations of the Majority Lenders) not to be unreasonably withheld or delayed;
“
Availability Period
” means the period commencing on the date of this Agreement
and ending on:
|
|
(a)
|
the Final Availability Date; or
|
|
|
(b)
|
if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;
|
“
Bretta Tankers
” means Bretta Tankers Holdings Inc. a company incorporated in Panama and having its registered office at 16th
Floor, 53rd Street, Urbanization Marbella, MMG Tower, Panama, Republic of Panama;
“
Builder
” means Samsung Heavy
Industries Co., Ltd., a company incorporated in the Republic of Korea whose registered office is at Samsung Life Insurance Seocho Tower 1321-15, Seocho-Dong, Seocho-Gu, Seoul, Korea;
“
Business Day
” means a day on which banks are open in London, Brussels, Dublin and in Monaco and, in respect of a day on which
a payment is required to be made under a Finance Document, also in New York City;
“
Charter
” means any time charter in
respect of the Ship which satisfies the requirements of Clause 2.4(a);
“
Charter Assignment
” means an assignment of any
Charter and any supporting guarantee for the Charter (if any) in the Agreed Form;
“
Charter Top-Up Amount
” means an amount
which, in addition to the scheduled amortisation of Loan Amount A, will amortise to zero from the Earnings in the fixed period of the Charter (without any extensions)
Provided that
the aggregate of Loan Amount A and the Charter Top-Up Amount
shall not exceed the lesser of (i) $76,000,000 and (ii) 80 per cent. of the Market Value on the Delivery Date;
“
Commitment
” means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may require, the
amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement;
“
Contract Price
” means the contract price payable by the Borrower to the Builder under the Shipbuilding Contract which, at the
date of this Agreement, is $95,830,000;
“
Contractual Currency
” has the meaning given in Clause 21.4;
“
Contribution
” means, in relation to a Lender, the part of the Loan which is owing to that Lender;
“
Counter Guarantee
” means the counter guarantee of the Counter Guarantor in the Agreed Form;
“
Counter Guarantor
” means the company nominated by the Borrower and accepted by the Agent (acting with the authority of the
Lenders) in the Guarantee Nomination Letter as the company to provide the Counter Guarantee;
“
Creditor Party
” means the
Agent, the Security Trustee or any Lender, whether as at the date of this Agreement or at any later time;
“
Delivery Date
”
means the date on which the Ship is delivered to, and accepted by, the Borrower under the Shipbuilding Contract;
2
“
Dollars
” and “
$
” means the lawful currency for the time being
of the United States of America;
“
Drawdown Date
” means, in relation to each Advance, the date requested by the Borrower
for the Advance to be made, or (as the context requires) the date on which the Advance is actually made;
“
Drawdown
Notice
” means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);
“
Earnings
” means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or
the Security Trustee and which arise out of the use or operation of the Ship, including (but not limited to):
|
|
(a)
|
except to the extent that they fall within paragraph (b);
|
|
|
(i)
|
all freight, hire and passage moneys;
|
|
|
(ii)
|
compensation payable to the Borrower or the Security Trustee in the event of requisition of the Ship for hire;
|
|
|
(iii)
|
remuneration for salvage and towage services;
|
|
|
(iv)
|
demurrage and detention moneys;
|
|
|
(v)
|
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; and
|
|
|
(vi)
|
all moneys which are at any time payable under any Insurances in respect of any loss; and
|
|
|
(b)
|
if and whenever the Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or
sharing arrangement which is attributable to the Ship;
|
“
Earnings Account
” means an account in the name of
the Borrower with the Account Bank in London designated “FIORANO SHIPHOLDING - Earnings Account”, or any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank)
which is designated by the Agent as the Earnings Account for the purposes of this Agreement;
“
Environmental Claim
” means:
|
|
(a)
|
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
|
|
|
(b)
|
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
and “
claim
” means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar
to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;
3
“
Environmental Incident
” means:
|
|
(a)
|
any release of Environmentally Sensitive Material from the Ship; or
|
|
|
(b)
|
any incident in which Environmentally Sensitive Material is released from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or
operation, in either case, in connection with which the Ship is actually or reasonably likely to be arrested, attached, detained or injuncted and/or the Ship and/or the Borrower and/or any operator or manager of the Ship is 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 the Ship and in connection with which the Ship is actually or reasonably likely to be arrested and/or where the Borrower
and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
|
“
Environmental Law
” means any law relating to pollution or protection of the environment, to the carriage of Environmentally
Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;
“
Environmentally Sensitive
Material
” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;
“
Euronav Hong Kong
” means Euronav Hong Kong Limited, a company incorporated in Hong Kong and having its registered office at
Room 3206, 32
nd
Floor, Lippo Centre, Tower Two, No. 89 Queensway, Hong Kong;
“
Event of Default
” means any of the events or circumstances described in Clause 19.1;
“
Fee Letter
” means any letter or letters dated on or about the date of this Agreement between the Agent and the Borrower
setting out any of the fees referred to in Clause 20;
“
Final Availability Date
” means:
|
|
(b)
|
in the event of arbitration proceedings in connection with the Shipbuilding Contract, with the prior consent of the Agent (with the authorisation of the Majority Lenders) which is not to be unreasonably withheld or
delayed, the day falling 365 days after the commencement of such arbitration (if later than 26 February 2012); or
|
|
|
(c)
|
such later date as the Agent (with the authorisation of the Majority Lenders) may agree in writing
|
Provided that
any such extension under paragraphs (b) or (c) shall not extend beyond the expiry of the Refund Guarantee;
“
Finance Documents
” means:
|
|
(b)
|
the Agency and Trust Agreement;
|
4
|
|
(d)
|
the Predelivery Security Assignment;
|
|
|
(e)
|
the General Assignment;
|
|
|
(f)
|
the Charter Assignment (if any);
|
|
|
(h)
|
the Account Security Deed;
|
|
|
(i)
|
the Counter Guarantee;
|
|
|
(l)
|
any Transfer Certificate;
|
|
|
(m)
|
the Guarantee Nomination Letter;
|
|
|
(n)
|
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in
relation to, any amount payable to the Lenders under this Agreement and/or any of the other documents referred to in this definition; and
|
|
|
(o)
|
any other document designated as such by the Agent and the Borrower;
|
“
Financial
Indebtedness
” means, in relation to a person (the “
debtor
”), a liability of the debtor:
|
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
|
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
|
|
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
|
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred
to the other person;
|
“
General Assignment
” means a general assignment of the Earnings, the Insurances and
any Requisition Compensation in the Agreed Form;
“
Guarantee A
” means a guarantee of Guarantor A in the Agreed Form;
“
Guarantee B
” means a guarantee of Guarantor B in the Agreed Form;
5
“
Guarantees
” means, together, Guarantee A and Guarantee B;
“
Guarantee Nomination Letter
” means the letter dated 27 OCTOBER 2008 nominating the Counter Guarantor as the company to
provide the Counter Guarantee and made between the Agent, the Borrower and the Counter Guarantor;
“
Guarantor A
” means
J.M. Maritime Investments Inc., a company incorporated in Panama whose registered office is at Capital Plaza Building, Floor 8, Paseo Roberto Motta, Costa del Este, Panama City, Republic of Panama;
“
Guarantor B
” means Euronav NV, a company incorporated in Belgium whose registered office is at de Gerlachekaai 20, B-2000
Antwerp, Belgium;
“
Guarantors
” means, together, Guarantor A and Guarantor B;
“
IFRS
” means international accounting standards within the meaning of the IAS Regulations 1606/2002 to the extent applicable
to the relevant financial statements;
“
Insurances
” means:
|
|
(a)
|
all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, which are effected in respect of the Ship, her Earnings or otherwise in relation to her;
and
|
|
|
(b)
|
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;
|
“
Interest Period
” means a period determined in accordance with Clause 6;
“
ISM Code
” means the International Safety Management Code (including the guidelines on its implementation), adopted by the
International Maritime Organisation, as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same
meanings as are given to them in the ISM Code);
“
ISPS Code
” means the International Ship and Port Facility Security Code
as adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time;
“
ISSC
” means a valid and current International Ship Security Certificate issued under the ISPS Code;
“
Lender
” means a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or
through another branch notified to the Borrower under Clause 26.14) or its transferee, successor or assign, which in each case has not ceased to be a party in accordance with the terms of this Agreement;
“
LIBOR
” means, for an Interest Period:
|
|
(a)
|
the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on Reuters BBA Page LIBOR 01 at or about 11.00
a.m. (London time) on the Quotation Date for that Interest Period (and, for the purposes of this Agreement, “
Reuters BBA Page LIBOR 01
” means the display designated as “Page 01” on the Reuters Money News Service or such
other page as may replace Page 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of
displaying the British Bankers’ Association Interest Settlement Rates for Dollars);
|
6
|
|
(b)
|
if no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to 4 decimal places) of the rates, as supplied to the Agent at its request, quoted
by each Reference Bank to leading banks in the London Interbank Market as of 11 a.m. (London time) on the Quotation Date for that period for the offering of deposits in the relevant currency and for a period comparable to that period;
|
“
Loan
” means a loan made or to be made under this Agreement or the principal amount for the time being
outstanding under this Agreement;
“
Loan Amount A
” means an amount equal to the lesser of (i) $71,250,000 and
(ii) 75 per cent. of the Market Value on the Delivery Date;
“
Major Casualty
” means any casualty to the Ship in
respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible exceeds $5,000,000 or the equivalent in any other currency;
“
Majority Lenders
” means:
|
|
(a)
|
before any Advance has been made, Lender or Lenders whose Commitments total more than 66.66 per cent. of the Total Commitments; and
|
|
|
(b)
|
at any other time, Lender or Lenders whose Contributions in the Loan outstanding total more than 66.66 per cent. of all the Loan then outstanding;
|
“
Mandatory Cost
” means the percentage rate, which represents the cost to the Lenders, relative to the Loan, of compliance with
the requirements of the Bank of England, the Financial Services Authority or any other regulatory authority, as determined by the Agent in accordance with the formula detailed in Schedule 5;
“
Margin
” means:
|
|
(a)
|
1.225 per cent. per annum; or
|
|
|
(b)
|
such other amount as may be agreed between the Lenders and the Borrower pursuant to Clause 2.5, which shall take effect as the applicable margin on the Margin Reset Date subject to the Lenders and the Borrower agreeing
the amount of the new margin;
|
“
Margin Reset Date
” means the earlier of:
|
|
(a)
|
the date falling 5 years after the Delivery Date; and
|
“
Market Disruption Event
” has the meaning given to
that term in Clause 5.7(b);
“
Market Value
” means the market value of the Ship as determined in accordance with Clause
15.3;
“
Maturity Date
” means:
|
|
(a)
|
if the Agent requests the Borrower to prepay the Loan in accordance with Clause 8.9, the Margin Reset Date; or
|
|
|
(b)
|
if the Agent does not request the Borrower to prepay the Loan in accordance with Clause 8.9, the date falling 8 years after the Delivery Date or, if earlier, 26 February 2020;
|
7
“
Mortgage
” means the first preferred Greek ship mortgage or the first priority
statutory ship mortgage or first preferred ship mortgage and, if applicable, collateral deed of covenant in the form appropriate for the flag of the Ship in the event that the Approved Flag is not Greek flag in the Agreed Form;
“
Negative Pledge
” means the negative pledge in relation to the shares of the Borrower to be executed by the Shareholders in
favour of the Security Trustee in the Agreed Form;
“
Negotiation Period
” has the meaning given in Clause 5.9;
“
Notifying Lender
” has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;
“
Payment Currency
” has the meaning given in Clause 21.4;
“
Permitted Security Interests
” means:
|
|
(a)
|
Security Interests created by the Finance Documents;
|
|
|
(b)
|
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
|
|
(d)
|
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to the Ship not prohibited by this Agreement;
|
|
|
(e)
|
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of the Ship or
in the ordinary course of business of the Borrower, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps) and subject, in the case of
liens for repair or maintenance, to Clause 14.12(f);
|
|
|
(f)
|
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Borrower is actively prosecuting or defending such proceedings or
arbitration in good faith; and
|
|
|
(g)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves
have been made;
|
“
Pertinent Document
” means:
|
|
(a)
|
any Finance Document;
|
|
|
(b)
|
any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;
|
|
|
(c)
|
any other document contemplated by or referred to in any Finance Document; and
|
|
|
(d)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
|
8
“
Pertinent Jurisdiction
”, in relation to a company, means:
|
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
|
|
(c)
|
a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;
|
|
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business,
or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;
|
“
Pertinent Matter
” means:
|
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
|
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
|
and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or
on or at any time after that signing;
“
Potential Event of Default
” means an event or circumstance which, with the giving
of any notice, the lapse of time, a reasonable determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;
“
Predelivery Security Assignment
” means an assignment in the Agreed Form of the Shipbuilding Contract, the Refund Guarantee
and the Supervision Agreement;
“
Quotation Date
” means, in relation to any Interest Period (or any other period for which
an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to
be determined for delivery on the first day of that Interest Period or other period;
“
Reference Banks
” means, subject to
Clause 26.16, the London, Dublin or Toronto (as the case may be) branches of each of the Lenders or such other banks as may be appointed by the Agent in consultation with the Borrower;
9
“
Refund Guarantee
” means the guarantee dated 25 July 2008 (with guarantee
number 11000078) issued by the Refund Guarantor in favour of the Borrower under the Shipbuilding Contract;
“
Refund
Guarantor
” means Kookmin Bank of 9-1, 2-Ga, Namdaemun-Ro, Jung-Gu, Seoul 100-703, Korea;
“
Relevant Interbank
Market
” means the London Interbank Market;
“
Relevant Person
” has the meaning given in Clause 19.9;
“
Repayment Date
” means a date on which a repayment is required to be made under Clause 8;
“
Requisition Compensation
” includes all compensation or other moneys payable by reason of any act or event such as is referred
to in paragraph (b) of the definition of “Total Loss”;
“
Secured Liabilities
” means all monies from time to
time due or owing, and all obligations and other actual or contingent liabilities incurred by the Borrower, the Security Parties or any of them to any Creditor Party, at the date of this Agreement or at any later time or times, in whatever currency,
whether due, owing or incurred alone or jointly with others or as principal, surety or otherwise under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any
total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;
“
Security Interest
” means:
|
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
|
|
(b)
|
the security rights of a plaintiff under an action
in rem
; and
|
|
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a
security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
|
“
Security Party
” means the Guarantors, the Counter Guarantor, each Shareholder and any other person (except a Creditor Party)
who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the definition of “Finance Documents”;
“
Security Period
” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies
the Borrower, the Security Parties and the Creditor Parties that:
|
|
(a)
|
all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;
|
|
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
|
10
|
|
(c)
|
neither the Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and
|
|
|
(d)
|
the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or
adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by
a Finance Document;
|
“
Security Trustee
” means The Bank of Nova Scotia, a company incorporated in Canada and
acting in such capacity through its office at Scotia House, 33 Finsbury Square, London EC2A 1BB, England or any successor of it appointed under clause 5 of the Agency and Trust Agreement;
“
Servicing Bank
” means the Agent or the Security Trustee;
“
Shareholders
” means Bretta Tankers and Euronav Hong Kong;
“
Ship
” means the Suezmax tanker with hull no. 1893 of 158,000 dwt which is to be constructed by the Builder for, and purchased
by, the Borrower under the Shipbuilding Contract and upon delivery registered in the name of the Borrower under an Approved Flag;
“
Shipbuilding Contract
” means the Shipbuilding Contract dated 25 July 2008 made between the Builder and the Borrower for
the construction by the Builder of the Ship and its purchase by the Borrower as supplemented and amended from time to time;
“
Supervision Agreement
” means the agreement dated 17 September 2008 in respect of the supervision of the construction of
the Ship between the Supervisor and the Borrower;
“
Supervisor
” means Guarantor B or any of its subsidiaries with the
prior written consent of the Agent (acting with the authorisation of the Majority Lenders) not to be unreasonably withheld or delayed;
“
Total Commitments
” means the aggregate of the Commitments of all the Lenders being the Loan Amount A plus, if such amount is
made available pursuant to Clause 2.4, the Charter Top-Up Amount;
“
Total Loss
” means:
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of the Ship;
|
|
|
(b)
|
any expropriation, confiscation, requisition or acquisition of the Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an
extension) unless it is within 3 months redelivered to the Borrower’s full control; and
|
|
|
(c)
|
any arrest, capture, seizure or detention of the Ship (including any hijacking or theft) unless it is within 3 months redelivered to the Borrower’s full control;
|
11
“
Total Loss Date
” means:
|
|
(a)
|
in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;
|
|
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earliest of:
|
|
|
(i)
|
the date on which a notice of abandonment is given to the insurers; and
|
|
|
(ii)
|
the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship’s insurers in which the insurers agree to treat the Ship as a total loss; and
|
|
|
(c)
|
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;
|
“
Transfer Certificate
” has the meaning given in Clause 26.2; and
“
Trust Property
” has the meaning given in clause 3.1 of the Agency and Trust Agreement.
|
1.2
|
Construction of certain terms.
In this Agreement:
|
“
administration
notice
” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in
connection with, the appointment of an administrator;
“
approved
” means, for the purposes of Clause 13, approved in
writing by the Agent;
“
asset
” includes every kind of property, asset, interest or right, including any present, future or
contingent right to any revenues or other payment;
“
company
” includes any partnership, joint venture and unincorporated
association;
“
consent
” includes an authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;
“
contingent liability
” means a liability which is not certain to arise
and/or the amount of which remains unascertained;
“
continuing
” means, in relation to any Event of Default, the Event of
Default has not been remedied to the satisfaction of, or waived by the Majority Lenders;
“
document
” includes a deed; also
a letter or fax;
“
excess risks
” means the proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;
“
expense
” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value
added or other tax;
“
law
” includes any order or decree, any form of delegated legislation, any treaty or international
convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
12
“
legal or administrative action
” means any legal proceeding or arbitration and
any administrative or regulatory action or investigation;
“
liability
” includes every kind of debt or liability (present
or future, certain or contingent), whether incurred as principal or surety or otherwise;
“
months
” shall be construed in
accordance with Clause 1.3;
“
obligatory insurances
” means all insurances effected, or which the Borrower is obliged to
effect, under Clause 13 or any other provision of this Agreement or another Finance Document;
“
parent company
” has the
meaning given in Clause 1.4;
“
person
” includes any company; any state, political sub-division of a state and local or
municipal authority; and any international organisation;
“
policy
”, in relation to any insurance, includes a slip, cover
note, certificate of entry or other document evidencing the contract of insurance or its terms;
“
protection and indemnity
risks
” means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not
recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or clause 8 of the Institute
Time Clauses (Hulls) (1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
“
regulation
” includes any regulation, rule, official directive, request or guideline whether or not having the force of law of
any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
“
subsidiary
” has the meaning given in Clause 1.4;
“
tax
” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any
political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and
“
war risks
” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or
1/11/03) or clause 24 of the Institute Time Clauses (Hulls)(1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
|
1.3
|
Meaning of “month”.
A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started
(“
the numerically corresponding day
”), but:
|
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding
the numerically corresponding day; or
|
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,
|
and “
month
” and “
monthly
” shall be construed accordingly.
13
|
1.4
|
Meaning of “subsidiary”.
A company (S) is a subsidiary of another company (P) if:
|
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
|
|
(b)
|
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
|
|
(c)
|
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
|
(d)
|
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;
|
and any company of which S is a subsidiary is a parent company of S.
|
1.5
|
General Interpretation
. In this Agreement:
|
|
(a)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
|
(b)
|
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
|
|
(c)
|
words denoting the singular number shall include the plural and vice versa; and
|
|
(d)
|
Clauses 1.1 to 1.5 apply unless the contrary intention appears.
|
|
1.6
|
Headings.
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
|
|
2.1
|
Amount of facility.
Subject to Clause 2.4 and the other provisions of this Agreement, the Lenders shall make available to the Borrower a term loan facility in an aggregate amount equal to the Total Commitments to
enable the Borrower to finance its acquisition of the Ship by 5 Advances as follows:
|
|
(a)
|
a first Advance of up to $14,250,000 to enable the Borrower to refinance the first pre-delivery instalment of the Contract Price under the Shipbuilding Contract paid to the Builder upon signing of the Shipbuilding
Contract;
|
|
(b)
|
a second Advance of up to $7,125,000 to enable the Borrower to meet the second pre-delivery instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder on the date falling 12 calendar
months after the date of the Shipbuilding Contract;
|
|
(c)
|
a third Advance of up to $7,125,000 to enable the Borrower to meet the third pre-delivery instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder upon keel laying;
|
|
(d)
|
a fourth Advance of up to $7,125,000 to enable the Borrower to meet the fourth pre-delivery instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder upon launching;
|
|
(e)
|
a fifth Advance of up to $35,625,000 to enable the Borrower to meet the final instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder upon delivery of the Ship.
|
14
|
2.2
|
Lenders’ participations in Loan.
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment
bears to the Total Commitments. No Creditor Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
|
|
2.3
|
Purpose of Loan.
The Borrower undertakes with each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement.
|
|
2.4
|
Charter Top-Up Amount.
The Lenders agree to also advance the Charter Top-Up Amount to the Borrower on the Delivery Date if requested to do so by the Borrower subject to the following conditions:
|
|
(a)
|
the Borrower providing evidence that the Ship is or will be subject to a charter from the Delivery Date for a period not less than 3 years and on terms (including rates), and to a charterer, in each case acceptable to
the Lenders in their absolute discretion; and
|
|
(b)
|
the Borrower executes and delivers to the Agent the Charter Assignment (and each document to be delivered under it).
|
|
2.5
|
Margin renegotiation.
The Borrower shall renegotiate the Margin with the Agent during the 3 month period commencing 6 months prior to the Margin Reset Date so as to agree a new Margin to apply with effect from
the Margin Reset Date. If the Borrower and the Agent agree on a new Margin that shall be the Margin with effect from the Margin Reset Date throughout the remainder of the Security Period. If the Borrower and the Agent do not agree on a new Margin
the Margin shall remain as 1.225 per cent. per annum unless the Agent requests the Borrower to repay the Loan in accordance with Clause 8.9.
|
|
3
|
POSITION OF THE LENDERS
|
|
3.1
|
Interests of Lenders several.
The rights of the Lenders under this Agreement are several.
|
|
3.2
|
Individual Lender’s right of action.
Subject to Clause 3.3, each Lender shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement without joining the
Agent, the Security Trustee or any other Lender as additional parties in the proceedings.
|
|
3.3
|
Proceedings by individual Lender requiring Majority Lender consent.
No Lender may commence proceedings against the Borrower or any Security Party in connection with a Finance Document without the prior consent of
the Majority Lenders.
|
|
3.4
|
Obligations of Lenders several.
The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:
|
|
(a)
|
the obligations of the other Lenders being increased; nor
|
|
(b)
|
the Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,
|
and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.
15
|
4.1
|
Request for Advance.
Subject to the following conditions, the Borrower may request an Advance to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 3
Business Days prior to the intended Drawdown Date or such shorter period as the Agent and the Borrower mutually agree.
|
|
4.2
|
Availability.
The conditions referred to in Clause 4.1 are that:
|
|
(a)
|
a Drawdown Date has to be a Business Day within the Availability Period
|
|
(b)
|
the amount of the Advance requested complies with Clause 2.1;
|
|
(c)
|
each Advance in relation to Loan Amount A shall not exceed 75 per cent. of the amount of the instalment under the Shipbuilding Contract which is being financed by that Advance;
|
|
(d)
|
the Charter Top-Up Amount shall only be available on the Delivery Date subject to Clause 2.4 and shall not exceed the amount referred to in the definition of Charter Top-Up Amount;
|
|
(e)
|
the aggregate amount of the Advances shall not exceed the Total Commitments;
|
|
(f)
|
the proposed Interest Period complies with Clause 6; and
|
|
(g)
|
and the conditions set out in Clause 9.1 are met.
|
|
4.3
|
Notification to Lenders of receipt of a Drawdown Notice.
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
|
|
(a)
|
the amount of the Advance and the Drawdown Date;
|
|
(b)
|
the amount of that Lender’s participation in the Advance; and
|
|
(c)
|
the duration of the first Interest Period.
|
|
4.4
|
Drawdown Notice irrevocable.
A Drawdown Notice must be signed by a director or officer or an authorised person of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of
the Agent, acting on the authorisation of the Majority Lenders.
|
|
4.5
|
Lenders to make available Contributions.
Subject to the provisions of this Agreement, and in particular Clause 9, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the
account of the Borrower the amount due from that Lender on that Drawdown Date under Clause 2.2.
|
|
4.6
|
Disbursement of Advance.
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5; and that
payment to the Borrower shall be made:
|
|
(a)
|
to the account of the Builder which the Borrower specifies in the Drawdown Notice; and
|
|
(b)
|
in the like funds as the Agent received the payments from the Lenders.
|
|
4.7
|
Disbursement of Advance to third party.
The payment by the Agent under Clause 4.6 to the Builder shall constitute the making of the Advance and the Borrower shall at that time become indebted, as principal and
direct obligor, to each Lender in an amount equal to that Lender’s Contribution.
|
|
4.8
|
Cancellation of Total Commitments
. The Total Commitments shall be immediately cancelled at the end of the Availability Period.
|
16
|
5.1
|
Payment of normal interest.
Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.
|
|
5.2
|
Normal rate of interest.
Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period shall be the aggregate of:
|
|
(b)
|
the Mandatory Cost, if any; and
|
|
(c)
|
LIBOR for that Interest Period.
|
|
5.3
|
Payment of accrued interest.
In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.
|
|
5.4
|
Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrower and each Lender of:
|
|
(a)
|
each rate of interest; and
|
|
(b)
|
the duration of each Interest Period,
|
as soon as reasonably practicable after each is
determined.
|
5.5
|
Obligation of Reference Banks to quote.
A Lender which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this
Agreement.
|
|
5.6
|
Absence of quotations by Reference Banks.
If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or
Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.
|
|
(a)
|
If a Market Disruption Event occurs in relation to an Advance for any Interest Period, then the rate of interest on each Lender’s share of that Advance for the Interest Period shall be the percentage rate per annum
which is the sum of:
|
|
|
(ii)
|
the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the
cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and
|
|
|
(iii)
|
the Mandatory Cost, if any, applicable to that Lender’s participation in the Advance.
|
17
|
(b)
|
In this Agreement “
Market Disruption Event
” means:
|
|
|
(i)
|
at or about noon on the Quotation Date for the relevant Interest Period the Reuters BBA Page LIBOR 01 is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for
dollars for the relevant Interest Period; or
|
|
|
(ii)
|
before close of business in London on the Quotation Date for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders that the cost to it or them obtaining matching deposits in the
Relevant Interbank Market would be in excess of LIBOR.
|
|
5.8
|
Notification of market disruption.
The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.7 which have caused its notice to be given.
|
|
5.9
|
Negotiation of alternative rate of interest.
If the Agent’s notice under Clause 5.8 is served after an Advance is made, the Borrower, the Agent and the Lenders shall use reasonable endeavours to agree,
within the 30 days after the date on which the Agent serves its notice under Clause 5.8 (the “
Negotiation Period
”), an alternative interest rate or (as the case may be) an alternative basis for the Lenders to fund or continue to
fund their or its Contribution during the Interest Period concerned.
|
|
5.10
|
Application of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
|
5.11
|
Alternative rate of interest in absence of agreement.
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of
the Negotiation Period, then the Agent shall, with the agreement of each Lender, set an interest period and interest rate representing the cost of funding of the Lenders in Dollars or in any available currency of their or its Contribution plus the
Margin; and the procedure provided for by this Clause 5.11 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
|
|
5.12
|
Notice of prepayment.
If the Borrower does not agree with an interest rate set by the Agent under Clause 5.11, the Borrower may give the Agent not less than 15 Business Days’ notice of its intention to
prepay at the end of the interest period set by the Agent.
|
|
5.13
|
Prepayment; termination of Commitments.
A notice under Clause 5.12 shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrower’s notice of intended prepayment; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Total Commitments shall be cancelled; and
|
|
(b)
|
on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan together with accrued interest thereon at the applicable rate plus the Margin.
|
|
5.14
|
Application of prepayment.
The provisions of Clause 8 shall apply in relation to the prepayment made pursuant to Clause 5.12.
|
18
|
6.1
|
Commencement of Interest Periods.
The first Interest Period applicable to an Advance shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest
Period.
|
|
6.2
|
Duration of normal Interest Periods.
Subject to Clauses 6.3 and 6.4, each Interest Period shall be:
|
|
(a)
|
3 or 6 months as notified by the Borrower to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of the Interest Period; or
|
|
(b)
|
in the case of the first Interest Period applicable to the second and any subsequent Advance, a period ending on the last day of the Interest Period applicable to the first Advance then current, whereupon all of the
Advances shall be consolidated and treated as a single Advance;
|
|
(c)
|
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
|
|
(d)
|
such other period as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower.
|
|
6.3
|
Duration of Interest Periods for repayment instalments.
In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.
|
|
6.4
|
Non-availability of matching deposits for Interest Period selected.
If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00
a.m. (London time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the
Interest Period commences, the Interest Period shall be of 3 months.
|
|
7.1
|
Payment of default interest on overdue amounts.
The Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which
the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
|
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
|
(c)
|
if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.
|
|
7.2
|
Default rate of interest.
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by
the Agent to be 1 per cent. above:
|
|
(a)
|
in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or
|
|
(b)
|
in the case of any other overdue amount, the rate set out at Clause 7.3(b).
|
19
|
7.3
|
Calculation of default rate of interest.
The rates referred to in Clause 7.2 are:
|
|
(a)
|
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);
|
|
(b)
|
the Margin and the Mandatory Cost, if any, plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
|
|
(ii)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time
determine.
|
|
7.4
|
Notification of interest periods and default rates.
The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the
Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent’s notification.
|
|
7.5
|
Payment of accrued default interest.
Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and
the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
|
|
7.6
|
Compounding of default interest.
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
|
8
|
REPAYMENT AND PREPAYMENT
|
|
8.1
|
Amount of repayment instalments.
|
A. Loan Amount A.
The Borrower shall repay Loan
Amount A by equal consecutive quarterly instalments of $1,062,500 each together with a balloon instalment in an amount equal to the remaining amount of Loan Amount A payable simultaneously with the final instalment.
B. Charter Top-Up Amount.
If the Charter Top-Up Amount is made available to the Borrower pursuant to Clause 2.4, the Borrower shall
repay the Charter Top-Up Amount by quarterly equal instalments so as to amortise that amount to zero on the earlier of the Maturity Date and the expiry date (without any extensions) of the Charter.
The Agent shall provide the Borrower with a repayment schedule for the Charter Top-Up Amount promptly after receiving a Drawdown Notice for the
Charter Top-Up Amount.
|
8.2
|
Repayment Dates.
The first instalment in relation to Loan Amount A and the Charter Top-Up Amount shall be repaid on the date falling 3 months after the Delivery Date and the last instalment together with the
balloon (i) in the case of Loan Amount A, on the Maturity Date and (ii) in the case of the Charter Top-Up Amount, the earlier of the Maturity Date and the expiry date (without any extensions) of the Charter.
|
20
|
8.3
|
Maturity Date.
On the Maturity Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
|
|
8.4
|
Voluntary prepayment.
Subject to the following conditions, the Borrower may, without penalty, prepay the whole or any part of the Loan on the last day of an Interest Period for that Advance.
|
|
8.5
|
Conditions for voluntary prepayment.
The conditions referred to in Clause 8.4 are that:
|
|
(a)
|
a partial prepayment shall be $500,000 or a multiple of $500,000 or such other amount agreed by the Agent;
|
|
(b)
|
the Agent has received from the Borrower at least 5 Business Days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
|
|
(c)
|
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any
requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.
|
|
8.6
|
Effect of notice of prepayment.
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the
prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.
|
|
8.7
|
Notification of notice of prepayment.
The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the
Borrower under Clause 8.5(c).
|
|
8.8
|
Mandatory prepayment on sale or Total Loss or in relation to the Shipbuilding Contract.
The Borrower shall be obliged to prepay the whole of the Loan:
|
|
(a)
|
if the Ship is sold, on or before the date on which such sale is completed by delivery of the Ship to the buyer
Provided that
the Borrower shall not be required to prepay the Loan if the Ship is sold to a
subsidiary of either Guarantor pursuant to the proviso to Clause 11.3.; or
|
|
(b)
|
if the Ship becomes a Total Loss, on the earlier of the date falling 180 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss;
|
|
(c)
|
if any of the following occurs, on demand by the Agent:
|
|
|
(i)
|
either the Shipbuilding Contract or the Refund Guarantee is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in force for any reason; or
|
|
|
(ii)
|
the Shipbuilding Contract is materially amended or materially varied without the prior written consent of the Majority Lenders except for any such amendment or variation as is permitted by this Agreement or any other
relevant Finance Document; or
|
|
|
(iii)
|
the Ship has not for any reason been delivered to, and accepted by, the Borrower under the Shipbuilding Contract by the date specified in Article III.5 of the Shipbuilding Contract as the date giving rise to the right
of cancellation for excessive late delivery.
|
21
|
8.9
|
Mandatory Prepayment on failing to agree new Margin
. If the Borrower and the Agent fail to reach agreement on the new Margin to apply with effect from the Margin Reset Date, the Borrower shall prepay the Loan on
the Margin Reset Date if requested to do so by the Agent.
|
|
8.10
|
Mandatory prepayment on termination or expiry of the Charter.
The Borrower shall prepay the outstanding amount of the Charter Top-Up Amount if the Charter is terminated or otherwise cease to remain in full force
and effect within 15 Business Days of the date of such termination or expiration.
|
|
8.11
|
Amounts payable on prepayment.
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period together with any sums payable under Clause 21.1(b) but without premium or penalty. Unless such prepayment is made pursuant to Clause 8.10, any prepayment shall be applied first against Loan Amount A and
then against the Charter Top-Up Amount.
|
|
8.12
|
Application of partial prepayment.
Each partial prepayment shall be applied first against the balloon and then against the repayment instalments specified in Clause 8.1 in inverse order of maturity.
|
|
8.13
|
No reborrowing.
No amount prepaid may be reborrowed.
|
|
9.1
|
Documents, fees and no default.
Each Lender’s obligation to contribute to an Advance is subject to the following conditions precedent:
|
|
(a)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
|
|
(b)
|
that, on or before the first Drawdown Date for, but prior to the making of, an Advance (other than the final Advance), the Agent receives or is satisfied that it will receive on the making of such Advance the documents
described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers;
|
|
(c)
|
that before the final Drawdown Date for, but prior to the making of, the final Advance, the Agent receives or is satisfied that it will receive on the making of such Advance the documents described in Part C of Schedule
3 in form and substance satisfactory to it and its lawyers;
|
|
(d)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the arrangement fee referred to in Clause 20.1, all accrued commitment fee payable pursuant to Clause 20.1 and has received payment of the
expenses referred to in Clause 20.2; and
|
|
(e)
|
that both at the date of each Drawdown Notice and at each Drawdown Date:
|
|
|
(i)
|
no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Loan;
|
|
|
(ii)
|
the representations and warranties in Clause 10.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with
reference to the circumstances then existing; and
|
|
|
(iii)
|
none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and
|
22
|
(f)
|
that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
|
|
(g)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the
Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.
|
|
9.2
|
Waiver of conditions precedent.
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure
that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
|
|
10
|
REPRESENTATIONS AND WARRANTIES
|
|
10.1
|
General.
The Borrower represents and warrants to each Creditor Party as follows.
|
|
10.2
|
Status.
The Borrower is duly incorporated and validly existing under the laws of Hong Kong.
|
|
10.3
|
Share capital and ownership.
The Borrower has an authorised share capital of $10,000 divided into 10,000 shares of $1 each, two (2) of which shares have been issued fully paid, and the legal title and
beneficial ownership of one (1) share is held free of any Security Interest or other claim by Bretta Tankers and the other one (1) share is held free of any Security Interest or other claim by Euronav Hong Kong.
|
|
10.4
|
Corporate power.
The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
|
|
(a)
|
to execute the Shipbuilding Contract, to purchase and pay for the Ship under the Shipbuilding Contract and register the Ship in its name under the Approved Flag;
|
|
(b)
|
to execute the Finance Documents to which the Borrower is a party; and
|
|
(c)
|
to borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents.
|
|
10.5
|
Consents in force.
All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
|
|
10.6
|
Legal validity; effective Security Interests.
The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as
provided for in the Finance Documents):
|
|
(a)
|
constitute the Borrower’s legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and
|
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
|
subject to any relevant insolvency laws affecting creditors’ rights generally.
23
|
10.7
|
No third party Security Interests.
Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:
|
|
(a)
|
the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
|
|
(b)
|
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms,
relates.
|
|
10.8
|
No conflicts.
The execution by the Borrower of each Finance Document, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document will not involve or lead to a contravention of:
|
|
(a)
|
any law or regulation; or
|
|
(b)
|
the constitutional documents of the Borrower; or
|
|
(c)
|
any contractual or other obligation or restriction which is binding on the Borrower or any of its assets.
|
|
10.9
|
Governing law and enforcement.
|
|
(a)
|
The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation.
|
|
(b)
|
Any judgment obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.
|
|
10.10
|
No withholding taxes.
All payments which the Borrower is liable to make under the Finance Documents must be made without deduction or withholding for or on account of any tax payable under any law of any
Pertinent Jurisdiction.
|
|
10.11
|
No default.
No Event of Default or Potential Event of Default has occurred.
|
|
10.12
|
Information.
All information which has been provided in writing by or on behalf of the Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of
Clause 11.5; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7; and there has been no material adverse change in the financial position or state of affairs of the Borrower from that disclosed in
the latest of those accounts.
|
|
10.13
|
No litigation.
No legal or administrative action involving the Borrower (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the
Borrower’s knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on the Borrower’s financial position or profitability.
|
|
10.14
|
Validity and completeness of Shipbuilding Contract.
The Shipbuilding Contract constitutes valid, binding and enforceable obligations of the Builder and the Borrower respectively in accordance with its terms; and:
|
|
(a)
|
the copy of the Shipbuilding Contract delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
|
(b)
|
no amendments or additions to the Shipbuilding Contract as delivered to the Agent before the date of this Agreement have been agreed (except for those amendments which are permitted under Clause 11.12) nor has the
Borrower or the Builder waived any of their respective rights under the Shipbuilding Contract.
|
24
|
10.15
|
Validity and completeness of Supervision Agreement.
The Supervision Agreement constitutes valid, binding and enforceable obligations of the Supervisor and the Borrower respective in accordance with its terms;
and:
|
|
(a)
|
the copy of the Supervision Agreement delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
|
(b)
|
no amendments or additions to the Supervision Agreement as delivered to the Agent before the date of this Agreement have been agreed nor has the Borrower or the Supervisor waived any of their respective rights under the
Supervision Agreement.
|
|
10.16
|
No rebates etc.
There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to the Borrower, the Builder or a third party in
connection with the purchase by the Borrower of the Ship, other than as disclosed to the Lenders in writing on or prior to the date of this Agreement.
|
|
10.17
|
Compliance with certain undertakings.
At the date of this Agreement, the Borrower is in compliance with Clauses 11.2, 11.4, 11.9 and 11.13.
|
|
10.18
|
Taxes paid.
The Borrower has paid all taxes applicable to, or imposed on or in relation to the Borrower, its business or the Ship.
|
|
10.19
|
ISM Code and ISPS Code compliance.
All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Approved Manager and the Ship have been complied with or shall be complied with as from
the delivery of the Ship to the Borrower under the Shipbuilding Contract.
|
|
10.20
|
No money laundering.
Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance
Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) that it is acting for its own account; (ii) that it will use the proceeds
of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other
regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive (91/308) EEC of the Council of the European Communities).
|
|
11.1
|
General.
The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the
Majority Lenders, otherwise permit (such consent not to be unreasonably withheld or delayed in the case of Clause 11.12).
|
|
11.2
|
Title; negative pledge.
The Borrower will:
|
|
(a)
|
keep its rights under the Shipbuilding Contract, the Supervision Agreement and the Refund Guarantee and with effect from delivery of the Ship under the Shipbuilding Contract will hold the legal title to, and own the
entire beneficial interest in the Ship, the Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the
Finance Documents and except for Permitted Security Interests; or
|
|
(b)
|
not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future.
|
25
|
11.3
|
No disposal of assets.
The Borrower will not transfer, lease or otherwise dispose of:
|
|
(a)
|
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except for those in the ordinary course of business and for fair market value payable in cash upon
completion of such transaction; or
|
|
(b)
|
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.;
|
but paragraph (a) does not apply to any charter of the Ship as to which Clause 14.13 applies,
Provided
that the Borrower may sell the Ship to another subsidiary of either Guarantor subject to the following conditions:
|
|
(i)
|
there is no Event of Default or Potential Event of Default which is continuing;
|
|
|
(ii)
|
the new owning company and the jurisdiction of incorporation being acceptable to the Lenders;
|
|
|
(iii)
|
the Borrower and the Security Parties entering into such amendments to this Agreement and the other Finance Documents as may be required by the Lenders in order to document the change of ownership;
|
|
|
(iv)
|
the new owning company entering into such other security documents which are required by the Lenders so as to maintain the same security for the Lenders on the transfer of ownership; and
|
|
|
(v)
|
the new owner shall pay to the Agent on demand all expenses (including but not limited to legal expenses) relating to the said documentation.
|
|
11.4
|
No other liabilities or obligations to be incurred.
The Borrower will not incur any liability or obligation except liabilities and obligations under the Shipbuilding Contract, the Supervision Agreement and the
Finance Documents and liabilities or obligations incurred in the ordinary course of its business (including operating and chartering the Ship).
|
|
11.5
|
Information provided to be accurate.
All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not
misleading and will not omit any material fact or consideration.
|
|
11.6
|
Provision of financial statements.
The Borrower will send to the Agent:
|
|
(a)
|
as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower, (commencing with the financial year ending 31 December 2010), the audited accounts of the Borrower;
|
|
(b)
|
as soon as possible, but in no event later than 90 days after the end of each financial half year of the Borrower (commencing with the financial half year ending 30 June 2010) unaudited management accounts of the
Borrower which are certified as to their correctness by the chief financial officer of the Borrower.
|
|
11.7
|
Form of financial statements.
All accounts (audited and unaudited) delivered under Clause 11.6 will:
|
|
(a)
|
be prepared in accordance with all applicable laws and IFRS consistently applied;
|
26
|
(b)
|
fairly represent the financial condition of the Borrower at the date of those accounts and of its profit for the period to which those accounts relate; and
|
|
(c)
|
fully disclose or provide for all significant liabilities of the Borrower.
|
|
11.8
|
Creditor notices.
The Borrower will send the Agent, at the same time as they are despatched, copies of all material communications which are despatched to the Borrower’s creditors or any class of them.
|
|
11.9
|
Consents.
The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
|
|
(a)
|
for the Borrower to perform its obligations under any Finance Document;
|
|
(b)
|
for the validity or enforceability of any Finance Document; and
|
|
(c)
|
for the Borrower to continue to own and operate the Ship,
|
and the Borrower will comply with
the terms of all such consents.
|
11.10
|
Maintenance of Security Interests.
The Borrower will:
|
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
|
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid,
enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
|
11.11
|
Notification of litigation.
The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Security Party, the Approved Manager or the Ship, the Earnings or the
Insurances as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance
Document.
|
|
11.12
|
No amendment to Shipbuilding Contract.
The Borrower will not agree to any material amendment or supplement to, or waive the Supervision Agreement or the Shipbuilding Contract or any of their provisions without
the prior written consent of the Agent save that the Borrower may without requiring such consent of the Agent, agree with the Builder to amend the Shipbuilding Contract if such amendment:
|
|
(a)
|
does not alter the intended size, commercial use or purpose of the Ship;
|
|
(b)
|
does not alter the construction milestones for payment of the instalments of the Contract Price under the Shipbuilding Contract;
|
|
(c)
|
does not alter the identity of the Refund Guarantor nor the form, and amount, of the Refund Guarantee to be provided nor impair the effectiveness of the Refund Guarantee; and
|
|
(d)
|
will not materially reduce the Ship’s anticipated value when completed.
|
27
|
11.13
|
Principal place of business.
The Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated at the commencement of this Agreement; and the Borrower will not
establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than Hong Kong.
|
|
11.14
|
Confirmation of no default.
The Borrower will, within 5 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by 2 directors of the Borrower and which:
|
|
(a)
|
states that no Event of Default or Potential Event of Default has occurred; or
|
|
(b)
|
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
|
The Agent may serve requests under this Clause 11.14 from time to time but only if reasonably asked to do so by a Lender or Lenders having
Contributions exceeding 10 per cent. of the Loan or (if the Loan has not been made) Commitments exceeding 10 per cent of the Total Commitments; and this Clause 11.14 does not affect the Borrower’s obligations under Clause 11.15.
|
11.15
|
Notification of default.
The Borrower will notify the Agent as soon as the Borrower becomes aware of:
|
|
(a)
|
the occurrence of an Event of Default or a Potential Event of Default; or
|
|
(b)
|
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred;
|
and will keep the Agent fully up-to-date with all developments.
|
11.16
|
Provision of further information.
The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:
|
|
(a)
|
to the Borrower, the Ship, the Earnings or the Insurances; or
|
|
(b)
|
to any other matter relevant to, or to any provision of, a Finance Document,
|
which may
reasonably be requested by the Agent, the Security Trustee or any Lender at any time.
|
11.17
|
“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 or any Security Party 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,
|
obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with “know your customer” or
similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation
and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned
28
(for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described
in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated
in the Finance Documents.
|
12
|
CORPORATE UNDERTAKINGS
|
|
12.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period after the Ship has been delivered to the Borrower
under the Shipbuilding Contract except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
|
12.2
|
Maintenance of status.
The Borrower will maintain its separate corporate existence and remain in good standing under the laws of Hong Kong.
|
|
12.3
|
Negative undertakings.
The Borrower will not:
|
|
(a)
|
carry on any business other than the ownership, chartering and operation of the Ship; or
|
|
(b)
|
effect any form of redemption purchase or return of share capital or effect any form of redemption, purchase or return of share capital; or
|
|
(c)
|
provide any form of credit or financial assistance to:
|
|
|
(i)
|
a person who is directly or indirectly interested in the Borrower’s share or loan capital; or
|
|
|
(ii)
|
any company in or with which such a person is directly or indirectly interested or connected; or
|
|
|
(iii)
|
enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms’ length,
|
and the Borrower agrees to subordinate any inter-company loans to the Loan on such terms as the Lenders may reasonably
require;
|
(d)
|
issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital;
|
|
(e)
|
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative;
|
|
(f)
|
enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation; or
|
|
(g)
|
enter into any freight forwarding agreements.
|
|
12.4
|
Payment of dividends.
The Borrower may pay dividends
provided that
no Event of Default has occurred and is continuing.
|
|
12.5
|
Minimum Liquidity.
The Borrower shall ensure that from the Delivery Date and throughout the Security Period there is at all times standing to the credit of the Earnings Account free of any Security Interest other
than in favour of the Security Trustee an amount of not less than $300,000 increasing to $500,000 with effect from the first anniversary of the Delivery Date.
|
29
|
13.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 at all times during the Security Period (after the Delivery Date) except as the Agent may,
with the authorisation of the Majority Lenders, otherwise permit (such consent not to be unreasonably withheld or delayed in the case of Clauses 13.11(b) and 13.12).
|
|
13.2
|
Maintenance of obligatory insurances.
The Borrower shall keep the Ship insured at the expense of the Borrower against:
|
|
(a)
|
fire and usual marine risks (including hull and machinery and excess risks);
|
|
(c)
|
protection and indemnity risks; and
|
|
(d)
|
any other risks against which the Majority Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Majority Lenders be reasonable for the
Borrower to insure and which are specified by the Security Trustee by notice to the Borrower.
|
|
13.3
|
Terms of obligatory insurances.
The Borrower shall effect such insurances:
|
|
(b)
|
in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) 120 per cent. of the Loan and (ii) the market value of the Ship; and
|
|
(c)
|
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine
insurance market;
|
|
(d)
|
in relation to protection and indemnity risks in respect of the Ship’s full tonnage;
|
|
(e)
|
on approved terms; and
|
|
(f)
|
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
|
|
13.4
|
Further protections for the Creditor Parties.
In addition to the terms set out in Clause 13.3, the Borrower shall procure that the obligatory insurances shall:
|
|
(a)
|
whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of
subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
|
(b)
|
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
|
30
|
(c)
|
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
|
|
(d)
|
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
|
|
(e)
|
provide that the Security Trustee may make proof of loss if the Borrower fails to do so.
|
|
13.5
|
Renewal of obligatory insurances.
The Borrower shall:
|
|
(a)
|
at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance; and
|
|
(b)
|
promptly after each such renewal, there is provided to the Agent details of the terms and conditions on which such obligatory insurances have been renewed.
|
|
13.6
|
Copies of policies; letters of undertaking.
The Borrower shall ensure that all approved brokers provide the Security Trustee with a letter or letters of undertaking in a form required by the Majority Lenders and
including undertakings by the approved brokers that:
|
|
(a)
|
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;
|
|
(b)
|
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
|
|
(c)
|
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
|
|
(d)
|
they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Borrower or its agents and,
in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and
|
|
(e)
|
they will not set off against any sum recoverable in respect of a claim relating to the Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the Ship
or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or
other amounts, and will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Security Trustee.
|
|
13.7
|
Copies of certificates of entry.
The Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship is entered provides the Security Trustee with:
|
|
(a)
|
a certified copy of the certificate of entry for the Ship;
|
|
(b)
|
a letter or letters of undertaking in such form as may be required by the Majority Lenders; and
|
|
(c)
|
a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship.
|
31
|
13.8
|
Deposit of original policies.
The Borrower shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
|
13.9
|
Payment of premiums.
The Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.
|
|
13.10
|
Guarantees.
The Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
|
13.11
|
Compliance with terms of insurances.
The Borrower shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void,
voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
|
|
(a)
|
the Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c))
ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
|
(b)
|
the Borrower shall not make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances;
|
|
(c)
|
the Borrower shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship is entered to
maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
|
|
(d)
|
the Borrower shall not employ the Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and
complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
|
13.12
|
Alteration to terms of insurances.
The Borrower shall neither make or agree to any material alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance without the
consent of the Agent.
|
|
13.13
|
Settlement of claims.
The Borrower shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all
documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
|
13.14
|
Provision of information.
In addition, the Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated
person) reasonably requests for the purpose of:
|
|
(a)
|
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
32
|
(b)
|
effecting, maintaining or renewing any such insurances as are referred to in Clause 13.15 or dealing with or considering any matters relating to any such insurances,
|
and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the
account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
|
13.15
|
Mortgagee’s interest and additional perils insurances.
The Security Trustee shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest additional perils insurance and a
mortgagee’s interest marine insurance each in an amount of 110 per cent. of the Loan and on such terms, through such insurers and generally in such manner as the Majority Lenders may from time to time consider appropriate and the Borrower
shall upon demand fully indemnify the Creditor Parties in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any
matter arising out of any such insurance.
|
|
14.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 at all times during the Security Period (after the Delivery Date) except as the Agent, with
the authorisation of the Majority Lenders, may otherwise permit.
|
|
14.2
|
Ship’s name and registration.
The Borrower shall keep the Ship registered in its name under the relevant Approved Flag at its relevant port of registry; shall not do or omit to do or allow to be done
anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of the Ship.
|
|
14.3
|
Repair and classification.
The Borrower shall keep the Ship in a good and safe condition and state of repair:
|
|
(a)
|
consistent with first-class ship ownership and management practice;
|
|
(b)
|
so as to maintain the Ship’s class (namely A1(E), “Oil Carrier ESP”, AMS, ACCU, SPM, VEC(-L), CSR, Safeship-CM, RES, ES, TEM, Green Passport, POT, UWILD (sea chest blanking devices shall not be provided),
CPS at American Bureau of Shipping) free of overdue recommendations and conditions; and
|
|
(c)
|
so as to comply with all laws and regulations applicable to vessels registered at ports in Greece or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the
ISM Code or the ISPS Code.
|
|
14.4
|
Modification.
The Borrower shall not make any modification or repairs to, or replacement of, the Ship or equipment installed on it which would or might materially alter the structure, type or performance
characteristics of the Ship or materially reduce its value.
|
|
14.5
|
Removal of parts.
The Borrower shall not remove any material part of the Ship, or any item of equipment installed on, the Ship unless the part or item so removed is forthwith replaced by a suitable part or item
which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on the Ship the property of the
Borrower and subject to the security constituted by the Mortgage
Provided that
the Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship.
|
33
|
14.6
|
Surveys.
The Borrower shall submit the Ship regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Majority Lenders provide the Security Trustee,
with copies of all survey reports.
|
|
14.7
|
Inspection.
The Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship at all reasonable times to inspect its condition or to satisfy
themselves about proposed or executed repairs and shall afford all proper facilities for such inspections provided that prior to the occurrence of an Event of Default reasonable notice of such inspection is given and such inspection does not
materially affect the Ship’s commercial operation.
|
|
14.8
|
Prevention of and release from arrest.
The Borrower shall promptly discharge:
|
|
(a)
|
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship, the Earnings or the Insurances;
|
|
(b)
|
all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and
|
|
(c)
|
all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances,
|
and,
forthwith upon receiving notice of the arrest of the Ship, or of its detention in exercise or purported exercise of any lien or claim, the Borrower shall procure its release by providing bail or otherwise as the circumstances may require.
|
14.9
|
Compliance with laws etc.
The Borrower shall:
|
|
(a)
|
comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship, its ownership, operation and management or to the business of the Borrower;
|
|
(b)
|
not employ the Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
|
|
(c)
|
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship’s war
risks insurers unless the Borrower (at its expense) effected any necessary special, additional or modified insurance cover and, upon the Agent’s request, the Borrower will confirm that they have effected such insurance cover.
|
|
14.10
|
Provision of information.
The Borrower shall promptly provide the Security Trustee with any information which the Majority Lenders reasonably request regarding:
|
|
(a)
|
the Ship, its employment, position and engagements;
|
|
(b)
|
the Earnings and payments and amounts due to the Ship’s master and crew;
|
|
(c)
|
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship;
|
|
(d)
|
any towages and salvages; and
|
|
(e)
|
the Borrower’s, the Approved Manager’s or the Ship’s compliance with the ISM code and the ISPS code,
|
34
|
|
and, upon the Security Trustee’s request, provide copies of any current charter relating to the Ship and of any current charter guarantee, and copies of the Borrower’s or the Approved
Manager’s Document of Compliance.
|
|
14.11
|
Notification of certain events.
The Borrower shall immediately notify the Security Trustee by fax, confirmed forthwith by letter, of:
|
|
(a)
|
any casualty which is or is likely to be or to become a Major Casualty;
|
|
(b)
|
any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
|
(c)
|
any overdue requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;
|
|
(d)
|
any arrest or detention of the Ship, any exercise or purported exercise of any lien on the Ship or its Earnings or any requisition of the Ship for hire;
|
|
(e)
|
any intended dry docking of the Ship other than a routine dry docking;
|
|
(f)
|
any Environmental Claim made against the Borrower or in connection with the Ship, or any Environmental Incident;
|
|
(g)
|
any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, the Approved Manager or otherwise in connection with the Ship; or
|
|
(h)
|
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or ISPS Code not being complied with,
|
and the Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require
of the Borrower’s, the Approved Manager’s or any other person’s response to any of those events or matters.
|
14.12
|
Restrictions on chartering, appointment of managers etc.
The Borrower shall not:
|
|
(a)
|
let the Ship on demise charter for any period;
|
|
(b)
|
enter into any charter in relation to the Ship under which more than 2 months’ hire (or the equivalent) is payable in advance;
|
|
(c)
|
charter the Ship otherwise than on bona fide arm’s length terms at the time when the Ship is fixed;
|
|
(d)
|
appoint a manager of the Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager’s appointment;
|
|
(e)
|
de-activate or lay up the Ship; or
|
|
(f)
|
put the Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed the Major Casualty amount unless either:
|
|
|
(i)
|
that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or its Earnings for the cost of such work or for any other reason; or
|
|
|
(ii)
|
the Borrower has established to the reasonable satisfaction of the Security Trustee that the Borrower has sufficient reserves to pay for the cost of such work.
|
35
|
14.13
|
Notice of Mortgage.
The Borrower shall keep the Mortgage registered against the Ship as a valid first priority mortgage, carry on board the Ship a certified copy of the Mortgage and place and maintain in a
conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Borrower to the Security Trustee.
|
|
14.14
|
Sharing of Earnings.
The Borrower shall not enter into any agreement or arrangement for the sharing of any Earnings without the prior approval of the Agent such approval not to be unreasonably withheld. For the
avoidance of doubt the Agent’s approval shall not be required in relation to:
|
|
(a)
|
any “profit split” of hire between the Borrower and a charterer of the Ship; or
|
|
(b)
|
the entry into an established pool or a pool established by Guarantor B in both cases on usual commercial terms and at a market rate allocation.
|
|
15.1
|
Minimum required security cover.
Clause 15.2 applies if (after the Delivery Date) the Agent notifies the Borrower that, according to the determination mechanism under Clause 15.3:
|
|
(a)
|
the market value (determined as provided in Clause 15.3) of the Ship; plus
|
|
(b)
|
the net realisable value of any additional security previously provided under this Clause 15,
|
is below 125 per cent. of the Loan.
|
15.2
|
Provision of additional security; prepayment.
If the Agent serves a notice on the Borrower under Clause 15.1, the Borrower shall, within 1 month after the date on which the Agent’s notice is served, either:
|
|
(a)
|
provide, or ensure that a third party provides, additional security which is acceptable to the Agent and, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and is
documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require; or
|
|
(b)
|
prepay such part (at least) of the Loan as will eliminate the shortfall.
|
|
15.3
|
Valuation of Ship.
The market value of the Ship at any date is that shown by the average of 2 valuations addressed to the Agent for the benefit of the Lenders and prepared:
|
|
(a)
|
as at a date not more than 14 days previously;
|
|
(b)
|
by 2 independent first class sale and purchase shipbrokers which the Agent has approved or appointed for the purpose;
|
|
(c)
|
with or without physical inspection of the Ship (as the Agent may require);
|
|
(d)
|
on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
|
|
(e)
|
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
|
36
|
1
5.4
|
Value of additional vessel security.
The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by a
valuation complying with the requirements of Clause 15.3.
|
|
15.5
|
Valuations binding.
Any valuation under Clause 15.2, 15.3 or 15.4 shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Majority Lenders make of any additional security
which does not consist of or include a Security Interest.
|
|
15.6
|
Provision of information.
The Borrower shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or the shipbroker or expert may
reasonably request for the purposes of the valuation;
|
|
15.7
|
Payment of valuation expenses.
Without prejudice to the generality of the Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the Agent the amount of the fees and
expenses of any shipbroker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
|
|
15.8
|
Application of prepayment.
Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.2(b).
|
|
16
|
PAYMENTS AND CALCULATIONS
|
|
16.1
|
Currency and method of payments.
All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
|
(a)
|
by not later than 11.00 a.m. (New York City time) on the due date;
|
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time
for the settlement of international transactions of the type contemplated by this Agreement);
|
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to such account as the Agent may advise from time to time; and
|
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.
|
|
16.2
|
Payment on non-Business Day.
If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
|
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
|
16.3
|
Basis for calculation of periodic payments.
All interest, commitment fee and commission and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and
shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
|
37
|
16.4
|
Distribution of payments to Creditor Parties.
Subject to Clauses 16.5, 16.6 and 16.7:
|
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security
Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
|
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.
|
|
16.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that
amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
|
|
16.6
|
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender
any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
|
|
16.7
|
Refund to Agent of monies not received.
If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the
Lender concerned shall, on demand:
|
|
(a)
|
refund the sum in full to the Agent; and
|
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before
receiving it.
|
|
16.8
|
Agent may assume receipt.
Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the
sum which it made available.
|
|
16.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those
amounts made by the Borrower and any Security Party.
|
|
16.10
|
Agent’s memorandum account.
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the
Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
|
|
16.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie
evidence that that amount is owing to that Creditor Party.
|
38
|
17
|
APPLICATION OF RECEIPTS
|
|
17.1
|
Normal order of application.
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
|
(a)
|
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
|
|
(b)
|
SECONDLY: in or towards payment pro rata of any accrued interest or commission due but unpaid under this Agreement;
|
|
(c)
|
THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement;
|
|
(d)
|
FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Document;
|
|
(e)
|
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in
its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a), 17.1(b), 17.1(c) and 17.1(d); and
|
|
(f)
|
SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
|
|
17.2
|
Variation of order of application.
The Agent may, with the authorisation of the Majority Lenders, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of
application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
|
|
17.3
|
Notice of variation of order of application.
The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the
future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
|
|
17.4
|
Appropriation rights overridden.
This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any
Security Party.
|
|
18
|
APPLICATION OF EARNINGS
|
|
18.1
|
Payment of Earnings.
The Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignment), all the Earnings are paid to
the Earnings Account.
|
|
18.2
|
Interest accrued on Earnings Account.
Any credit balance on the Earnings Account shall bear interest at the rate from time to time offered by the Agent to its customers for Dollar deposits of similar amounts and
for periods similar to those for which such balances appear to the Agent likely to remain on the Earnings Account.
|
|
18.3
|
Monies on Earnings.
Any monies standing to the credit of the Earnings Account shall, provided that the provisions of Clause 12.5 are complied with and provided that no Event of Default or Potential Event of
Default shall have occurred, be at the free disposal of the Borrower.
|
39
|
18.4
|
Location of accounts.
The Borrower shall promptly:
|
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Earnings Account; and
|
|
(b)
|
execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings
Account.
|
|
18.5
|
Debits for expenses etc
.
Following the occurrence of an Event of Default which is continuing the Agent shall be entitled (but not obliged) from time to time to debit the Earnings Account without prior
notice in order to discharge any amount due and payable to it under Clause 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 or 21.
|
|
19.1
|
Events of Default.
An Event of Default occurs if:
|
|
(a)
|
the Borrower or any Security Party fails to pay within 3 Business Days of the date when due any sum payable under a Finance Document or under any document relating to a Finance Document; or
|
|
(b)
|
any breach occurs of Clause 9.2, 11.2, 11.3, 12.2, 12.3, 12.4, 12.5 or 15.2; or
|
|
(c)
|
any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of
remedy, and such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
|
|
(d)
|
any representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance
Document is untrue or misleading when it is made or repeated; or
|
|
(e)
|
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person in respect of a sum, or sums aggregating, $5,000,000 or more in the case of the Borrower and $15,000,000 or more in the case of
each Guarantor and the Counter Guarantor or the equivalent in another currency:
|
|
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due; or
|
|
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or
|
|
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event;
or
|
|
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of
a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default;
or
|
|
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
40
|
(f)
|
any of the following occurs in relation to a Relevant Person:
|
|
|
(i)
|
a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
|
|
(ii)
|
any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $5,000,000 or more in the case of the Borrower and
$15,000,000 or more in the case of each Guarantor and the Counter Guarantor or the equivalent in another currency; or
|
|
|
(iii)
|
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
|
(iv)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
|
|
(v)
|
any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in
any proceedings, by a lawyer acting for a Relevant Person; or
|
|
|
(vi)
|
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or
|
|
|
(vii)
|
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a
Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view
to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or
payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or either Guarantor or Counter Guarantor which is, or is to be, effected for the purposes of an amalgamation or
reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
|
|
|
(viii)
|
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a Relevant Person (other than a holder of Security Interests which
together relate to all or substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in any Pertinent Jurisdiction,
unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead and either (aa)
the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken, other action is taken which will
ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or
|
41
|
|
(ix)
|
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise)
with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value)
of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
|
|
|
(x)
|
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any
action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or
should be taken if certain conditions materialise or fail to materialise; or
|
|
|
(xi)
|
in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or
|
|
(g)
|
the Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or
|
|
(h)
|
it becomes unlawful in any Pertinent Jurisdiction or impossible:
|
|
|
(i)
|
for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
|
|
|
(ii)
|
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
|
(i)
|
any consent necessary to enable the Borrower to own, operate or charter the Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance
Document or the Shipbuilding Contract is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or
|
|
(j)
|
without the prior written consent of the Majority Lenders there is a change of control in the direct and ultimate ownership of the Borrower
Provided that
a transfer of shares in the Borrower as between the
Guarantors or any of their subsidiaries is permitted subject always to the new shareholder entering into a Negative Pledge in substantially the same form as entered into by the Shareholders at the date of this Agreement and subject to the new
shareholder being a 100 per cent subsidiary of the acquiring Guarantor; or
|
|
(k)
|
any provision which the Majority Lenders reasonably consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have
been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
|
|
(l)
|
the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
|
42
|
(m)
|
any event or circumstance occurs which the Majority Lenders determine has, or could reasonably be expected to have a material adverse effect:
|
|
|
(i)
|
on the ability of the Borrower or a Guarantor or the Counter Guarantor to perform its obligations under the Finance Documents; or
|
|
|
(ii)
|
on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or Guarantor A or the Counter Guarantor.
|
|
19.2
|
Actions following an Event of Default.
On, or at any time after, the occurrence of an Event of Default which is continuing:
|
|
(a)
|
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
|
|
(i)
|
serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or
|
|
|
(ii)
|
serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
|
|
|
(iii)
|
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law;
and/or
|
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice
served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.
|
|
19.3
|
Termination of Commitments.
On the service of a notice under Clause 19.2(a)(i), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall be cancelled.
|
|
19.4
|
Acceleration of Loan.
On the service of a notice under Clause 19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and
every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
|
|
19.5
|
Multiple notices; action without notice.
The Agent may serve notices under Clauses 19.2(a)(i) or (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to
in Clause 19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
|
|
19.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrower
under Clause 19.2; but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any
Security Party with any form of claim or defence.
|
|
19.7
|
Lender’s rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular,
this Clause is without prejudice to Clause 3.1.
|
43
|
19.8
|
Exclusion of Creditor Party liability.
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:
|
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the
value of such an asset,
|
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses
shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.
|
19.9
|
Relevant Persons.
In this Clause 19, a “
Relevant Person
” means the Borrower and any Security Party.
|
|
19.10
|
Interpretation.
In Clause 19.1(e), references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination
event in a finance lease; and in Clause 19.1(f) “petition” includes an application.
|
|
20.1
|
Arrangement and commitment fees.
The Borrower shall pay:
|
|
(a)
|
to the Agent an arrangement fee in the amount and at the times agreed in a Fee Letter; and
|
|
(b)
|
to the Agent (for the account of each Lender) quarterly in arrears during the period from (and including) the date of this Agreement to the earlier of (i) the final Drawdown Date and (ii) the last day of the
Availability Period, for the account of the Lenders, a commitment fee at the rate of 0.50 per cent. per annum on the amount of the Total Commitments less the amount of the Loan, for distribution among the Lenders pro rata to their Commitments.
|
|
20.2
|
Costs of negotiation, preparation etc.
The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation,
execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
|
|
20.3
|
Costs of variations, amendments, enforcement etc.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor
Party in connection with:
|
|
(a)
|
any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;
|
|
(b)
|
any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
|
|
(c)
|
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; or
|
|
(d)
|
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
44
There shall be recoverable under paragraph (d) the full amount of all legal expenses,
whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.
|
20.4
|
Documentary taxes.
The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims,
expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.
|
|
20.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
|
21.1
|
Indemnities regarding borrowing and repayment of Loan.
The Borrower shall fully indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in respect of all claims,
expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
|
|
(a)
|
an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
|
|
(b)
|
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
|
|
(c)
|
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the
Borrower on the amount concerned under Clause 7);
|
|
(d)
|
the occurrence of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19,
|
and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or
payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
|
21.2
|
Breakage costs.
Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Lender:
|
|
(a)
|
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or
any overdue amount); and
|
|
(b)
|
in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned)
to hedge any exposure arising under this Agreement or a number of transactions of which this Agreement is one.
|
45
In the circumstances referred to in Clause 21.1(b) such costs shall include an amount equal to
the Margin which would, but, for receipt or recovery of the relevant part of the Loan, have accrued on the relevant part of the Loan, from the date of such receipt or recovery to the end of the then current Interest Period relating thereto.
|
21.3
|
Miscellaneous indemnities.
The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought
against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance
Document; or
|
|
(b)
|
any other Pertinent Matter,
|
other than claims, expenses, liabilities and losses which are
shown to have been directly and mainly caused by the dishonesty, gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.
Without prejudice to its generality, this Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under
or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.
|
21.4
|
Currency indemnity.
If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into another currency (the “
Payment Currency
”) for the purpose of:
|
|
(a)
|
making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
|
(c)
|
enforcing any such order or judgment,
|
the Borrower shall indemnify the Creditor Party
concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
In this Clause 21.4, the “available rate of exchange” means the rate at which the Creditor Party concerned is able at the opening of
business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Clause 21.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and
which shall not be merged in any judgment or order relating to those other liabilities.
|
21.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
46
|
21.6
|
Sums deemed due to a Lender.
For the purposes of this Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
|
22
|
NO SET-OFF OR TAX DEDUCTION
|
|
22.1
|
No deductions.
All amounts due from the Borrower under a Finance Document shall be paid:
|
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
|
(b)
|
free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.
|
|
22.2
|
Grossing-up for taxes.
If the Borrower is required by law to make a tax deduction from any payment:
|
|
(a)
|
the Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
|
(b)
|
the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and
|
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would otherwise have received.
|
|
22.3
|
Evidence of payment of taxes.
Within 1 month after making any tax deduction, the Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate
taxation authority.
|
|
22.4
|
Tax credits.
If a Creditor Party receives for its own account a repayment or credit in respect of tax on account of which the Borrower has made an increased payment under Clause 22.2, it shall pay to the Borrower
a sum equal to the proportion of the repayment or credit which it allocates to the amount due from the Borrower in respect of which the Borrower made the increased payment:
|
|
(a)
|
a Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
|
|
(b)
|
nothing in this Clause 22.4 shall oblige a Creditor Party to arrange its tax. affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to
make any such claim within any particular time;
|
|
(c)
|
nothing in this Clause 22.4 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrower had not been required to make a tax deduction from a
payment; and
|
|
(d)
|
any allocation or determination made by a Creditor Party under or in connection with this Clause 22.4 shall be conclusive and binding on the Borrower.
|
|
22.5
|
Exclusion of tax on overall net income.
In this Clause 22 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s
overall net income.
|
47
|
23.1
|
Illegality.
This Clause 23 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
|
(b)
|
contrary to, or inconsistent with, any regulation,
|
for the Notifying Lender to maintain or
give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
|
23.2
|
Notification of illegality.
The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the
Notifying Lender.
|
|
23.3
|
Prepayment; termination of Commitment.
On the Agent notifying the Borrower under Clause 23.2, the Notifying Lender’s Commitment shall terminate; and thereupon or, if later, on the date specified in the
Notifying Lender’s notice under Clause 23.1 as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender’s Contribution in accordance with Clause 8.
|
|
23.4
|
Mitigation.
If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, the Notifying Lender shall use
reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or might:
|
|
(a)
|
have an adverse effect on its business, operations or financial condition; or
|
|
(b)
|
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c)
|
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
|
24.1
|
Increased costs.
This Clause 24 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to
the application to payments under this Agreement of a tax on the Lender’s overall net income); or
|
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
|
the Notifying Lender (or a parent company of it) has incurred or will incur an “i
ncreased cost
”.
|
24.2
|
Meaning of “
increased cost
”. In this Clause 24, “
increased cost
” means, in relation to a Notifying Lender:
|
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its
Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
|
48
|
(b)
|
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
|
|
(c)
|
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the
proportion of that cost attributable to the Contribution; or
|
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an
item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or an item arising directly out of the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a
Revised Framework” published by the Basel Committee on Banking Supervision in June 2004, in the form existing on the date of this Agreement (“
Basel II
”) or any other law or regulation which implements Basel II (whether such
implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates.
For the purposes of this
Clause 24.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
|
24.3
|
Notification to Borrower of claim for increased costs.
The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.
|
|
24.4
|
Payment of increased costs.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the
Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
|
|
24.5
|
Notice of prepayment.
If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrower may give the Agent not less than 14 days’ notice of
its intention to prepay the Notifying Lender’s Contribution at the end of an Interest Period.
|
|
24.6
|
Prepayment; termination of Commitment.
A notice under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower’s notice of intended prepayment; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
|
|
(b)
|
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate
plus the Margin.
|
|
24.7
|
Application of prepayment.
Clause 8 shall apply in relation to the prepayment.
|
49
|
25.1
|
Application of credit balances.
At any time after the occurrence of an Event of Default which is continuing, each Creditor Party may without prior notice:
|
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum
then due from the Borrower to that Creditor Party under any of the Finance Documents; and
|
|
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of the Borrower;
|
|
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
|
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
|
25.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
|
|
25.3
|
Sums deemed due to a Lender.
For the purposes of this Clause 25, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum
due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
|
|
25.4
|
No Security Interest.
This Clause 25 gives the Creditor Parties a contractual right of set-off only and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.
|
|
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
26.1
|
Transfer by Borrower.
The Borrower may not transfer any of its rights, liabilities or obligations under any Finance Document.
|
|
26.2
|
Transfer by a Lender.
Subject to Clause 26.4, a Lender (the “
Transferor Lender
”) may, at its own cost, with the prior written consent of the Borrower (not to be unreasonably withheld or delayed)
or without the consent of the Borrower if an Event of Default or a Potential Event of Default has occurred and is continuing, cause:
|
|
(a)
|
its rights in respect of all or part of its Contribution; or
|
|
(b)
|
its obligations in respect of all or part of its Commitment; or
|
|
(c)
|
a combination of (a) and (b),
|
to be (in the case of its rights) transferred to, or (in
the case of its obligations) assumed by, another bank or financial institution or a trust; fund or the entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial
assets (a “
Transferee Lender
”) by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a “
Transfer Certificate
”) executed by the
Transferor Lender and the Transferee Lender,
50
Provided that
a Lender may cause such transfer without needing the consent of the Borrower
or any Security Party if an Event of Default has occurred and is continuing or if the Transferee Lender is:
|
(a)
|
another branch of the Transferor Lender;
|
|
(b)
|
a direct or indirect subsidiary or affiliate of the Transferor Lender;
|
|
(c)
|
a company of which the Transferor Lender is a subsidiary; or
|
|
(d)
|
a company which is under the same control as the Lender.
|
However any rights and obligations of
the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Agreement.
|
26.3
|
Transfer Certificate, delivery and notification.
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate
may be defective):
|
|
(a)
|
sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee and each of the other Lenders;
|
|
(b)
|
on behalf of the Transferee Lender, send to the Borrower letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
|
|
(c)
|
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,
|
but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once
it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to that Transferee Lender.
|
26.4
|
Effective Date of Transfer Certificate.
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date
Provided that
it is signed by the Agent
under Clause 26.3 on or before that date.
|
|
26.5
|
No transfer without Transfer Certificate.
No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party,
the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
|
|
26.6
|
Lender re-organisation; waiver of Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person
(the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent’s
notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
|
|
26.7
|
Effect of Transfer Certificate.
A Transfer Certificate takes effect in accordance with English law as follows:
|
|
(a)
|
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee
Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;
|
51
|
(b)
|
the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;
|
|
(c)
|
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
|
|
(d)
|
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and
the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
|
|
(e)
|
any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the
transferor, assuming that any defects in the transferor’s title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;
|
|
(f)
|
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under
Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
|
(g)
|
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled
to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
|
The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any
other kind of cross-claim.
|
26.8
|
Maintenance of register of Lenders
.
During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including
the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender,
the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days’ prior notice.
|
|
26.9
|
Reliance on register of Lenders
.
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and
Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
|
|
26.10
|
Authorisation of Agent to sign Transfer Certificates
.
The Borrower, the Security Trustee and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
|
|
26.11
|
Registration fee.
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,000 from the Transferee Lender.
|
52
|
26.12
|
Sub-participation; subrogation assignment.
A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to,
the Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who
has become subrogated to them.
|
|
26.13
|
Disclosure of information.
A Lender may with the consent of the Borrower (such consent not to be unreasonably withheld or delayed) disclose to a potential Transferee Lender or sub-participant any information
which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.
|
|
26.14
|
Change of lending office.
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
|
|
(a)
|
the date on which the Agent receives the notice; and
|
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
|
26.15
|
Notification.
On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through
the lending office of which the Agent last had notice.
|
|
26.16
|
Replacement of Reference Bank.
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrower, the Agent and the
Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment
comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
|
|
26.17
|
Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office.
If
:
|
|
(a)
|
the Lender assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 26.2 or changes its lending office; and
|
|
(b)
|
as a result of circumstances existing at the date of assignment, transfer or change occurs the Borrower would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under
Clause 21.1 in respect of any tax, Clause 22 or 24,
|
then the Transferee Lender or the Lender acting through its new lending
office is only entitled to receive payment under those Clauses to the same extent as the Transferor Lender or the Lender acting through its previous lending office would have been if the assignment, transfer or change had not occurred.
53
|
27
|
VARIATIONS AND WAIVERS
|
|
27.1
|
Variations, waivers etc. by Majority Lenders.
Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or
remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if
the document relates to a Finance Document to which a Security Party is party, by that Security Party.
|
|
27.2
|
Variations, waivers etc. requiring agreement of all Lenders.
However, as regards the following, Clause 27.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the
words “by or on behalf of every Lender”:
|
|
(a)
|
a change in the Margin or in the definition of LIBOR;
|
|
(b)
|
a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;
|
|
(c)
|
a change to any Lender’s Commitment;
|
|
(d)
|
an extension of Availability Period;
|
|
(e)
|
a change to the definition of “Majority Lenders” or “Finance Documents”;
|
|
(f)
|
a change to the preamble or to Clause 2, 3, 4, 5.1, 17, 18 or 30;
|
|
(g)
|
a change to this Clause 27;
|
|
(h)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
|
(i)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required.
|
|
27.3
|
Exclusion of other or implied variations.
Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
|
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
|
(b)
|
an Event of Default; or
|
|
(c)
|
a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law,
|
and there shall
not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
54
|
28.1
|
Communications in writing.
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
|
|
28.2
|
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 the Finance Documents is:
|
|
(a)
|
in the case of the Borrower, that identified with its name below;
|
|
(b)
|
in the case of each Lender or any Security Party, that notified in writing to the Agent on or prior to the date on which it becomes a party to this Agreement;
|
|
(c)
|
in the case of the Agent, the Security Trustee or the Lead Arranger that identified with its name below,
|
or any substitute address or fax number or department or officer as the party to this Agreement may notify to the Agent (or the Agent may
notify to the parties to this Agreement, if a change is made by the Agent) by not less than five Business Days’ notice:
|
|
|
|
|
to the Borrower:
|
|
c/o Euronav NV
|
|
|
|
De Gerlachekaai 20
|
|
|
|
2000 Antwerp
|
|
|
|
Fax No: +32 3 247 4409
|
|
|
|
|
to the Lender:
|
|
At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate
|
|
|
|
|
to the Agent:
|
|
The Bank of Nova Scotia
|
|
|
|
Scotia House
|
|
|
|
33 Finsbury Square
|
|
|
|
London EC2M 1BB
|
|
|
|
|
|
|
Attention: David Stuart
|
|
|
|
Fax No: +44 207 454 9019
|
|
|
|
|
to the Security Trustee:
|
|
The Bank of Nova Scotia
|
|
|
|
Scotia House
|
|
|
|
33 Finsbury Square
|
|
|
|
London EC2M 1BB
|
|
|
|
|
|
|
Attention: David Stuart
|
|
|
|
Fax No: +44 207 454 9019
|
or to such other address as the relevant party may notify the Agent or, if the relevant party is the
Agent or the Security Trustee, the Borrower, the Lenders and the Security Parties.
|
(a)
|
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
|
|
|
(i)
|
if by way of fax, when received in legible form; or
|
|
|
(ii)
|
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;
|
55
and, if a particular department or officer is specified as part of its address details provided
under Clause 28.2, if addressed to that department or officer.
|
(b)
|
Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer
identified with the Agent’s signature below (or any substitute department or officer as the Agent shall specify for this purpose).
|
|
(c)
|
All notices from or to the Borrower or a Security Party shall be sent through the Agent.
|
|
(d)
|
Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each Security Party.
|
|
28.4
|
Notification of address and fax number.
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 28.2 (Addresses) or changing its own address or fax
number, the Agent shall notify the other parties to this Agreement.
|
|
28.5
|
Electronic communication.
|
|
(a)
|
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:
|
|
|
(i)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
|
(ii)
|
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
|
|
(iii)
|
notify each other of any change to their address or any other such information supplied by them.
|
|
(b)
|
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent only if it is
addressed in such a manner as the Agent shall specify for this purpose.
|
|
(a)
|
Any notice given under or in connection with any Finance Document must be in English.
|
|
(b)
|
All other documents provided under or in connection with any Finance Document must be:
|
|
|
(ii)
|
if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other
official document.
|
56
|
29.1
|
Rights cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to each Creditor Party are:
|
|
(b)
|
may be exercised as often as appears expedient; and
|
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
|
29.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions
of that Finance Document or of the provisions of any other Finance Document.
|
|
29.3
|
Counterparts.
A Finance Document may be executed in any number of counterparts.
|
|
29.4
|
Third Party rights.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
|
30.1
|
English law.
This Agreement shall be governed by, and construed in accordance with, English law.
|
|
30.2
|
Exclusive English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.
|
|
30.3
|
Choice of forum for the exclusive benefit of the Creditor Parties.
Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
|
(a)
|
to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and
|
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
|
30.4
|
Process agent.
The Borrower irrevocably appoints Unisea Maritime Ltd at its registered office for the time being, presently at 14 Headfort Place, London SW1 7DH, to act as its agent to receive and accept on its
behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.
|
|
30.5
|
Creditor Party rights unaffected.
Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with
regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
57
|
30.6
|
Meaning of “proceedings”.
In this Clause 30, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure.
|
THIS AGREEMENT
has been entered into on the date stated at the beginning of this Agreement.
58
SCHEDULE 1
LENDERS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Commitment
(US Dollars)
|
|
|
|
|
|
|
Scotiabank (Ireland) Limited
|
|
I.F.S.C. House
Custom House Quay
Dublin 1
Ireland
|
|
|
76,000,000
|
|
59
SCHEDULE 2
DRAWDOWN NOTICE
|
|
|
|
|
To:
|
|
The Bank of Nova Scotia
|
|
|
|
Scotia House
|
|
|
|
33 Finsbury Square
|
|
|
|
London EC2A 1BB
|
|
|
|
|
Attention:
|
|
Loans Administration
|
[
—
] 2008
DRAWDOWN NOTICE
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated [
—
] 2008 and made between ourselves, as Borrower, the Lenders referred to therein, and
yourselves as Agent and as Security Trustee in connection with a facility of up to US$76,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
|
2
|
We request to borrow as follows:
|
|
(b)
|
[Advance as specified in Clause 2.1 [first, second, third, etc]] [the Charter Top-Up Amount];
|
|
(c)
|
Drawdown Date: [
—
];
|
|
(d)
|
Duration of the first Interest Period shall be [
—
] months; and
|
|
(e)
|
Payment instructions: account of [
—
] and numbered [
—
] with [
—
]
of [
—
].
|
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
|
5
|
We authorise you to deduct the arrangement fee referred to in Clause 20 from the amount of the Advance.
|
|
|
|
[Name of Signatory]
|
|
|
|
|
|
Director
for and on behalf of
[
—
]
|
60
SCHEDULE 3
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents
referred to in Clause 9.1(a) before the service of the first Drawdown Notice.
|
1
|
A duly executed original of this Agreement, the Guarantee Nomination Letter, the Agency and Trust Agreement, the Negative Pledge, each Guarantee, the Counter Guarantee and the Account Security Deed.
|
|
2
|
Copies of the certificate of incorporation and constitutional documents of the Borrower, each Guarantor, the Counter Guarantor and each Shareholder (and in relation to the Borrower a copy of the shareholders agreement
or joint venture agreement entered into by its shareholders).
|
|
3
|
Copies of resolutions of directors of the Borrower, each Guarantor (except for Guarantor B), the Counter Guarantor and each Shareholder and copies of resolutions of the shareholders of the Borrower and the Counter
Guarantor authorising the execution of each of the Finance Documents to which the Borrower, that Guarantor, the Counter Guarantor or that Shareholder is a party and, in the case of the Borrower, authorising named officers to give the Drawdown
Notices and other notices under this Agreement and ratifying the execution of the Shipbuilding Contract and the Supervision Agreement.
|
|
4
|
The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower, a Guarantor, the Counter Guarantor or the Shareholder.
|
|
5
|
Copies of all consents which the Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document or the Shipbuilding Contract or the Supervision Agreement.
|
|
6
|
The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Account.
|
|
7
|
Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment.
|
|
8
|
Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of Hong Kong, Belgium, Panama, Bermuda and such other relevant jurisdictions as the Lenders may require.
|
|
9
|
Receipt of all documentation required by the Lenders in respect of the Borrower, any Security Party or the ultimate beneficial ownership of each Guarantor or the Counter Guarantor pursuant to that Lenders “know
your customer” requirements.
|
61
PART B
The following are the documents referred to in Clause 9.1(b) required before the drawdown of an Advance (other than the final Advance):
|
1
|
Evidence that the relevant pre-delivery instalment of the Contract Price payable under the Shipbuilding Contract has fallen due for payment and that such part of such instalment not being met out of the proceeds of an
Advance has been paid or shall be paid by the Borrower simultaneously with the making of such Advance.
|
|
2
|
A duly executed original of the Predelivery Security Assignment (and of each document required to be delivered thereunder).
|
|
3
|
A certified copy of the Shipbuilding Contract and Supervision Agreement and a certified copy of the Refund Guarantee.
|
|
4
|
Such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution by the Builder of the Shipbuilding Contract, by the Supervisor of the Supervision Agreement
and by the Refund Guarantor of the Refund Guarantee.
|
|
5
|
Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of Korea and such other relevant jurisdictions as the Lender may require.
|
62
PART C
The following are the documents referred to in Clause 9.1(c) required before the Drawdown of the final Advance.
|
1
|
A duly executed original of the Mortgage, of the Charter Assignment (if any Charter) and of the General Assignment (and of each document to be delivered by each of them).
|
|
2
|
Documentary evidence that:
|
|
(a)
|
the Ship has been unconditionally delivered by the Builder to, and accepted by, the Borrower under the Shipbuilding Contract, and the full purchase price payable under the Shipbuilding Contract (in addition to the part
to be financed by the Loan) has been duly paid;
|
|
(b)
|
the Ship is definitively and permanently registered in the name of the Borrower under the relevant Approved Flag at its relevant port of registry;
|
|
(c)
|
the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
|
|
(d)
|
the Ship maintains the class (namely A1(E), “Oil Carrier ESP”, AMS, ACCU, SPM, VEC(-L), CSR, Safeship-CM, RES, ES, TEM, Green Passport, POT, UWILD (sea chest blanking devices shall not be provided), CPS with
American Bureau of Shipping free of all recommendations and conditions of such Classification Society;
|
|
(e)
|
the Mortgage has been duly recorded against the Ship as a valid first preferred/priority ship mortgage in accordance with the laws of the relevant Approved Flag;
|
|
(f)
|
the Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and
|
|
(g)
|
such part of the acquisition cost of the Ship which has not been funded out of the proceeds of the Loan and which has been borrowed by the Borrower is subordinated to the obligations of the Borrower to the Lenders under
this Agreement in terms satisfactory to the Lenders in their absolute discretion;
|
|
3
|
Documents establishing that the Ship will, as from the final Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
|
|
(a)
|
a letter of undertaking executed by the Approved Manager in favour of the Agent in the terms agreed between the Agent and the Approved Manager agreeing certain matters in relation to the management of the Ship and
subordinating the rights of the Approved Manager against the Ship and the Borrower to the rights of the Creditor Parties under the Finance Documents; and
|
|
(b)
|
copies of the Approved Manager’s Document of Compliance and of the Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Lenders require)
and ISSC.
|
|
4
|
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Ship as the Agent may require.
|
|
5
|
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of Greece (or such other jurisdiction as may be appropriate if the Ship is not registered on Greek flag) and such other
relevant jurisdictions as the Agent may require.
|
63
SCHEDULE 4
TRANSFER CERTIFICATE
The Transferor
and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
|
|
|
|
|
To:
|
|
[
—
] as Agent.
|
|
|
|
|
From:
|
|
[
The Existing Lender
] (the “
Transferor
”) and [
The New Lender
] (the “
Transferee
”)
|
|
|
|
|
Dated:
|
|
[
—
] 2008
|
US$76,000,000 Loan Agreement to Fiorano Shipbuilding Limited
dated [
—
] 2008 (the “Agreement”)
|
1
|
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
|
|
2
|
We refer to Clause 26 of the Agreement.
|
|
(a)
|
The Transferor and the Transferee agree to the Transferor transferring to the Transferee by novation all or part of the Transferor’s Commitment, rights and obligations referred to in the Schedule in accordance with
Clause 26.
|
|
(b)
|
The proposed Transfer Date is [
—
].
|
|
(c)
|
the lending office and address, fax number and attention details for notices of the Transferee for the purposes of Clause 28.2 (Addresses) are set out in the Schedule.
|
|
3
|
The Transferee expressly acknowledges the limitations on the Transferor’s obligations set out in Clause 26.
|
|
4
|
[The Transferee confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:
|
|
(a)
|
a company resident in the United Kingdom for United Kingdom tax purposes; or
|
|
(b)
|
a partnership each number of which is:
|
|
|
(i)
|
a company so resident in the United Kingdom; or
|
|
|
(ii)
|
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (for the purposes of
section 11 (2) of the [Taxes Act] the whole of any share of interest payable in respect of that advance that falls to it by reason of sections 114 and 115 of the [Taxes Act]; or
|
|
(c)
|
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the
chargeable profits (for the purposes of Section 11(2) of the [Taxes Act] of that company.]
|
64
|
[4/5]
|
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
|
|
[5/6]
|
This Transfer Certificate is governed by English law.
|
THE SCHEDULE
Commitment/rights and obligations to be transferred
[
insert relevant details
]
[
Facility Office address, fax number and attention details for notices and account details for
payments
]
|
|
|
|
|
|
|
Transferor
|
|
|
|
Transferee
|
|
|
|
|
|
By:
|
|
|
|
By:
|
This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [
—
].
65
SCHEDULE 5
MANDATORY COST
|
1
|
The Mandatory Cost is an addition to the interest rate to compensate 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.
|
|
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 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.
|
|
3
|
The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its
notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that lending office) of complying with the minimum reserve requirements of the European Central
Bank in respect of loans made from that lending office.
|
|
4
|
The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
|
|
(a)
|
in relation to a sterling Loan:
|
|
|
|
|
|
AB
+
C
(
B
–
D
) +
E
x
0.01
|
|
per cent. per annum
|
|
100 – (
A
+
C
)
|
|
|
|
(b)
|
in relation to a Loan in any currency other than sterling:
|
|
|
|
|
|
E
x 0.01
|
|
per cent. per annum
|
|
300
|
|
Where:
|
|
A
|
is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of
England to comply with cash ratio requirements.
|
|
|
B
|
is the percentage rate of interest (excluding the Margin and the Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest specified in paragraph (a) of Clause 7.2 (
Default rate of
interest
)) payable for the relevant Interest Period on the Loan.
|
|
|
C
|
is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.
|
66
|
|
D
|
is the percentage rate per annum payable by the Bank of England to the Agent on interest bearing Special Deposits.
|
|
|
E
|
is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to
paragraph 7 below and expressed in pounds per £1,000,000.
|
|
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)
|
“
Fees 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;
|
|
(c)
|
“
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 Fees Rules but taking
into account any applicable discount rate); and
|
|
(d)
|
“
Tariff Base
” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
|
(e)
|
“
Unpaid Sum
” means any sum due and payable but unpaid by the Borrower or a Security Party under the Finance Documents.
|
|
6
|
In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting
D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.
|
|
7
|
If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference 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 Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank
for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
|
8
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or
prior to the date on which it becomes a Lender:
|
|
(a)
|
the jurisdiction of its lending office; and
|
|
(b)
|
any other information that the Agent may reasonably require for such purpose.
|
Each Lender
shall promptly notify the Agent of any change to the information provided by it pursuant to this paragraph.
|
9
|
The percentages of each Lender for the purpose of A and C above and the rates of charge of each Reference Bank for the purpose of E above shall be
determined by the Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on
|
67
|
|
the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’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 lending office in the same jurisdiction as its lending office.
|
|
10
|
The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any
Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.
|
|
11
|
The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and
each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
|
|
12
|
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 Lender shall, in the absence of manifest error, be conclusive and
binding on all parties to the Loan Agreement.
|
|
13
|
The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties to the Loan Agreement 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 to the Loan Agreement.
|
68
EXECUTION PAGE
|
|
|
|
|
|
|
|
|
BORROWER
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
NAHEEMA WALJI
|
|
)
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
FIORANO SHIPHOLDING LIMITED
|
|
)
|
|
|
Naheema Walji
|
|
in the presence of:
|
|
)
|
|
|
Attorney-in-fact
|
|
|
|
|
|
|
|
|
Patrick Moore
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LENDERS
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
GARY WALSH
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
SCOTIABANK (IRELAND) LIMITED
|
|
)
|
|
|
|
|
in the presence of:
|
|
)
|
|
|
|
|
|
Patrick Moore
|
|
|
|
Gary Walsh
Attorney-in-Fact
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AGENT
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
GARY WALSH
|
|
)
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
THE BANK OF NOVA SCOTIA
|
|
)
|
|
Gary Walsh
|
|
|
|
in the presence of:
|
|
)
|
|
Attorney-in-Fact
|
|
|
|
|
|
|
|
|
Patrick Moore
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITY TRUSTEE
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
GARY WALSH
|
|
)
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
THE BANK OF NOVA SCOTIA
|
|
)
|
|
Gary Walsh
|
|
|
|
in the presence of:
|
|
)
|
|
Attorney-in-Fact
|
|
|
|
Patrick Moore
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
Watson Farley & Williams LLP
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
69
FIORANO SHIPHOLDING LIMITED
DRAWDOWN NOTICE
|
|
|
|
|
|
|
To:
|
|
The Bank of Nova Scotia
|
|
|
|
|
|
Scotia House, 33 Finsbury Square
|
|
|
|
|
|
London EC2A 1BB
|
|
|
|
|
|
Attention: Loans Administration
|
|
28
th
October 2008
|
DRAWDOWN NOTICE
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated 23
rd
October 2008 and made between ourselves, as Borrower, the Lenders referred to
therein, and yourselves as Agent and as Security Trustee in connection with a facility of up to US$76,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
|
2
|
We request to borrow as follows:
|
|
(a)
|
Amount: US$14,250,000.—;
|
|
(b)
|
Advance as specified in Clause 2.1 (a) (“first Advance”);
|
|
(c)
|
Drawdown Date: 31
st
October 2008;
|
|
(d)
|
Duration of the first Interest Period shall be 1 month; and
|
|
(e)
|
Payment instructions:
|
PLEASE TRANSFER FUNDS TO MONEGHETTI SHIPHOLDING LIMITED ACCOUNT IBAN
NUMBER CH88 0868 6001 0867 0400 1 HELD WITH BNP PARIBAS (SUISSE) SA - GENEVE, SWITZERLAND (SWIFT BPPBCHGG)
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
|
5
|
We authorise you to deduct the arrangement fee referred to in Clause 20 from the amount of the Advance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Luigi Pulcini
|
|
|
|
Attorney-in-fact for and on behalf of
FIORANO SHIPHOLDING LIMITED
|
|
|
|
|
Room 3206, 32
nd
Floor, Lippo Centre, Tower Two, No.89
Queensway, Hong Kong
Exhibit 10.13
Date 29 AUGUST 2008
LARVOTTO
SHIPHOLDING LIMITED
as Borrower
– and –
THE BANKS
AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
– and –
FORTIS BANK S.A./N.V., UK BRANCH
as Lead Arranger
– and
–
FORTIS BANK S.A./N.V., UK BRANCH
as Agent
and as Security Trustee
LOAN AGREEMENT
relating to
a US$67,500,000 facility to finance a newbuilding suezmax
tanker of about 158,000 dwt having Hull No. 1860 at Samsung
Watson, Farley & Williams
London
INDEX
|
|
|
|
|
|
|
|
|
Clause
|
|
Page
|
|
|
|
|
|
|
1
|
|
INTERPRETATION
|
|
|
1
|
|
|
|
|
|
|
2
|
|
FACILITY
|
|
|
14
|
|
|
|
|
|
|
3
|
|
POSITION OF THE LENDERS
|
|
|
15
|
|
|
|
|
|
|
4
|
|
DRAWDOWN
|
|
|
15
|
|
|
|
|
|
|
5
|
|
INTEREST
|
|
|
16
|
|
|
|
|
|
|
6
|
|
INTEREST PERIODS
|
|
|
18
|
|
|
|
|
|
|
7
|
|
DEFAULT INTEREST
|
|
|
19
|
|
|
|
|
|
|
8
|
|
REPAYMENT AND PREPAYMENT
|
|
|
20
|
|
|
|
|
|
|
9
|
|
CONDITIONS PRECEDENT
|
|
|
21
|
|
|
|
|
|
|
10
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
22
|
|
|
|
|
|
|
11
|
|
GENERAL UNDERTAKINGS
|
|
|
24
|
|
|
|
|
|
|
12
|
|
CORPORATE UNDERTAKINGS
|
|
|
28
|
|
|
|
|
|
|
13
|
|
INSURANCE
|
|
|
29
|
|
|
|
|
|
|
14
|
|
SHIP COVENANTS
|
|
|
32
|
|
|
|
|
|
|
15
|
|
SECURITY COVER
|
|
|
35
|
|
|
|
|
|
|
16
|
|
PAYMENTS AND CALCULATIONS
|
|
|
36
|
|
|
|
|
|
|
17
|
|
APPLICATION OF RECEIPTS
|
|
|
38
|
|
|
|
|
|
|
18
|
|
APPLICATION OF EARNINGS
|
|
|
38
|
|
|
|
|
|
|
19
|
|
EVENTS OF DEFAULT
|
|
|
39
|
|
|
|
|
|
|
20
|
|
FEES AND EXPENSES
|
|
|
43
|
|
|
|
|
|
|
21
|
|
INDEMNITIES
|
|
|
44
|
|
|
|
|
|
|
22
|
|
NO SET-OFF OR TAX DEDUCTION
|
|
|
46
|
|
|
|
|
|
|
23
|
|
ILLEGALITY, ETC
|
|
|
47
|
|
|
|
|
|
|
24
|
|
INCREASED COSTS
|
|
|
47
|
|
|
|
|
|
|
25
|
|
SET-OFF
|
|
|
49
|
|
|
|
|
|
|
26
|
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
|
49
|
|
|
|
|
|
|
27
|
|
VARIATIONS AND WAIVERS
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
|
|
NOTICES
|
|
|
54
|
|
|
|
|
|
|
29
|
|
SUPPLEMENTAL
|
|
|
56
|
|
|
|
|
|
|
30
|
|
LAW AND JURISDICTION
|
|
|
56
|
|
|
|
|
|
SCHEDULE 1 LENDERS AND COMMITMENTS
|
|
|
58
|
|
|
|
|
|
SCHEDULE 2 DRAWDOWN NOTICE
|
|
|
59
|
|
|
|
|
|
SCHEDULE 3 CONDITION PRECEDENT DOCUMENTS
|
|
|
60
|
|
|
|
|
|
SCHEDULE 4 TRANSFER CERTIFICATE
|
|
|
63
|
|
|
|
|
|
SCHEDULE 5 MANDATORY COST
|
|
|
65
|
|
|
|
|
|
EXECUTION PAGES
|
|
|
68
|
|
THIS AGREEMENT
is made on 29 AUGUST 2008
BETWEEN
|
(1)
|
LARVOTTO SHIPHOLDING LIMITED
a company incorporated in Hong Kong whose registered office is at Room 3206, 32
nd
Floor, Lippo Centre, Tower Two, No. 89
Queensway, Hong Kong (the “
Borrower
”);
|
|
(2)
|
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1, as
Lenders
;
|
|
(3)
|
FORTIS BANK S.A./N.V., UK BRANCH
, as
Lead Arranger
;
|
|
(4)
|
FORTIS BANK S.A./N.V., UK BRANCH
, as
Agent
; and
|
|
(5)
|
FORTIS BANK S.A./N.V., UK BRANCH
, as
Security Trustee
.
|
BACKGROUND
The Lenders have agreed to make available to the Borrower a facility of the lesser of (i) $67,500,000 and (ii) 75 per cent, of
the Contract Price for the purpose of part financing the purchase price of the Ship to be constructed by the Builder for, and purchased by, the Borrower.
IT IS AGREED
as follows:
|
1.1
|
Definitions
. Subject to Clause 1.5, in this Agreement:
|
“
Account Security
Deed
” means a deed creating security in respect of the Earnings Account in the Agreed Form;
“
Advance
” means the
principal amount of each borrowing by the Borrower under this Agreement;
“
Affected Lender
” has the meaning given in
Clause 5.7;
“
Agency and Trust Agreement
” means the agency and trust agreement dated the same date as this Agreement and
made between the same parties;
“
Agent
” means Fortis Bank S.A./N.V., acting in such capacity through its UK Branch with
its office at 5 Aldermanbury Square, London, EC2V 7HR, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;
“
Agreed Form
” means in relation to any document, that document in the form approved in writing by the Agent (acting with the
instructions of all the Lenders) and mutually agreed with the Borrower or as otherwise approved in accordance with any other approval procedure specified in any relevant provision of any Finance Document;
“
Approved Flag
” means Greek flag or such other flag as the Agent (acting with the authorisation of all the Lenders) may
approve as the flag on which the Ship shall be registered at delivery;
“
Approved Manager
” means Guarantor B or any of its
subsidiaries or any other company incorporated by the Borrower with the prior written consent of the Agent (acting with the authorisations of the Majority Lenders) not to be unreasonably withheld or delayed;
“
Availability Period
” means the period commencing on the date of this Agreement
and ending on:
|
|
(a)
|
the Final Availability Date; or
|
|
|
(b)
|
if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;
|
“
Bretta Tankers
” means Bretta Tankers Holdings Inc. a company incorporated in Panama and having its registered office at 16th
Floor, 53rd Street, Urbanizacion Marbella, MMG Tower, Panama, Republic of Panama;
“
Builder
” means Samsung Heavy
Industries Co., Ltd., a company incorporated in the Republic of Korea whose registered office is at 647-9, Yeoksam-Dong, Kangnam-Gu, Seoul, Korea 135-080;
“
Business Day
” means a day on which banks are open in London, Bremen, Brussels and in Monaco and, in respect of a day on which
a payment is required to be made under a Finance Document, also in New York City;
“
Charter
” means any time or consecutive
voyage charter in respect of the Ship which exceeds, or which by virtue of any optional extensions may exceed, 36 months in duration;
“
Charter Assignment
” means an assignment of any Charter and any supporting guarantee for a Charter (if any) in the Agreed
Form;
“
Commitment
” means, in relation to a Lender, the amount set opposite its name in Schedule 1, or, as the case may
require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement;
“
Contract Price
” means the contract price payable by the Borrower to the Builder under the Shipbuilding Contract which, at the
date of this Agreement, is $90,750,000;
“
Contractual Currency
” has the meaning given in Clause 21.4;
“
Contribution
” means, in relation to a Lender, the part of the Loan which is owing to that Lender;
“
Counter Guarantee
” means the counter guarantee of the Counter Guarantor in the Agreed Form;
“
Counter Guarantor
” means the company nominated by the Borrower and accepted by the Agent (acting with the authority of the
Lenders) in the Supplemental Letter to this Agreement as the company to provide the Counter Guarantee;
“
Creditor Party
”
means the Agent, the Security Trustee, the Lead Arranger or any Lender, whether as at the date of this Agreement or at any later time;
“
Dollars
” and “
$
” means the lawful currency for the time being of the United States of America;
2
“
Drawdown Date
” means, in relation to each Advance, the date requested by the
Borrower for the Advance to be made, or (as the context requires) the date on which the Advance is actually made;
“
Drawdown
Notice
” means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);
“
Earnings
” means all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower or
the Security Trustee and which arise out of the use or operation of the Ship, including (but not limited to):
|
|
(a)
|
except to the extent that they fall within paragraph (b);
|
|
|
(i)
|
all freight, hire and passage moneys;
|
|
|
(ii)
|
compensation payable to the Borrower or the Security Trustee in the event of requisition of the Ship for hire;
|
|
|
(iii)
|
remuneration for salvage and towage services;
|
|
|
(iv)
|
demurrage and detention moneys;
|
|
|
(v)
|
damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of the Ship; and
|
|
|
(vi)
|
all moneys which are at any time payable under any Insurances in respect of any loss; and
|
|
|
(b)
|
if and whenever the Ship is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or
sharing arrangement which is attributable to the Ship;
|
“
Earnings Account
” means an account in the name of
the Borrower with the Agent in London designated “Larvotto - Earnings Account”, or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is designated by the Agent
as the Earnings Account for the purposes of this Agreement;
“
Environmental Claim
” means:
|
|
(a)
|
any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or
|
|
|
(b)
|
any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,
|
and “
claim
” means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar
to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;
“
Environmental Incident
” means:
|
|
(a)
|
any release of Environmentally Sensitive Material from the Ship; or
|
3
|
|
(b)
|
any incident in which Environmentally Sensitive Material is released from a vessel other than the Ship and which involves a collision between the Ship and such other vessel or some other incident of navigation or
operation, in either case, in connection with which the Ship is actually or reasonably likely to be arrested, attached, detained or injuncted and/or the Ship and/or the Borrower and/or any operator or manager of the Ship is 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 the Ship and in connection with which the Ship is actually or reasonably likely to be arrested and/or where the Borrower
and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;
|
“
Environmental Law
” means any law relating to pollution or protection of the environment, to the carriage of Environmentally
Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;
“
Environmentally Sensitive
Material
” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;
“
Euronav Hong Kong
” means Euronav Hong Kong Limited, a company incorporated in Hong Kong and having its registered office at
Room 3206, 32nd Floor, Lippo Centre, Tower Two, No. 89 Queensway, Hong Kong;
“
Event of Default
” means any of the
events or circumstances described in Clause 19.1;
“
Fee Letter
” means any letter or letters dated on or about the date of
this Agreement between the Lead Arranger and the Borrower (or the Agent and the Borrower) setting out any of the fees referred to in Clause 20 (Fees and expenses);
“
Final Availability Date
” means 30 November 2011 and in the event of arbitration proceedings in connection with the
Shipbuilding Contract, with the prior consent of the Agent (with the authorisation of the Majority Lenders) which is not to be unreasonably withheld or delayed, the day falling 365 days after the commencement of such arbitration (if later than
30 November 2011) or such later date as the Agent (with the authorisation of the Majority Lenders) may agree in writing
Provided that
any such extension shall not extend beyond the expiry of the Refund Guarantee;
“
Finance Documents
” means:
|
|
(b)
|
the Agency and Trust Agreement;
|
|
|
(d)
|
the Predelivery Security Assignment;
|
|
|
(e)
|
the General Assignment;
|
|
|
(f)
|
the Charter Assignment (if any);
|
|
|
(h)
|
the Account Security Deed;
|
4
|
|
(i)
|
the Counter Guarantee;
|
|
|
(l)
|
any Transfer Certificate;
|
|
|
(m)
|
the Supplemental Letter;
|
|
|
(n)
|
any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in
relation to, any amount payable to the Lenders under this Agreement and/or any of the other documents referred to in this definition; and
|
|
|
(o)
|
any other document designated as such by the Agent and the Borrower;
|
“
Financial
Indebtedness
” means, in relation to a person (the “
debtor
”), a liability of the debtor:
|
|
(a)
|
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
|
|
|
(b)
|
under any loan stock, bond, note or other security issued by the debtor;
|
|
|
(c)
|
under any acceptance credit, guarantee or letter of credit facility or dematerialised equivalent made available to the debtor;
|
|
|
(d)
|
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
|
|
|
(e)
|
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net amount; or
|
|
|
(f)
|
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred
to the other person;
|
“
General Assignment
” means a general assignment of the Earnings, the Insurances and
any Requisition Compensation in the Agreed Form;
“
Guarantee A
” means a guarantee of Guarantor A in the Agreed Form;
“
Guarantee B
” means a guarantee of Guarantor B in the Agreed Form;
“
Guarantees
” means, together, Guarantee A and Guarantee B;
“
Guarantor A
” means J.M. Maritime Investments Inc., a company incorporated in Panama whose registered office is at Hong Kong
Bank Building, 6th Floor, Samuel Lewis Avenue, Panama City, Republic of Panama;
“
Guarantor B
” means Euronav NV, a company
incorporated in Belgium whose registered office is at de Gerlachekaai 20, B-2000 Antwerp, Belgium;
5
“
Guarantors
” means, together, Guarantor A and Guarantor B;
“
IFRS
” means international accounting standards within the meaning of the IAS Regulations 1606/2002 to the extent applicable
to the relevant financial statements;
“
Increased Amount
” has the meaning given to that term in Clause 2.4;
“
Insurances
” means:
|
|
(a)
|
all policies and contracts of insurance, including entries of the Ship in any protection and indemnity or war risks association, which are effected in respect of the Ship, her Earnings or otherwise in relation to her;
and
|
|
|
(b)
|
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;
|
“
Interest Period
” means a period determined in accordance with Clause 6;
“
ISM Code
” means the International Safety Management Code (including the guidelines on its implementation), adopted by the
International Maritime Organisation, as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same
meanings as are given to them in the ISM Code);
“
ISPS Code
” means the International Ship and Port Facility Security Code
as adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time;
“
ISSC
” means a valid and current International Ship Security Certificate issued under the ISPS Code;
“
Lender
” means a bank or financial institution listed in Schedule 1 and acting through its branch indicated in Schedule 1 (or
through another branch notified to the Borrower under Clause 26.14) or its transferee, successor or assign, which in each case has not ceased to be a party in accordance with the terms of this Agreement;
“
LIBOR
” means, for an Interest Period:
|
|
(a)
|
the rate per annum equal to the offered quotation for deposits in Dollars for a period equal to, or as near as possible equal to, the relevant Interest Period which appears on Reuters BBA Page LIBOR 01 at or about 11.00
a.m. (London time) on the Quotation Date for that Interest Period (and, for the purposes of this Agreement, “
Reuters BBA Page LIBOR 01
” means the display designated as “Page 01” on the Reuters Money News Service or such
other page as may replace Page 01 on that service for the purpose of displaying rates comparable to that rate or on such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of
displaying the British Bankers’ Association Interest Settlement Rates for Dollars);
|
|
|
(b)
|
if no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to 4 decimal places) of the rates, as supplied to the Agent at its request, quoted
by each Reference Bank to leading banks in the London Interbank Market as of 11 a.m. (London time) on the Quotation Date for that period for the offering of deposits in the relevant currency and for a period comparable to that period;
|
“
Loan
” means a loan made or to be made under this Agreement or the principal amount for the time being
outstanding under this Agreement;
6
“
Major Casualty
” means any casualty to the Ship in respect of which the claim or
the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible exceeds $5,000,000 or the equivalent in any other currency;
“
Majority Lenders
” means:
|
|
(a)
|
before any Advance has been made, Lender or Lenders whose Commitments total more than 66.66 per cent. of the Total Commitments; and
|
|
|
(b)
|
at any other time, Lender or Lenders whose Contributions in the Loan outstanding total more than 66.66 per cent. of all the Loan then outstanding,
|
Provided that,
for the avoidance of doubt, whilst Fortis Bank S.A./N.V., UK Branch and Deutsche Schiffsbank Aktiengesellschaft each hold
50 per cent. of the Total Commitments Majority Lenders shall mean both Fortis Bank S.A./N.V., UK Branch and Deutsche Schiffsbank Aktiengesellschaft;
“
Mandatory Cost
” means the percentage rate, which represents the cost to the Lenders, relative to the Loan, of compliance with
the requirements of the Bank of England, the Financial Services Authority or any other regulatory authority, as determined by the Agent in accordance with the formula detailed in Schedule 5;
“
Margin
” means 1.15 per cent, per annum;
“
Market Disruption Event
” has the meaning given to that term in Clause 5.7(b);
“
Maturity Date
” means the earlier of the date falling 96 months after (i) the date of the delivery of the Ship to the
Borrower and (ii) 30 November 2011;
“
Mortgage
” means the first preferred Greek ship mortgage or the first
priority statutory ship mortgage or first preferred ship mortgage and, if applicable, collateral deed of covenant in the form appropriate for the flag of the Ship in the event that the Approved Flag is not Greek flag in the Agreed Form;
“
Negative Pledge
” means the negative pledge in relation to the shares of the Borrower to be executed by the Shareholders in
favour of the Security Trustee in the Agreed Form;
“
Negotiation Period
” has the meaning given in Clause 5.9;
“
Notifying Lender
” has the meaning given in Clause 23.1 or Clause 24.1 as the context requires;
“
Payment Currency
” has the meaning given in Clause 21.4;
“
Permitted Security Interests
” means:
|
|
(a)
|
Security Interests created by the Finance Documents;
|
|
|
(b)
|
liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;
|
|
|
(d)
|
liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to the Ship not prohibited by this Agreement;
|
|
|
(e)
|
liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the
ordinary course of
|
7
|
|
the operation, repair or maintenance of the Ship or in the ordinary course of business of the Borrower, provided such liens do not secure amounts more than 30 days overdue (unless the overdue
amount is being contested by the Borrower in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 14.12(f);
|
|
|
(f)
|
any Security Interest created in favour of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Borrower is actively prosecuting or defending such proceedings or
arbitration in good faith; and
|
|
|
(g)
|
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves
have been made;
|
“
Pertinent Document
” means:
|
|
(a)
|
any Finance Document;
|
|
|
(b)
|
any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;
|
|
|
(c)
|
any other document contemplated by or referred to in any Finance Document; and
|
|
|
(d)
|
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);
|
“
Pertinent Jurisdiction
”, in relation to a company, means:
|
|
(b)
|
the country under the laws of which the company is incorporated or formed;
|
|
|
(c)
|
a country in which the company has the centre of its main interests or in which the company’s central management and control is or has recently been exercised;
|
|
|
(d)
|
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
|
|
|
(e)
|
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business,
or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and
|
|
|
(f)
|
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c) above;
|
“
Pertinent Matter
” means:
|
|
(a)
|
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
|
|
|
(b)
|
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
|
and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or
on or at any time after that signing;
8
“
Potential Event of Default
” means an event or circumstance which, with the
giving of any notice, the lapse of time, a reasonable determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default;
“
Predelivery Security Assignment
” means an assignment in the Agreed Form of the Shipbuilding Contract, the Refund Guarantee
and the Supervision Agreement;
“
Quotation Date
” means, in relation to any Interest Period (or any other period for which
an interest rate is to be determined under any provision of a Finance Document), the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to
be determined for delivery on the first day of that Interest Period or other period;
“
Reference Banks
” means, subject to
Clause 26.16, the London branches of each of the Lenders or such other banks as may be appointed by the Agent in consultation with the Borrower;
“
Refund Guarantee
” means the guarantee dated 2 June 2008 issued by the Refund Guarantor in favour of the Borrower under
the Shipbuilding Contract;
“
Refund Guarantor
” means Korea Development Bank of 16-3 Yeouida-Dong, Yeongdeungpo-gu, Seoul,
Korea;
“
Relevant Interbank Market
” means the London Interbank Market;
“
Relevant Person
” has the meaning given in Clause 19.9;
“
Repayment Date
” means a date on which a repayment is required to be made under Clause 8;
“
Requisition Compensation
” includes all compensation or other moneys payable by reason of any act or event such as is referred
to in paragraph (b) of the definition of “Total Loss”;
“
Secured Liabilities
” means all monies from time to
time due or owing, and all obligations and other actual or contingent liabilities incurred by the Borrower, the Security Parties or any of them to any Creditor Party, at the date of this Agreement or at any later time or times, in whatever currency,
whether due, owing or incurred alone or jointly with others or as principal, surety or otherwise under or in connection with any Finance Document or any judgment relating to any Finance Document; and for this purpose, there shall be disregarded any
total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;
“
Security Interest
” means:
|
|
(a)
|
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
|
|
|
(b)
|
the security rights of a plaintiff under an action
in rem
; and
|
9
|
|
(c)
|
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a
security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;
|
“
Security Party
” means the Guarantors, the Counter Guarantor, each Shareholder and any other person (except a Creditor Party)
who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within the definition of “Finance Documents”;
“
Security Period
” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies
the Borrower, the Security Parties and the Creditor Parties that:
|
|
(a)
|
all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;
|
|
|
(b)
|
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;
|
|
|
(c)
|
neither the Borrower nor any Security Party has any future or contingent liability under Clause 20, 21 or 22 or any other provision of this Agreement or another Finance Document; and
|
|
|
(d)
|
the Agent, the Security Trustee and the Majority Lenders do not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or
adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by
a Finance Document;
|
“
Security Trustee
” means Fortis Bank S.A./N.V., acting in such capacity through its UK
Branch with its office at 5 Aldermanbury Square, London, EC2V 7HR, or any successor of it appointed under clause 5 of the Agency and Trust Agreement;
“
Servicing Bank
” means the Agent or the Security Trustee;
“
Shareholders
” means Bretta Tankers and Euronav Hong Kong;
“
Ship
” means the Suezmax tanker with hull no. 1860 of 158,000 dwt which is to be constructed by the Builder for, and purchased
by, the Borrower under the Shipbuilding Contract and upon delivery registered in the name of the Borrower under an Approved Flag;
“
Shipbuilding Contract
” means the Shipbuilding Contract dated 18 April 2008 made between the Builder and the Borrower for
the construction by the Builder of the Ship and its purchase by the Borrower as supplemented and amended from time to time;
“
Supervision Agreement
” means the agreement dated 23 June 2008 in respect of the supervision of the construction of the
Ship between the Supervisor and the Borrower;
“
Supervisor
” means Guarantor B or any of its subsidiaries with the prior
written consent of the Agent (acting with the authorisation of the Majority Lenders) not to be unreasonably withheld or delayed;
10
“
Supplemental Letter
” means the supplemental letter to this Agreement dated
2008 and made between the Agent, the Borrower and the Counter Guarantor;
“
Total Commitments
” means the aggregate of the Commitments of all the Lenders being the lesser (i) $67,500,000 and
(ii) 75 per cent. of the Contract Price at the date of this Agreement plus any increase to the Commitments made pursuant to Clause 2.4;
“
Total Loss
” means:
|
|
(a)
|
actual, constructive, compromised, agreed or arranged total loss of the Ship;
|
|
|
(b)
|
any expropriation, confiscation, requisition or acquisition of the Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an
extension) unless it is within 3 months redelivered to the Borrower’s full control; and
|
|
|
(c)
|
any arrest, capture, seizure or detention of the Ship (including any hijacking or theft) unless it is within 3 months redelivered to the Borrower’s full control;
|
“
Total Loss Date
” means:
|
|
(a)
|
in the case of an actual loss of the Ship, the date on which it occurred or, if that is unknown, the date when the Ship was last heard of;
|
|
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss of the Ship, the earliest of:
|
|
|
(i)
|
the date on which a notice of abandonment is given to the insurers; and
|
|
|
(ii)
|
the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with the Ship’s insurers in which the insurers agree to treat the Ship as a total loss; and
|
|
|
(c)
|
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred;
|
“
Transfer Certificate
” has the meaning given in Clause 26.2; and
“
Trust Property
” has the meaning given in clause 3.1 of the Agency and Trust Agreement.
|
1.2
|
Construction of certain terms.
In this Agreement:
|
“
administration
notice
” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in
connection with, the appointment of an administrator;
“
approved
” means, for the purposes of Clause 13, approved in
writing by the Agent;
“
asset
” includes every kind of property, asset, interest or right, including any present, future or
contingent right to any revenues or other payment;
“
company
” includes any partnership, joint venture and unincorporated
association;
11
“
consent
” includes an authorisation, consent, approval, resolution, licence,
exemption, filing, registration, notarisation and legalisation;
“
contingent liability
” means a liability which is not
certain to arise and/or the amount of which remains unascertained;
“
continuing
” means, in relation to any Event of
Default, the Event of Default has not been remedied to the satisfaction of, or waived by the Majority Lenders;
“
document
”
includes a deed; also a letter or fax;
“
excess risks
” means the proportion of claims for general average, salvage and
salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;
“
expense
” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value
added or other tax;
“
law
” includes any order or decree, any form of delegated legislation, any treaty or international
convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council;
“
legal or administrative action
” means any legal proceeding or arbitration and any administrative or regulatory action or
investigation;
“
liability
” includes every kind of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“
months
” shall be construed in accordance with Clause 1.3;
“
obligatory insurances
” means all insurances effected, or which the Borrower is obliged to effect, under Clause 13 or any
other provision of this Agreement or another Finance Document;
“
parent company
” has the meaning given in Clause 1.4;
“
person
” includes any company; any state, political sub-division of a state and local or municipal authority; and any
international organisation;
“
policy
”, in relation to any insurance, includes a slip, cover note, certificate of entry or
other document evidencing the contract of insurance or its terms;
“
protection and indemnity risks
” means the usual risks
covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery
policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02 or 1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or
the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;
“
regulation
” includes any
regulation, rule, official directive, request or guideline whether or not having the force of law of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
“
subsidiary
” has the meaning given in Clause 1.4;
12
“
tax
” includes any present or future tax, duty, impost, levy or charge of any
kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine; and
“
war risks
” includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or
1/11/03) or clause 24 of the Institute Time Clauses (Hulls)(l/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
|
1.3
|
Meaning of “month”
. A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started
(“
the numerically corresponding day
”), but:
|
|
(a)
|
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding
the numerically corresponding day; or
|
|
(b)
|
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,
|
and “
month
” and “
monthly
” shall be construed accordingly.
|
1.4
|
Meaning of “subsidiary”
.
A company (S) is a subsidiary of another company (P) if:
|
|
(a)
|
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
|
|
(b)
|
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
|
|
(c)
|
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
|
|
(d)
|
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;
|
and any company of which S is a subsidiary is a parent company of S.
|
1.5
|
General Interpretation
. In this Agreement:
|
|
(a)
|
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
|
|
(b)
|
references to, or to a provision of, any law include any amendment, extension, re- enactment or replacement, whether made before the date of this Agreement or otherwise;
|
|
(c)
|
words denoting the singular number shall include the plural and vice versa; and
|
|
(d)
|
Clauses 1.1 to 1.5 apply unless the contrary intention appears.
|
|
1.6
|
Headings.
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.
|
13
|
2.1
|
Amount of facility.
Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrower a term loan facility in an aggregate amount equal to the Total Commitments to enable the
Borrower to finance its acquisition of the Ship by 5 Advances as follows:
|
|
(a)
|
a first Advance of up to $13,500,000 to enable the Borrower to refinance the first pre-delivery instalment of the Contract Price under the Shipbuilding Contract paid to the Builder upon signing of the Shipbuilding
Contract;
|
|
(b)
|
a second Advance of up to $6,750,000 to enable the Borrower to meet the second pre-delivery instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder on the date falling twelve calendar
months after the date of the Shipbuilding Contract;
|
|
(c)
|
a third Advance of up to $6,750,000 to enable the Borrower to meet the third pre-delivery instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder upon keel laying;
|
|
(d)
|
a fourth Advance of up to $6,750,000 to enable the Borrower to meet the fourth pre-delivery instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder upon launching;
|
|
(e)
|
a fifth Advance of up to $33,750,000 to enable the Borrower to meet the final instalment of the Contract Price under the Shipbuilding Contract to be paid to the Builder upon delivery of the Ship.
|
|
2.2
|
Lenders’ participations in Loan.
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment
bears to the Total Commitments. No Creditor Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
|
|
2.3
|
Purpose of Loan.
The Borrower undertakes with each Creditor Party to use each Advance only for the purpose stated in the preamble to this Agreement.
|
|
2.4
|
Increase of Loan.
All the Lenders agree that they may increase the amount of the Loan by an additional amount of $10,000,000 (the “
Increased Amount
”) if requested to do so by the Borrower subject
to the following conditions:
|
|
(a)
|
the Borrower providing evidence that the Ship is on charter on terms, and to a charterer, in each case acceptable to all the Lenders in their absolute discretion (which terms shall include without limitation a daily
hire rate which the Lenders are satisfied shall be sufficient to cover the operating expenses of the Ship, the repayments of principal and interest under this Agreement and the increased repayments of principal and interest under this Agreement that
will result from an increase of the Loan by the Increased Amount); and
|
|
(b)
|
the Lenders and the Borrower agreeing the terms and conditions of such increase including, but not limited to, amended pricing, repayment and the entry into documentation satisfactory to the Lenders so as to amend this
Agreement and the other Finance Documents so as to secure the Increase Amount of the Loan and to provide new security to the extent required by the Lenders so as to maintain the same security for the Lenders.
|
14
|
3
|
POSITION OF THE LENDERS
|
|
3.1
|
Interests of Lenders several.
The rights of the Lenders under this Agreement are several.
|
|
3.2
|
Individual Lender’s right of action.
Subject to Clause 3.3, each Lender shall be entitled to sue for any amount which has become due and payable by the Borrower to it under this Agreement without joining the
Agent, the Security Trustee or any other Lender as additional parties in the proceedings.
|
|
3.3
|
Proceedings by individual Lender requiring Majority Lender consent.
No Lender may commence proceedings against the Borrower or any Security Party in connection with a Finance Document without the prior consent of
the Majority Lenders.
|
|
3.4
|
Obligations of Lenders several.
The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:
|
|
(a)
|
the obligations of the other Lenders being increased; nor
|
|
(b)
|
the Borrower, any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,
|
and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.
|
4.1
|
Request for Advance.
Subject to the following conditions, the Borrower may request an Advance to be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 3
Business Days prior to the intended Drawdown Date or such shorter period as the Agent and the Borrower mutually agree.
|
|
4
.2
|
Availability.
The conditions referred to in Clause 4.1 are that:
|
|
(a)
|
a Drawdown Date has to be a Business Day within the Availability Period
|
|
(b)
|
the amount of the Advance requested complies with Clause 2.1 (Amount of Facility);
|
|
(c)
|
each Advance shall not exceed 75 per cent. of the amount of the instalment under the Shipbuilding Contract which is being financed by that Advance;
|
|
(d)
|
the aggregate amount of the Advances shall not exceed the Total Commitments;
|
|
(e)
|
the proposed Interest Period complies with Clause 6 (Interest Periods); and
|
|
(f)
|
and the conditions set out in Clause 9.1 are met.
|
|
4.3
|
Notification to Lenders of receipt of a Drawdown Notice.
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
|
|
(a)
|
the amount of the Advance and the Drawdown Date;
|
|
(b)
|
the amount of that Lender’s participation in the Advance; and
|
|
(c)
|
the duration of the first Interest Period.
|
15
|
4.4
|
Drawdown Notice irrevocable.
A Drawdown Notice must be signed by a director or officer or an authorised person of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of
the Agent, acting on the authorisation of the Majority Lenders.
|
|
4.5
|
Lenders to make available Contributions.
Subject to the provisions of this Agreement, and in particular Clause 9, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the
account of the Borrower the amount due from that Lender on that Drawdown Date under Clause 2.2.
|
|
4.6
|
Disbursement of Advance.
Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5; and that
payment to the Borrower shall be made:
|
|
(a)
|
to the account of the Builder which the Borrower specifies in the Drawdown Notice; and
|
|
(b)
|
in the like funds as the Agent received the payments from the Lenders.
|
|
4.7
|
Disbursement of Advance to third party.
The payment by the Agent under Clause 4.6 to the Builder shall constitute the making of the Advance and the Borrower shall at that time become indebted, as principal and
direct obligor, to each Lender in an amount equal to that Lender’s Contribution.
|
|
4.8
|
Cancellation of Total Commitments.
The Total Commitments shall be immediately cancelled at the end of the Availability Period.
|
|
5.1
|
Payment of normal interest.
Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.
|
|
5.2
|
Normal rate of interest.
Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period shall be the aggregate of:
|
|
(b)
|
the Mandatory Cost, if any; and
|
|
(c)
|
LIBOR for that Interest Period.
|
|
5.3
|
Payment of accrued interest.
In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.
|
|
5.4
|
Notification of Interest Periods and rates of normal interest.
The Agent shall notify the Borrower and each Lender of:
|
|
(a)
|
each rate of interest; and
|
|
(b)
|
the duration of each Interest Period,
|
as soon as reasonably practicable after each is
determined.
|
5.5
|
Obligation of Reference Banks to quote.
A Lender which is a Reference Bank shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this
Agreement.
|
16
|
5.6
|
Absence of quotations by Reference Banks.
If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or
Banks; but if 2 or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.
|
|
(a)
|
If a Market Disruption Event occurs in relation to an Advance for any Interest Period, then the rate of interest on each Lender’s share of that Advance for the Interest Period shall be the percentage rate per annum
which is the sum of:
|
|
|
(ii)
|
the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the
cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and
|
|
|
(iii)
|
the Mandatory Cost, if any, applicable to that Lender’s participation in the Advance.
|
|
(b)
|
In this Agreement “
Market Disruption Event
” means:
|
|
|
(i)
|
at or about noon on the Quotation Date for the relevant Interest Period the Reuters BBA Page LIBOR 01 is not available and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for
dollars for the relevant Interest Period; or
|
|
|
(ii)
|
before close of business in London on the Quotation Date for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders that the cost to it or them obtaining matching deposits in the
Relevant Interbank Market would be in excess of LIBOR.
|
|
5.8
|
Notification of market disruption.
The Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.7 which have caused its notice to be given.
|
|
5.9
|
Negotiation of alternative rate of interest.
If the Agent’s notice under Clause 5.8 is served after an Advance is made, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender
shall use reasonable endeavours to agree, within the 30 days after the date on which the Agent serves its notice under Clause 5.8 (the “
Negotiation Period
”), an alternative interest rate or (as the case may be) an alternative basis
for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the Interest Period concerned.
|
|
5.10
|
Application of agreed alternative rate of interest.
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.
|
|
5.11
|
Alternative rate of interest in absence of agreement.
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of
the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the
Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin; and the procedure provided for by this Clause 5.11 shall be repeated if the relevant circumstances are continuing at the end of the interest period
so set by the Agent.
|
17
|
5.12
|
Notice of prepayment.
If the Borrower does not agree with an interest rate set by the Agent under Clause 5.11, the Borrower may give the Agent not less than 15 Business Days’ notice of its intention to
prepay at the end of the interest period set by the Agent.
|
|
5.13
|
Prepayment; termination of Commitments.
A notice under Clause 5.12 shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower’s notice
of intended prepayment; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Total Commitments or (as the case may require) the Commitment of the Affected Lender shall be cancelled; and
|
|
(b)
|
on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the Loan or, as the case may be, the Affected Lender’s Contribution, together with accrued
interest thereon at the applicable rate plus the Margin.
|
|
5.14
|
Application of prepayment.
The provisions of Clause 8 shall apply in relation to the prepayment made pursuant to Clause 5.12.
|
|
6.1
|
Commencement of Interest Periods.
The first Interest Period applicable to an Advance shall commence on the Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest
Period.
|
|
6.2
|
Duration of normal Interest Periods.
Subject to Clauses 6.3 and 6.4, each Interest Period shall be:
|
|
(a)
|
3, 6, 9 or 12 months as notified by the Borrower to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of the Interest Period; or
|
|
(b)
|
in the case of the first Interest Period applicable to the second and any subsequent Advance, a period ending on the last day of the Interest Period applicable to the first Advance then current, whereupon all of the
Advances shall be consolidated and treated as a single Advance;
|
|
(c)
|
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
|
|
(d)
|
such other period as the Agent may, with the authorisation of the Majority Lenders, agree with the Borrower.
|
|
6.3
|
Duration of Interest Periods for repayment instalments.
In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.
|
|
6.4
|
Non-availability of matching deposits for Interest Period selected.
If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00
a.m. (London time) on the third Business Day before the commencement of the Interest Period that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London Interbank Market when the
Interest Period commences, the Interest Period shall be of 3 months.
|
18
|
7.1
|
Payment of default interest on overdue amounts.
The Borrower shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by the Borrower under any Finance Document which
the Agent, the Security Trustee or the other designated payee does not receive on or before the relevant date, that is:
|
|
(a)
|
the date on which the Finance Documents provide that such amount is due for payment; or
|
|
(b)
|
if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or
|
|
(c)
|
if such amount has become immediately due and payable under Clause 19.4, the date on which it became immediately due and payable.
|
|
7.2
|
Default rate of interest.
Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by
the Agent to be 1 per cent. above:
|
|
(a)
|
in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or
|
|
(b)
|
in the case of any other overdue amount, the rate set out at Clause 7.3(b).
|
|
7.3
|
Calculation of default rate of interest.
The rates referred to in Clause 7.2 are:
|
|
(a)
|
the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period);
|
|
(b)
|
the Margin and the Mandatory Cost, if any, plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may select from time to time:
|
|
|
(ii)
|
if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time
determine.
|
|
7.4
|
Notification of interest periods and default rates.
The Agent shall promptly notify the Lenders and the Borrower of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the
Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Agent’s notification.
|
|
7.5
|
Payment of accrued default interest.
Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and
the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.
|
|
7.6
|
Compounding of default interest.
Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.
|
19
|
8
|
REPAYMENT AND PREPAYMENT
|
|
8.1
|
Amount of repayment instalments.
The Borrower shall repay the Loan by 32 equal consecutive quarterly instalments of $992,500 each together with a balloon instalment of $35,740,000 payable simultaneously with the
final instalment.
|
|
8.2
|
Repayment Dates.
The first instalment shall be repaid on the date falling 3 months after the last Drawdown Date and the last instalment together with the balloon on the date falling 96 months after the last
Drawdown Date.
|
|
8.3
|
Maturity Date.
On the Maturity Date, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
|
|
8.4
|
Voluntary prepayment.
Subject to the following conditions, the Borrower may, without penalty, prepay the whole or any part of the Loan on the last day of an Interest Period for that Advance.
|
|
8.5
|
Conditions for voluntary prepayment.
The conditions referred to in Clause 8.4 are that:
|
|
(a)
|
a partial prepayment shall be $500,000 or a multiple of $500,000 or such other amount agreed by the Agent;
|
|
(b)
|
the Agent has received from the Borrower at least 5 Business Days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
|
|
(c)
|
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any
requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.
|
|
8.6
|
Effect of notice of prepayment.
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the
prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.
|
|
8.7
|
Notification of notice of prepayment.
The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the
Borrower under Clause 8.5(c).
|
|
8.8
|
Mandatory prepayment.
The Borrower shall be obliged to prepay the whole of the Loan:
|
|
(a)
|
if the Ship is sold, on or before the date on which such sale is completed by delivery of the Ship to the buyer; or
|
|
(b)
|
if the Ship becomes a Total Loss, on the earlier of the date falling 180 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss;
|
Provided that
the Borrower shall not be required to prepay the Loan if the Ship is sold to a subsidiary of either
Guarantor pursuant to the proviso to Clause 11.3.
20
|
(c)
|
if any of the following occurs, on demand by the Agent:
|
|
|
(i)
|
either the Shipbuilding Contract or the Refund Guarantee is cancelled, terminated, rescinded or suspended or otherwise ceases to remain in force for any reason; or
|
|
|
(ii)
|
the Shipbuilding Contract is materially amended or materially varied without the prior written consent of the Majority Lenders except for any such amendment or variation as is permitted by this Agreement or any other
relevant Finance Document; or
|
|
|
(iii)
|
the Ship has not for any reason been delivered to, and accepted by, the Borrower under the Shipbuilding Contract by the date specified in Article III. 4 of the Shipbuilding Contract as the date giving rise to the right
of cancellation for excessive late delivery.
|
|
8.9
|
Amounts payable on prepayment.
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period together with any sums payable under Clause 21.1(b) but without premium or penalty.
|
|
8.10
|
Application of partial prepayment.
Each partial prepayment shall be applied first against the balloon and then against the repayment instalments specified in Clause 8.1 in inverse order of maturity.
|
|
8.11
|
No reborrowing.
No amount prepaid may be reborrowed.
|
|
9.1
|
Documents, fees and no default.
Each Lender’s obligation to contribute to an Advance is subject to the following conditions precedent:
|
|
(a)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the documents described in Part A of Schedule 3 in form and substance satisfactory to the Agent and its lawyers;
|
|
(b)
|
that, on or before the first Drawdown Date for, but prior to the making of, an Advance (other than the final Advance), the Agent receives or is satisfied that it will receive on the making of such Advance the documents
described in Part B of Schedule 3 in form and substance satisfactory to it and its lawyers;
|
|
(c)
|
that before the final Drawdown Date for, but prior to the making of, the final Advance, the Agent receives or is satisfied that it will receive on the making of such Advance the documents described in Part C of Schedule
3 in form and substance satisfactory to it and its lawyers;
|
|
(d)
|
that, on or before the service of the first Drawdown Notice, the Agent receives the arrangement fee referred to in Clause 20.1 all accrued commitment fee payable pursuant to Clause 20.1 and the first instalment of the
annual agency fee referred to in Clause 20.1 and has received payment of the expenses referred to in Clause 20.2; and
|
|
(e)
|
that both at the date of each Drawdown Notice and at each Drawdown Date:
|
|
|
(i)
|
no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Loan;
|
|
|
(ii)
|
the representations and warranties in Clause 10.1 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with
reference to the circumstances then existing; and
|
|
|
(iii)
|
none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and
|
21
|
(f)
|
that, if the ratio set out in Clause 15.1 were applied immediately following the making of the Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
|
|
(g)
|
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the
Majority Lenders, request by notice to the Borrower prior to the Drawdown Date.
|
|
9.2
|
Waiver of conditions precedent.
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure
that those conditions are satisfied within 5 Business Days after the Drawdown Date (or such longer period as the Agent may, with the authorisation of the Majority Lenders, specify).
|
|
10
|
REPRESENTATIONS AND WARRANTIES
|
|
10.1
|
General.
The Borrower represents and warrants to each Creditor Party as follows.
|
|
10.2
|
Status.
The Borrower is duly incorporated and validly existing under the laws of Hong Kong.
|
|
10.3
|
Share capital and ownership.
The Borrower has an authorised share capital of $10,000 divided into 10,000 shares of $1 each, two (2) of which shares have been issued fully paid, and the legal title and
beneficial ownership of one (1) share is held free of any Security Interest or other claim by Bretta Tankers and the other one (1) share is held free of any Security Interest or other claim by Euronav Hong Kong.
|
|
10.4
|
Corporate power.
The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
|
|
(a)
|
to execute the Shipbuilding Contract, to purchase and pay for the Ship under the Shipbuilding Contract and register the Ship in its name under the Approved Flag;
|
|
(b)
|
to execute the Finance Documents to which the Borrower is a party; and
|
|
(c)
|
to borrow under this Agreement and to make all the payments contemplated by, and to comply with, those Finance Documents.
|
|
10.5
|
Consents in force.
All the consents referred to in Clause 10.4 remain in force and nothing has occurred which makes any of them liable to revocation.
|
|
10.6
|
Legal validity; effective Security Interests.
The Finance Documents to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as
provided for in the Finance Documents):
|
|
(a)
|
constitute the Borrower’s legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and
|
|
(b)
|
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,
|
subject to any relevant insolvency laws affecting creditors’ rights generally.
22
|
10.7
|
No third party Security Interests.
Without limiting the generality of Clause 10.6, at the time of the execution and delivery of each Finance Document:
|
|
(a)
|
the Borrower will have the right to create all the Security Interests which that Finance Document purports to create; and
|
|
(b)
|
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms,
relates.
|
|
10.8
|
No conflicts.
The execution by the Borrower of each Finance Document, and the borrowing by the Borrower of the Loan, and its compliance with each Finance Document will not involve or lead to a contravention of:
|
|
(a)
|
any law or regulation; or
|
|
(b)
|
the constitutional documents of the Borrower; or
|
|
(c)
|
any contractual or other obligation or restriction which is binding on the Borrower or any of its assets.
|
|
10.9
|
Governing law and enforcement.
|
|
(a)
|
The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation.
|
|
(b)
|
Any judgment obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.
|
|
10.10
|
No withholding taxes.
All payments which the Borrower is liable to make under the Finance Documents must be made without deduction or withholding for or on account of any tax payable under any law of any
Pertinent Jurisdiction.
|
|
10.11
|
No default.
No Event of Default or Potential Event of Default has occurred.
|
|
10.12
|
Information.
All information which has been provided in writing by or on behalf of the Borrower or any Security Party to any Creditor Party in connection with any Finance Document satisfied the requirements of
Clause 11.5; all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.7; and there has been no material adverse change in the financial position or state of affairs of the Borrower from that disclosed in
the latest of those accounts.
|
|
10.13
|
No litigation.
No legal or administrative action involving the Borrower (including action relating to any alleged or actual breach of the ISM Code or the ISPS Code) has been commenced or taken or, to the
Borrower’s knowledge, is likely to be commenced or taken which, in either case, would be likely to have a material adverse effect on the Borrower’s financial position or profitability.
|
|
10.14
|
Validity and completeness of Shipbuilding Contract.
The Shipbuilding Contract constitutes valid, binding and enforceable obligations of the Builder and the Borrower respectively in accordance with its terms; and:
|
|
(a)
|
the copy of the Shipbuilding Contract delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
|
(b)
|
no amendments or additions to the Shipbuilding Contract as delivered to the Agent before the date of this Agreement have been agreed (except for those amendments which are permitted under Clause 11.12) nor has the
Borrower or the Builder waived any of their respective rights under the Shipbuilding Contract.
|
23
|
10.15
|
Validity and completeness of Supervision Agreement.
The Supervision Agreement constitutes valid, binding and enforceable obligations of the Supervisor and the Borrower respective in accordance with its terms;
and:
|
|
(a)
|
the copy of the Supervision Agreement delivered to the Agent before the date of this Agreement is a true and complete copy; and
|
|
(b)
|
no amendments or additions to the Supervision Agreement as delivered to the Agent before the date of this Agreement have been agreed nor has the Borrower or the Supervisor waived any of their respective rights under the
Supervision Agreement.
|
|
10.16
|
No rebates etc.
There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to the Borrower, the Builder or a third party in
connection with the purchase by the Borrower of the Ship, other than as disclosed to the Lenders in writing on or prior to the date of this Agreement.
|
|
10.17
|
Compliance with certain undertakings.
At the date of this Agreement, the Borrower is in compliance with Clauses 11.2, 11.4, 11.9 and 11.13.
|
|
10.18
|
Taxes paid.
The Borrower has paid all taxes applicable to, or imposed on or in relation to the Borrower, its business or the Ship.
|
|
10.19
|
ISM Code and ISPS Code compliance.
All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Approved Manager and the Ship have been complied with or shall be complied with as from
the delivery of the Ship to the Borrower under the Shipbuilding Contract.
|
|
10.20
|
No money laundering.
Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower of the Loan, the performance and discharge of its obligations and liabilities under the Finance
Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms (i) that it is acting for its own account; (ii) that it will use the proceeds
of the Loan for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and (iii) that the foregoing will not involve or lead to a contravention of any law, official requirement or other
regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive (91/308) EEC of the Council of the European Communities).
|
|
11.1
|
General.
The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 at all times during the Security Period except as the Agent may, with the authorisation of the
Majority Lenders, otherwise permit (such consent not to be unreasonably withheld or delayed in the case of Clause 11.12).
|
|
11.2
|
Title; negative pledge.
The Borrower will:
|
|
(a)
|
keep its rights under the Shipbuilding Contract, the Supervision Agreement and the Refund Guarantee and with effect from delivery of the Ship under the Shipbuilding Contract will hold the legal title to, and own the
entire beneficial interest in the Ship, the Insurances and Earnings, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the
Finance Documents and except for Permitted Security Interests; or
|
|
(b)
|
not create or permit to arise any Security Interest (except for Permitted Security Interests) over any other asset, present or future.
|
24
|
11.3
|
No disposal of assets.
The Borrower will not transfer, lease or otherwise dispose of:
|
|
(a)
|
all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except for those in the ordinary course of business and for fair market value payable in cash upon
completion of such transaction; or
|
|
(b)
|
any debt payable to it or any other right (present, future or contingent right) to receive a payment, including any right to damages or compensation.;
|
but paragraph (a) does not apply to any charter of the Ship as to which Clause 14.13 applies,
Provided
that the Borrower may sell the Ship to another subsidiary of either Guarantor subject to the following conditions:
|
|
(i)
|
there is no Event of Default or Potential Event of Default which is continuing;
|
|
|
(ii)
|
the new owning company and the jurisdiction of incorporation being acceptable to the Lenders;
|
|
|
(iii)
|
the Borrower and the Security Parties entering into such amendments to this Agreement and the other Finance Documents as may be required by the Lenders in order to document the change of ownership;
|
|
|
(iv)
|
the new owning company entering into such other security documents which are required by the Lenders so as to maintain the same security for the Lenders on the transfer of ownership; and
|
|
|
(v)
|
the new owner shall pay to the Agent on demand all expenses (including but not limited to legal expenses) relating to the said documentation.
|
|
11.4
|
No other liabilities or obligations to be incurred.
The Borrower will not incur any liability or obligation except liabilities and obligations under the Shipbuilding Contract, the Supervision Agreement and the
Finance Documents and liabilities or obligations incurred in the ordinary course of its business (including operating and chartering the Ship).
|
|
11.5
|
Information provided to be accurate.
All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true and not
misleading and will not omit any material fact or consideration.
|
|
11.6
|
Provision of financial statements.
The Borrower will send to the Agent:
|
|
(a)
|
as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower, (commencing with the financial year ending 31 December 2010), the audited accounts of the Borrower;
|
|
(b)
|
as soon as possible, but in no event later than 90 days after the end of each financial half year of the Borrower (commencing with the financial half year ending 30 June 2010) unaudited management accounts of the
Borrower which are certified as to their correctness by the chief financial officer of the Borrower.
|
|
11.7
|
Form of financial statements.
All accounts (audited and unaudited) delivered under Clause 11.6 will:
|
|
(a)
|
be prepared in accordance with all applicable laws and IFRS consistently applied;
|
25
|
(b)
|
fairly represent the financial condition of the Borrower at the date of those accounts and of its profit for the period to which those accounts relate; and
|
|
(c)
|
fully disclose or provide for all significant liabilities of the Borrower.
|
|
11.8
|
Creditor notices.
The Borrower will send the Agent, at the same time as they are despatched, copies of all material communications which are despatched to the Borrower’s creditors or any class of them.
|
|
11.9
|
Consents.
The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
|
|
(a)
|
for the Borrower to perform its obligations under any Finance Document;
|
|
(b)
|
for the validity or enforceability of any Finance Document; and
|
|
(c)
|
for the Borrower to continue to own and operate the Ship,
|
and the Borrower will comply with
the terms of all such consents.
|
11.10
|
Maintenance of Security Interests.
The Borrower will:
|
|
(a)
|
at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and
|
|
(b)
|
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become necessary or desirable for any Finance Document to be valid,
enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
|
|
11.11
|
Notification of litigation.
The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Security Party, the Approved Manager or the Ship, the Earnings or the
Insurances as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance
Document.
|
|
11.12
|
No amendment to Shipbuilding Contract.
The Borrower will not agree to any material amendment or supplement to, or waive the Supervision Agreement or the Shipbuilding Contract or any of their provisions without
the prior written consent of the Agent save that the Borrower may without requiring such consent of the Agent, agree with the Builder to amend the Shipbuilding Contract if such amendment:
|
|
(a)
|
does not alter the intended size, commercial use or purpose of the Ship;
|
|
(b)
|
does not alter the construction milestones for payment of the instalments of the Contract Price under the Shipbuilding Contract;
|
|
(c)
|
does not alter the identity of the Refund Guarantor nor the form, and amount, of the Refund Guarantee to be provided nor impair the effectiveness of the Refund Guarantee; and
|
|
(d)
|
will not materially reduce the Ship’s anticipated value when completed.
|
26
|
11.13
|
Principal place of business.
The Borrower will maintain its place of business, and keep its corporate documents and records, at the address stated at the commencement of this Agreement; and the Borrower will not
establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than Hong Kong.
|
|
11.14
|
Confirmation of no default.
The Borrower will, within 5 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by 2 directors of the Borrower and which:
|
|
(a)
|
states that no Event of Default or Potential Event of Default has occurred; or
|
|
(b)
|
states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.
|
The Agent may serve requests under this Clause 11.14 from time to time but only if reasonably asked to do so by a Lender or Lenders having
Contributions exceeding 10 per cent. of the Loan or (if the Loan has not been made) Commitments exceeding 10 per cent of the Total Commitments; and this Clause 11.14 does not affect the Borrower’s obligations under Clause 11.15.
|
11.15
|
Notification of default.
The Borrower will notify the Agent as soon as the Borrower becomes aware of:
|
|
(a)
|
the occurrence of an Event of Default or a Potential Event of Default; or
|
|
(b)
|
any matter which indicates that an Event of Default or a Potential Event of Default may have occurred;
|
and will keep the Agent fully up-to-date with all developments.
|
11.16
|
Provision of further information.
The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating:
|
|
(a)
|
to the Borrower, the Ship, the Earnings or the Insurances; or
|
|
(b)
|
to any other matter relevant to, or to any provision of, a Finance Document,
|
which may
reasonably be requested by the Agent, the Security Trustee or any Lender at any time.
|
11.17
|
“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 or any Security Party 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,
|
obliges the Agent or any Lender (or, in the case of paragraph (c), any prospective new Lender) to comply with “know your customer” or
similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation
and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned
27
(for itself or, in the case of the event described in paragraph (c), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described
in paragraph (c), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated
in the Finance Documents.
|
12
|
CORPORATE UNDERTAKINGS
|
|
12.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 at all times during the Security Period after the Ship has been delivered to the Borrower
under the Shipbuilding Contract except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
|
|
12.2
|
Maintenance of status.
The Borrower will maintain its separate corporate existence and remain in good standing under the laws of Hong Kong.
|
|
12.3
|
Negative undertakings.
The Borrower will not:
|
|
(a)
|
carry on any business other than the ownership, chartering and operation of the Ship; or
|
|
(b)
|
effect any form of redemption purchase or return of share capital or effect any form of redemption, purchase or return of share capital; or
|
|
(c)
|
provide any form of credit or financial assistance to:
|
|
|
(i)
|
a person who is directly or indirectly interested in the Borrower’s share or loan capital; or
|
|
|
(ii)
|
any company in or with which such a person is directly or indirectly interested or connected; or
|
|
|
(iii)
|
enter into any transaction with or involving such a person or company on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms’ length,
|
and the Borrower agrees to subordinate any inter-company loans to the Loan on such terms as the Lenders may reasonably
require;
|
(d)
|
issue, allot or grant any person a right to any shares in its capital or repurchase or reduce its issued share capital;
|
|
(e)
|
acquire any shares or other securities other than US or UK Treasury bills and certificates of deposit issued by major North American or European banks, or enter into any transaction in a derivative;
|
|
(f)
|
enter into any form of amalgamation, merger or de-merger or any form of reconstruction or reorganisation; or
|
|
(g)
|
enter into any freight forwarding agreements.
|
|
12.4
|
Payment of dividends.
The Borrower may pay dividends
provided that
no Event of Default has occurred and is continuing.
|
|
12.5
|
Minimum Liquidity
.
The Borrower shall ensure that from the delivery of the Ship to the Borrower under the Shipbuilding Contract and throughout the Security Period there is at all times standing to the
credit of the Earnings Account free of any Security Interest other than in favour of the Security Trustee an amount of not less than $300,000 increasing to $500,000 with effect from the first anniversary of the said delivery date.
|
28
|
13.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 13 at all times during the Security Period (after the Ship has been delivered to it under the
Shipbuilding Contract) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit (such consent not to be unreasonably withheld or delayed in the case of Clauses 13.11(b) and 13.12).
|
|
13.2
|
Maintenance of obligatory insurances.
The Borrower shall keep the Ship insured at the expense of the Borrower against:
|
|
(a)
|
fire and usual marine risks (including hull and machinery and excess risks);
|
|
(c)
|
protection and indemnity risks; and
|
|
(d)
|
any other risks against which the Majority Lenders consider, having regard to practices and other circumstances prevailing at the relevant time, it would in the opinion of the Majority Lenders be reasonable for the
Borrower to insure and which are specified by the Security Trustee by notice to the Borrower.
|
|
13.3
|
Terms of obligatory insurances.
The Borrower shall effect such insurances:
|
|
(b)
|
in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of (i) 120 per cent. of the Loan and (ii) the market value of the Ship; and
|
|
(c)
|
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine
insurance market;
|
|
(d)
|
in relation to protection and indemnity risks in respect of the Ship’s full tonnage;
|
|
(e)
|
on approved terms; and
|
|
(f)
|
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
|
|
13.4
|
Further protections for the Creditor Parties.
In addition to the terms set out in Clause 13.3, the Borrower shall procure that the obligatory insurances shall:
|
|
(a)
|
whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of
subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
|
|
(b)
|
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
|
29
|
(c)
|
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;
|
|
(d)
|
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
|
|
(e)
|
provide that the Security Trustee may make proof of loss if the Borrower fails to do so.
|
|
13.5
|
Renewal of obligatory insurances.
The Borrower shall:
|
|
(a)
|
at least 14 days before the expiry of any obligatory insurance, renew that obligatory insurance; and
|
|
(b)
|
promptly after each such renewal, there is provided to the Agent details of the terms and conditions on which such obligatory insurances have been renewed.
|
|
13.6
|
Copies of policies; letters of undertaking.
The Borrower shall ensure that all approved brokers provide the Security Trustee with a letter or letters of undertaking in a form required by the Majority Lenders and
including undertakings by the approved brokers that:
|
|
(a)
|
they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 13.4;
|
|
(b)
|
they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;
|
|
(c)
|
they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances;
|
|
(d)
|
they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from the Borrower or its agents and,
in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and
|
|
(e)
|
they will not set off against any sum recoverable in respect of a claim relating to the Ship under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of the Ship
or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non-payment of such premiums or
other amounts, and will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Security Trustee.
|
|
13.7
|
Copies of certificates of entry.
The Borrower shall ensure that any protection and indemnity and/or war risks associations in which the Ship is entered provides the Security Trustee with:
|
|
(a)
|
a certified copy of the certificate of entry for the Ship;
|
|
(b)
|
a letter or letters of undertaking in such form as may be required by the Majority Lenders; and
|
|
(c)
|
a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship.
|
30
|
13.8
|
Deposit of original policies.
The Borrower shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
|
|
13.9
|
Payment of premiums.
The Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.
|
|
13.10
|
Guarantees.
The Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.
|
|
13.11
|
Compliance with terms of insurances.
The Borrower shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void,
voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
|
|
(a)
|
the Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c))
ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
|
|
(b)
|
the Borrower shall not make any changes relating to the classification or classification society or manager or operator of the Ship approved by the underwriters of the obligatory insurances;
|
|
(c)
|
the Borrower shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship is entered to
maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
|
|
(d)
|
the Borrower shall not employ the Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and
complying with any requirements (as to extra premium or otherwise) which the insurers specify.
|
|
13.12
|
Alteration to terms of insurances.
The Borrower shall neither make or agree to any material alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance without the
consent of the Agent.
|
|
13.13
|
Settlement of claims.
The Borrower shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all
documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
|
|
13.14
|
Provision of information.
In addition, the Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated
person) reasonably requests for the purpose of:
|
|
(a)
|
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
|
|
(b)
|
effecting, maintaining or renewing any such insurances as are referred to in Clause 13.15 or dealing with or considering any matters relating to any such insurances,
|
and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the
account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
31
|
13.15
|
Mortgagee’s interest and additional perils insurances.
The Security Trustee shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest additional perils insurance and a
mortgagee’s interest marine insurance each in an amount of 110 per cent. of the Loan and on such terms, through such insurers and generally in such manner as the Majority Lenders may from time to time consider appropriate and the Borrower
shall upon demand fully indemnify the Creditor Parties in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any
matter arising out of any such insurance.
|
|
14.1
|
General.
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 14 at all times during the Security Period (after the Ship has been delivered to it under the
Shipbuilding Contract) except as the Agent, with the authorisation of the Majority Lenders, may otherwise permit.
|
|
14.2
|
Ship’s name and registration.
The Borrower shall keep the Ship registered in its name under the relevant Approved Flag at its relevant port of registry; shall not do or omit to do or allow to be done
anything as a result of which such registration might be cancelled or imperilled; and shall not change the name or port of registry of the Ship.
|
|
14.3
|
Repair and classification.
The Borrower shall keep the Ship in a good and safe condition and state of repair:
|
|
(a)
|
consistent with first-class ship ownership and management practice;
|
|
(b)
|
so as to maintain the Ship’s class (namely A1(E), “Oil Carrier ESP”, AMS, ACCU, SPM, VEC(-L), CSR, Safeship-CM, RES, ES, TEM, Green Passport, POT, UWILD (sea chest blanking devices shall not be provided),
CPS at American Bureau of Shipping) free of overdue recommendations and conditions; and
|
|
(c)
|
so as to comply with all laws and regulations applicable to vessels registered at ports in Greece or to vessels trading to any jurisdiction to which the Ship may trade from time to time, including but not limited to the
ISM Code or the ISPS Code.
|
|
14.4
|
Modification.
The Borrower shall not make any modification or repairs to, or replacement of, the Ship or equipment installed on it which would or might materially alter the structure, type or performance
characteristics of the Ship or materially reduce its value.
|
|
14.5
|
Removal of parts.
The Borrower shall not remove any material part of the Ship, or any item of equipment installed on, the Ship unless the part or item so removed is forthwith replaced by a suitable part or item
which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on the Ship the property of the
Borrower and subject to the security constituted by the Mortgage
Provided that
the Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship.
|
32
|
14.6
|
Surveys.
The Borrower shall submit the Ship regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Majority Lenders provide the Security Trustee,
with copies of all survey reports.
|
|
14.7
|
Inspection.
The Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose) to board the Ship at all reasonable times to inspect its condition or to satisfy
themselves about proposed or executed repairs and shall afford all proper facilities for such inspections provided that prior to the occurrence of an Event of Default reasonable notice of such inspection is given and such inspection does not
materially affect the Ship’s commercial operation.
|
|
14.8
|
Prevention of and release from arrest.
The Borrower shall promptly discharge:
|
|
(a)
|
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship, the Earnings or the Insurances;
|
|
(b)
|
all taxes, dues and other amounts charged in respect of the Ship, the Earnings or the Insurances; and
|
|
(c)
|
all other outgoings whatsoever in respect of the Ship, the Earnings or the Insurances,
|
and,
forthwith upon receiving notice of the arrest of the Ship, or of its detention in exercise or purported exercise of any lien or claim, the Borrower shall procure its release by providing bail or otherwise as the circumstances may require.
|
14.9
|
Compliance with laws etc.
The Borrower shall:
|
|
(a)
|
comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other laws or regulations relating to the Ship, its ownership, operation and management or to the business of the Borrower;
|
|
(b)
|
not employ the Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and
|
|
(c)
|
in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship’s war
risks insurers unless the Borrower (at its expense) effected any necessary special, additional or modified insurance cover and, upon the Agent’s request, the Borrower will confirm that they have effected such insurance cover.
|
|
14.10
|
Provision of information.
The Borrower shall promptly provide the Security Trustee with any information which the Majority Lenders reasonably request regarding:
|
|
(a)
|
the Ship, its employment, position and engagements;
|
|
(b)
|
the Earnings and payments and amounts due to the Ship’s master and crew;
|
|
(c)
|
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of the Ship and any payments made in respect of the Ship;
|
|
(d)
|
any towages and salvages; and
|
|
(e)
|
the Borrower’s, the Approved Manager’s or the Ship’s compliance with the ISM code and the ISPS code,
|
and, upon the Security Trustee’s request, provide copies of any current charter relating to the Ship and of any current charter guarantee,
and copies of the Borrower’s or the Approved Manager’s Document of Compliance.
33
|
14.11
|
Notification of certain events.
The Borrower shall immediately notify the Security Trustee by fax, confirmed forthwith by letter, of:
|
|
(a)
|
any casualty which is or is likely to be or to become a Major Casualty;
|
|
(b)
|
any occurrence as a result of which the Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;
|
|
(c)
|
any overdue requirement or recommendation made by any insurer or classification society or by any competent authority which is not immediately complied with;
|
|
(d)
|
any arrest or detention of the Ship, any exercise or purported exercise of any lien on the Ship or its Earnings or any requisition of the Ship for hire;
|
|
(e)
|
any intended dry docking of the Ship other than a routine dry docking;
|
|
(f)
|
any Environmental Claim made against the Borrower or in connection with the Ship, or any Environmental Incident;
|
|
(g)
|
any claim for breach of the ISM Code or the ISPS Code being made against the Borrower, the Approved Manager or otherwise in connection with the Ship; or
|
|
(h)
|
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or ISPS Code not being complied with,
|
and the Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require
of the Borrower’s, the Approved Manager’s or any other person’s response to any of those events or matters.
|
14.12
|
Restrictions on chartering, appointment of managers etc.
The Borrower shall not:
|
|
(a)
|
let the Ship on demise charter for any period;
|
|
(b)
|
enter into any charter in relation to the Ship under which more than 2 months’ hire (or the equivalent) is payable in advance;
|
|
(c)
|
charter the Ship otherwise than on bona fide arm’s length terms at the time when the Ship is fixed;
|
|
(d)
|
appoint a manager of the Ship other than the Approved Manager or agree to any alteration to the terms of the Approved Manager’s appointment;
|
|
(e)
|
de-activate or lay up the Ship; or
|
|
(f)
|
put the Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed the Major Casualty amount unless either:
|
|
|
(i)
|
that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on the Ship or its Earnings for the cost of such work or for any other reason; or
|
|
|
(ii)
|
the Borrower has established to the reasonable satisfaction of the Security Trustee that the Borrower has sufficient reserves to pay for the cost of such work.
|
34
|
14.13
|
Time and consecutive voyage charters in excess of 36 months.
The Borrower agrees that if it should enter into any Charter the Borrower shall execute and deliver to the Agent promptly upon such Charter being
entered into a Charter Assignment in respect of that Charter in favour of the Security Trustee unless such Charter contains a substitution clause or a clause with similar effect.
|
If the Lenders agree to the increase of the Loan pursuant to Clause 2.4 of this Agreement, then the Borrower agrees that if it should enter
into any Charter (or has previously entered into any Charter) the Borrower shall execute and deliver to the Agent promptly upon such Charter being entered into (or where such Charter has already been entered into on the date of the increase of the
Loan pursuant to Clause 2.4) a Charter Assignment in respect of that Charter in favour of the Security Trustee.
|
14.14
|
Notice of Mortgage.
The Borrower shall keep the Mortgage registered against the Ship as a valid first priority mortgage, carry on board the Ship a certified copy of the Mortgage and place and maintain in a
conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice stating that the Ship is mortgaged by the Borrower to the Security Trustee.
|
|
14.15
|
Sharing of Earnings.
The Borrower shall not enter into any agreement or arrangement for the sharing of any Earnings without the prior approval of the Agent such approval not to be unreasonably withheld. For the
avoidance of doubt the Agent’s approval shall not be required in relation to:
|
|
(a)
|
any “profit split” of hire between the Borrower and a charterer of the Ship; or
|
|
(b)
|
the entry into an established pool or a pool established by Euronav NV in both cases on usual commercial terms and at a market rate allocation.
|
|
15.1
|
Minimum required security cover.
Clause 15.2 applies if (after the Ship has been delivered to the Borrower under the Shipbuilding Contract) the Agent notifies the Borrower that, according to the determination
mechanism under Clause 15.3:
|
|
(a)
|
the market value (determined as provided in Clause 15.3) of the Ship; plus
|
|
(b)
|
the net realisable value of any additional security previously provided under this Clause 15,
|
is below 120 per cent. of the Loan.
|
15.2
|
Provision of additional security; prepayment.
If the Agent serves a notice on the Borrower under Clause 15.1, the Borrower shall, within 1 month after the date on which the Agent’s notice is served, either:
|
|
(a)
|
provide, or ensure that a third party provides, additional security which is acceptable to the Agent and, in the opinion of the Majority Lenders, has a net realisable value at least equal to the shortfall and is
documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require; or
|
|
(b)
|
prepay such part (at least) of the Loan as will eliminate the shortfall.
|
|
15.3
|
Valuation of Ship.
The market value of the Ship at any date is that shown by the average of 2 valuations addressed to the Agent for the benefit of the Lenders and prepared:
|
|
(a)
|
as at a date not more than 14 days previously;
|
35
|
(b)
|
by 2 independent first class sale and purchase shipbrokers which the Agent has approved or appointed for the purpose;
|
|
(c)
|
with or without physical inspection of the Ship (as the Agent may require);
|
|
(d)
|
on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment; and
|
|
(e)
|
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
|
|
15.4
|
Value of additional vessel security.
The net realisable value of any additional security which is provided under Clause 15.2 and which consists of a Security Interest over a vessel shall be that shown by a
valuation complying with the requirements of Clause 15.3.
|
|
15.5
|
Valuations binding.
Any valuation under Clause 15.2, 15.3 or 15.4 shall be binding and conclusive as regards the Borrower, as shall be any valuation which the Majority Lenders make of any additional security
which does not consist of or include a Security Interest.
|
|
15.6
|
Provision of information.
The Borrower shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.3 or 15.4 with any information which the Agent or the shipbroker or expert may
reasonably request for the purposes of the valuation;
|
|
15.7
|
Payment of valuation expenses.
Without prejudice to the generality of the Borrower’s obligations under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the Agent the amount of the fees and
expenses of any shipbroker or expert instructed by the Agent under this Clause and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
|
|
15.8
|
Application of prepayment.
Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.2(b).
|
|
16
|
PAYMENTS AND CALCULATIONS
|
|
16.1
|
Currency and method of payments.
All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
|
|
(a)
|
by not later than 11.00 a.m. (New York City time) on the due date;
|
|
(b)
|
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time
for the settlement of international transactions of the type contemplated by this Agreement);
|
|
(c)
|
in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to such account as the Agent may advise from time to time; and
|
|
(d)
|
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.
|
|
16.2
|
Payment on non-Business Day.
If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
|
|
(a)
|
the due date shall be extended to the next succeeding Business Day; or
|
|
(b)
|
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
|
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
36
|
16.3
|
Basis for calculation of periodic payments.
All interest, commitment fee and commission and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and
shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
|
|
16.4
|
Distribution of payments to Creditor Parties.
Subject to Clauses 16.5, 16.6 and 16.7:
|
|
(a)
|
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security
Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
|
|
(b)
|
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.
|
|
16.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that
amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.
|
|
16.6
|
Agent only obliged to pay when monies received.
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender
any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.
|
|
16.7
|
Refund to Agent of monies not received.
If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the
Lender concerned shall, on demand:
|
|
(a)
|
refund the sum in full to the Agent; and
|
|
(b)
|
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before
receiving it.
|
|
16.8
|
Agent may assume receipt.
Clause 16.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the
sum which it made available.
|
|
16.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those
amounts made by the Borrower and any Security Party.
|
|
16.10
|
Agent’s memorandum account.
The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the
Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
|
37
|
16.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 16.9 and 16.10 show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie
evidence that that amount is owing to that Creditor Party.
|
|
17
|
APPLICATION OF RECEIPTS
|
|
17.1
|
Normal order of application.
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
|
|
(a)
|
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
|
|
(b)
|
SECONDLY: in or towards payment pro rata of any accrued interest or commission due but unpaid under this Agreement;
|
|
(c)
|
THIRDLY: in or towards payment pro rata of any principal due but unpaid under this Agreement;
|
|
(d)
|
FOURTHLY: in or towards payment pro rata of any other amounts due but unpaid under any Finance Document;
|
|
(e)
|
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in
its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 17.1(a), 17.1(b), 17.1(c) and 17.1(d); and
|
|
(f)
|
SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
|
|
17.2
|
Variation of order of application.
The Agent may, with the authorisation of the Majority Lenders, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of
application from that set out in Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.
|
|
17.3
|
Notice of variation of order of application.
The Agent may give notices under Clause 17.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the
future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
|
|
17.4
|
Appropriation rights overriden.
This Clause 17 and any notice which the Agent gives under Clause 17.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any
Security Party.
|
|
18
|
APPLICATION OF EARNINGS
|
|
18.1
|
Payment of Earnings.
The Borrower undertakes with each Creditor Party to ensure that, throughout the Security Period (and subject only to the provisions of the General Assignment), all the Earnings are paid to
the Earnings Account.
|
38
|
18.2
|
Interest accrued on Earnings Account.
Any credit balance on the Earnings Account shall bear interest at the rate from time to time offered by the Agent to its customers for Dollar deposits of similar amounts and
for periods similar to those for which such balances appear to the Agent likely to remain on the Earnings Account.
|
|
18.3
|
Monies on Earnings.
Any monies standing to the credit of the Earnings Account shall, provided that the provisions of Clause 12.5 are complied with and provided that no Event of Default or Potential Event of
Default shall have occurred, be at the free disposal of the Borrower.
|
|
18.4
|
Location of accounts.
The Borrower shall promptly:
|
|
(a)
|
comply with any requirement of the Agent as to the location or re-location of the Earnings Account; and
|
|
(b)
|
execute any documents which the Agent specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings
Account.
|
|
18.5
|
Debits for expenses
etc.
Following the occurrence of an Event of Default which is continuing the Agent shall be entitled (but not obliged) from time to time to debit the Earnings Account without prior
notice in order to discharge any amount due and payable to it under Clause 20 or 21 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 20 or 21.
|
|
19.1
|
Events of Default.
An Event of Default occurs if:
|
|
(a)
|
the Borrower or any Security Party fails to pay within 3 Business Days of the date when due any sum payable under a Finance Document or under any document relating to a Finance Document; or
|
|
(b)
|
any breach occurs of Clause 9.2, 11.2, 11.3, 12.2, 12.3, 12.4, 12.5 or 15.2; or
|
|
(c)
|
any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) which, in the opinion of the Majority Lenders, is capable of
remedy, and such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
|
|
(d)
|
any representation, warranty or statement made or repeated by, or by an officer of, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance
Document is untrue or misleading when it is made or repeated; or
|
|
(e)
|
any of the following occurs in relation to any Financial Indebtedness of a Relevant Person in respect of a sum, or sums aggregating, $5,000,000 or more in the case of the Borrower and $15,000,000 or more in the case of
each Guarantor and the Counter Guarantor or the equivalent in another currency:
|
|
|
(i)
|
any Financial Indebtedness of a Relevant Person is not paid when due; or
|
|
|
(ii)
|
any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable prior to its stated maturity date as a consequence of any event of default; or
|
39
|
|
(iii)
|
a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event;
or
|
|
|
(iv)
|
any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of
a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility as a result of any event of default;
or
|
|
|
(v)
|
any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or
|
|
(f)
|
any of the following occurs in relation to a Relevant Person:
|
|
|
(i)
|
a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
|
|
|
(ii)
|
any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $5,000,000 or more in the case of the Borrower and
$15,000,000 or more in the case of each Guarantor and the Counter Guarantor or the equivalent in another currency; or
|
|
|
(iii)
|
any administrative or other receiver is appointed over any asset of a Relevant Person; or
|
|
|
(iv)
|
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person; or
|
|
|
(v)
|
any formal declaration of bankruptcy or any formal statement to the effect that a Relevant Person is insolvent or likely to become insolvent is made by a Relevant Person or by the directors of a Relevant Person or, in
any proceedings, by a lawyer acting for a Relevant Person; or
|
|
|
(vi)
|
a provisional liquidator is appointed in respect of a Relevant Person, a winding up order is made in relation to a Relevant Person or a winding up resolution is passed by a Relevant Person; or
|
|
|
(vii)
|
a resolution is passed, an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by (aa) a Relevant Person, (bb) the members or directors of a
Relevant Person, (cc) a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person, or (dd) a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view
to the winding up of that or another Relevant Person or the appointment of a provisional liquidator or administrator in respect of that or another Relevant Person, or that or another Relevant Person ceasing or suspending business operations or
payments to creditors, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or either Guarantor or Counter Guarantor which is, or is to be, effected for the purposes of an amalgamation or
reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
|
|
|
(viii)
|
an administration notice is given or filed, an application or petition to a court is made or presented or any other step is taken by a creditor of a
Relevant Person (other than a holder of Security Interests which together relate to all or
|
40
|
|
substantially all of the assets of a Relevant Person) for the winding up of a Relevant Person or the appointment of a provisional liquidator or administrator in respect of a Relevant Person in
any Pertinent Jurisdiction, unless the proposed winding up, appointment of a provisional liquidator or administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being
implemented instead and either (aa) the application or petition is dismissed or withdrawn within 30 days of being made or presented, or (bb) within 30 days of the administration notice being given or filed, or the other relevant steps being taken,
other action is taken which will ensure that there will be no administration and (in both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending
insolvency law procedure; or
|
|
|
(ix)
|
a Relevant Person or its directors take any steps (whether by making or presenting an application or petition to a court, or submitting or presenting a document setting out a proposal or proposed terms, or otherwise)
with a view to obtaining, in relation to that or another Relevant Person, any form of moratorium, suspension or deferral of payments, reorganisation of debt (or certain debt) or arrangement with all or a substantial proportion (by number or value)
of creditors or of any class of them or any such moratorium, suspension or deferral of payments, reorganisation or arrangement is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or
|
|
|
(x)
|
any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any
action of a type described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or
should be taken if certain conditions materialise or fail to materialise; or
|
|
|
(xi)
|
in a Pertinent Jurisdiction other than England, any event occurs, any proceedings are opened or commenced or any step is taken which, in the opinion of the Majority Lenders is similar to any of the foregoing; or
|
|
(g)
|
the Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or
|
|
(h)
|
it becomes unlawful in any Pertinent Jurisdiction or impossible:
|
|
|
(i)
|
for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
|
|
|
(ii)
|
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
|
|
(i)
|
any consent necessary to enable the Borrower to own, operate or charter the Ship or to enable the Borrower or any Security Party to comply with any provision which the Majority Lenders consider material of a Finance
Document or the Shipbuilding Contract is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or
|
|
(j)
|
without the prior written consent of the Majority Lenders there is a change of control in the direct and ultimate ownership of the Borrower
Provided that
a transfer of shares in the Borrower as between the
Guarantors or any of their subsidiaries is permitted subject always to the new shareholder entering into a Negative Pledge in substantially the same form as entered into by the Shareholders at the date of this Agreement; or
|
41
|
(k)
|
any provision which the Majority Lenders reasonably consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have
been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
|
|
(l)
|
the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
|
|
(m)
|
any event or circumstance occurs which the Majority Lenders determine has, or could reasonably be expected to have a material adverse effect:
|
|
|
(i)
|
on the ability of the Borrower or a Guarantor or the Counter Guarantor to perform its obligations under the Finance Documents; or
|
|
|
(ii)
|
on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or Guarantor A or the Counter Guarantor.
|
|
19.2
|
Actions following an Event of Default.
On, or at any time after, the occurrence of an Event of Default which is continuing:
|
|
(a)
|
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
|
|
|
(i)
|
serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or
|
|
|
(ii)
|
serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
|
|
|
(iii)
|
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law;
and/or
|
|
(b)
|
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice
served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.
|
|
19.3
|
Termination of Commitments.
On the service of a notice under Clause 19.2(a)(i), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall be cancelled.
|
|
19.4
|
Acceleration of Loan.
On the service of a notice under Clause 19.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and
every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
|
|
19.5
|
Multiple notices; action without notice.
The Agent may serve notices under Clauses 19.2(a)(i) or (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to
in Clause 19.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
|
|
19.6
|
Notification of Creditor Parties and Security Parties.
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy
or the text of any notice
|
42
|
|
which the Agent serves on the Borrower under Clause 19.2; but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text
of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.
|
|
19.7
|
Lender’s rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular,
this Clause is without prejudice to Clause 3.1.
|
|
19.8
|
Exclusion of Creditor Party liability.
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:
|
|
(a)
|
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
|
|
(b)
|
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the
value of such an asset,
|
except that this does not exempt a Creditor Party or a receiver or manager from liability for losses
shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.
|
19.9
|
Relevant Persons.
In this Clause 19, a “
Relevant Person
” means the Borrower and any Security Party.
|
|
19.10
|
Interpretation.
In Clause 19.1(e), references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination
event in a finance lease; and in Clause 19.1(f) “petition” includes an application.
|
|
20.1
|
Arrangement, commitment, agency fees.
The Borrower shall pay:
|
|
(a)
|
to the Lead Arranger an arrangement fee in the amount and at the times agreed in a Fee Letter;
|
|
(b)
|
to the Agent (for the account of each Lender) quarterly in arrears during the period from (and including) the date of the acceptance of the term sheet to the earlier of (i) the final Drawdown Date and (ii) the
last day of the Availability Period, for the account of the Lenders, a commitment fee at the rate of 0.5175 per cent. per annum on the amount of the Total Commitments less the amount of the Loan, for distribution among the Lenders pro rata to
their Commitments; and
|
|
(c)
|
to the Agent (for its own account) a non-refundable agency fee in the amount and at the times agreed in a Fee Letter.
|
|
20.2
|
Costs of negotiation, preparation etc.
The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation,
execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
|
43
|
20.3
|
Costs of variations, amendments, enforcement etc.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor
Party in connection with:
|
|
(a)
|
any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;
|
|
(b)
|
any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
|
|
(c)
|
the valuation of any security provided or offered under Clause 15 or any other matter relating to such security; or
|
|
(d)
|
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
|
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules
of court or any taxation or other procedure carried out under such rules.
|
20.4
|
Documentary taxes.
The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims,
expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.
|
|
20.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
|
21.1
|
Indemnities regarding borrowing and repayment of Loan.
The Borrower shall fully indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in respect of all claims,
expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:
|
|
(a)
|
an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
|
|
(b)
|
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;
|
|
(c)
|
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the
Borrower on the amount concerned under Clause 7);
|
|
(d)
|
the occurrence of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19,
|
44
|
|
and in respect of any tax (other than tax on its overall net income) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own
account or otherwise) under any Finance Document.
|
|
21.2
|
Breakage costs.
Without limiting its generality, Clause 21.1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Lender:
|
|
(a)
|
in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or
any overdue amount); and
|
|
(b)
|
in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned)
to hedge any exposure arising under this Agreement or a number of transactions of which this Agreement is one.
|
In the
circumstances referred to in Clause 21.1(b) such costs shall include an amount equal to the Margin which would, but, for receipt or recovery of the relevant part of the Loan, have accrued on the relevant part of the Loan, from the date of such
receipt or recovery to the end of the then current Interest Period relating thereto.
|
21.3
|
Miscellaneous indemnities.
The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought
against or incurred by a Creditor Party, in any country, as a result of or in connection with:
|
|
(a)
|
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance
Document; or
|
|
(b)
|
any other Pertinent Matter,
|
other than claims, expenses, liabilities and losses which are
shown to have been directly and mainly caused by the dishonesty, gross negligence or wilful misconduct of the officers or employees of the Creditor Party concerned.
Without prejudice to its generality, this Clause 21.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under
or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.
|
21.4
|
Currency indemnity.
If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid (the “
Contractual Currency
”) into another currency (the “
Payment Currency
”) for the purpose of:
|
|
(a)
|
making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
|
|
(b)
|
obtaining an order or judgment from any court or other tribunal; or
|
|
(c)
|
enforcing any such order or judgment,
|
the Borrower shall indemnify the Creditor Party
concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
45
In this Clause 21.4, the “available rate of exchange” means the rate at which the
Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.
This Clause 21.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and
which shall not be merged in any judgment or order relating to those other liabilities.
|
21.5
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which
indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
|
|
21.6
|
Sums deemed due to a Lender.
For the purposes of this Clause 21, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
|
|
22
|
NO SET-OFF OR TAX DEDUCTION
|
|
22.1
|
No deductions.
All amounts due from the Borrower under a Finance Document shall be paid:
|
|
(a)
|
without any form of set-off, cross-claim or condition; and
|
|
(b)
|
free and clear of any tax deduction except a tax deduction which the Borrower is required by law to make.
|
|
22.2
|
Grossing-up for taxes.
If the Borrower is required by law to make a tax deduction from any payment:
|
|
(a)
|
the Borrower shall notify the Agent as soon as it becomes aware of the requirement;
|
|
(b)
|
the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and
|
|
(c)
|
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would otherwise have received.
|
|
22.3
|
Evidence of payment of taxes.
Within 1 month after making any tax deduction, the Borrower shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate
taxation authority.
|
|
22.4
|
Tax credits.
If a Creditor Party receives for its own account a repayment or credit in respect of tax on account of which the Borrower has made an increased payment under Clause 22.2, it shall pay to the Borrower
a sum equal to the proportion of the repayment or credit which it allocates to the amount due from the Borrower in respect of which the Borrower made the increased payment:
|
|
(a)
|
a Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
|
|
(b)
|
nothing in this Clause 22.4 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to
make any such claim within any particular time;
|
46
|
(c)
|
nothing in this Clause 22.4 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrower had not been required to make a tax deduction from a
payment; and
|
|
(d)
|
any allocation or determination made by a Creditor Party under or in connection with this Clause 22.4 shall be conclusive and binding on the Borrower.
|
|
22.5
|
Exclusion of tax on overall net income.
In this Clause 22 “
tax deduction
” means any deduction or withholding for or on account of any present or future tax except tax on a Creditor Party’s
overall net income.
|
|
23.1
|
Illegality.
This Clause 23 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that it has become, or will with effect from a specified date, become:
|
|
(a)
|
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
|
|
(b)
|
contrary to, or inconsistent with, any regulation,
|
for the Notifying Lender to maintain or
give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
|
23.2
|
Notification of illegality.
The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23.1 which the Agent receives from the
Notifying Lender.
|
|
23.3
|
Prepayment; termination of Commitment.
On the Agent notifying the Borrower under Clause 23.2, the Notifying Lender’s Commitment shall terminate; and thereupon or, if later, on the date specified in the
Notifying Lender’s notice under Clause 23.1 as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender’s Contribution in accordance with Clause 8.
|
|
23.4
|
Mitigation
.
If circumstances arise which would result in a notification under Clause 23.1 then, without in any way limiting the rights of the Notifying Lender under Clause 23.3, the Notifying Lender shall
use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or might:
|
|
(a)
|
have an adverse effect on its business, operations or financial condition; or
|
|
(b)
|
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
|
|
(c)
|
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
|
|
24.1
|
Increased costs.
This Clause 24 applies if a Lender (the “
Notifying Lender
”) notifies the Agent that the Notifying Lender considers that as a result of:
|
|
(a)
|
the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to
the application to payments under this Agreement of a tax on the Lender’s overall net income); or
|
|
(b)
|
complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,
|
the Notifying Lender (or a parent company of it) has incurred or will incur an “
increased cost
”.
47
|
24.2
|
Meaning of “
increased cost
”. In this Clause 24, “
increased cost
” means, in relation to a Notifying Lender:
|
|
(a)
|
an additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or a Transfer Certificate, of funding or maintaining its
Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;
|
|
(b)
|
a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;
|
|
(c)
|
an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the
proportion of that cost attributable to the Contribution; or
|
|
(d)
|
a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;
|
but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an
item covered by the indemnity for tax in Clause 21.1 or by Clause 22 or an item arising directly out of the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a
Revised Framework” published by the Basel Committee on Banking Supervision in June 2004, in the form existing on the date of this Agreement (“
Basel II
”) or any other law or regulation which implements Basel II (whether such
implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates.
For the purposes of this
Clause 24.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.
|
24.3
|
Notification to Borrower of claim for increased costs.
The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 24.1.
|
|
24.4
|
Payment of increased costs.
The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the
Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
|
|
24.5
|
Notice of prepayment.
If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 24.4, the Borrower may give the Agent not less than 14 days’ notice of
its intention to prepay the Notifying Lender’s Contribution at the end of an Interest Period.
|
48
|
24.6
|
Prepayment; termination of Commitment.
A notice under Clause 24.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower’s notice of intended prepayment; and:
|
|
(a)
|
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
|
|
(b)
|
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate
plus the Margin.
|
|
24.7
|
Application of prepayment.
Clause 8 shall apply in relation to the prepayment.
|
|
25.1
|
Application of credit balances.
At any time after the occurrence of an Event of Default which is continuing, each Creditor Party may without prior notice:
|
|
(a)
|
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum
then due from the Borrower to that Creditor Party under any of the Finance Documents; and
|
|
|
(i)
|
break, or alter the maturity of, all or any part of a deposit of the Borrower;
|
|
|
(ii)
|
convert or translate all or any part of a deposit or other credit balance into Dollars; and
|
|
|
(iii)
|
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
|
|
25.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights under Clause 25.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
|
|
25.3
|
Sums deemed due to a Lender.
For the purposes of this Clause 25, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum
due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
|
|
25.4
|
No Security Interest.
This Clause 25 gives the Creditor Parties a contractual right of set-off only and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.
|
|
26
|
TRANSFERS AND CHANGES IN LENDING OFFICES
|
|
26.1
|
Transfer by Borrower.
The Borrower may not transfer any of its rights, liabilities or obligations under any Finance Document.
|
|
26.2
|
Transfer by a Lender.
Subject to Clause 26.4, a Lender (the “
Transferor Lender
”) may, at its own cost, with the prior written consent of the Borrower (not to be unreasonably withheld or delayed)
or without the consent of the Borrower if an Event of Default or a Potential Event of Default has occurred and is continuing, cause:
|
|
(a)
|
its rights in respect of all or part of its Contribution; or
|
49
|
(b)
|
its obligations in respect of all or part of its Commitment; or
|
|
(c)
|
a combination of (a) and (b),
|
to be (in the case of its rights) transferred to, or (in
the case of its obligations) assumed by, another bank or financial institution or a trust; fund or the entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial
assets (a “
Transferee Lender
”) by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a “
Transfer Certificate
”) executed by the
Transferor Lender and the Transferee Lender,
Provided that
a Lender may cause such transfer without needing the consent of the
Borrower or any Security Party if an Event of Default has occurred and is continuing or if the Transferee Lender is:
|
(a)
|
another branch of the Transferor Lender;
|
|
(b)
|
a direct or indirect subsidiary or affiliate of the Transferor Lender;
|
|
(c)
|
a company of which the Transferor Lender is a subsidiary; or
|
|
(d)
|
a company which is under the same control as the Lender.
|
However any rights and obligations of
the Transferor Lender in its capacity as Agent or Security Trustee will have to be dealt with separately in accordance with the Agency and Trust Agreement.
|
26.3
|
Transfer Certificate, delivery and notification.
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate
may be defective):
|
|
(a)
|
sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee and each of the other Lenders;
|
|
(b)
|
on behalf of the Transferee Lender, send to the Borrower letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
|
|
(c)
|
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b) above,
|
but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once
it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to that Transferee Lender.
|
26.4
|
Effective Date of Transfer Certificate.
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date
Provided that
it is signed by the Agent
under Clause 26.3 on or before that date.
|
|
26.5
|
No transfer without Transfer Certificate.
No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party,
the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
|
50
|
26.6
|
Lender re-organisation; waiver of Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person
(the “
successor
”), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent’s
notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.
|
|
26.7
|
Effect of Transfer Certificate.
A Transfer Certificate takes effect in accordance with English law as follows:
|
|
(a)
|
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee
Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;
|
|
(b)
|
the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;
|
|
(c)
|
the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;
|
|
(d)
|
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and
the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
|
|
(e)
|
any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the
transferor, assuming that any defects in the transferor’s title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;
|
|
(f)
|
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under
Clause 5.7 and Clause 20, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
|
|
(g)
|
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled
to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
|
The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any
other kind of cross-claim.
|
26.8
|
Maintenance of register of Lenders
.
During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the
lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 26.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the
Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days’ prior notice.
|
51
|
26.9
|
Reliance on register of Lenders.
The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and
Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
|
|
26.10
|
Authorisation of Agent to sign Transfer Certificates.
The Borrower, the Security Trustee and each Lender irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
|
|
26.11
|
Registration fee.
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $3,000 from the Transferee Lender.
|
|
26.12
|
Sub-participation; subrogation assignment.
A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to,
the Borrower, any Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who
has become subrogated to them.
|
|
26.13
|
Disclosure of information.
A Lender may with the consent of the Borrower (such consent not to be unreasonably withheld or delayed) disclose to a potential Transferee Lender or sub-participant any information
which the Lender has received in relation to the Borrower, any Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.
|
|
26.14
|
Change of lending office.
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
|
|
(a)
|
the date on which the Agent receives the notice; and
|
|
(b)
|
the date, if any, specified in the notice as the date on which the change will come into effect.
|
|
26.15
|
Notification.
On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through
the lending office of which the Agent last had notice.
|
|
26.16
|
Replacement of Reference Bank.
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrower, the Agent and the
Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment
comes into effect, the first-mentioned Reference Bank’s appointment shall cease to be effective.
|
|
26.17
|
Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office.
If:
|
|
(a)
|
the Lender assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 26.2 or changes its lending office; and
|
|
(b)
|
as a result of circumstances existing at the date of assignment, transfer or change occurs the Borrower would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under
Clause 21.1 in respect of any tax, Clause 22 or 24,
|
52
then the Transferee Lender or the Lender acting through its new lending office is only entitled
to receive payment under those Clauses to the same extent as the Transferor Lender or the Lender acting through its previous lending office would have been if the assignment, transfer or change had not occurred.
|
27
|
VARIATIONS AND WAIVERS
|
|
27.1
|
Variations, waivers etc. by Majority Lenders.
Subject to Clause 27.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or
remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if
the document relates to a Finance Document to which a Security Party is party, by that Security Party.
|
|
27.2
|
Variations, waivers etc. requiring agreement of all Lenders.
However, as regards the following, Clause 27.1 applies as if the words “by the Agent on behalf of the Majority Lenders” were replaced by the
words “by or on behalf of every Lender”:
|
|
(a)
|
a change in the Margin or in the definition of LIBOR;
|
|
(b)
|
a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;
|
|
(c)
|
a change to any Lender’s Commitment;
|
|
(d)
|
an extension of Availability Period;
|
|
(e)
|
a change to the definition of “Majority Lenders” or “Finance Documents”;
|
|
(f)
|
a change to the preamble or to Clause 2, 3, 4, 5.1, 17, 18 or 30;
|
|
(g)
|
a change to this Clause 27;
|
|
(h)
|
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document; and
|
|
(i)
|
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender’s consent is required.
|
|
27.3
|
Exclusion of other or implied variations.
Except for a document which satisfies the requirements of Clauses 27.1 and 27.2, no document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
|
|
(a)
|
a provision of this Agreement or another Finance Document; or
|
|
(b)
|
an Event of Default; or
|
|
(c)
|
a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or
|
|
(d)
|
any right or remedy conferred by any Finance Document or by the general law,
|
53
and there shall not be implied into any Finance Document any term or condition requiring any such
provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
|
28.1
|
Communications in writing.
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
|
|
28.2
|
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 the Finance Documents is:
|
|
(a)
|
in the case of the Borrower, that identified with its name below;
|
|
(b)
|
in the case of each Lender or any Security Party, that notified in writing to the Agent on or prior to the date on which it becomes a party to this Agreement;
|
|
(c)
|
in the case of the Agent, the Security Trustee or the Lead Arranger that identified with its name below,
|
or any substitute address or fax number or department or officer as the party to this Agreement may notify to the Agent (or the Agent may
notify to the parties to this Agreement, if a change is made by the Agent) by not less than five Business Days’ notice:
|
|
|
|
|
to the Borrower:
|
|
c/o Euronav NV
De Gerlachekaai 20
2000 Antwerp
Fax No: +32 3 247 4409
|
|
|
|
|
to the Lender:
|
|
At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate
|
|
|
|
|
to the Agent:
|
|
Fortis Bank S.A./N.V., UK Branch
Merchant &
Private Banking
5 Aldermanbury Square
London EC2V
7HR
|
|
|
|
|
|
|
For Loan Administration Matters
Attention:
Simon Cornick/Karen Jeffries
Fax No: +44 3296 8101/+44 3296 8810
|
|
|
|
|
|
|
For Non Loan Administration Matters
Attention:
Syndicated Loans Agency
Fax No: +44 (0)20 3296 8456
|
|
|
|
|
to the Security Trustee or Lead Arranger:
|
|
Fortis Bank S.A./N.V., UK Branch
Merchant &
Private Banking
5 Aldermanbury Square
London EC2V
7HR
|
|
|
|
|
|
|
Attention: Syndicated Loans Agency
Fax No:+44
3296 8456
|
54
or to such other address as the relevant party may notify the Agent or, if the relevant party is
the Agent or the Security Trustee, the Borrower, the Lenders and the Security Parties.
|
(a)
|
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
|
|
|
(i)
|
if by way of fax, when received in legible form; or
|
|
|
(ii)
|
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address;
|
and, if a particular department or officer is specified as part of its address details provided under Clause 28.2 (Addresses), if addressed to
that department or officer.
|
(b)
|
Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer
identified with the Agent’s signature below (or any substitute department or officer as the Agent shall specify for this purpose).
|
|
(c)
|
All notices from or to the Borrower or a Security Party shall be sent through the Agent.
|
|
(d)
|
Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each Security Party.
|
|
28.4
|
Notification of address and fax number.
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 28.2 (Addresses) or changing its own address or fax
number, the Agent shall notify the other parties to this Agreement.
|
|
28.5
|
Electronic communication.
|
|
(a)
|
Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent and the relevant Lender:
|
|
|
(i)
|
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
|
|
|
(ii)
|
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
|
|
|
(iii)
|
notify each other of any change to their address or any other such information supplied by them.
|
|
(b)
|
Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent only if it is
addressed in such a manner as the Agent shall specify for this purpose.
|
|
(a)
|
Any notice given under or in connection with any Finance Document must be in English.
|
55
|
(b)
|
All other documents provided under or in connection with any Finance Document must be:
|
|
|
(ii)
|
if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other
official document.
|
|
29.1
|
Rights cumulative, non-exclusive.
The rights and remedies which the Finance Documents give to each Creditor Party are:
|
|
(b)
|
may be exercised as often as appears expedient; and
|
|
(c)
|
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
|
|
29.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions
of that Finance Document or of the provisions of any other Finance Document.
|
|
29.3
|
Counterparts.
A Finance Document may be executed in any number of counterparts.
|
|
29.4
|
Third Party rights.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
|
|
30.1
|
English law.
This Agreement shall be governed by, and construed in accordance with, English law.
|
|
30.2
|
Exclusive English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Agreement.
|
|
30.3
|
Choice of forum for the exclusive benefit of the Creditor Parties.
Clause 30.2 is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
|
|
(a)
|
to commence proceedings in relation to any matter which arises out of or in connection with this Agreement in the courts of any country other than England and which have or claim jurisdiction to that matter; and
|
|
(b)
|
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
|
|
30.4
|
Process agent.
The Borrower irrevocably appoints Unisea Maritime Ltd at its registered office for the time being, presently at 14 Headfort Place, London SW1 7DH, to act as its agent to receive and accept on its
behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.
|
56
|
30.5
|
Creditor Party rights unaffected.
Nothing in this Clause 30 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with
regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
|
|
30.6
|
Meaning of “proceedings”.
In this Clause 30, “
proceedings
” means proceedings of any kind, including an application for a provisional or protective measure.
|
THIS AGREEMENT
has been entered into on the date stated at the beginning of this Agreement.
57
SCHEDULE 1
LENDERS AND COMMITMENTS
|
|
|
|
|
|
|
|
|
Lender
|
|
Lending Office
|
|
Commitment
(US Dollars)
|
|
|
|
|
|
|
FORTIS BANK S.A./N.V., UK BRANCH
|
|
5 Aldermanbury Square London EC2V 7HR
|
|
|
33,750,000
|
|
|
|
|
|
|
DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT
|
|
Domshof 17
28195 Bremen Germany
|
|
|
33,750,000
|
|
58
SCHEDULE 2
DRAWDOWN NOTICE
|
|
|
|
|
To:
|
|
Fortis Bank S.A./N.V., UK Branch
acting through
its office at
5 Aldermanbury Square
London EC2V
7HR
|
|
|
|
|
|
|
Attention: [Loans Administration]
|
[
—
] 2008
DRAWDOWN NOTICE
|
1
|
We refer to the loan agreement (the “
Loan Agreement
”) dated [
—
] 2008 and made between ourselves, as Borrower, the Lenders referred to therein, and
yourselves as Lead Arranger, Agent and as Security Trustee in connection with a facility of up to US$67,500,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
|
|
2
|
We request to borrow as follows:
|
|
(b)
|
Advance as specified in Clause 2.1 [first, second, third, etc];
|
|
(c)
|
Drawdown Date: [
—
];
|
|
(d)
|
Duration of the first Interest Period shall be [
—
] months; and
|
|
(e)
|
Payment instructions: account of [
—
] and numbered [
—
] with [
—
]
of [
—
].
|
|
3
|
We represent and warrant that:
|
|
(a)
|
the representations and warranties in Clause 10 of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing; and
|
|
(b)
|
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.
|
|
4
|
This notice cannot be revoked without the prior consent of the Majority Lenders.
|
|
5
|
We authorise you to deduct the arrangement fee referred to in Clause 20 from the amount of the Advance.
|
|
|
|
[Name of Signatory]
|
|
|
|
|
|
|
|
Director
|
|
for and on behalf of
|
|
LARVOTTO SHIPHOLDING LIMITED
|
59
SCHEDULE 3
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents
referred to in Clause 9.1(a) before the service of the first Drawdown Notice.
|
1
|
A duly executed original of this Agreement, the Supplemental Letter, the Agency and Trust Agreement, the Negative Pledge, each Guarantee, the Counter Guarantee and the Account Security Deed.
|
|
2
|
Copies of the certificate of incorporation and constitutional documents of the Borrower, each Guarantor, the Counter Guarantor and each Shareholder (and in relation to the Borrower a copy of the shareholders agreement
or joint venture agreement entered into by its shareholders).
|
|
3
|
Copies of resolutions of directors of the Borrower, each Guarantor (except for Guarantor B), the Counter Guarantor and each Shareholder and copies of resolutions of the shareholders of the Borrower and the Counter
Guarantor authorising the execution of each of the Finance Documents to which the Borrower, that Guarantor, the Counter Guarantor or that Shareholder is a party and, in the case of the Borrower, authorising named officers to give the Drawdown
Notices and other notices under this Agreement and ratifying the execution of the Shipbuilding Contract and the Supervision Agreement.
|
|
4
|
The original of any power of attorney under which any Finance Document is executed on behalf of the Borrower, a Guarantor, the Counter Guarantor or the Shareholder.
|
|
5
|
Copies of all consents which the Borrower or any Security Party requires to enter into, or make any payment under, any Finance Document or the Shipbuilding Contract or the Supervision Agreement.
|
|
6
|
The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Account.
|
|
7
|
Documentary evidence that the agent for service of process named in Clause 30 has accepted its appointment.
|
|
8
|
Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of Hong Kong, Belgium, Panama, Bermuda and such other relevant jurisdictions as the Lender may require.
|
60
PART B
The following are the documents referred to in Clause 9.1(b) required before the drawdown of an Advance (other than the final Advance):
|
1
|
Evidence that the relevant pre-delivery instalment of the Contract Price payable under the Shipbuilding Contract has fallen due for payment and that such part of such instalment not being met out of the proceeds of an
Advance has been paid or shall be paid by the Borrower simultaneously with the making of such Advance.
|
|
2
|
A duly executed original of the Predelivery Security Assignment (and of each document required to be delivered thereunder).
|
|
3
|
A certified copy of the Shipbuilding Contract and Supervision Agreement and a certified copy of the Refund Guarantee.
|
|
4
|
Such documentary evidence as the Lender and its legal advisers may require in relation to the due authorisation and execution by the Builder of the Shipbuilding Contract, by the Supervisor of the Supervision Agreement
and by the Refund Guarantor of the Refund Guarantee.
|
|
5
|
Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of Korea and such other relevant jurisdictions as the Lender may require.
|
61
PART C
The following are the documents referred to in Clause 9.1(c) required before the Drawdown of the final Advance.
|
1
|
A duly executed original of the Mortgage, of the Charter Assignment (if any) and of the General Assignment (and of each document to be delivered by each of them).
|
|
2
|
Documentary evidence that:
|
|
(a)
|
the Ship has been unconditionally delivered by the Builder to, and accepted by, the Borrower under the Shipbuilding Contract, and the full purchase price payable under the Shipbuilding Contract (in addition to the part
to be financed by the Loan) has been duly paid;
|
|
(b)
|
the Ship is definitively and permanently registered in the name of the Borrower under the relevant Approved Flag at its relevant port of registry;
|
|
(c)
|
the Ship is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
|
|
(d)
|
the Ship maintains the class (namely A1(E), “Oil Carrier ESP”, AMS, ACCU, SPM, VEC(-L), CSR, Safeship-CM, RES, ES, TEM, Green Passport, POT, UWILD (sea chest blanking devices shall not be provided), CPS with
American Bureau of Shipping free of all recommendations and conditions of such Classification Society;
|
|
(e)
|
the Mortgage has been duly recorded against the Ship as a valid first preferred/priority ship mortgage in accordance with the laws of the relevant Approved Flag;
|
|
(f)
|
the Ship is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with; and
|
|
(g)
|
such part of the acquisition cost of the Ship which has not been funded out of the proceeds of the Loan and which has been borrowed by the Borrower is subordinated to the obligations of the Borrower to the Lender under
this Agreement in terms satisfactory to the Lender in its absolute discretion;
|
|
3
|
Documents establishing that the Ship will, as from the final Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lender, together with:
|
|
(a)
|
a letter of undertaking executed by the Approved Manager in favour of the Lender in the terms agreed between the Lender and the Approved Manager agreeing certain matters in relation to the management of the Ship and
subordinating the rights of the Approved Manager against the Ship and the Borrower to the rights of the Lender under the Finance Documents; and
|
|
(b)
|
copies of the Approved Manager’s Document of Compliance and of the Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Lender requires)
and ISSC.
|
|
4
|
A favourable opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the insurances for the Ship as the Lender may require.
|
|
5
|
Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the laws of Greece (or such other jurisdiction as may be appropriate if the Ship is not registered on Greek flag) and such other
relevant jurisdictions as the Lender may require.
|
62
SCHEDULE 4
TRANSFER CERTIFICATE
The Transferor
and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
|
|
|
|
|
To:
|
|
Fortis Bank S.A./N.V., UK Branch as Agent.
|
|
|
|
|
From:
|
|
[
The Existing Lender
] (the “
Transferor
”) and [
The New Lender
] (the “
Transferee
”)
|
|
|
|
|
Dated:
|
|
[
—
] 2008
|
US$67,500,000 Loan Agreement to Larvotto Shipholding Limited
dated [
—
] (the “Agreement”)
|
1
|
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
|
|
2
|
We refer to Clause 26 of the Agreement.
|
|
(a)
|
The Transferor and the Transferee agree to the Transferor transferring to the Transferee by novation all or part of the Transferor’s Commitment, rights and obligations referred to in the Schedule in accordance with
Clause 26.
|
|
(b)
|
The proposed Transfer Date is [
—
].
|
|
(c)
|
the lending office and address, fax number and attention details for notices of the Transferee for the purposes of Clause 28.2 (Addresses) are set out in the Schedule.
|
|
3
|
The Transferee expressly acknowledges the limitations on the Transferor’s obligations set out in Clause 26.
|
|
4
|
[The Transferee confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:
|
|
(a)
|
a company resident in the United Kingdom for United Kingdom tax purposes; or
|
|
(b)
|
a partnership each number of which is:
|
|
|
(i)
|
a company so resident in the United Kingdom; or
|
|
|
(ii)
|
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (for the purposes of
section 11(2) of the [Taxes Act] the whole of any share of interest payable in respect of that advance that falls to it by reason of sections 114 and 115 of the [Taxes Act]; or
|
|
(c)
|
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the
chargeable profits (for the purposes of Section 11(2) of the [Taxes Act] of that company.]
|
63
|
[4/5]
|
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
|
|
[5/6]
|
This Transfer Certificate is governed by English law.
|
THE SCHEDULE
Commitment/rights and obligations to be transferred
[
insert relevant details
]
[
Facility Office address, fax number and attention details for notices and account details for payments
]
|
|
|
|
|
Transferor
|
|
Transferee
|
|
|
|
|
By:
|
|
By:
|
This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [
—
].
64
SCHEDULE 5
MANDATORY COST
|
1
|
The Mandatory Cost is an addition to the interest rate to compensate 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.
|
|
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 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.
|
|
3
|
The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its
notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that lending office) of complying with the minimum reserve requirements of the European Central
Bank in respect of loans made from that lending office.
|
|
4
|
The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:
|
|
(a)
|
in relation to a sterling Loan:
|
|
|
|
|
|
|
|
AB + C
(
B – D
)
+ E
x
0.01
|
|
per cent. per annum
|
|
|
|
100 – (
A
+
C
)
|
|
|
|
|
|
(b)
|
in relation to a Loan in any currency other than sterling:
|
|
|
|
|
|
|
|
E
x 0.01
|
|
|
|
|
|
300
|
|
per cent. per annum
|
|
|
Where:
|
|
A
|
is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of
England to comply with cash ratio requirements.
|
|
|
B
|
is the percentage rate of interest (excluding the Margin and the Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest specified in paragraph (a) of Clause 7.2 (
Default rate of
interest
)) payable for the relevant Interest Period on the Loan.
|
|
|
C
|
is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.
|
65
|
|
D
|
is the percentage rate per annum payable by the Bank of England to the Agent on interest bearing Special Deposits.
|
|
|
E
|
is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to
paragraph 7 below and expressed in pounds per £1,000,000.
|
|
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)
|
“
Fees 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;
|
|
(c)
|
“
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 Fees Rules but taking
into account any applicable discount rate); and
|
|
(d)
|
“
Tariff Base
” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.
|
|
(e)
|
“
Unpaid Sum
” means any sum due and payable but unpaid by the Borrower or a Security Party under the Finance Documents.
|
|
6
|
In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting
D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.
|
|
7
|
If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Reference 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 Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank
for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.
|
|
8
|
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or
prior to the date on which it becomes a Lender:
|
|
(a)
|
the jurisdiction of its lending office; and
|
|
(b)
|
any other information that the Agent may reasonably require for such purpose.
|
Each Lender
shall promptly notify the Agent of any change to the information provided by it pursuant to this paragraph.
|
9
|
The percentages of each Lender for the purpose of A and C above and the rates of charge of each Reference Bank for the purpose of E above shall be
determined by the Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on
|
66
|
|
the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’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 lending office in the same jurisdiction as its lending office.
|
|
10
|
The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any
Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.
|
|
11
|
The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and
each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
|
|
12
|
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 Lender shall, in the absence of manifest error, be conclusive and
binding on all parties to the Loan Agreement.
|
|
13
|
The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties to the Loan Agreement 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 to the Loan Agreement.
|
67
EXECUTION PAGES
|
|
|
|
|
|
|
|
|
|
|
BORROWER
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
Naheema Walji
|
|
)
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
LARVOTTO SHIPHOLDING LIMITED
|
|
)
|
|
|
Naheema Walji
|
|
in the presence of:
|
|
|
|
)
|
|
|
Attorney-in-fact
|
|
|
|
Simon Harms
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
LENDERS
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
GARY WALSH
|
|
)
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
FORTIS BANK S.A./N.V., UK BRANCH
|
|
)
|
|
Gary Walsh
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
|
|
|
|
Simon Harms
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
GARY WALSH
|
|
)
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
DEUTSCHE SCHIFFSBANK
|
|
)
|
|
|
|
|
AKTIENGESELLSCHAFT
|
|
)
|
|
Gary Walsh
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
|
|
|
|
Simon Harms
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
AGENT
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
GARY WALSH
|
|
)
|
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
FORTIS BANK S.A./N.V., UK BRANCH
|
|
)
|
|
Gary Walsh
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
|
|
|
|
Simon Harms
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITY TRUSTEE
|
|
|
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
|
|
GARY WALSH
|
|
)
|
|
|
|
|
for and on behalf of
|
|
)
|
|
|
|
|
FORTIS BANK S.A./N.V., UK BRANCH
|
|
)
|
|
Gary Walsh
|
|
|
|
in the presence of:
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
|
|
|
|
Simon Harms
|
|
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
|
|
68
|
|
|
|
|
|
|
|
|
LEAD ARRANGER
|
|
|
|
|
|
|
|
|
|
SIGNED
by
|
|
)
|
|
|
|
GARY WALSH
|
|
)
|
|
|
for and behalf of
|
|
)
|
|
|
FORTIS BANK S.A./N.V., UK BRANCH
|
|
)
|
|
Gary Walsh
|
|
in the presence of:
|
|
|
|
)
|
|
Attorney-in-Fact
|
|
|
|
Simon Harms
|
|
|
|
|
|
|
|
Trainee Solicitor
|
|
|
|
|
|
|
|
15 Appold Street
|
|
|
|
|
|
|
|
London EC2A 2HB
|
|
|
|
|
69
Exhibit 10.15
Execution version
Framework Agreement
in relation to the sale of VLCC vessels
dated
3 January 2014
between
Maersk Tankers Singapore
Pte Ltd
as Sellers
and
Euronav NV or a nominated company (fully guaranteed by Euronav NV)
as Buyers
Contents
|
|
|
|
|
|
|
|
|
1
|
|
DEFINITIONS
|
|
|
3
|
|
|
2
|
|
SALE OF THE VESSELS
|
|
|
4
|
|
|
3
|
|
ACCEDING BUYERS
|
|
|
4
|
|
|
4
|
|
PURCHASE PRICE AND DEPOSIT
|
|
|
5
|
|
|
5
|
|
DELIVERY OF THE VESSELS
|
|
|
6
|
|
|
6
|
|
COMMERCIAL MANAGEMENT
|
|
|
7
|
|
|
7
|
|
GENERAL DEFAULT PROVISION
|
|
|
7
|
|
|
8
|
|
BUYERS’ DEFAULT
|
|
|
8
|
|
|
9
|
|
SELLERS’ DEFAULT
|
|
|
9
|
|
|
10
|
|
MISCELLANEOUS DEFAULT PROVISION
|
|
|
10
|
|
|
11
|
|
SIGNING
|
|
|
10
|
|
|
12
|
|
GOVERNMENTAL APPROVALS
|
|
|
10
|
|
|
13
|
|
INTEREST
|
|
|
10
|
|
|
14
|
|
ASSIGNMENT
|
|
|
11
|
|
|
15
|
|
CONFIDENTIALITY
|
|
|
11
|
|
|
16
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
11
|
|
|
17
|
|
INTERPRETATION
|
|
|
12
|
|
|
18
|
|
COSTS AND EXPENSES
|
|
|
12
|
|
|
19
|
|
CONFLICT BETWEEN PROVISIONS
|
|
|
12
|
|
|
20
|
|
NOTICES
|
|
|
13
|
|
|
21
|
|
GOVERNING LAW AND JURISDICTION
|
|
|
13
|
|
|
22
|
|
LIST OF APPENDICES
|
|
|
14
|
|
|
23
|
|
COUNTERPARTS
|
|
|
14
|
|
2
This framework agreement (the “
Agreement
”) is entered into on 3 January 2014 between
|
(1)
|
Maersk Tankers Singapore Pte Ltd
, 200 Cantonment Road, 10-00 Southpoint, 089763, Singapore, (the “
Sellers
”); and
|
|
(2)
|
Euronav NV
, 20 De Gerlachekaai, 2000 Antwerp, Belgium or a company to be nominated, such nominee to be fully guaranteed by Euronav NV (“
Euronav
”).
|
WHEREAS:
|
A.
|
The Sellers have agreed to sell and the Buyers (as defined below) have agreed to buy 15 VLCC vessels (as more particularly defined below, the “Vessels” and individually, a “Vessel”) on en bloc basis
for a total price of USD 980,000,000 (United States Dollars Nine Hundred and Eighty Million) made up of each Allocated Purchase Price and otherwise on the terms and conditions set out in this Agreement and in the MOAs (as each expression is defined
below);
|
|
B.
|
The Parties have agreed that each of the Vessels will be delivered separately to the Buyers and that the delivery date for each Vessel will be nominated by the Sellers in accordance with the provisions set out below and
in the MOAs.
|
IT IS AGREED as follows:
|
1.1
|
In this Agreement the following terms and expressions shall have the meaning set out below:
|
“
Acceding Buyer
” shall have the meaning set out in Clause 3.1.
“
Allocated Deposit
” shall have the meaning set out in Clause 4.3.
“
Allocated Purchase Price
” shall have the meaning set out in Clause 4.2.
“
Buyers
” means Euronav and, upon the accession by an Acceding Buyer, that Acceding Buyer in relation to the relevant Vessel.
“
Banking Days
” means days on which banks are open in New York, Singapore, London, Antwerp and Copenhagen.
“
Consequential Losses
” means: (a) consequential or indirect loss under English law and (b) loss and/or deferral of
production, loss of product, loss of use, loss of revenue in each case whether direct, consequential or indirect to the extent that these are not included in (a) and whether or not foreseeable at the Effective Date.
“
Delivery Port
” means any area or port worldwide, excluding any area or port within (i) the jurisdiction of the West
Coast of the United States of America; and (ii) any nation prohibited under the laws of the United States of America, the United Nations or the European Union.
“
Delivery Window
” means the dates set out against the name of each Vessel in Appendix 2.
“
Deposit
” shall have the meaning set out in Clause 4.3.
“
Deposit Date
” means the date that USD 98,000,000 has been deposited with the Escrow Bank in accordance with Clause 4.3 of the
Agreement.
3
“
Effective Date
” means the date of this Agreement.
“
Escrow Agreement
” means the escrow agreement entered into on the same date as this Agreement between the Sellers, the Buyers
and the Escrow Bank attached hereto as Appendix 4.
“
Escrow Bank
” means Nordea Bank Finland Plc, London Branch or such
other bank to be mutually agreed.
“
Escrow Funds
” means the Deposit paid to and held by the Escrow Bank from time to time,
in accordance with Clause 4.3 of the Agreement.
“
Escrow Payment Letter
” means an escrow payment letter to be given by the
Sellers and the Buyers in accordance with Clause 4.3 of the Agreement and the Escrow Agreement.
“
Letter Agreement
” means
the Parties’ offer and acceptance of the letter agreement dated 26 December 2013.
“
Losses
” means direct
liabilities, losses, costs, claims and expenses, excluding Consequential Losses.
“
MOA
” means the Norwegian Saleform 2012
Memorandum of Agreement with amendments for the sale of each Vessel made on the date of this Agreement between the Sellers and the Buyers in each case, in the forms attached as Appendices 1-A to 1-O inclusive to this Agreement.
“
Parties
” means each party to this Agreement and any Acceding Buyer nominated by the Buyers in accordance with Clause 3 of
this Agreement.
“
Purchase Price
” shall have the meaning set out in Clause 4.1.
“
Vessels
” means the 15 VLCC vessels listed in Appendix 2 to this Agreement and individually, a “
Vessel
”.
|
2.1
|
The Sellers hereby agree to sell by way of an en bloc sale, and the Buyers agree to buy, the Vessels on the terms set out in this Agreement, including but not limited to the terms and conditions of the MOAs.
|
|
2.2
|
The Sellers hereby confirm to Euronav that as from the Effective Date and until the Deposit Date, the Sellers shall not sell or long-term charter or agree to sell or long-term charter any of the Vessels except as
provided herein. In this context long-term charter means any charter exceeding beyond the Delivery Window.
|
|
3.1
|
Any wholly owned subsidiary of the Buyers may accede to this Agreement (an “
Acceding Buyer
”) by way of (i) executing and delivering to the Sellers an accession deed in the form set out in Appendix
3 and (ii) delivering to the Sellers a copy of its certificate of incorporation and memorandum and articles of association, or equivalent constitutional documents. Upon execution and delivery of an accession deed by any Acceding Buyer and
delivery of such constitutional documents, Euronav may nominate that Acceding Buyer as “Buyers” under a particular MOA in relation to the purchase of an individual Vessel on the terms and conditions of that MOA.
|
4
|
3.2
|
Each MOA shall stand alone and the relevant Acceding Buyer shall be fully responsible to the Sellers only for the relevant obligations under this Agreement and the MOA in respect of the Vessel to be acquired by that
Acceding Buyer.
|
|
3.3
|
Upon accession, each Acceding Buyer in respect of a Vessel’s classification records which have been inspected by Euronav, shall be deemed to have instructed Euronav to carry out such inspection on its behalf and
the Acceding Buyer shall thus have the same rights and obligations as if the Acceding Buyer itself had inspected the Vessel’s classification records. It is noted that Euronav (on the Buyers’ behalf) have inspected and accepted the
Vessels’ classification records in Copenhagen on 20 December 2013. The Buyers have waived their right to physically inspect the Vessels and as a consequence the Buyers accept that the sale is outright and definite, subject only to the
terms and conditions of this Agreement and each MOA.
|
|
3.4
|
Notwithstanding any nomination of an Acceding Buyer for one or more individual Vessel(s) pursuant to Clause 3.1, Euronav shall remain fully responsible for any and all the obligations of each of the Acceding Buyers
under this Agreement and each MOA. In consideration of the Sellers entering into this Agreement and the MOAs, Euronav unconditionally and irrevocably guarantees and agrees to guarantee (as primary obligor and not as surety only) the performance of
any Acceding Buyer’s obligations under this Agreement and the purchase of the individual Vessel under the relevant MOA. As a separate continuing obligation, Euronav indemnifies and agrees to indemnify the Sellers from and against any and all
Losses which the Sellers may suffer or incur as a consequence of the failure of an Acceding Buyer to fully perform all of its respective obligations under the relevant MOA in accordance with the terms thereof. The obligations of Euronav under this
Clause shall remain in full force and effect notwithstanding (i) any intermediate settlement of the guaranteed or indemnified obligations, (ii) any amendment of this Agreement or any MOA, (iii) any event described in clause 7.1
affecting of any Acceding Buyer or (iv) any other event or matter whatsoever.
|
|
4
|
Purchase price and deposit
|
|
4.1
|
The total purchase price for all the Vessels is USD 980,000,000 (United States Dollars Nine Hundred and Eighty Million) (the “
Purchase Price
”).
|
|
4.2
|
The allocated purchase price for each of the Vessels is set out in Appendix 2 (each, an “
Allocated Purchase Price
”).
|
|
4.3
|
As security for the correct fulfilment of this Agreement Euronav shall pay on its own behalf and on behalf of the Acceding Buyers a deposit of 10% (ten per cent) of the Purchase Price, equal to USD 98,000,000 (United
States Dollars Ninety Eight Million) (the “
Deposit
”). The Deposit shall be paid to the Escrow Bank as follows: (i) Euronav shall transfer USD 88,000,000 (United States Dollars Eighty Eight Million) to the Escrow Bank no later
than 17 January 2014, 1700 hours London time and (ii) following confirmation of receipt of USD 88,000,000 by the Escrow Bank to the Sellers, the Sellers shall transfer USD 10,000,000 (United States Dollars Ten Million) to the Escrow Bank
(being the amount that the Sellers have received in accordance with the Letter Agreement) (the “
Deposit Date
”). This Deposit shall be placed as Escrow Funds with the Escrow Bank and held by it in an account in the name of the
Sellers in accordance with an Escrow Agreement between the Sellers, the Buyers and the Escrow Bank in such form as may reasonably be required by the Escrow Bank and the Parties and the relevant part of the Deposit (being 10% (ten per cent) of the
Allocated Purchase Price for that Vessel, each an “
Allocated Deposit
”) is to be released upon the Buyers and Sellers signing a protocol of delivery and acceptance in respect of that relevant Vessel or released as otherwise provided
in this Agreement or the Escrow Agreement. Simultaneously with signing the protocol of delivery and acceptance the Sellers and the Buyers shall also be obliged to sign an Escrow Payment Letter under the Escrow Agreement and thereby releasing the
relevant Allocated Deposit. Interest on the Deposit, if any, shall be credited to the Buyers upon delivery of each Vessel by reference to the Allocated Deposit. Any fee charged for holding the Deposit shall be borne equally by the Sellers and the
Buyers.
|
|
4.4
|
The remaining part of the Allocated Purchase Price (i.e. 90% (ninety per cent)) for a Vessel plus any other amount due under the relevant MOA shall be
paid in full free of bank charges
|
5
|
|
by way of conditional payments using SWIFT messages MT202 and MT199 to the Escrow Bank on delivery of the relevant Vessel or, subject to the consent of the Buyers’ financing bank, 1 (one)
Banking Day prior to delivery.
|
|
4.5
|
When the Vessel is in every respect physically ready for delivery in accordance with the terms of the relevant MOA, the Sellers shall give the Buyers a written Notice of Readiness for delivery in accordance with the
terms of this Agreement and the relevant MOA. The Buyers shall then take delivery of the Vessel promptly but not later than 3 (three) Banking Days after the date that the Notice of Readiness has been given. The Allocated Deposit shall be released
from the Escrow Funds in accordance with Clause 4.3 and paid to the Sellers for the relevant Vessel, and the Buyers and Sellers shall jointly instruct the Escrow Bank to release this amount by sending the Escrow Payment Letter simultaneously with
the release of the payment of the remainder of the Allocated Purchase Price by the Buyers.
|
|
4.6
|
The Allocated Purchase Price of each Vessel and any other amounts due from the Buyers to the Sellers under this Agreement or each MOA shall be paid by the Buyers to the Sellers in full without any set-off, counterclaim,
deduction or withholding unless such right of set-off, counterclaim, deduction or withholding is specified in this Agreement or the MOA.
|
|
5
|
Delivery of the Vessels
|
|
5.1
|
Each Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or anchorage at the Vessel’s Delivery Port which is to be nominated by the Sellers in accordance with the terms of this
Clause 5 and the relevant MOA.
|
|
5.2
|
Notwithstanding Clause 5.1, if the intended location of a Delivery Port entails a risk of an adverse tax effect for the Buyers or the Sellers as a result of the transfer of title to a Vessel, the Sellers and the Buyers
shall be obliged to postpone submission of a Notice of Readiness and the transfer of title of such Vessel until the Vessel is in such location where there is no risk of such adverse tax effects. The Sellers and the Buyers shall cooperate in this
respect, including evaluating the possibility of a transfer of title of the Vessel in international waters.
|
|
5.3
|
Subject to the other provisions of this Clause 5, delivery of the Vessels shall take place within the Delivery Window for each Vessel. At the time of delivery each Vessel shall be free from all charters, encumbrances,
taxes, mortgages and maritime liens and any other debts whatsoever, and shall not be subject to Port State or other administrative detentions. The Sellers hereby undertake to indemnify the Buyers against the consequences of claims made against the
Vessel which have been incurred prior to the time of delivery.
|
|
5.4
|
The Sellers shall nominate an estimated delivery date and time for each of the Vessels in the Sellers’ absolute discretion by giving the Buyers 20,15,10, 5 and 3 days’ notice of the estimated time of arrival
at the anticipated Delivery Port or other place of delivery nominated by the Sellers in accordance with this Clause 5.
|
|
5.5
|
Subject to Clause 5.6, all Vessels shall be delivered between 30 days and 180 days after the Deposit Date. Latest three (3) weeks after the Deposit Date Sellers will provide Buyers with a non-binding tentative
delivery overview specifying current known schedule of each Vessel and whether Sellers intend to complete additional voyages prior to Delivery. If Buyers have difficulty providing the technical management required to take Delivery of one or more
Vessels, Sellers will use all reasonable efforts to offer technical management services for a period of up to 6 months on each relevant Vessel against Buyers informing Sellers of the relevant Vessels no later than 10 days after receiving the
non-binding tentative overview and with the Parties being obliged to co-operate in good faith should such notice provide a challenge to the Sellers. Such services will be provided at actual cost plus USD 20,000 in administration fee per month per
Vessel as per executed Shipman agreed between the parties no later than 30 days after Deposit Date. The form of Shipman shall reflect that the Buyers shall not be responsible for Severance Costs or post-termination Management Fees, but the Buyers
are responsible for pro rata Crew Support Costs in accordance with ordinary Maersk principles.
|
6
|
5.6
|
In relation to the Vessel “Maersk Sandra” employed on French Flag through a bareboat charter and employed on time charter requiring French flag, the Vessel shall be delivered upon expiry of the time charter,
or, in the Sellers’ option, earlier if the Sellers can arrange to swap an alternative vessel (not subject to this Agreement) into the above mentioned bareboat and time charter arrangement. The Vessel shall be delivered with deletion from the
French International Flag and deletion from the Vessel’s primary registration in the Singapore Registry of Ships. “Maersk Sandra” shall be delivered not later than 30 March 2015 which shall be the Cancelling Date under the MOA
for that Vessel.
|
|
5.7
|
In order to assist a smooth delivery of the Vessels as set out in this Clause 5 the Parties agree to cooperate in good faith (as may be reasonably required) in connection with the delivery of the Vessels.
|
|
5.8
|
As of the date of this Agreement and until delivery of the Vessels, the Sellers undertake not to employ the Vessels in contradiction with any sanctions against any sovereign nation issued by the European Union, United
States of America or United Nations.
|
|
5.9
|
The Parties acknowledge that the Sellers are exiting the VLCC sector and that all spare parts and spare equipment relating to the Vessels are included in the sale. If any such spare parts and equipment are fleet spares
and are not allocated to any specific Vessel they shall not be sold or otherwise disposed of during the currency of this Agreement and shall be delivered to the Buyers, immediately if required for a delivered Vessel’s operation, and in any case
not later than 180 days after the Deposit Date. The Sellers shall provide to the Buyers a list of critical spares and all spares as per vessel Planned Maintenance System and any other information reasonably requested in relation to spare parts and
equipment and their location. Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are not required to replace spare parts taken out of spare and used as replacement on one of the Vessels prior to delivery of that Vessel.
|
|
5.10
|
The Sellers agree that spares shall be maintained at normal operating levels, properly stored and maintained or repaired (as necessary) until the time of delivery.
|
|
6.1
|
The Sellers or their relevant affiliate shall have the option (exercisable at any time during the Sellers controlling the below-mentioned VLCC vessels) of placing some or all of their remaining VLCC controlled vessels
(currently named “Maersk Hakone”, “Maersk Hakata”, “Maersk Hirado”, “Maersk Hojo”, “Maersk Heiwa” and “Maersk Hayama”) under commercial management with Euronav or another affiliated company
managed by Euronav, which arrangement Euronav will procure) at a fixed fee of 1.25% on earnings on the terms of a commercial management agreement to be agreed between the Parties.
|
|
7
|
General default provision
|
|
7.1
|
Without prejudice to any rights that have accrued under this Agreement or any of its rights or remedies, either Party may terminate this Agreement with immediate effect by giving notice to the other Party if:
|
|
7.1.1
|
the other Party suspends payment of its debts, or is unable to pay its debts as they fall due or admits inability to pay its debts, or is deemed unable to pay its debts within the meaning of section 123 of the English
Insolvency Act 1986; or
|
|
7.1.2
|
the other Party defaults under any indebtedness for borrowed money, which default (a) is caused by a failure to pay principal of, or interest or premium, if any, on such indebtedness prior to the expiration of the
grace period provided in such indebtedness (“payment default”) or (b) results in the acceleration of such indebtedness prior to the maturity date on which the payment of principal is due and payable (excluding any contingent
obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof); and, in each case, (i) the principal amount of any such indebtedness, together with the principal amount of any other
such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates USD 20.0 million or more; and (ii) such circumstances reasonably impact upon the ability of the Party in default to
perform their obligations under this Agreement or any of the MOAs; or
|
7
|
7.1.3
|
a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that other Party, and that petition, notice, resolution or order is not discharged within
14 (fourteen) days; or
|
|
7.1.4
|
an application is made to court, or an order is made, for the appointment of an administrator, or if a notice of intention to appoint an administrator is given or if an administrator is appointed, over the other Party,
and that application, order, notice or appointment is not discharged within 14 (fourteen) days; or
|
|
7.1.5
|
a person becomes entitled to appoint a receiver over the assets of the other Party or a receiver is appointed over the assets of the other Party; or
|
|
7.1.6
|
the other Party is the subject of a bankruptcy petition or order, and that petition or order is not discharged within 14 (fourteen) days; or
|
|
7.1.7
|
the other Party fails to pay final judgments aggregation in excess of USD 20 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing) which
judgments are not paid, discharged or stayed for a period of 60 days and such circumstances reasonably impact upon the ability of the Party in default to perform their obligations under this Agreement or any of the MOAs; or
|
|
7.1.8
|
the other Party suspends or ceases carrying on all or a substantial part of its business.
|
For
the purposes of this Clause 7.1, the Sellers constitute one Party and the Buyers constitutes the other Party.
|
7.2
|
Should the USD 88,000,000 of the Deposit not be paid in accordance with item (i) of Clause 4.3, the Sellers shall have the right to terminate this Agreement with immediate effect by giving notice to the Buyers in
which case the USD 10,000,000 paid to the Sellers in accordance with the Letter Agreement shall be forfeited to the Sellers.
|
|
7.3
|
The remedies available to the Sellers in the case of the Buyers’ default under this Clause are set out in Clause 8, and the remedies available to the Buyers in case of the Sellers default under this Clause are set
out in Clause 9.
|
|
8.1
|
Should the Allocated Purchase Price for a Vessel not be paid in accordance with this Agreement and the terms and conditions of the MOA, the Sellers have the right to either:
|
|
8.1.1
|
terminate the MOA for the Vessel, in which case the full amount of the Allocated Deposit remaining in the joint account (as per Clause 4.3) together with interest earned shall be forfeited and immediately released to
the Sellers. If the Sellers’ Losses exceed the amount received in this way, the Sellers shall be entitled to claim further compensation from the Buyers for their direct Losses in relation to that Vessel up to a maximum amount of (i) the
Allocated Purchase Price less (ii) the Allocated Deposit in relation to that Vessel, provided however, in such case, any further claim by the Sellers may not be made or enforced against the remaining Escrow Funds but such agreement by the
Sellers shall be without prejudice to all other rights and remedies of the Sellers against the Buyers under this Agreement or any of the MOAs; or
|
|
8.1.2
|
terminate this Agreement (which for the avoidance of doubt include all of the MOAs relating to Vessels which have not been delivered) in which case
the aggregate of (i) the Allocated Deposit in relation to that Vessel, and (ii) 30% of the balance of all of the remaining Escrow Funds after deduction of such Allocated Deposit together with interest earned, shall be forfeited and
immediately released to the Sellers in full and final settlement of any claims which
|
8
|
|
the Sellers might otherwise have against the Buyers under this Agreement and/or any of the MOAs (relating to Vessels which have not been delivered) and the remaining balance of the Escrow Funds
together with any interest accrued thereon shall be immediately returned to the Buyers.
|
|
8.2
|
Should the Sellers terminate this Agreement under the provisions of Clause 7, the full amount of the Escrow Funds (if any) together with interest earned shall be forfeited and immediately released to the Sellers. If the
Sellers’ Losses exceed any amount received in this way, the Sellers shall be entitled to claim (further) compensation for their direct Losses, however, up to a maximum amount of the amount of the Purchase Price not then received by the Sellers
(after deduction of the Escrow Funds (if any) released to the Sellers in accordance with this Clause 8.2).
|
|
8.3
|
Should the Sellers terminate this Agreement under the provisions of Clause 7.2 (being a result of the Buyers not having paid the Deposit in accordance with the terms of this Agreement), the Sellers shall be entitled
(i) to the USD 10,000,000 paid to the Sellers in accordance with the Letter Agreement (which shall be forfeited to the Sellers) and (ii) to claim an amount equal to the Deposit less USD 10,000,000. If the Sellers’ Losses exceed any
amount received in this way, the Sellers shall be entitled to claim (further) compensation for their direct Losses, however, up to a maximum amount no greater than (i) the amount of the Purchase Price less (ii) the Deposit.
|
|
9.1
|
Should any Vessel become an actual, constructive or compromised total loss (in each case, as so determined by the Vessel’s insurers) before it has been delivered to the Buyers in accordance with this Agreement and
the relevant MOA, such Vessel shall be excluded from the sale of the Vessels to the Buyers and the Purchase Price shall be reduced by the relevant Allocated Purchase Price. The Allocated Deposit for the Vessel shall promptly be released to the
Buyers together with interest earned in relation to that Vessel and the relevant Acceding Buyers shall be fully and finally released by the Sellers from all of their obligations under this Agreement and the relevant MOA in relation to the relevant
Vessel. Otherwise, this Agreement shall not be affected in any way. The Buyers shall not be entitled to terminate this Agreement or to bring any other claim whatsoever against the Sellers for this reason (except for a breach by the Sellers of this
Clause 9.1) and likewise the Sellers shall not be entitled to bring any claim against the Buyers in such a total loss situation.
|
|
9.2
|
Subject to the provisions of Clause 9.1, should the Sellers fail to give Notice of Readiness in accordance with the terms and conditions of the MOA for any Vessel, or fail to be ready to validly complete a legal
transfer of any Vessel by 180 days after the Deposit Date (at the latest) (or by 30 March 2015 in the case of “Maersk Sandra”), the Buyers shall have the option of terminating the MOA for any such Vessel. If, after Notice of Readiness
has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again in every respect and a new Notice of Readiness given within such 180 day period (or by
30 March 2015 in the case of the “Maersk Sandra”) the Buyers shall retain their option to terminate the MOA for the Vessel. The Sellers shall indemnify the Buyers in respect of any Losses (excluding Consequential Losses) arising from
the withdrawal of a Notice of Readiness under this Clause 9.2.
|
|
9.3
|
Should the Buyers terminate the sale of a Vessel for any reason whatsoever (including but not limited to under Clause 9.2), the Allocated Deposit related to that Vessel together with interest thereon, shall be released
to the Buyers immediately from the Escrow Funds and the Sellers shall make due compensation to the Buyers for their Loss and for all expenses together with interest if their failure is due to proven negligence. As a separate continuing obligation,
the Sellers indemnify and agree to indemnify the Buyers from and against any and all Losses which the Buyers may suffer or incur as a consequence of the failure of the Sellers fully to perform all of its respective obligations under each MOA.
Otherwise, this Agreement shall remain in full force and effect, and the Parties’ rights and obligations under this Agreement in relation to the other Vessels shall not be affected in any way.
|
9
|
9.4
|
Without prejudice to Clause 9.3, should the Buyers terminate this Agreement under the provisions of Clause 7, the full remaining balance of the Escrow Funds (together with interest earned thereon) shall be released to
them immediately and the Buyers shall be entitled to claim further compensation for their direct Losses, however, up to a maximum amount no greater than (i) the Purchase Price less (ii) the aggregate of the Allocated Deposits of the
Vessels not already delivered.
|
|
10
|
Miscellaneous default provision
|
|
10.1
|
Apart from the right to terminate this Agreement as set out in the provisions of Clauses 7, 8, 9 and the termination provisions of Clause 12, neither Party shall be entitled to terminate this Agreement for any reason
whatsoever.
|
|
10.2
|
The termination of this Agreement for any reason whatsoever shall have no retrospective effect on the rights and obligations of the Parties in respect of any Vessels which have been delivered at such time.
|
|
11.1
|
At the signing of this Agreement, the Sellers have delivered to the Buyers:
|
|
11.1.1
|
documentary evidence from relevant corporate bodies of the Sellers authorising the signing of this Agreement and the consummation of the transactions contemplated under this Agreement.
|
|
11.2
|
At the signing of this Agreement, the Buyers have delivered to the Sellers:
|
|
11.2.1
|
documentary evidence from relevant corporate bodies of the Buyers authorising the signing of this Agreement and the consummation of the transactions contemplated under this Agreement.
|
|
12
|
Governmental Approvals
|
|
12.1
|
The Buyers confirm they have made customary and reasonable inquiries to investigate if the consummation of the transactions contemplated by this Agreement and the MOAs require notification to or approval/clearance by
any regulatory or competition authority in any jurisdiction. Should any notifications or approvals/clearances be required the Buyers are solely responsible for taking any and all steps necessary for obtaining any clearance(s) required by the Buyers
and/or the Sellers under any antitrust or competition law to consummate the transactions under this Agreement and the MOAs in accordance with the agreed delivery dates.
|
|
12.2
|
If relevant, the Buyers shall prepare and submit relevant submissions, filings, etc. as soon as reasonably practicable provided the Sellers have adequately and timely provided the Buyers with information and documents
reasonably requested by the Buyers to fulfill their obligations. The Buyers and the Sellers shall cooperate in this respect and the Sellers shall be given reasonable time to comment on any submissions, filings, etc. and the Buyers shall take the
reasonable comments of the Sellers into account.
|
|
12.3
|
If the Buyers are not able or willing to consummate the transactions set forth herein due to lack of any required clearance or due to any other governmental approval related issue the Sellers shall be entitled to
terminate this Agreement and the full amount of the Escrow Funds together with interest earned shall be forfeited and immediately released to the Sellers. If the Sellers’ Losses exceed any amount received in this way, the Sellers shall be
entitled to claim (further) compensation for their direct Losses, however, up to a maximum amount of the amount of the Purchase Price not then received by the Sellers (after deduction of the Escrow Funds (if any) released to the Sellers).
|
|
13.1
|
If a Party fails to make any payment due to another Party under this Agreement by the due date for payment, then the defaulting Party shall pay
interest on the overdue amount at the
|
10
|
|
rate of 3% (three per cent) per annum above 3 months LIBOR as such is fixed on the date on which such failure to make payment occurs. Such interest shall accrue on a daily basis from the due date
until actual payment of the overdue amount, whether before or after judgment. The defaulting Party shall pay the interest together with the overdue amount.
|
|
14.1
|
Except for accession of an Acceding Buyer under Clause 3, neither Party shall assign, novate, transfer, mortgage, charge, subcontract or deal in any other manner with any of its rights and obligations under this
Agreement without the prior written consent of the other Party.
|
|
15.1
|
Each Party undertakes that it shall not at any time during this Agreement, disclose the commercial terms of this Agreement and the MOAs or any information which should reasonably be considered to be private or
confidential concerning the business (including, without limitation, any customer or suppliers) of the other Party to any person which is not (i) an employee, (ii) professional advisor, (iii) representative or (iv) director or
officer of such Party and any agents or affiliates of such Party (on a need to know basis) (v) potential financing parties (and then only on a need to know basis) or except as may be required by law, court order or any governmental or
regulatory authority.
|
|
15.2
|
No Party shall make, or permit any person to make, any public announcement, communication or circular (announcement) concerning this Agreement without the prior written consent of the other Party (such consent not to be
unreasonably withheld or delayed). The parties shall consult together on the timing, contents and manner of release of any announcement, but it is expressly agreed that no announcements shall be made prior to the date and time referred to in Clause
15.5 herein.
|
|
15.3
|
Where an announcement is required by law or any governmental or regulatory authority (including, without limitation, any relevant securities exchange), or by any court or other authority of competent jurisdiction, the
Party required to make the announcement shall promptly notify the other Party. The Party concerned shall make all reasonable attempts to agree the contents of the announcement with the other Party before making it.
|
|
15.4
|
This Clause 15 shall apply whether or not the Deposit Date occurs.
|
|
15.5
|
The Parties may issue a press release/stock exchange announcement after 1800 hours CET on Sunday 5
th
January 2014 and shall use reasonable endeavours to agree
the wording of such press release/stock exchange announcement with the other Party.
|
|
16
|
Representations and warranties
|
|
16.1
|
Each of the Parties represents and warrants to the other as follows:
|
|
16.1.1
|
it is a corporation duly established and existing under the laws of the place of its incorporation and has full power and authority to carry on its business as now conducted and no authorisations, consents or approvals
are required in connection with this Agreement;
|
|
16.1.2
|
it has full power, authority and legal right to execute, deliver and perform the terms of this Agreement;
|
|
16.1.3
|
this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligations (subject to insolvency and other laws affecting creditors’ rights generally); and
|
|
16.1.4
|
it is not aware of any pending actions or proceedings before any court of administrative agency which might materially affect its ability to perform its obligations under this Agreement.
|
|
16.2
|
The representations and warranties in this Clause shall survive execution and delivery of this Agreement and shall be deemed to be repeated by the Buyers at the time of accession of any Acceding Buyer to this Agreement
and by both Parties on the date of delivery of each Vessel.
|
11
|
17.1
|
This Agreement and the MOAs constitute the entire agreement and understanding between the Parties and supersede and extinguish all previous drafts, agreements, arrangements, discussions, exchanges and understandings
between them, whether written or oral, relating to its subject matter.
|
|
17.2
|
Each Party acknowledges that in entering into this Agreement and the MOAs it has not and does not rely on, and shall have no right or remedies in respect of, any statement, representation, assurance or warranty (whether
made innocently or negligently) that is not expressly set out in this Agreement or any MOA.
|
|
17.3
|
Any terms implied into this Agreement or the MOAs by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Agreement shall limit or exclude any
liability for fraud or for death or personal injury caused by the negligence of a Party to the extent not permitted by law.
|
|
17.4
|
Neither Party shall be liable to the other Party for any Losses whether arising from breach of this Agreement or any MOA, breach of statutory duty, tort (including negligence) or otherwise howsoever where such Losses
constitute indirect, special, punitive or Consequential Losses.
|
|
17.4.1
|
No failure or delay by a Party to exercise any right or remedy provided under this Agreement or any MOA or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the
further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.
|
|
17.4.2
|
Without prejudice to the rights of (i) any Acceding Buyer under this Agreement and the relevant MOA or (ii) any affiliate of the Sellers under Clause 6, no term of this Agreement or any MOA shall be
enforceable under the Contracts (Rights of Third Parties) Act 1999 (or otherwise) by any party who is not a Party to this Agreement
|
|
17.4.3
|
Each of the Parties undertakes with the other to use its reasonable endeavours to do and perform such other and further acts and execute and deliver any and all other instruments as may be required by law or reasonably
required by the other Party in order to establish, maintain and protect the rights and remedies of the other Party and to carry out and effect the intent and purpose of this Agreement.
|
|
17.4.4
|
The Parties shall use reasonable endeavours to satisfy, in a timely manner, their other obligations under this Agreement.
|
|
17.4.5
|
This Agreement may be executed in counterparts each of which will constitute one and the same document.
|
|
18.1
|
Whether or not the Effective Date occurs, each of the Parties shall bear their own costs and expenses including (i) fees with respect to their external advisors, including auditors and lawyers and (ii) public
charges of any nature.
|
|
19
|
Conflict between provisions
|
|
19.1
|
The Appendices attached to the Agreement shall form an integrated part hereof. In case of any ambiguity or conflict between the provisions of this Agreement (excluding the ambiguous or conflicting Appendix) and the
provisions of any Appendix (including, without limitation, any MOA), the terms of this Agreement (excluding the ambiguous or conflicting Appendix) shall prevail.
|
12
|
20.1
|
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 letter (by courier/hand delivery) or E-mail as follows:
|
If to Maersk Tankers Singapore Pte Ltd:
c/o Maersk Tankers A/S
Esplanaden 50
1098 Copenhagen K
Denmark
For the attention
of: COO
Email: christian.michael.ingerslev@maersktankers.com
cc
For the attention of: Head of
Legal
Email: anette.ryde@maersktankers.com
If to the Buyers:
Euronav NV
20 De Gerlachekaai
2000
Antwerp
Belgium
For the
attention of: Chief Executive Officer
Email:
management@euronav.com
cc
For the attention of: General
Counsel
Email: legal@euronav.com
or any substitute address or Email-address or department or officer as any Party may notify to the other Party.
|
20.2
|
The receipt of any notices or other communication from a Party made by E-mail shall also be forwarded by letter (by courier/hand delivery) unless the E-mail is confirmed as received by the other Party.
|
|
21
|
Governing law and jurisdiction
|
|
21.1
|
This Agreement or any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this
Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
|
|
21.2
|
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
|
13
|
21.3
|
The reference shall be to three arbitrators. A Party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to
appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the 14 days
specified. If the other Party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the Party referring a dispute to arbitration may, without the requirement of any further prior notice to the other
Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he had been appointed by agreement.
|
|
21.4
|
In the event that there are multiple claimants and/or multiple respondents, the reference shall be to three arbitrators. Two of these shall be appointed by the Parties as defined in this Agreement: one by the Sellers
for their party in the dispute (either the claimants or the respondents), and one by the Buyers (which shall include any Acceding Buyer) for their party in the dispute. Otherwise, the appointment of arbitrators shall follow the procedure set out in
Clause 21.3.
|
|
21.5
|
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
|
|
21.6
|
In cases where neither the claim nor any counterclaim exceeds the sum of USD 50,000 (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure
current at the time when the arbitration proceedings are commenced.
|
|
22.1
|
The following Appendices are attached to this Agreement:
|
|
|
|
|
|
Appendix 1-A to 1-O:
|
|
MOAs for the sale of each Vessel
|
|
|
|
|
Appendix 2:
|
|
List of the Vessels and Delivery Windows
|
|
|
|
|
Appendix 3:
|
|
Form of Accession Deed
|
|
|
|
|
Appendix 4:
|
|
Escrow Agreement
|
|
23.1
|
This Agreement and each of the MOAs may be executed in any number of counterparts, each of which shall constitute an original, but all counterparts shall together constitute one and the same instrument.
|
14
This Agreement has been entered into on the date stated at the beginning of it.
For and on behalf of
Maersk Tankers Singapore Pte Ltd
as Sellers
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
|
|
Christian M. Ingerslev
|
|
|
|
|
Title:
|
|
Attorney-in-fact
|
For and on behalf of
Euronav NV
as Buyers and Guarantor
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
|
|
EGIED VERBEECK
|
|
|
|
|
Title:
|
|
GENERAL COUNSEL
|
|
|
|
|
By:
|
|
|
|
|
|
|
Name:
|
|
PADDY RODGERS
|
|
|
|
|
Title:
|
|
CEO
|
15
Appendix 1 – MOA for the sale of each Vessel
16
Appendix 2 – List of the Vessels
List of the Vessels
|
|
|
|
|
|
|
Name of Vessel
|
|
Allocated Purchase Price
|
|
Delivery Window
|
|
Maersk Nautilus
|
|
USD 41,000,000 (United States Dollars Forty One Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Navarin
|
|
USD 47,000,000 (United States Dollars Forty Seven Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Neptune
|
|
USD 47,000,000 (United States Dollars Forty Seven Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Nucleus
|
|
USD 47,000,000 (United States Dollars Forty Seven Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Nectar
|
|
USD 54,000,000 (United States Dollars Fifty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Nautica
|
|
USD 54,000,000 (United States Dollars Fifty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Noble
|
|
USD 54,000,000 (United States Dollars Fifty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Newton
|
|
USD 60,000,000 (United States Dollars Sixty Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Sara
|
|
USD 78,000,000 (United States Dollars Seventy Eight Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Sandra
|
|
USD 78,000,000 (United States Dollars Seventy Eight Million)
|
|
As provided in Clause 5.6.
|
17
|
|
|
|
|
|
|
Maersk Simone
|
|
USD 84,000,000 (United States Dollars Eighty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Sonia
|
|
USD 84,000,000 (United States Dollars Eighty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Ingrid
|
|
USD 84,000,000 (United States Dollars Eighty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Isabella
|
|
USD 84,000,000 (United States Dollars Eighty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Ilma
|
|
USD 84,000,000 (United States Dollars Eighty Four Million)
|
|
30 to 180 days after the Deposit Date as nominated by the Sellers in accordance with Clause 5
|
18
Appendix 3 – Form of Accession Deed
|
To:
|
Maersk Tankers Singapore Pte Ltd
|
|
From:
|
[ ], as Acceding Buyer
|
Dear Sirs,
Framework Agreement in relation to the sale of
VLCC vessels – Accession Deed
We refer to the Framework Agreement dated 3 January 2014 (the “
Agreement
”), as amended,
supplemented and restated from time to time, and amongst others made between Maersk Tankers Pte Ltd, as Sellers and Euronav NV as Buyers.
This is an
accession deed.
Terms defined in the Agreement shall, unless otherwise defined therein, have the same meaning when used herein.
|
1.
|
[ ] is a limited company duly incorporated under the laws of
[ ] with company registration number
[ ], having its address at
[ ].
|
|
2.
|
We confirm that we are a wholly owned subsidiary of Euronav NV; and
|
|
3.
|
We agree that we shall become a Party to the Agreement as Acceding Buyer immediately upon signing this accession deed.
|
|
4.
|
The provisions in Clause 21 of the Agreement in respect of choice of law and jurisdiction shall apply to this accession deed as if set out in full herein.
|
19
THIS ACCESSION DEED
has been executed by the parties mentioned below as a DEED and is delivered on the
date stated above.
|
|
|
|
|
[
Acceding Buyer
]
|
|
|
|
|
|
|
[
EXECUTED
as a
DEED
|
|
]
|
|
By: [
Acceding Buyer]
|
|
)
|
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
Director/Secretary
|
|
|
|
|
OR
|
|
|
|
|
|
|
[
EXECUTED
as a
DEED
|
|
|
|
By: [
Acceding Buyer]
|
|
|
|
|
|
|
|
|
Signature of Director
|
|
|
|
|
|
|
Name of Director
|
|
|
|
|
in the presence of
|
|
|
|
|
|
|
|
|
Signature of witness
|
|
|
|
|
|
|
Name of witness
|
|
|
|
|
|
|
Address of witness
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupation of witness
|
Acknowledged by Euronav NV
20
|
|
|
|
|
as Guarantor
|
|
|
|
|
|
|
|
|
Signature of Director
|
|
|
|
|
|
|
Name of Director
|
|
|
|
|
|
|
|
21
Appendix 4 – Escrow Agreement
22
Exhibit 10.16
Addendum No. 1
to Framework Agreement in
relation to the sale of VLCC vessels
dated
23
May 2014
between
Maersk Tankers Singapore Pte Ltd
as Sellers
and
Euronav NV or a nominated company (fully guaranteed by Euronav NV)
as Buyers
This Addendum No. 1 (the “
Addendum
”) is entered into on
23
May 2014 between
|
(1)
|
Maersk Tankers Singapore Pte Ltd
, 200 Cantonment Road, 10-00 Southpoint, 089763, Singapore, (the “
Sellers
”); and
|
|
(2)
|
Euronav NV
, 20 De Gerlachekaai, 2000 Antwerp, Belgium or a company to be nominated, such nominee to be fully guaranteed by Euronav NV (“
Euronav
”).
|
WHEREAS:
|
A.
|
The Sellers and the Buyers have entered into a framework agreement in relation to the sale of VLCC vessels (the
“Vessels”
) dated 3 January 2014 (the “
Framework Agreement
”), whereby
the Sellers agreed to sell and the Buyers agreed to buy 15 VLCC vessels on en bloc basis for a total price of USD 980,000,000 (United States Dollars Nine Hundred and Eighty Million);
|
|
B.
|
The Parties have now agreed that the agreed delivery window for the vessels “Maersk Sonia”, “Maersk Neptune” and “Maersk Isabella” shall be increased by 30 days;
|
|
C.
|
The Parties wish to regulate certain matters with regard to the supply of lubricating and hydraulic oils and greases on board the Vessels.
|
It is hereby agreed as follows:
|
1.1
|
Unless otherwise defined herein, capitalised terms and definitions shall have the meaning when used in this Addendum as set out in the Framework Agreement.
|
|
2
|
Amendments to the Framework Agreement
|
|
2.1
|
As of and with effect from the date hereof the Framework Agreement shall hereby be amended as follows:
|
|
2.2
|
A new Clause 5.11 shall be added to the Framework Agreement as follows:
|
|
|
“5.11
|
Notwithstanding anything in this Agreement, it is agreed, in relation to the vessels “Maersk Sonia”, “Maersk Neptune” and “Maersk Isabella”, that these three vessels shall be delivered
between 30 days and 210 days after the Deposit Date. The definition of “Delivery Window” / Schedule 2 is therefore amended accordingly in relation to these three vessels.
|
If the Delivery Port for any of the vessels “Maersk Sonia”, “Maersk Neptune” and “Maersk Isabella” is
nominated by the Sellers to be a port west of the Suez channel, the Sellers are obliged to provide technical management services for such a Vessel for a period of up to 3 months at actual costs and the Parties shall enter into a technical management
agreement to this effect.
Sellers to keep Buyers closely informed about the above vessels’ employment schedule and notify
them immediately upon each of such vessel’s fixture.”
|
2.3
|
A new Clause 5.12 shall be added to the Framework Agreement as follows:
|
|
|
“5.12
|
Notwithstanding anything in this Agreement or any technical management agreement already entered into between Sellers and Buyers, it is agreed,
that in relation to any supply of lubricating or hydraulic oils or greases on the Vessels
|
2
|
|
by the Sellers within three (3) months prior to each Vessel’s schedule delivery to the Buyers and at any time after each Vessel’s transfer of ownership to the Buyers, in case the
Sellers are the Vessels Technical Managers, the Sellers are required to coordinate with the Buyers in advance.”
|
|
3.1
|
This Addendum shall form an integral part of the Framework Agreement and in case of any difference or discrepancies between the terms of the Framework Agreement and this Addendum, the terms of this Addendum shall
prevail. All other provisions of the Framework Agreement shall remain in full force and effect and apply to this Addendum.
|
|
3.2
|
This Addendum may be executed in any number of counterparts, each of which shall constitute and original, but all counterparts shall together constitute one and the same instrument.
|
|
4
|
Governing law and jurisdiction
|
|
4.1
|
This Addendum or any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this
Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
|
|
4.2
|
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
|
|
4.3
|
The reference shall be to three arbitrators. A Party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to
appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the 14 days
specified. If the other Party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the Party referring a dispute to arbitration may, without the requirement of any further prior notice to the other
Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he had been appointed by agreement.
|
|
4.4
|
In the event that there are multiple claimants and/or multiple respondents, the reference shall be to three arbitrators. Two of these shall be appointed by the Parties as defined in this Agreement: one by the Sellers
for their party in the dispute (either the claimants or the respondents), and one by the Buyers (which shall include any Acceding Buyer) for their party in the dispute. Otherwise, the appointment of arbitrators shall follow the procedure set out in
Clause 4.3.
|
|
4.5
|
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
|
|
4.6
|
In cases where neither the claim nor any counterclaim exceeds the sum of USD 50,000 (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure
current at the time when the arbitration proceedings are commenced.
|
3
This Addendum has been entered into on the date stated at the beginning of it.
|
|
|
|
|
For and on behalf of
|
|
Maersk Tankers Singapore Pte Ltd
as Sellers
|
|
|
|
|
By:
|
|
/s/ Christian M. Ingerslev
|
|
|
|
|
Name:
|
|
Christian M. Ingerslev
|
|
|
|
|
Title:
|
|
Attorney-in-fact
|
|
|
|
For and on behalf of
|
|
Euronav NV
as Buyers and
Guarantor
|
|
|
|
|
By:
|
|
/s/ Alexander Staring
|
|
|
|
|
Name:
|
|
Alexander Staring
|
|
|
|
|
Title:
|
|
Member of the Executive Committee
|
|
|
|
|
By:
|
|
/s/ Hugo De Stoop
|
|
|
|
|
Name:
|
|
Hugo De Stoop
|
|
|
|
|
Title:
|
|
Member of Executive Committee
|
4
Exhibit 10.17
MEMORANDUM OF AGREEMENT
|
|
|
Norwegian Shipbrokers’ Association’s
Memorandum of Agreement for sale and
purchase of ships. Adopted by BIMCO in 1956.
Code-name
|
|
SALEFORM 2012
|
|
Revised 1966, 1983 and 1986/87, 1993 and 2012
|
Dated:
3 January 2014
Maersk Tankers Singapore Pte. Ltd.
(
Name of sellers
), hereinafter called the “Sellers”, have agreed to sell,
and
Euronav NV or its fully guaranteed nominee pursuant to
the Framework Agreement
(
Name of buyers
), hereinafter called the “Buyers”, have agreed to buy:
Name of vessel:
IMO Number:
Classification Society:
Lloyd’s
Register
Class Notation:
|
|
|
|
|
|
|
Year of Build:
|
|
Builder/Yard:
|
|
|
|
|
|
Flag:
Singapore
|
|
Place of Registration:
Singapore
|
|
GT/NT:
|
hereinafter called the “Vessel”, on the following terms and conditions:
Definitions
“Banking Days” are days on which
banks are open both in
New York, Singapore, London, Antwerp and Copenhagen
the country of the currency stipulated for the Purchase Price in
Clause 1
(Purchase Price) and in the place of closing stipulated in
Clause 8
(Documentation) and
(
add additional jurisdictions as appropriate
).
“Buyers’ Nominated Flag State” means (
state flag state
)
.
“Class” means the class notation referred to above.
“Classification Society” means the Society referred to above.
“Deposit” shall have the meaning given in
Clause 2
(Deposit)
“Deposit Holder” means
(state name and location of Deposit Holder)
or, if left blank, the
Sellers’ Bank, which shall hold and release the Deposit in accordance with this Agreement.
“Framework Agreement” means the agreement
governing the terms for the sale of 15 VLCC vessels, entered into on the same date as this Agreement between the Sellers and Buyers.
“In
writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, e-mail or
telefax
in accordance with Clause 20 of the Framework Agreement
.
“Parties” means the Sellers and the Buyers.
“Purchase Price” means the price for the Vessel as stated in
Clause 1
Clause 4 and Appendix 2 of the Framework
Agreement
(Purchase Price).
“Sellers’ Account” means (
state details of bank
account
) at the Sellers’ Bank.
“Seller’s Bank” means
(
state name of
bank, branch and details
) or, if left blank,
the bank notified by the Sellers to the Buyers for receipt of the balance of the Purchase Price.
Save as specifically defined in this Agreement the definitions used in the Framework Agreement shall have the same meaning in this Agreement.
|
|
The Purchase Price is
(
state currency and amount both in words and figures
)
See Clause 4 and Appendix 2 of the Framework
Agreement
.
|
|
|
See Clause 4 of the Framework Agreement.
As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of
%
(
per cent) or, if left blank, 10% (ten per cent), of the Purchase Price (the “Deposit”) in an interest bearing account for the Parties with the Deposit Holder within three
(3) Banking Days after the date that:
|
|
|
(i)
|
this Agreement has been signed by the Parties and exchanged in original or by e-mail or telefax; and
|
|
|
(ii)
|
the Deposit Holder has confirmed in writing to the Parties that the account has been opened.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
|
|
The Deposit shall be released in accordance with joint written instructions of the Parties. Interest, if any, shall be credited to the Buyers. Any fee charged for holding and releasing the Deposit shall be borne
equally by the Parties. The Parties shall provide to the Deposit Holder all necessary documentation to open and maintain the account without delay.
|
|
|
See Clause 4 of the Framework Agreement.
|
|
|
On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of Readiness has been given in accordance with
Clause 5
(Time and place of
delivery and notices):
|
|
|
(i)
|
the Deposit shall be released to the Sellers; and
|
|
|
(ii)
|
the balance of the Purchase Price and all other sums payable on delivery by the Buyers to the Sellers under this Agreement shall be paid in full free of bank charges to the Seller’s Account.
|
|
|
(a)*
The Buyers have inspected and accepted the Vessel’s classification records. The Buyers have also inspected the Vessel at/in
(
state place
) on
(
state date
) and have accepted the Vessel following this inspection and the sale is outright and definite, subject only to the terms and conditions of this Agreement.
|
|
|
The Buyers have inspected and accepted the Vessel’s classification records in Copenhagen on 20 December 2013. The Buyers have waived their right to physically inspect the Vessel, and as a consequence the
Buyers accept that the sale is outright and definite, subject only to the terms and conditions of this Agreement and the Framework Agreement.
|
|
|
(b)*
The Buyers shall have right to inspect the Vessel’s classification records and declare whether same are accepted or not within
(
state date/period
).
|
|
|
The Sellers shall make the Vessel available for inspection at/in
(
state place/range
) within
(
state date/period
).
|
|
|
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
|
|
|
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
|
|
|
During the inspection, the Vessel’s deck and engine log books shall be made available for examination by the Buyers.
|
|
|
The sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within
seventy two (72) hours after completion of such inspection or after the date/last day of the period stated in
Line 59
,
whichever is earlier.
|
|
|
Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of the Vessel’s classification records and/or of the Vessel not be received by the Sellers as aforesaid, the
Deposit together with interest earned, if any, shall be released immediately to the Buyers, whereafter this Agreement shall be null and void.
|
|
*
|
4(a)
and
4(b)
are alternatives; delete whichever is not applicable. In the absence of deletions, alternative
4(a)
shall apply.
|
|
5.
|
Time and place of delivery and notices
|
|
|
See Clause 5 of the Framework Agreement.
|
|
|
(a)
The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or anchorage at
/in
any area or port worldwide
(
state
place/range
)
in the Sellers’ option
, but excluding any area or port within (i) the jurisdiction of the West Coast of the United States of America; and (ii) any nation prohibited under the
laws of the United States of America, the United Nations or the European Union
.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
2
Notice of
Readiness shall not be tendered before:
(
date
)
Cancelling Date (see
Clauses 5(c),
6 (a)(i)
,
6 (a) (iii)
and
14
):
See Clause 9.2 of the Framework Agreement
(b)
The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall provide the Buyers with twenty (20),
fifteen (15),
ten (10), five (5) and three (3) days’ notice of the date the Sellers intend to tender Notice of Readiness and of the intended
range/
place of delivery.
When the Vessel is at the place of delivery and physically ready for delivery in accordance with this Agreement, the Sellers shall give the
Buyers a written Notice of Readiness for delivery.
(c)
If the Sellers anticipate that, notwithstanding the exercise of due
diligence by them, the Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and proposing a new Cancelling Date. Upon
receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with
Clause 14
(Sellers’ Default) within three (3) Banking Days of receipt of the notice or of accepting the new date as the
new Cancelling Date. If the Buyers have not declared their option within three (3) Banking Days of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be
deemed to be the new Cancelling Date and shall be substituted for the Cancelling Date stipulated in
line 79
.
If this Agreement is
maintained with the new Cancelling Date all other terms and conditions hereof including those contained in
Clauses 5(b)
and
5(d)
shall remain unaltered and in full force and effect.
(d)
Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely without prejudice to any claim
for damages the Buyers may have under
Clause 14
(Sellers’ Default) for the Vessel not being ready by the original Cancelling Date.
(e)
Should the Vessel become an actual, constructive or compromised total loss before delivery the Deposit together with
interest earned, if any, shall be released immediately to the Buyers whereafter this Agreement shall be null and void.
|
6.
|
Divers Inspection / Drydocking
|
|
|
(i)
|
The Buyers shall have the option at their cost and expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel
at the Delivery Port as
defined in the Framework Agreement. If Clause 5.2 of the Framework Agreement is applicable and the Vessel is to be delivered in international waters, the Buyers shall instead have the right to arrange for an underwater inspection of the Vessel at
the last discharge port prior to delivery
. Such option shall be declared latest nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to
Clause 5(b)
of this
Agreement. The Sellers shall at their cost and expense make the Vessel available for such inspection. This inspection shall be carried out without undue delay and in the presence of a Classification Society surveyor arranged for by the Sellers and
paid for by the Buyers. The Buyers’ representative(s) shall have the right to be present at the diver’s inspection as observer(s) only without interfering with the work or decisions of the Classification Society surveyor. The extent of the
inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at their cost and expense make the
Vessel available at a suitable alternative place near to the delivery port, in which event the Cancelling Date shall be extended by the additional time required for such positioning and the subsequent re-positioning. The Sellers may not tender
Notice of Readiness prior to completion of the underwater inspection.
|
|
|
(ii)
|
If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, then (1) unless repairs can be carried
out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line,
the extent of the inspection being in accordance with the Classification Society’s rules (2) such defects shall be made good by the Sellers at their cost and expense to the satisfaction of the Classification Society without
condition/recommendation** and (3) the Sellers shall pay for the underwater inspection and the Classification Society’s attendance.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
3
|
|
|
Notwithstanding anything to the contrary in this Agreement, if the Classification Society do not require the aforementioned defects to be rectified
before
until
the next class drydocking survey,
the Sellers shall be entitled to deliver the Vessel with these defects against a deduction from the Purchase Price of the estimated direct cost (of labour and materials) of carrying out the repairs to the satisfaction of the Classification Society,
whereafter the Buyers shall have no further rights whatsoever in respect of the defects and/or repairs
, the scope of repairs shall be ascertained and endorsed by the Classification Society
.
The estimated direct cost of the repairs
shall be the average of quotes for the repair work obtained from two reputable independent shipyards
at or
in the
UAE-Japan Range, excl. Chinese shipyards
vicinity of the port of delivery
, one to be obtained
by each of the Parties within
two
four
(
2
4
) Banking Days from the date
of the
on which the Classification Society ascertained and endorsed the scope of repairs
imposition of the condition/recommendation
, unless the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within the stipulated time then the quote duly obtained by the other Party shall be the sole basis for
the estimate of the direct repair costs. The Sellers may not tender Notice of Readiness prior to such estimate having been established.
|
|
|
(iii)
|
If the Vessel is to be drydocked pursuant to Clause
6(a)(ii)
and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking
facilities are available, whether within or outside the delivery range as per
Clause 5(a)
. Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per
Clause 5(a)
which shall, for the
purpose of this Clause, become the new port of delivery. In such event the Cancelling Date shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of fourteen (14) days.
|
|
|
(b)
* The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the
inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such
defects shall be made good at the Sellers’ cost and expense to the satisfaction of the Classification Society without condition/recommendation**. In such event the Sellers are also to pay for the costs and expenses in connection with putting
the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees. The Sellers shall also pay for these costs and expenses if parts of the tailshaft system are condemned or found defective or broken
so as to affect the Vessel’s class. In all other cases, the Buyers shall pay the aforesaid costs and expenses, dues and fees.
|
|
|
(c)
If the Vessel is drydocked pursuant to Clause
6 (a)(ii)
or
6 (b)
above:
|
|
|
(i)
|
The Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the
Buyers shall have the option to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the
current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the
tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ cost and expense to the
satisfaction of Classification Society without condition/recommendation**.
|
|
|
(ii)
|
The costs and expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out or if parts of the system are condemned or
found defective or broken so as to affect the Vessel’s class, in which case the Sellers shall pay these costs and expenses.
|
|
|
(iii)
|
The Buyers’ representative(s) shall have the right to be present in the drydock, as observer(s) only without interfering with the work or decisions of the Classification Society surveyor.
|
|
|
(iv)
|
The Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk, cost and expense without interfering
with the Sellers’ or the Classification Society surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.
|
4
|
|
Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and expense. In
the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and, notwithstanding
Clause 5(a)
, the
Buyers shall be obliged to take delivery in accordance with
Clause 3
(Payment), whether the Vessel is in drydock or not.
|
|
*
|
6 (a) and 6 (b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 (a) shall apply.
|
|
**
|
Notes or memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.
|
|
7.
|
Spares, bunkers and other items
|
|
|
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller
blade(s), if any, belonging to the Vessel at the time of inspection used or unused, whether on board or not
and in the warehouse at shore
shall become the Buyers’ property, but spares on order are excluded. Forwarding charges, if any,
shall be for the Buyers’ account. The Sellers are not required to replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the
replaced items shall be the property of the Buyers. Unused stores and provisions shall be included in the sale and be taken over by the Buyers without extra payment.
|
|
|
Library and forms exclusively for use in the Sellers’ vessel(s) and captain’s, officers’ and crew’s personal belongings including the slop chest are excluded from the sale without compensation, as
well as the following additional items:
|
|
|
•
|
|
log books for deck/engine/Cargo ops
|
|
|
•
|
|
pictures and paintings in the Sellers’ option
|
|
|
•
|
|
documents directly related to present ownership
|
|
|
•
|
|
documents which have to be returned to the authorities
|
|
|
•
|
|
all forms etc. which are related to the present ownership
|
|
|
•
|
|
the Vessel’s maintenance system for hull and machinery, however, Sellers shall deliver to the Buyers ship specific PMS database in the format that comes out of Shipnet
|
|
|
•
|
|
computer software for pc’s either developed by or licensed to the Sellers except loadmaster computer which is included in the sale
|
|
|
•
|
|
software for chart corrections and nautical documents
|
|
|
•
|
|
ship’s bell (will be replaced by Sellers with a generic ship’s bell of equal or better quality)
|
|
|
•
|
|
digital cameras and mobile telephones
|
|
|
•
|
|
all hired and rented equipment such as videotel, Unitor/Drew bottles
|
|
|
•
|
|
EPIRB, SAT D etc hardware will remain onboard, but subscriptions will be cancelled/reprogrammed
|
|
|
•
|
|
administrative LAN server
|
|
|
•
|
|
Scanjets including hoses and fittings (if any)
|
|
|
Items on board which are on hire or owned by third parties
, listed as follows,
are excluded from the sale without compensation:
Sellers will latest 30 days prior to the anticipated delivery date
provide a list to Buyers of items onboard which are on hire or owned by third parties.
(include list)
Items on board at the time of inspection which are on hire or owned by third parties, not listed above, shall be replaced or
procured by the Sellers prior to delivery at their cost and expense.
|
|
|
The Buyers shall take over remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and unopened drums
at the port and date of delivery and for bunkers pay the actual supplied net
price on a FIFO basis as evidenced by invoices or vouchers. For the unused lubricating and hydraulic oils and greases the Buyers shall pay the list prices of the latest supplier (of such products) applicable in the port of Singapore (at the time of
delivery of the relevant supply of products) minus 20% for the quantities taken over.
|
|
|
Quantities of the bunkers/luboils/greases/heel onboard are to be verified by a joint survey between the Sellers’ and the Buyers’ repesentative(s) onboard prior to delivery.
and pay
either:
|
|
|
(a)
*the actual net price (excluding barging expenses) as evidenced by invoices or vouchers; or
|
|
|
(b)
*the current net market price (excluding barging expenses) at the port and date of delivery of the Vessel or, if unavailable, at the nearest bunkering port, for the quantities taken over.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
5
Payment under this Clause shall be made at the same time and place and in the same currency as
the Purchase Price.
“inspection” in this
Clause 7
, shall mean the Buyers’ inspection according to
Clause 4(a)
or
4(b)
(Inspection), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date.
|
*
|
(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions alternative (a) shall apply.
|
The place of closing:
London, unless otherwise agreed between Sellers
and Buyers.
(a)
In exchange for payment of the Purchase Price the Sellers shall provide the Buyers with the following delivery
documents:
|
|
(i)
|
Two (2)
Legal Bill(s) of Sale in a form recordable in the Buyers’ Nominated Flag State, transferring title of the Vessel and stating that the Vessel is free from all mortgages, encumbrances
,
taxes
and maritime liens or any other debts whatsoever, duly notarially attested and legalised or apostilled, as required by the Buyers’ Nominated Flag State;
|
|
|
(ii)
|
Evidence that all necessary corporate
, shareholder
and other action has been taken by the Sellers to authorise the execution, delivery and performance of this Agreement;
|
|
|
(iii)
|
Power of Attorney of the Sellers appointing one or more representatives to act on behalf of the Sellers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate);
|
|
|
(iv)
|
Certificate or Transcript of Registry issued by the competent authorities of the flag state on the date of delivery evidencing the Sellers’ ownership of the Vessel and that the Vessel is free from registered
encumbrances and mortgages , to be faxed or e-mailed by such authority
or the Sellers
to the closing meeting with the original to be sent to the Buyers as soon as possible after delivery of the Vessel;
|
|
|
(v)
|
Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate issued within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of
condition/recommendation;
|
|
|
(vi)
|
Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not
as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and provide a certificate or other official evidence of deletion to the Buyers promptly
and latest within four (4) weeks after the Purchase Price has been paid and the Vessel has been delivered;
|
|
|
(vii)
|
A copy of the Vessel’s Continuous Synopsis Record certifying the date on which the Vessel ceased to be registered with the Vessel’s registry, or, in the event that the registry does not as a matter of practice
issue such certificate immediately, a written undertaking from the Sellers to provide the copy of this certificate promptly upon it being issued together with evidence of submission by the Sellers of a duly executed Form 2 stating the date on which
the Vessel shall cease to be registered with the Vessel’s registry;
|
|
|
(viii)
|
Commercial Invoice for the Vessel;
|
|
|
(ix)
|
Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases;
|
|
|
(x)
|
A copy of the Sellers’ letter to their satellite communication provider cancelling the Vessel’s communications contract which is to be sent immediately after delivery of the Vessel;
|
|
|
(xi)
|
Any additional documents as may reasonably be required by the competent authorities of the Buyers’ Nominated Flag State for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such
documents as soon as possible
and within reasonable time
after the date of this Agreement; and
|
|
|
(xii)
|
The Sellers’ letter of confirmation that to the best of their knowledge, the Vessel is not
at the time of delivery to Buyers
black listed by
the USA or any European Union nation or under blockade by ITF
or the Arab Boycott League;
any nation-or-international organisation.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
6
|
|
(xiii)
|
The Sellers’: (1) Certificate of Incorporation; (2) ACRA transcript issued within five (5) business days prior to the delivery of the Vessel; (3) copy of Sellers’ Memorandum and Articles
of Association; and (4) a certificate of director of the Sellers.
|
|
|
(b)
At the time of delivery the Buyers shall provide the Sellers with:
|
|
|
(i)
|
Evidence that all necessary corporate
, shareholder and other
action has been taken by the Buyers to authorise the execution, delivery and performance of this Agreement; and
|
|
|
(ii)
|
Power of Attorney of the Buyers appointing one or more representatives to act on behalf of the Buyers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as
appropriate)
;
.
|
|
|
(iii)
|
The Buyers’: Certificate of Incorporation and Good Standing confirming the good standing of the Buyers and providing information on the current Directors of the Buyers together with copy of Buyers’ Articles
of Association attached to it, issued within five (5) business days prior to the delivery, duly notarially attested and legalized by apostille (as appropriate). If information on the Directors of the Buyers is not by practice provided in the
above Certificate, Buyers to provide Sellers with a separate Certificate of Incumbency, duly notarially attested and legalized by apostille (as appropriate).
|
|
|
(c)
If any of the documents listed in Sub-clauses (a) and (b) above are not in the English language they shall be accompanied by an English translation by an authorised translator or certified by a
lawyer qualified to practice in the country of the translated language.
|
|
|
(d)
The Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Sub-clause (a) and Sub-clause (b) above for review and comment by the other party not later
than
nine (9)
(
state number of days)
,
or if left-blank, nine (9)
days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to
Clause 5(b)
of this
Agreement.
|
|
|
(e)
Concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above, the Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans, drawings and
manuals, (excluding ISM/ISPS manuals), which are on board the Vessel. Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers have the right to
take copies.
|
|
|
(f)
Other technical documentation which may be in the Sellers’ possession shall promptly after delivery be forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s
log books but the Buyers have the right to take copies of same.
|
|
|
(g)
The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers.
|
|
|
The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances, mortgages and maritime liens or any other debts whatsoever, and is not subject to Port State or other administrative
detentions. The Sellers hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery.
|
|
10.
|
Taxes, fees and expenses
|
|
|
Any taxes, fees and expenses in connection with the purchase and registration in the Buyers’ Nominated Flag State shall be for the Buyers’ account, whereas similar charges in connection with the closing of the
Sellers’ register shall be for the Sellers’ account.
|
|
11.
|
Condition on delivery
|
|
|
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken
over as she was at the time of inspection
of the Vessel’s Class records
, fair wear and tear excepted.
|
|
|
However, the Vessel shall be delivered free of cargo and free of stowaways with her Class maintained without condition/recommendation*, free of average damage affecting the Vessel’s class, and with her
classification certificates and national certificates, as well as all other certificates the Vessel had at the time of inspection
of the Vessel’s Class records
, valid
for three (3) months
and unextended without
condition/recommendation* by the Classification Society or the relevant authorities at the time of delivery.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
7
|
|
The Sellers shall notify the Classification Society of any matters coming to their knowledge prior to delivery which upon being reported to the Classification Society would lead to the withdrawal of the Vessel’s
Class or to the imposition of a recommendation relating to her Class.
|
|
|
“inspection” in this
Clause 11
, shall mean the Buyers’ inspection according to
Clause 4(a)
or
4(b)
(Inspections), if applicable. If the Vessel is taken over without inspection, the
date of this Agreement shall be the relevant date.
|
|
*
|
Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.
|
|
|
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.
Latest at the Vessel’s next scheduled dry-docking Buyers shall repaint the Vessel’s hull in a colour which is
not associated with the Sellers.
|
|
|
See Clause 8 of the Framework Agreement
|
|
|
Should the Deposit not be lodged in accordance with
Clause 2
(Deposit), the Sellers have the right to cancel this Agreement, and they shall be entitled to claim
compensation for their losses and for all expenses incurred together with interest.
|
|
|
Should the Purchase Price not be paid in accordance with
Clause 3
(Payment), the Sellers have the right to cancel this Agreement, in which case the Deposit together with
interest earned, if any, shall be released to the Sellers. If the Deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest.
|
|
|
See Clause 9 of the Framework Agreement.
|
|
|
Should the Sellers fail to give Notice of Readiness in accordance with
Clause 5(b)
or fail to be ready to validly complete a legal transfer by the Cancelling Date the
Buyers shall have the option of cancelling this Agreement. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again by the
Cancelling Date and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement, the Deposit together with interest earned, if any
;
shall be released to them immediately.
|
|
|
Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and
for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement.
|
|
15.
|
Buyers’ representatives/crew
|
|
|
After
this Agreement has been signed by the Parties
the Effective Date
and
when
the Deposit has been lodged, the Buyers have the right to place
two
three
(
2
3
) representatives on board the Vessel at their sole risk and expense.
|
|
|
These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with the operation of the Vessel. The Buyers and the Buyers’
representatives shall sign the Sellers’ P&I Club’s standard letter of indemnity prior to their embarkation.
|
|
|
Once Notice of Readiness has been given to the Buyers by the Sellers the Sellers shall allow access to the Vessel by the Buyers’ crew for the purpose of familiarisation only subject to signing the Sellers’
P&I Club’s standard letter of indemnity prior to embarkation and always provided that (i) there is enough space onboard, (ii) safety is not endangered, (iii) Buyers’ crew do not interfere with the delivery and
(iv) no regulations are breached.
|
|
|
Clause 21 of the Framework Agreement shall apply mutatis mutandis to and form an integral part of this Agreement.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
8
|
(a)
*This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 or any statutory modification or re enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
|
|
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
|
|
|
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other
party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so
within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the
requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both Parties as if the sole arbitrator had been
appointed by agreement.
|
|
|
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration
proceedings are commenced.
|
|
|
(b)
*This Agreement shall be governed by and construed in accordance with Title 9 of the United States Code and the substantive law (not including the choice of law rules) of the State of New York and any
dispute arising out of or in connection with this Agreement shall be referred to three (3) persons at New York, one to be appointed by-each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them
shall be final, and for the purposes of enforcing any award, judgment may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators,
Inc.
|
|
|
In cases where neither the claim nor any counterclaim exceeds the-sum of US$100,000 the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime
Arbitrators, Inc.
|
|
|
(c)
This Agreement shall be governed by and construed in accordance with the laws of
(
state place
) and any dispute arising out of
or in connection with this Agreement shall be referred to arbitration at
(
state place
), subject to the procedures applicable there.
|
*
|
16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 16(a) shall apply.
|
|
|
All notices to be provided under this Agreement shall be in writing.
|
|
|
Contact details for recipients of notices are as follows:
|
|
|
|
|
|
For the Buyers:
|
|
Euronav NV
|
|
|
|
20 De Gerlachekaai
|
|
|
|
2000 Antwerp
|
|
|
|
Belgium
|
|
|
|
For the attention of: Chief Executive Officer
|
|
|
|
Email: management@euronav.com
|
|
|
|
|
|
|
c.c. For the attention of: General Counsel
|
|
|
|
Email: legal@euronav.com
|
|
|
|
|
For the Sellers:
|
|
c/o Maersk Tankers A/S
|
|
|
|
Esplanaden 50
|
|
|
|
1098 Copenhagen K
|
|
|
|
Denmark
|
|
|
|
For the attention of: COO
|
|
|
|
Email: christian.michael.ingerslev@maersktankers.com
|
|
|
|
|
|
|
c.c. For the attention of: Head of Legal
|
|
|
|
Email: anette.ryde@maersktankers.com
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.
|
9
|
18.
|
Entire Agreement
Various
|
|
|
This Agreement constitutes an integrated part of the Framework Agreement. In case of conflict between this Agreement and the Framework Agreement, the latter shall prevail.
|
|
|
The written terms of this Agreement
together with the Framework Agreement
comprise the entire agreement
and understanding
between the Buyers and the Sellers in relation to the sale and purchase of the
Vessel and supersede
and extinguishes
all previous
drafts,
agreements,
discussions, exchanges and understandings between them,
whether oral or written
between the Parties in relation thereto
relating to its
subject matter
.
|
|
|
Each of the Parties acknowledges that in entering into this Agreement it has not
and does not
rel
y
ied
on and shall have no right or remed
y
ies
in respect of any
statement, representation, assurance or warranty (whether
or not
made
innocently
or negligently) other than as is expressly set out in this Agreement.
|
|
|
Any terms implied into this Agreement by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For and on behalf of the Sellers
|
|
|
|
For and on behalf of the Buyers
|
|
|
|
|
|
Name:
|
|
Christian Michael Ingerslev
|
|
|
|
Name:
|
|
Egied Verbeeck
|
|
|
|
Paddy Rodgers
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Attorney-in-fact
|
|
|
|
Title:
|
|
General Counsel
|
|
|
|
CEO
|
|
19.
|
Trading and delivery of the Vessel
|
The Sellers also undertake with the Buyers not to employ the
Vessel in contradiction with any sanctions against any sovereign nation issued by the European Union, United States of America or United Nations.
The Sellers shall indemnify the Buyers in relation to any fines or penalties which may be applied by any regulatory authorities in relation to the trading
of the Vessel prior to the date of delivery of the Vessel.
The days on which any notice is given by one party to the other will be excluded from the
total number of days required for such notice.
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
10
Exhibit 10.18
Execution Version
Framework Agreement
in relation to the sale of VLCC vessels
dated
7 July 2014
between
Maersk Tankers Singapore Pte
Ltd
as Sellers
and
Euronav NV or a nominated company (fully guaranteed by Euronav NV)
as Buyers
1224538
Contents
|
|
|
|
|
|
|
|
|
1
|
|
DEFINITIONS
|
|
|
3
|
|
|
2
|
|
SALE OF THE VESSELS
|
|
|
4
|
|
|
3
|
|
ACCEDING BUYERS
|
|
|
4
|
|
|
4
|
|
PURCHASE PRICE AND DEPOSIT
|
|
|
5
|
|
|
5
|
|
DELIVERY OF THE VESSELS
|
|
|
6
|
|
|
6
|
|
THE CHARTER PARTIES
|
|
|
7
|
|
|
7
|
|
GENERAL DEFAULT PROVISION
|
|
|
7
|
|
|
8
|
|
BUYERS’ DEFAULT
|
|
|
8
|
|
|
9
|
|
SELLERS’ DEFAULT
|
|
|
9
|
|
|
10
|
|
MISCELLANEOUS DEFAULT PROVISION
|
|
|
9
|
|
|
11
|
|
SIGNING
|
|
|
10
|
|
|
12
|
|
CONDITIONS
|
|
|
10
|
|
|
13
|
|
GOVERNMENTAL APPROVALS
|
|
|
10
|
|
|
14
|
|
INTEREST
|
|
|
11
|
|
|
15
|
|
ASSIGNMENT
|
|
|
11
|
|
|
16
|
|
CONFIDENTIALITY
|
|
|
11
|
|
|
17
|
|
REPRESENTATIONS AND WARRANTIES
|
|
|
12
|
|
|
18
|
|
INTERPRETATION
|
|
|
12
|
|
|
19
|
|
COSTS AND EXPENSES
|
|
|
13
|
|
|
20
|
|
CONFLICT BETWEEN PROVISIONS
|
|
|
13
|
|
|
21
|
|
NOTICES
|
|
|
13
|
|
|
22
|
|
GOVERNING LAW AND JURISDICTION
|
|
|
14
|
|
|
23
|
|
LIST OF APPENDICES
|
|
|
14
|
|
|
24
|
|
COUNTERPARTS
|
|
|
14
|
|
1224538
2
This framework agreement (the “
Agreement
”) is entered into on 7 July 2014 between
|
(1)
|
Maersk Tankers Singapore Pte Ltd
, 200 Cantonment Road, 10-00 Southpoint, 089763, Singapore (the “
Sellers
”); and
|
|
(2)
|
Euronav NV
, 20 De Gerlachekaai, 2000 Antwerp, Belgium or a company to be nominated, such nominee to be fully guaranteed by Euronav NV (“
Euronav
”).
|
WHEREAS:
|
A.
|
The Sellers or their affiliated entities are the bareboat charterers of 4 VLCC vessels (as more particularly defined below, the “
Vessels
” and individually, a “
Vessel
”), and the Sellers
have agreed to purchase the Vessels from their current owners.
|
|
B.
|
The Sellers have agreed to sell and the Buyers (as defined below) have agreed to buy the Vessels on an en bloc basis for a total price of USD 342,000,000 (United States Dollars Three Hundred and Forty TwoMillion) made
up of each Allocated Purchase Price and otherwise on the terms and conditions set out in this Agreement and in the MOAs (as each expression is defined below).
|
|
C.
|
Three of the Vessels are on time charters to Euronav or its affiliates. The remaining Vessel (“Maersk Hakata”) is currently on time charter to another charterer (Cosmo Oil), and it is the intention to transfer
the Vessel upon completion of the time charter.
|
|
D.
|
The Parties have agreed that each of the Vessels will be delivered separately to the Buyers and that the delivery date for each Vessel will be nominated by the Sellers in accordance with the provisions set out below and
in the MOAs.
|
IT IS AGREED as follows:
|
1.1
|
In this Agreement the following terms and expressions shall have the meaning set out below:
|
“
Acceding Buyer
” shall have the meaning set out in Clause 3.1.
“
Allocated Deposit
” shall have the meaning set out in Clause 4.3.
“
Allocated Purchase Price
” shall have the meaning set out in Clause 4.2.
“
Buyers
” means Euronav and, upon the accession by an Acceding Buyer, that Acceding Buyer in relation to the relevant Vessel.
“
Banking Days
” means days on which banks are open in New York, Singapore, London, Antwerp and Copenhagen.
“
Cancelling Date
” means 150 days after the Effective Date.
“
Charter Parties
” means each of the time charter parties for the Vessels as listed in Appendix 5.
“
Delivery Port
” means any area or port worldwide, excluding any area or port within (i) the jurisdiction of the West
Coast of the United States of America; and (ii) any nation prohibited under the laws of the United States of America, the United Nations or the European Union.
1224538
3
“
Delivery Window
” means the dates set out against the name of each Vessel in
Appendix 2.
“
Deposit
” shall have the meaning set out in Clause 4.3.
“
Effective Date
” means the date upon which (i) the Buyers have confirmed in writing to the Sellers that the conditions in
Clause 12.1 have been satisfied or waived; and (ii) the Sellers have confirmed in writing to the Buyers that the conditions in Clause 12.3 have been satisfied or waived.
“
Escrow Agreement
” means the escrow agreement entered into on the same date as this Agreement between the Sellers, the Buyers
and the Escrow Bank attached hereto as Appendix 4.
“
Escrow Bank
” means Nordea Bank Finland Plc, London Branch or such
other bank to be mutually agreed.
“
Escrow Funds
” means the Deposit paid to and held by the Escrow Bank from time to time,
in accordance with Clause 4.3 of the Agreement.
“
Escrow Payment Letter
” means an escrow payment letter to be given by the
Sellers and the Buyers in accordance with Clause 4.3 of the Agreement and the Escrow Agreement.
“
MOA
” means the Norwegian
Saleform 2012 Memorandum of Agreement with amendments for the sale of each Vessel made on the date of this Agreement between the Sellers and the Buyers in each case, in the forms attached as Appendices 1-A to 1-D inclusive to this Agreement.
“Parties”
means each party to this Agreement and any Acceding Buyer nominated by the Buyers in accordance with Clause 3 of
this Agreement.
“Purchase Price”
shall have the meaning set out in Clause 4.1.
“Vessels”
means the 4 VLCC vessels listed in Appendix 2 to this Agreement and individually, a “
Vessel
”.
|
2.1
|
The Sellers hereby agree to sell by way of an en bloc sale, and the Buyers agree to buy, the Vessels on the terms set out in this Agreement, including but not limited to the terms and conditions of the MOAs.
|
|
2.2
|
The Sellers hereby confirm to Euronav that as from the date of this Agreement, the Sellers shall not sell or charter out or agree to sell or charter out any of the Vessels.
|
|
3.1
|
Any wholly owned subsidiary of the Buyers may accede to this Agreement (an “
Acceding Buyer
”) by way of (i) executing and delivering to the Sellers an accession deed in the form set out in Appendix
3 and (ii) delivering to the Sellers a copy of its certificate of incorporation and memorandum and articles of association, or equivalent constitutional documents. Upon execution and delivery of an accession deed by any Acceding Buyer and
delivery of such constitutional documents, Euronav may nominate that Acceding Buyer as “Buyers” under a particular MOA in relation to the purchase of an individual Vessel on the terms and conditions of that MOA.
|
1224538
4
|
3.2
|
Each MOA shall stand alone and the relevant Acceding Buyer shall be fully responsible to the Sellers only for the relevant obligations under this Agreement and the MOA in respect of the Vessel to be acquired by that
Acceding Buyer.
|
|
3.3
|
Upon accession, each Acceding Buyer in respect of a Vessel’s classification records which have been inspected by Euronav, shall be deemed to have instructed Euronav to carry out such inspection on its behalf and
the Acceding Buyer shall thus have the same rights and obligations as if the Acceding Buyer itself had inspected the Vessel’s classification records. It is noted that Euronav (on the Buyers’ behalf) have inspected and accepted the
Vessels’ classification records. The Buyers have waived their right to physically inspect the Vessels and as a consequence the Buyers accept that the sale is outright and definite, subject only to the terms and conditions of this Agreement and
each MOA.
|
|
3.4
|
Notwithstanding any nomination of an Acceding Buyer for one or more individual Vessel(s) pursuant to Clause 3.1, Euronav shall remain fully responsible for any and all the obligations of each of the Acceding Buyers
under this Agreement and each MOA. In consideration of the Sellers entering into this Agreement and the MOAs, Euronav unconditionally and irrevocably guarantees and agrees to guarantee (as primary obligor and not as surety only) the performance of
any Acceding Buyer’s obligations under this Agreement and the purchase of the individual Vessel under the relevant MOA. As a separate continuing obligation, Euronav indemnifies and agrees to indemnify the Sellers from and against any and all
losses which the Sellers may suffer or incur as a consequence of the failure of an Acceding Buyer to fully perform all of its respective obligations under the relevant MOA in accordance with the terms thereof. The obligations of Euronav under this
Clause shall remain in full force and effect notwithstanding (i) any intermediate settlement of the guaranteed or indemnified obligations, (ii) any amendment of this Agreement or any MOA, (iii) any event described in clause 7.1
affecting of any Acceding Buyer or (iv) any other event or matter whatsoever.
|
|
4
|
Purchase price and deposit
|
|
4.1
|
The total purchase price for all the Vessels is USD 342,000,000 (United States Dollars Three Hundred and Forty Two Million) (the “
Purchase Price
”).
|
|
4.2
|
The allocated purchase price for each of the Vessels is set out in Appendix 2 (each, an “
Allocated Purchase Price
”).
|
|
4.3
|
As security for the correct fulfilment of this Agreement Euronav shall pay on its own behalf and on behalf of the Acceding Buyers a deposit of 10% (ten per cent) of the Purchase Price, equal to USD 34,200,000 (United
States Dollars Thirty Four Million Two Hundred Thousand) no later than 2 (two) Banking Days after the Effective Date (the “
Deposit
”). The Deposit shall be paid to the Escrow Bank no later than 2 (two) Banking Days after the
Effective Date. This Deposit shall be placed as Escrow Funds with the Escrow Bank and held by it in an account in the name of the Sellers in accordance with the Escrow Agreement between the Sellers, the Buyers and the Escrow Bank attached hereto as
Appendix 4 and the relevant part of the Deposit (being 10% (ten per cent) of the Allocated Purchase Price for that Vessel, each an “
Allocated Deposit
”) is to be released upon the Buyers and Sellers signing a protocol of delivery and
acceptance in respect of that relevant Vessel or released as otherwise provided in this Agreement or the Escrow Agreement. Simultaneously with signing the protocol of delivery and acceptance the Sellers and the Buyers shall also be obliged to sign
an Escrow Payment Letter under the Escrow Agreement thereby releasing the relevant Allocated Deposit. Interest on the Deposit, if any, shall be credited to the Buyers upon delivery of each Vessel by reference to the Allocated Deposit. Any fee
charged for holding the Deposit shall be borne equally by the Sellers and the Buyers.
|
|
4.4
|
The remaining part of the Allocated Purchase Price (i.e. 90% (ninety per cent)) for a Vessel plus any other amount due under the relevant MOA shall be paid in full free of bank charges by way of conditional payments
using SWIFT messages MT202 and MT199 to the Escrow Bank on delivery of the relevant Vessel or, subject to the consent of the Buyers’ financing bank, 1 (one) Banking Day prior to delivery.
|
1224538
5
|
4.5
|
When the Vessel is in every respect physically ready for delivery in accordance with the terms of the relevant MOA, the Sellers shall give the Buyers a written Notice of Readiness for delivery in accordance with the
terms of this Agreement and the relevant MOA. The Buyers shall then take delivery of the Vessel promptly but not later than 3 (three) Banking Days after the date that the Notice of Readiness has been given. The Allocated Deposit shall be released
from the Escrow Funds in accordance with Clause 4.3 and paid to the Sellers for the relevant Vessel, and the Buyers and Sellers shall jointly instruct the Escrow Bank to release this amount by sending the Escrow Payment Letter simultaneously with
the release of the payment of the remainder of the Allocated Purchase Price by the Buyers.
|
|
4.6
|
The Allocated Purchase Price of each Vessel and any other amounts due from the Buyers to the Sellers under this Agreement or each MOA shall be paid by the Buyers to the Sellers in full without any set-off, counterclaim,
deduction or withholding unless such right of set-off, counterclaim, deduction or withholding is specified in this Agreement or the MOA.
|
|
5
|
Delivery of the Vessels
|
|
5.1
|
Each Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or anchorage at the Vessel’s Delivery Port which is to be nominated by the Sellers in accordance with the terms of this
Clause 5 and the relevant MOA.
|
|
5.2
|
Notwithstanding Clause 5.1, if the intended location of a Delivery Port entails a risk of an adverse tax effect for the Buyers or the Sellers as a result of the transfer of title to a Vessel, the Sellers and the Buyers
shall be obliged to postpone submission of a Notice of Readiness and the transfer of title of such Vessel until the Vessel is in such location where there is no risk of such adverse tax effects. The Sellers and the Buyers shall cooperate in this
respect, including evaluating the possibility of a transfer of title of the Vessel in international waters.
|
|
5.3
|
Subject to the other provisions of this Clause 5, delivery of the Vessels shall take place within the Delivery Window for each Vessel. At the time of delivery each Vessel shall be free from all encumbrances, taxes,
mortgages and maritime liens and any other debts whatsoever, and shall not be subject to Port State or other administrative detentions. The Sellers hereby undertake to indemnify the Buyers against the consequences of claims made against the Vessel
which have been incurred prior to the time of delivery.
|
|
5.4
|
The Sellers shall nominate an estimated delivery date and time for each of the Vessels in the Sellers’ absolute discretion by giving the Buyers 20, 15, 10, 5 and 3 days’ notice of the estimated time of arrival
at the anticipated Delivery Port or other place of delivery nominated by the Sellers in accordance with this Clause 5.
|
|
5.5
|
All Vessels shall be delivered (i) not earlier than 6 weeks after the Effective Date (for the Buyers’ financing purposes) and (ii) after completion of the upcoming voyage(s) of the relevant Vessel
following the expiry of the aforementioned 6 weeks but delivery shall in all circumstances be effected no later than the Cancelling Date with the exception of Maersk Hakata which will be delivered upon completion of the Cosmo Charter. Latest four
(4) weeks after the Effective Date Sellers will provide Buyers with a non-binding tentative delivery overview specifying current known schedule of each Vessel and identifying the upcoming voyage(s) for the purposes of (ii) above. As 3 of
the Vessels are on time charters to Euronav or Euronav affiliates entities it is agreed that the abovementioned delivery process shall be conducted in good cooperation between the Parties. If Buyers have difficulty providing the technical management
required to take Delivery of one or more Vessels, Sellers will use all reasonable efforts to offer technical management services for any or all of the 4 Vessels for a period up to 6 months from Delivery of the relevant Vessel(s) on each relevant
Vessel against Buyers informing Sellers of the relevant Vessels no later than 10 days after receiving the non-binding tentative overview and with the Parties being obliged to co-operate in good faith should such notice provide a challenge to the
Sellers. Such services will be provided at actual cost plus USD 20,000 in administration fee per month per Vessel as per executed Shipman agreed between the parties no later than 30 days after the Effective Date. The form of Shipman shall reflect
that the Buyers shall not be responsible for Severance Costs or post-termination Management Fees, but the Buyers are responsible for pro rata Crew Support Costs in accordance with ordinary Maersk principles.
|
1224538
6
|
5.6
|
In order to assist a smooth delivery of the Vessels as set out in this Clause 5 the Parties agree to cooperate in good faith (as may be reasonably required) in connection with the delivery of the Vessels.
|
|
5.7
|
As of the date of this Agreement and until delivery of the Vessels, the Sellers undertake not to employ the Vessels in contradiction with any sanctions against any sovereign nation issued by the European Union, United
States of America or United Nations.
|
|
5.8
|
The Parties acknowledge that the Sellers are exiting the VLCC sector and that all spare parts and spare equipment relating to the Vessels are included in the sale. If any such spare parts and equipment are fleet spares
and are not allocated to any specific Vessel they shall not be sold or otherwise disposed of during the currency of this Agreement and shall be delivered to the Buyers, immediately if required for a delivered Vessel’s operation, and in any case
not later than 180 days after the Effective Date. The Sellers shall provide to the Buyers a list of critical spares and all spares as per vessel Planned Maintenance System and any other information reasonably requested in relation to spare parts and
equipment and their location. Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are not required to replace spare parts taken out of spare and used as replacement on one of the Vessels prior to delivery of that Vessel.
|
|
5.9
|
The Sellers agree that spares shall be maintained at normal operating levels, properly stored and maintained or repaired (as necessary) until the time of delivery.
|
|
5.10
|
In respect of each Vessel where the Sellers are also the technical manager, notwithstanding any other provision to the contrary in this Agreement or any prior technical management agreement between Sellers and Buyers,
it is agreed that in the period following the Effective Date until expiry or termination of the relevant technical management agreement, the Sellers are required to seek Buyers’ prior written approval to the quantity and price of any supply of
lubricating or hydraulic oils or greases on the Vessels.
|
|
6.1
|
In respect of the Charter Parties for Maersk Hakone, Maersk Hirado and Maersk Hojo which are entered into with Euronav or Euronav affiliated entities, the Parties agree that these Charters shall either be cancelled or
novated to the relevant Buyers and in both instances without any further approval from or compensation to the relevant charterers and/or Buyers save as provided in the relevant cancellation or novation agreement with regard to obligations,
liabilities and claims accrued on account of the Sellers in their capacity as owners under the Charter Parties up to the effective date and time of cancellation or novation. In case a novation is required the Buyers shall have the right to request
technical management in accordance with Clause 5.5. The Buyers shall assist with a suitable place for delivery in order to assist the Sellers with the delivery of the Vessels.
|
|
6.2
|
Maersk Hakata shall be delivered upon the completion of the Cosmo Charter Party. Maersk Hakata is due for special survey and dry dock in beginning of 2015 (around 1 March 2015) and any expense in this connection is
to be for Buyers’ account.
|
|
7
|
General default provision
|
|
7.1
|
Without prejudice to any rights that have accrued under this Agreement or any of its rights or remedies, either Party may terminate this Agreement with immediate effect by giving notice to the other Party if:
|
|
7.1.1
|
the other Party suspends payment of its debts, or is unable to pay its debts as they fall due or admits inability to pay its debts, or is deemed unable to pay its debts within the meaning of section 123 of the English
Insolvency Act 1986; or
|
1224538
7
|
7.1.2
|
the other Party defaults under any indebtedness for borrowed money, which default (a) is caused by a failure to pay principal of, or interest or premium, if any, on such indebtedness prior to the expiration of the
grace period provided in such indebtedness (“payment default”) or (b) results in the acceleration of such indebtedness prior to the maturity date on which the payment of principal is due and payable (excluding any contingent
obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof); and, in each case, (i) the principal amount of any such indebtedness, together with the principal amount of any other
such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates USD 20.0 million or more; and (ii) such circumstances reasonably impact upon the ability of the Party in default to
perform their obligations under this Agreement or any of the MOAs; or
|
|
7.1.3
|
a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that other Party, and that petition, notice, resolution or order is not discharged within
14 (fourteen) days; or
|
|
7.1.4
|
an application is made to court, or an order is made, for the appointment of an administrator, or if a notice of intention to appoint an administrator is given or if an administrator is appointed, over the other Party,
and that application, order, notice or appointment is not discharged within 14 (fourteen) days; or
|
|
7.1.5
|
a person becomes entitled to appoint a receiver over the assets of the other Party or a receiver is appointed over the assets of the other Party; or
|
|
7.1.6
|
the other Party is the subject of a bankruptcy petition or order, and that petition or order is not discharged within 14 (fourteen) days; or
|
|
7.1.7
|
the other Party fails to pay final judgments aggregation in excess of USD 20 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing) which
judgments are not paid, discharged or stayed for a period of 60 days and such circumstances reasonably impact upon the ability of the Party in default to perform their obligations under this Agreement or any of the MOAs; or
|
|
7.1.8
|
the other Party suspends or ceases carrying on all or a substantial part of its business.
|
For
the purposes of this Clause 7.1, the Sellers constitute one Party and the Buyers constitutes the other Party.
|
7.2
|
Should the Deposit not be paid in accordance with Clause 4.3, the Sellers shall have the right to terminate this Agreement with immediate effect by giving notice to the Buyers.
|
|
7.3
|
The remedies available to the Sellers in the case of the Buyers’ default under this Clause are set out in Clause 8, and the remedies available to the Buyers in case of the Sellers default under this Clause are set
out in Clause 9.
|
|
8.1
|
Should the Allocated Purchase Price for a Vessel not be paid in accordance with this Agreement and the terms and conditions of the MOA, the Sellers have the right to either:
|
|
8.1.1
|
terminate the MOA for the Vessel, in which case the full amount of the Allocated Deposit remaining in the escrow account (as per Clause 4.3) together with interest earned shall be forfeited and immediately released to
the Sellers. If the Sellers’ losses exceed the amount received in this way, the Sellers shall be entitled to claim further compensation from the Buyers for their losses in relation to that Vessel; or
|
|
8.1.2
|
terminate this Agreement (which for the avoidance of doubt include all of the MOAs relating to Vessels which have not been delivered) in which case
the aggregate of (i) the Allocated Deposit in relation to that Vessel, and (ii) 30% of the balance of all of the remaining Escrow
|
1224538
8
|
|
Funds after deduction of such Allocated Deposit together with interest earned, shall be forfeited and immediately released to the Sellers in full and final settlement of any claims which the
Sellers might otherwise have against the Buyers under this Agreement and/or any of the MOAs (relating to Vessels which have not been delivered) and the remaining balance of the Escrow Funds together with any interest accrued thereon shall be
immediately returned to the Buyers.
|
|
8.2
|
Should the Sellers terminate this Agreement under the provisions of Clause 7 (other than Clause 7.2), the full amount of the Escrow Funds (if any) together with interest earned shall be forfeited and immediately
released to the Sellers. If the Sellers’ losses exceed any amount received in this way, the Sellers shall be entitled to claim compensation for their losses.
|
|
8.3
|
Should the Sellers terminate this Agreement under the provisions of Clause 7.2 (being a result of the Buyers not having paid the Deposit in accordance with the terms of this Agreement), the Sellers shall be entitled to
claim compensation for their losses.
|
|
9.1
|
Should any Vessel become an actual, constructive or compromised total loss (in each case, as so determined by the Vessel’s insurers) before it has been delivered to the Buyers in accordance with this Agreement and
the relevant MOA, such Vessel shall be excluded from the sale of the Vessels to the Buyers and the Purchase Price shall be reduced by the relevant Allocated Purchase Price. The Allocated Deposit for the Vessel shall promptly be released to the
Buyers together with interest earned in relation to that Vessel and the relevant Acceding Buyers shall be fully and finally released by the Sellers from all of their obligations under this Agreement and the relevant MOA in relation to the relevant
Vessel. Otherwise, this Agreement shall not be affected in any way. The Buyers shall not be entitled to terminate this Agreement or to bring any other claim whatsoever against the Sellers for this reason (except for a breach by the Sellers of this
Clause 9.1) and likewise the Sellers shall not be entitled to bring any claim against the Buyers in such a total loss situation.
|
|
9.2
|
Subject to the provisions of Clause 9.1, should the Sellers fail to give Notice of Readiness in accordance with the terms and conditions of the MOA for any Vessel, or fail to be ready to validly complete a legal
transfer of any Vessel by the Cancelling Date the Buyers shall have the option of terminating the MOA for any such Vessel. If, after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically
ready for delivery and is not made physically ready again in every respect and a new Notice of Readiness given within the Cancelling Date the Buyers shall retain their option to terminate the MOA for the Vessel. The Sellers shall indemnify the
Buyers in respect of any losses arising from the withdrawal of a Notice of Readiness under this Clause 9.2.
|
|
9.3
|
Should the Buyers terminate the sale of a Vessel pursuant Clause 9.2 such Vessel shall be excluded from the sale of the Vessels to the Buyers and the Purchase Price shall be reduced by the relevant Allocated Purchase
Price. The Allocated Deposit for the Vessel shall promptly be released to the Buyers together with interest earned in relation to that Vessel. Otherwise, this Agreement shall not be affected in any way. The Buyers shall not be entitled to terminate
this Agreement or to bring any other claim whatsoever against the Sellers for this reason and likewise the Sellers shall not be entitled to bring any claim against the Buyers in such a situation.
|
|
9.4
|
Without prejudice to Clause 9.2, should the Buyers terminate this Agreement under the provisions of Clause 7, the full remaining balance of the Escrow Funds (together with interest earned thereon) shall be released to
them immediately and the Buyers shall be entitled to claim further compensation for their losses.
|
|
10
|
Miscellaneous default provision
|
|
10.1
|
Apart from the right to terminate this Agreement as set out in the provisions of Clauses 7, 8, 9, the termination provisions of Clause 13 and the conditions of Clause 12, neither Party shall be entitled to terminate
this Agreement for any reason whatsoever.
|
|
10.2
|
The termination of this Agreement for any reason whatsoever shall have no retrospective effect on the rights and obligations of the Parties in respect of any Vessels which have been delivered at such time.
|
1224538
9
|
11.1
|
At the signing of this Agreement, the Sellers have delivered to the Buyers:
|
|
11.1.1
|
documentary evidence from relevant corporate bodies of the Sellers authorising the signing of this Agreement and the consummation of the transactions contemplated under this Agreement.
|
|
11.2
|
At the signing of this Agreement, the Buyers have delivered to the Sellers:
|
|
11.2.1
|
documentary evidence from relevant corporate bodies of the Buyers authorising the signing of this Agreement and the consummation of the transactions contemplated under this Agreement.
|
|
12.1
|
Euronav’s obligation to consummate the transactions contemplated in this Agreement are subject to Euronav confirming to the Sellers in writing that the conditions set out in Clauses 12.1.1 are satisfied.
|
|
12.1.1
|
Euronav’s board approval The necessary approvals to the transactions contemplated by this Agreement have been obtained from Euronav’s board of directors.
|
|
12.2
|
If the Buyers have not confirmed to the Sellers in writing on or prior to 11 July 2014, 1200 hours CET that the conditions set out in Clause 12.1 have been satisfied or waived, this Agreement shall, unless
otherwise agreed between the Parties, be null and void and of no further effect and without any liability on either Party.
|
|
12.3
|
The Sellers’ obligations to consummate the transactions contemplated by this Agreement are subject to the Sellers confirming to the Buyers in writing that the conditions set out in Clause 12.3.1 are satisfied.
|
|
12.3.1
|
Sellers’ board approval The necessary approvals to the transactions contemplated by this Agreement have been obtained from the Sellers’ executive committees and/or board of directors.
|
|
12.4
|
If the Sellers have not confirmed to the Buyers in writing on or prior to 7 July 2014, that the condition set out in Clause 12.3 has been satisfied, this Agreement shall, unless otherwise agreed between the
Parties, be null and void and of no further effect and without any liability on either Party.
|
|
13
|
Governmental Approvals
|
|
13.1
|
The Buyers confirm they have made customary and reasonable inquiries to investigate if the consummation of the transactions contemplated by this Agreement and the MOAs require notification to or approval/clearance by
any regulatory or competition authority in any jurisdiction. Should any notifications or approvals/clearances be required the Buyers are solely responsible for taking any and all steps necessary for obtaining any clearance(s) required by the Buyers
and/or the Sellers under any antitrust or competition law to consummate the transactions under this Agreement and the MOA’s in accordance with the agreed delivery dates.
|
|
13.2
|
If relevant, the Buyers shall prepare and submit relevant submissions, filings, etc. as soon as reasonably practicable provided the Sellers have adequately and timely provided the Buyers with information and documents
reasonably requested by the Buyers to fulfill their obligations. The Buyers and the Sellers shall cooperate in this respect and the Sellers shall be given reasonable time to comment on any submissions, filings, etc. and the Buyers shall take the
reasonable comments of the Sellers into account.
|
1224538
10
|
13.3
|
If the Buyers are not able or willing to consummate the transactions set forth herein due to lack of any required clearance or due to any other governmental approval related issue the Sellers shall be entitled to
terminate this Agreement and the full amount of the Escrow Funds together with interest earned shall be forfeited and immediately released to the Sellers. If the Sellers’ losses exceed any amount received in this way, the Sellers shall be
entitled to claim (further) compensation for their losses, however, up to a maximum amount of the amount of the Purchase Price not then received by the Sellers (after deduction of the Escrow Funds (if any) released to the Sellers).
|
|
14.1
|
If a Party fails to make any payment due to another Party under this Agreement by the due date for payment, then the defaulting Party shall pay interest on the overdue amount at the rate of 3% (three per cent) per annum
above 3 months LIBOR as such is fixed on the date on which such failure to make payment occurs. Such interest shall accrue on a daily basis from the due date until actual payment of the overdue amount, whether before or after judgment. The
defaulting Party shall pay the interest together with the overdue amount.
|
|
15.1
|
Except for accession of an Acceding Buyer under Clause 3, neither Party shall assign, novate, transfer, mortgage, charge, subcontract or deal in any other manner with any of its rights and obligations under this
Agreement without the prior written consent of the other Party.
|
|
16.1
|
Each Party undertakes that it shall not at any time during this Agreement, disclose the commercial terms of this Agreement and the MOAs or any information which should reasonably be considered to be private or
confidential concerning the business (including, without limitation, any customer or suppliers) of the other Party to any person which is not (i) an employee, (ii) professional advisor, (iii) representative or (iv) director or
officer of such Party and any agents or affiliates of such Party (on a need to know basis) (v) potential financing parties (and then only on a need to know basis) or except as may be required by law, court order or any governmental or
regulatory authority.
|
|
16.2
|
No Party shall make, or permit any person to make, any public announcement, communication or circular (announcement) concerning this Agreement without the prior written consent of the other Party (such consent not to be
unreasonably withheld or delayed). The parties shall consult together on the timing, contents and manner of release of any announcement, but it is expressly agreed that no announcements shall be made prior to the date and time referred to in Clause
16.5 herein.
|
|
16.3
|
Where an announcement is required by law or any governmental or regulatory authority (including, without limitation, any relevant securities exchange), or by any court or other authority of competent jurisdiction, the
Party required to make the announcement shall promptly notify the other Party. The Party concerned shall make all reasonable attempts to agree the contents of the announcement with the other Party before making it.
|
|
16.4
|
This Clause 16 shall apply whether or not the Effective Date occurs.
|
|
16.5
|
The Parties may issue a press release/stock exchange announcement after 1800 hours CET on 11 July 2014 and shall use reasonable endeavours to agree the wording of such press release/stock exchange announcement with
the other Party. If the Buyer is obliged by the rules of the relevant stock exchange to make such announcement, it may do so, but shall use reasonable endeavours to agree the wording of such press release/stock exchange announcement with the other
Party.
|
1224538
11
|
17
|
Representations and warranties
|
|
17.1
|
Each of the Parties represents and warrants to the other as follows:
|
|
17.1.1
|
it is a corporation duly established and existing under the laws of the place of its incorporation and has full power and authority to carry on its business as now conducted and no authorisations, consents or approvals
are required in connection with this Agreement;
|
|
17.1.2
|
it has full power, authority and legal right to execute, deliver and perform the terms of this Agreement;
|
|
17.1.3
|
this Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligations (subject to insolvency and other laws affecting creditors’ rights generally); and
|
|
17.1.4
|
it is not aware of any pending actions or proceedings before any court of administrative agency which might materially affect its ability to perform its obligations under this Agreement.
|
|
17.2
|
The representations and warranties in this Clause shall survive execution and delivery of this Agreement and shall be deemed to be repeated by the Buyers at the time of accession of any Acceding Buyer to this Agreement
and by both Parties on the date of delivery of each Vessel.
|
|
18.1
|
This Agreement and the MOAs constitute the entire agreement and understanding between the Parties and supersede and extinguish all previous drafts, agreements, arrangements, discussions, exchanges and understandings
between them, whether written or oral, relating to its subject matter.
|
|
18.2
|
Each Party acknowledges that in entering into this Agreement and the MOAs it has not and does not rely on, and shall have no right or remedies in respect of, any statement, representation, assurance or warranty (whether
made innocently or negligently) that is not expressly set out in this Agreement or any MOA.
|
|
18.3
|
Any terms implied into this Agreement or the MOAs by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Agreement shall limit or exclude any
liability for fraud or for death or personal injury caused by the negligence of a Party to the extent not permitted by law.
|
|
18.4
|
No failure or delay by a Party to exercise any right or remedy provided under this Agreement or any MOA or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the
further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy.
|
|
18.5
|
Without prejudice to the rights of any Acceding Buyer under this Agreement and the relevant MOA, no term of this Agreement or any MOA shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 (or
otherwise) by any party who is not a Party to this Agreement.
|
|
18.6
|
Each of the Parties undertakes with the other to use its reasonable endeavours to do and perform such other and further acts and execute and deliver any and all other instruments as may be required by law or reasonably
required by the other Party in order to establish, maintain and protect the rights and remedies of the other Party and to carry out and effect the intent and purpose of this Agreement.
|
|
18.7
|
The Parties shall use reasonable endeavours to satisfy, in a timely manner, their other obligations under this Agreement.
|
|
18.8
|
This Agreement may be executed in counterparts each of which will constitute one and the same document.
|
1224538
12
|
19.1
|
Whether or not the Effective Date occurs, each of the Parties shall bear their own costs and expenses including (i) fees with respect to their external advisors, including auditors and lawyers and (ii) public
charges of any nature.
|
|
20
|
Conflict between provisions
|
|
20.1
|
The Appendices attached to the Agreement shall form an integrated part hereof. In case of any ambiguity or conflict between the provisions of this Agreement (excluding the ambiguous or conflicting Appendix) and the
provisions of any Appendix (including, without limitation, any MOA), the terms of this Agreement (excluding the ambiguous or conflicting Appendix) shall prevail.
|
|
21.1
|
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 letter (by courier/hand delivery) or E-mail as follows:
|
If to Maersk Tankers Singapore Pte Ltd:
c/o Maersk Tankers A/S
Esplanaden 50
1098 Copenhagen K
Denmark
For the attention
of: Head of Business Development
Email:
claus.gronborg@maersk.com
cc
For the attention of: Head of
Legal
Email: anette.ryde@maersktankers.com
If to the Buyers:
Euronav NV
20 De Gerlachekaai
2000
Antwerp
Belgium
For the
attention of: Chief Executive Officer
Email:
management@euronav.com
cc
For the attention of: General
Counsel
Email: legal@euronav.com
or any substitute address or Email-address or department or officer as any Party may notify to the other Party.
|
21.2
|
The receipt of any notices or other communication from a Party made by E-mail shall also be forwarded by letter (by courier/hand delivery) unless the E-mail is confirmed as received by the other Party.
|
1224538
13
|
22
|
Governing law and jurisdiction
|
|
22.1
|
This Agreement or any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this
Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
|
|
22.2
|
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
|
|
22.3
|
The reference shall be to three arbitrators. A Party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other Party requiring the other Party to
appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other Party appoints its own arbitrator and gives notice that it has done so within the 14 days
specified. If the other Party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified, the Party referring a dispute to arbitration may, without the requirement of any further prior notice to the other
Party, appoint its arbitrator as sole arbitrator and shall advise the other Party accordingly. The award of a sole arbitrator shall be binding on both Parties as if he had been appointed by agreement.
|
|
22.4
|
In the event that there are multiple claimants and/or multiple respondents, the reference shall be to three arbitrators. Two of these shall be appointed by the Parties as defined in this Agreement: one by the Sellers
for their party in the dispute (either the claimants or the respondents), and one by the Buyers (which shall include any Acceding Buyer) for their party in the dispute. Otherwise, the appointment of arbitrators shall follow the procedure set out in
Clause 22.3.
|
|
22.5
|
Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.
|
|
22.6
|
In cases where neither the claim nor any counterclaim exceeds the sum of USD 50,000 (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure
current at the time when the arbitration proceedings are commenced.
|
|
23.1
|
The following Appendices are attached to this Agreement:
|
|
|
|
|
|
Appendix 1-A to 1-D:
|
|
MOAs for the sale of each Vessel
|
|
|
|
|
Appendix 2:
|
|
List of the Vessels and Delivery Windows
|
|
|
|
|
Appendix 3:
|
|
Form of Accession Deed
|
|
|
|
|
Appendix 4:
|
|
Escrow Agreement
|
|
|
|
|
Appendix 5:
|
|
List of Time Charters
|
|
24.1
|
This Agreement and each of the MOAs may be executed in any number of counterparts, each of which shall constitute an original, but all counterparts shall together constitute one and the same instrument.
|
1224538
14
This Agreement has been entered into on the date stated at the beginning of it.
|
|
|
|
|
For and on behalf of
|
|
Maersk Tankers Singapore Pte Ltd
as Sellers
|
|
|
|
|
By:
|
|
/s/ Claus Gronborg
|
|
|
|
|
Name:
|
|
Claus Gronborg
|
|
|
|
|
Title:
|
|
Attorney-in-fact
|
|
|
|
For and on behalf of
|
|
Euronav NV
as Buyers and
Guarantor
|
|
|
|
|
By:
|
|
/s/ Hugo De Stoop
|
|
|
|
|
Name:
|
|
Hugo De Stoop
|
|
|
|
|
Title:
|
|
CFO
|
|
|
|
|
By:
|
|
/s/ Egied Verbeeck
|
|
|
|
|
Name:
|
|
Egied Verbeeck
|
|
|
|
|
Title:
|
|
General Counsel
|
1224538
15
Appendix 1 – MOA for the sale of each Vessel
1224538
16
Appendix 2 – List of the Vessels
List of the Vessels
|
|
|
|
|
|
|
Name of Vessel
|
|
Allocated Purchase Price
|
|
Delivery Window
|
|
Maersk Hakata
|
|
USD 80,000,000 (United States Dollars Eighty Million)
|
|
As nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Hakone
|
|
USD 80,000,000 (United States Dollars Eighty Million)
|
|
As nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Hirado
|
|
USD 86,000,000 (United States Dollars Eighty Six Million)
|
|
As nominated by the Sellers in accordance with Clause 5
|
|
|
|
|
|
Maersk Hojo
|
|
USD 96,000,000 (United States Dollars Ninety six Million)
|
|
As nominated by the Sellers in accordance with Clause 5
|
1224538
17
Appendix 3 – Form of Accession Deed
|
|
|
|
|
To:
|
|
Maersk Tankers Singapore Pte Ltd
|
|
|
|
|
Cc:
|
|
[
—
]
|
|
|
|
|
From:
|
|
[ ], as Acceding Buyer
|
|
|
|
|
Dated:
|
|
[ ]
|
Dear Sirs,
Framework
Agreement in relation to the sale of VLCC vessels – Accession Deed
We refer to the Framework Agreement dated 7 July 2014 (the
“
Agreement
”), as amended, supplemented and restated from time to time, and amongst others made between Maersk Tankers Pte Ltd, as Sellers and Euronav NV as Buyers.
This is an accession deed.
Terms defined in the Agreement
shall, unless otherwise defined therein, have the same meaning when used herein.
|
1.
|
[ ] is a limited company duly incorporated under the laws of
[ ] with company registration number
[ ], having its address at
[ ].
|
|
2.
|
We confirm that we are a wholly owned subsidiary of Euronav NV; and
|
|
3.
|
We agree that we shall become a Party to the Agreement as Acceding Buyer immediately upon signing this accession deed.
|
|
4.
|
The provisions in Clause 22 of the Agreement in respect of choice of law and jurisdiction shall apply to this accession deed as if set out in full herein.
|
1224538
18
THIS ACCESSION DEED
has been executed by the parties mentioned below as a DEED and is delivered on the
date stated above.
|
|
|
|
|
[
Acceding Buyer
]
|
|
|
|
|
|
|
[
EXECUTED
as a
DEED
|
|
]
|
|
By: [
Acceding Buyer
]
|
|
)
|
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
Director/Secretary
|
|
|
|
|
OR
|
|
|
|
|
|
|
[
EXECUTED
as a
DEED
|
|
|
|
By: [
Acceding Buyer
]
|
|
|
|
|
|
|
|
|
Signature of Director
|
|
|
|
|
|
|
Name of Director
|
|
|
|
|
in the presence of
|
|
|
|
|
|
|
|
|
Signature of witness
|
|
|
|
|
|
|
Name of witness
|
|
|
|
|
|
|
Address of witness
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Occupation of witness
|
1224538
19
|
|
|
|
|
Acknowledged by Euronav NV
|
|
|
|
as Guarantor
|
|
|
|
|
|
|
|
|
Signature of Director
|
|
|
|
|
|
|
Name of Director
|
|
|
|
|
|
|
|
1224538
20
Appendix 4 – Escrow Agreement
1224538
21
Appendix 5 – List of Charter Parties
List of the Vessels
|
|
|
|
|
|
|
Name of Vessel
|
|
Date
|
|
Charterer
|
|
Maersk Hakata
|
|
“Maersk Hakata – CP 25 Jan 2013”
|
|
Cosmo Oil Co., Ltd
|
|
|
|
|
|
Maersk Hakone
|
|
5 February 2014
|
|
Tara Transport Corporation (liberia), guaranteed by Carras Ltd
|
|
|
|
|
|
Maersk Hirado
|
|
5 February 2014
|
|
Euronav NV
|
|
|
|
|
|
Maersk Hojo
|
|
5 February 2014
|
|
Euronav NV
|
1224538
22
Exhibit 10.19
MEMORANDUM OF AGREEMENT
|
|
|
|
|
|
|
Norwegian Shipbrokers’ Association’s
Memorandum of Agreement for sale and
purchase of ships. Adopted by BIMCO in 1956.
Code-name
SALEFORM 2012
Revised 1966, 1983 and 1986/87, 1993 and 2012
|
Dated:
7 July 2014
Maersk Tankers Singapore Pte. Ltd.
(
Name of sellers
), hereinafter called the “Sellers”, have agreed to sell,
and
Euronav NV or its fully guaranteed nominee
pursuant to the Framework Agreement
(
Name of buyers
), hereinafter called the “Buyers”, have agreed to buy:
Name of vessel:
IMO Number:
Classification Society:
American Bureau of
Shipping
Class Notation:
|
|
|
|
|
|
|
Year of Build:
|
|
Builder/Yard:
|
|
|
|
|
|
Flag:
Singapore
|
|
Place of Registration:
Singapore
|
|
GT/NT:
|
hereinafter called the “Vessel”, on the following terms and conditions:
Definitions
“Banking Days” are days on which
banks are open both in
New York, Singapore, London, Antwerp and Copenhagen
the country of the currency stipulated for the Purchase Price in
Clause 1
(Purchase Price) and in the place of closing stipulated
in
Clause 8
(Documentation) and
(add additional jurisdictions as appropriate)
.
“Buyers’ Nominated Flag State” means
TBN
(
state flag state
).
“Class” means the class notation referred to above.
“Classification Society” means the Society referred to above.
“Deposit” shall have the meaning given in
Clause 2
(Deposit)
“Deposit Holder” means
(
state name and location of Deposit Holder
)
or, if left
blank, the Sellers’ Bank, which shall hold and release the Deposit in accordance with this Agreement.
“Framework Agreement” means the
agreement governing the terms for the sale of 4 VLCC vessels, entered into on the same date as this Agreement between the Sellers and Buyers.
“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, e-mail or
telefax
in accordance with Clause 21 of the Framework Agreement
.
“Parties” means the Sellers and the Buyers.
“Purchase Price” means the price for the Vessel as stated in
Clause 1
Clause 4 and Appendix 2 of the
Framework Agreement
(Purchase Price).
“Sellers’ Account” means (
state details of
bank account
) at the Sellers’ Bank.
“Sellers’ Bank” means
(
state name
of bank, branch and details
) or, if left blank,
the bank notified by the Sellers to the Buyers for receipt of the balance of the Purchase Price.
Save as specifically defined in this Agreement the definitions used in the Framework Agreement shall have the same meaning in this Agreement.
|
|
The Purchase Price is
(
state currency and amount both in words and figures
)
See Clause 4 and Appendix 2 of the Framework
Agreement
.
|
|
|
See Clause 4 of the Framework Agreement
.
As security for the correct fulfilment of this Agreement the Buyers shall ledge a deposit of
%
(
per cent) or, if left blank, 10% (ten per cent), of the Purchase Price (the “Deposit”) in an interest bearing account for the Parties with the Deposit Holder within three (3) Banking Days
after the date that:
|
|
|
(i)
|
this Agreement has been signed by the Parties and exchanged in original or by e-mail or telefax; and
|
|
|
(ii)
|
the Deposit Holder has confirmed in writing to the Parties that the account has been opened
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.
|
|
|
The Deposit shall be released in accordance with joint written instructions of the Parties interest, if any, shall be credited to the Buyers. Any fee charged for holding and releasing the Deposit shall be borne
equally by the Parties. The Parties shall provide to the Deposit Holder all necessary documentation to open and maintain the account without delay.
|
|
|
See Clause 4 of the Framework Agreement.
|
|
|
On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of Readiness has been given in accordance with
Clause 5
(Time and place of delivery
and notices):
|
|
|
(i)
|
the Deposit shall be released to the Sellers; and
|
|
|
(ii)
|
the balance of the Purchase Price and all other sums payable on delivery by the Buyers to the Sellers under this Agreement shall be paid in full free of bank charges to the Sellers’ Account.
|
|
|
(a)*
The Buyers have inspected and accepted the Vessel’s classification records. The Buyer’s have also inspected the Vessel at/in
(
state place
) on
(
state date
) and have accepted the Vessel following this inspection and the sale is
outright at definite, subject only to the terms and conditions of this Agreement.
|
|
|
The Buyers have inspected and accepted the Vessel’s classification records. The Buyers have waived their right to physically inspect the Vessel, and as a consequence the Buyers accept that the sale is outright
and definite, subject only to the terms and conditions of this Agreement and the Framework Agreement.
|
|
|
(b)*
The Buyers shall have the right to inspect the Vessel’s classification records and declare whether same are accepted or not within
(
state date/period
).
|
|
|
The Sellers shall make the Vessel available for inspection at/in
(
state place/range
) within
(
state date/period
).
|
|
|
The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.
|
|
|
The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.
|
|
|
During the inspection, the Vessel’s deck and engine log books shall be made available for examination by the Buyers.
|
|
|
The sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within
seventy two (72) hours after completion of such inspection or after the date/last day of the period stated in
Line 59
, whichever is earlier.
|
|
|
Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of the Vessel’s classification records and/or of the Vessel not be received by the Sellers as aforesaid, the
Deposit together with interest earned, if any, shall be released immediately to the Buyers, whereafter this Agreement shall be null and void.
|
|
*
|
4(a)
and
4(b)
are alternatives; delete whichever is not applicable. In the absence of deletions, alternative
4(a)
shall apply.
|
|
5.
|
Time and place of delivery and notices
|
|
|
See Clause 5 of the Framework Agreement.
|
|
|
(a)
The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or anchorage at
/in
any area or port worldwide
(
state
place/range
)
in the Seller’s option
,
but excluding any area or port within (i) the jurisdiction of the West Coast of the United States of America; and (iii) any nation prohibited under the laws
of the United States of America, the United Nations or the European Union
.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
2
|
|
Notice of Readiness shall not be tendered before:
(
date
)
|
|
|
Cancelling Date (see
Clauses 5(c),
6 (a)(i)
,
6 (a) (iii)
and
14
):
See Clause 9.2 of the Framework Agreement
|
|
|
(b)
The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall provide the Buyers with twenty (20),
fifteen (15),
ten (10), five (5) and three (3) days’ notice
of the date the Sellers intend to tender Notice of Readiness and of the intended
range/
place of delivery.
|
|
|
When the Vessel is at the place of delivery and physically ready for delivery in accordance with this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.
|
|
|
(c)
If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing stating the date
when they anticipate that the Vessel will be ready for delivery and proposing a new Cancelling Date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with
Clause 14
(Sellers’ Default) within three (3) Banking Days of receipt of the notice or of accepting the new date as the new Cancelling Date. If the Buyers have not declared their option within three (3) Banking Days of receipt of the
Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new Cancelling Date and shall be substituted for the Cancelling Date stipulated in
line 79
.
|
|
|
If this Agreement is maintained with the new Cancelling Date all other terms and conditions hereof including those contained in
Clauses 5(b)
and
5(d)
shall remain unaltered and in full force and effect.
|
|
|
(d)
Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely without prejudice to any claim for damages the Buyers may have under
Clause 14
(Sellers’ Default) for the Vessel not being ready by the original Cancelling Date.
|
|
|
(e)
Should the Vessel become an actual, constructive or compromised total loss before delivery the Deposit together with interest earned, if any, shall be released immediately to the Buyers whereafter
this Agreement shall be null and void.
|
|
6.
|
Divers Inspection / Drydocking
|
|
|
(i)
|
The Buyers shall have the option at their cost and expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel
at the Delivery Port as
defined in the Framework Agreement. If Clause 5.2 of the Framework Agreement is applicable and the Vessel is to be delivered in international waters, the Buyers shall instead have the right to arrange for an underwater inspection of the Vessel at
the last discharge port prior to delivery
. Such option shall be declared latest nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to
Clause 5(b)
of this
Agreement. The Sellers shall at their cost and expense make the Vessel available for such inspection. This inspection shall be carried out without undue delay and in the presence of a Classification Society surveyor arranged for by the Sellers and
paid for by the Buyers. The Buyers’ representative(s) shall have the right to be present at the diver’s inspection as observer(s) only without interfering with the work or decisions of the Classification Society surveyor. The extent of the
inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at their cost and expense make the
Vessel available at a suitable alternative place near to the delivery port, in which event the Cancelling Date shall be extended by the additional time required for such positioning and the subsequent re-positioning. The Sellers may not tender
Notice of Readiness prior to completion of the underwater inspection.
|
|
|
(ii)
|
If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, then (1) unless repairs can be carried
out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line,
the extent of the inspection being in accordance with the Classification Society’s rules (2) such defects shall be made good by the Sellers at their cost and expense to the satisfaction of the Classification Society without
condition/recommendation** and (3) the Sellers shall pay for the underwater inspection and the Classification Society’s attendance.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
3
|
|
|
Notwithstanding anything to the contrary in this Agreement, if the Classification Society do not require the aforementioned defects to be rectified
before
until
the next class drydocking survey,
the Sellers shall be entitled to deliver the Vessel with these defects against a deduction from the Purchase Price of the estimated direct cost (of labour and materials) of carrying out the repairs to the satisfaction of the Classification Society,
whereafter the Buyers shall have no further rights whatsoever in respect of the defects and/or repairs
,
the scope of repairs shall be ascertained and endorsed by the Classification Society
. The estimated direct cost of the repairs
shall be the average of quotes for the repair work obtained from two reputable independent shipyards
at or
in the
UAE-Japan Range, excl. Chinese shipyards
vicinity of the port of delivery
, one to be obtained
by each of the Parties within
two
four
(
2
4
) Banking Days from the date
of the
on which the Classification Society ascertained and endorsed the scope of repairs
imposition of the condition/recommendation
, unless the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within the stipulated time then the quote duly obtained by the other Party shall be the sole basis for
the estimate of the direct repair costs. The Sellers may not tender Notice of Readiness prior to such estimate having been established.
|
|
|
(iii)
|
If the Vessel is to be drydocked pursuant to Clause
6(a)(ii)
and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable
drydocking facilities are available, whether within or outside the delivery range as per
Clause 5(a)
. Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per
Clause 5(a)
which
shall, for the purpose of this Clause, become the new port of delivery. In such event the Cancelling Date shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of fourteen (14) days.
|
(b)
* The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below
the deepest load line are found broken, Sellers’ cost and expense to the satisfaction of the Classification Society without condition/recommendation**. In such event the Sellers are also to pay for the costs and expenses in connection with
putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees. The Sellers shall also pay for these costs and expenses if parts of the tailshaft system are condemned or found defective or
broken so as to affect the Vessel’s class. In all other cases, the Buyers shall pay the aforesaid costs and expenses, dues and fees.
(c)
If the Vessel is drydocked pursuant to Clause
6 (a)(ii)
or
6 (b)
above:
|
|
(i)
|
The Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the
Buyers shall have the option to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the
current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the
tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ cost and expense to the
satisfaction of Classification Society without condition/recommendation**.
|
|
|
(ii)
|
The costs and expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out or if parts of the system are condemned
or found defective or broken so as to affect the Vessel’s class, in which case the Sellers shall pay these costs and expenses.
|
|
|
(iii)
|
The Buyers’ representative(s) shall have the right to be present in the drydock, as observer(s) only without interfering with the work or decisions of the Classification Society surveyor.
|
|
|
(iv)
|
The Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk, cost and expense without
interfering with the Sellers’ or the Classification Society surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
4
|
|
Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and expense. In
the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and, notwithstanding
Clause 5(a)
, the
Buyers shall be obliged to take delivery in accordance with
Clause 3
(Payment), whether the Vessel is in drydock or not.
|
|
*
|
6 (a) and 6 (b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 (a) shall apply.
|
|
**
|
Notes or memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.
|
|
7.
|
Spares, bunkers and other items
|
|
|
The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller
blade(s), if any, belonging to the Vessel at the time of inspection used or unused, whether on board or not
and in the warehouse at shore
shall become the Buyers’ property, but spares on order are excluded. Forwarding charges, if any,
shall be for the Buyers’ account. The Sellers are not required to replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the
replaced items shall be the property of the Buyers. Unused stores and provisions shall be included in the sale and be taken over by the Buyers without extra payment.
|
|
|
Library and forms exclusively for use in the Sellers’ vessel(s) and captain’s, officers’ and crew’s personal belongings including the slop chest are excluded from the sale without compensation, as
well as the following additional items:
|
|
|
•
|
|
log books for deck/engine/Cargo ops
|
|
|
•
|
|
pictures and paintings in the Sellers’ option
|
|
|
•
|
|
documents directly related to present ownership
|
|
|
•
|
|
documents which have to be returned to the authorities
|
|
|
•
|
|
all forms etc. which are related to the present ownership
|
|
|
•
|
|
the Vessel’s maintenance system for hull and machinery, however, Sellers shall deliver to the Buyers ship specific PMS database in the format that comes out of Shipnet
|
|
|
•
|
|
computer software for pc’s either developed by or licensed to the Sellers except loadmaster computer which is included in the sale
|
|
|
•
|
|
software for chart corrections and nautical documents
|
|
|
•
|
|
ship’s bell (will be replaced by Sellers with a generic ship’s bell of equal or better quality)
|
|
|
•
|
|
digital cameras and mobile telephones
|
|
|
•
|
|
all hired and rented equipment such as videotel, Unitor/Drew bottles
|
|
|
•
|
|
EPIRB, SAT D etc hardware will remain onboard, but subscriptions will be cancelled/reprogrammed
|
|
|
•
|
|
administrative LAN server
|
|
|
•
|
|
Scanjets including hoses and fittings (if any)
|
|
|
Items on board which are on hire or owned by third parties
, listed as follows,
are excluded from the sale without compensation:
Sellers will latest 30 days prior to the anticipated delivery date
provide a list to Buyers of items onboard which are on hire or owned by third parties.
(include list)
Items on board at the time of inspection which are on hire or owned by third parties, not listed above, shall be replaced or
procured by the Sellers prior to delivery at their cost and expense.
|
|
|
The Buyers shall take over the remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and unopened drums
at the port and date of delivery and for bunkers pay the actual supplied net
price on a FIFO basis as evidenced by invoices or vouches. For the unused lubricating and hydraulic oils and greases the Buyers shall pay its own average prices as follows (all prices in USD/HL):
|
|
|
ME Engine system oil: 144.24
|
|
|
Generator (A/E) system oil: 170.17
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
5
|
|
For the unused oils and greases not included In the above mentioned price list Buyers shall pay the list prices of the latest supplier applicable in the port of Singapore (at the time of delivery of the relevant
supply of products) minus 20% for the quantities taken over.
|
|
|
Quantities of the bunkers/luboils/greases/heel onboard are to be verified by a joint survey between the Sellers’ and the Buyers’ representative(s) onboard prior to delivery
,
and pay
either:
|
(a)
*the actual net price (excluding barging expenses) as evidenced by invoices or vouchers;
or
(b)
*the current net market price (excluding barging expenses) at the port and date of delivery of the Vessel
or, if unavailable, at the nearest bunkering port,
|
|
for the quantities taken over.
|
|
|
Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price.
|
|
|
“inspection” in this
Clause 7
, shall mean the Buyers’ inspection according to
Clause 4(a)
or
4(b)
(Inspection), if applicable. If the Vessel is taken over without inspection, the date
of this Agreement shall be the relevant date.
|
|
*
|
(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions alternative (a) shall apply.
|
|
|
The place of dosing:
London, unless otherwise agreed between Sellers and Buyers.
|
|
|
(a)
In exchange for payment of the Purchase Price the Sellers shall provide the Buyers with the following delivery documents:
|
|
|
(i)
|
Two (2)
Legal Bill(s) of Sale in a form recordable in the Buyers’ Nominated Flag State, transferring title of the Vessel and stating that the Vessel is free from all mortgages,
encumbrances
,
taxes
and maritime liens or any other debts whatsoever, duly notarially attested and legalised or apostilled, as required by the Buyers’ Nominated Flag State;
|
|
|
(ii)
|
Evidence that all necessary corporate
, shareholder
and other action has been taken by the Sellers to authorise the execution, delivery and performance of this Agreement;
|
|
|
(iii)
|
Power of Attorney of the Sellers appointing one or more representatives to act on behalf of the Sellers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate);
|
|
|
(iv)
|
Certificate or Transcript of Registry issued by the competent authorities of the
Singapore
flag state on the date of delivery evidencing the Sellers’ ownership of the Vessel and that the Vessel is
free from registered encumbrances and mortgages, to be faxed or e-mailed by such authority
or the Sellers
to the closing meeting with the original to be sent to the Buyers as soon as possible after delivery of the Vessel;
|
|
|
(v)
|
Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate issued within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of
condition/recommendation;
|
|
|
(vi)
|
Certificate of Deletion of the Vessel from the Vessel’s
Singapore
registry or other official evidence of deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event
that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s
Singapore
registry forthwith and provide a certificate or other official
evidence of deletion to the Buyers promptly and latest within four (4) weeks after the Purchase Price has been paid and the Vessel has been delivered;
|
|
|
(vii)
|
A copy of the Vessel’s Continuous Synopsis Record certifying the date on which the Vessel ceased to be registered with the Vessel’s registry, or, in the event that the registry does not as a matter of
practice issue such certificate immediately, a written undertaking from the Sellers to provide the copy of this certificate promptly upon it being issued together with evidence of submission by the Sellers of a duly executed Form 2 stating the date
on which the Vessel shall cease to be registered with the Vessel’s registry;
|
|
|
(viii)
|
Commercial Invoice for the Vessel;
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
6
|
|
(ix)
|
Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases;
|
|
|
(x)
|
A copy of the Sellers’ letter to their satellite communication provider cancelling the Vessel’s communications contract which is to be sent immediately after delivery of the Vessel;
|
|
|
(xi)
|
Any additional documents as may reasonably be required by the competent authorities of the Buyers’ Nominated Flag State for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such
documents as soon as possible
and within reasonable time
after the date of this Agreement; and
|
|
|
(xii)
|
The Sellers’ letter of confirmation that to the best of their knowledge, the Vessel is not
at the time of delivery to Buyers
black listed by
the USA or any European Union nation or under blockade by ITF
or the Arab Boycott League;
any nation or international organisation.
|
|
|
(xiii)
|
The Sellers’: (1) Certificate of Incorporation; (2) ACRA transcript issued within five (5) business days prior to the delivery of the Vessel; (3) copy of Sellers’ Memorandum and Articles of Association; and
(4) a certificate of director of the Sellers.
|
|
|
(b)
At the time of delivery the Buyers shall provide the Sellers with:
|
|
|
(i)
|
Evidence that all necessary corporate
, shareholder and other
action has been taken by the Buyers to authorise the execution, delivery and performance of this Agreement; and
;
.
|
|
|
(ii)
|
Power of Attorney of the Buyers appointing one or more representatives to act on behalf of the Buyers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate)
|
|
|
(iii)
|
The Buyers’: Certificate of Incorporation and Good Standing confirming the good standing of the Buyers and providing Information on the current Directors of the Buyers together with copy of Buyers’ Articles
of Association attached to it, issued within five (5) business days prior to the delivery, duly notarially attested and legalized by apostille (as appropriate) If information on the Directors of the Buyers is not by practice provided in the above
Certificate, Buyers to provide Sellers with a separate Certificate of Incumbency, duly notarially attested and legalized by apostille (as appropriate).
|
|
|
(c)
If any of the documents listed in Sub-clauses (a) and (b) above are not in the English language they shall be accompanied by an English translation by an authorised translator or certified by a lawyer
qualified to practice in the country of the translated language.
|
|
|
(d)
The Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Sub-clause (a) and Sub-clause (b) above for review and comment by the other party not later than
nine
(9)
(
state number of days),
or if left blank, nine (9)
days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to
Clause 5(b)
of this Agreement.
|
|
|
(e)
Concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above, the Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans, drawings and manuals,
(excluding ISM/ISPS manuals), which are on board the Vessel. Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers have the right to take
copies.
|
|
|
(f)
Other technical documentation which may be in the Sellers’ possession shall promptly after delivery be forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s
log books but the Buyers have the right to take copies of same.
|
|
|
(g)
The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers.
|
|
|
The Sellers warrant that the Vessel, at the time of delivery, is free from all
charters,
encumbrances, mortgages and maritime liens or any other debts whatsoever, and is not subject to Port State or
other administrative detentions. The Sellers hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery.
|
|
10.
|
Taxes, fees and expenses
|
|
|
Any taxes, fees and expenses in connection with the purchase and registration in the Buyers’ Nominated Flag State shall be for the Buyers’ account, whereas similar charges in connection with the closing of the
Sellers’ register shall be for the Sellers’ account.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
7
|
11.
|
Condition on delivery
|
|
|
The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken
over as she was at the time of inspection
of
the Vessel’s Class records
, fair wear and tear excepted.
|
|
|
However, the Vessel shall be delivered free of cargo and free of stowaways with her Class maintained without condition/recommendation*, free of average damage affecting the Vessel’s class, and with her
classification certificates and national certificates, as well as all other certificates the Vessel had at the time of inspection
of
the Vessel’s Class records
, valid
for
three (3) months
and unextended without
condition/recommendation* by the Classification Society or the relevant authorities at the time of delivery.
|
|
|
The Sellers shall notify the Classification Society of any matters coming to their knowledge prior to delivery which upon being reported to the Classification Society would lead to the withdrawal of the Vessel’s
Class or to the imposition of a recommendation relating to her Class.
|
|
|
“inspection” in this
Clause 11
, shall mean the Buyers’ inspection according to
Clause 4(a)
or
4(b)
(Inspections), if applicable. If the Vessel is taken over without inspection, the
date of this Agreement shall be the relevant date.
|
|
*
|
Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.
|
|
|
Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.
Latest at the Vessel’s next scheduled dry-docking Buyers shall repaint the Vessel’s hull in a colour
which is not associated with the Sellers.
|
|
|
See Clause 8 of the Framework Agreement
|
|
|
Should the Deposit not be lodged in accordance with
Clause 2
(Deposit), the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their
losses and for all expenses incurred together with interest.
|
|
|
Should the Purchase Price not be paid in accordance with
Clause 3
(Payment), the Sellers have the right to cancel this Agreement, in which case the Deposit together with interest earned,
if any, shall be released to the Sellers. If the Deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest.
|
|
|
See Clause 9 of the Framework Agreement.
|
|
|
Should the Sellers fail to give Notice of Readiness in accordance with
Clause 5(b)
or fail to be ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have
the option of cancelling this Agreement. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again by the Cancelling Date and
new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement, the Deposit together with interest earned, if any, shall be released to them immediately.
|
|
|
Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to Validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and
for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement.
|
|
15.
|
Buyers’ representatives/crew
|
|
|
After
this Agreement has been signed by the Parties
the Effective Date
and
when
the Deposit has been lodged, the Buyers have the right to place
two
three
(
2
3
) representatives on board the Vessel at their sole risk and expense.
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
8
|
|
These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with the operation of the Vessel. The Buyers and the Buyers’
representatives shall sign the Sellers’ P&I Club’s standard letter of indemnity prior to their embarkation.
|
|
|
Once Notice of Readiness has been given to the Buyers by the Sellers the Sellers shall allow access to the Vessel by the Buyers’ crew for the purpose of familiarisation only subject to signing the Sellers’
P&I Club’s standard letter of indemnity prior to embarkation and always provided that (i) there is enough space onboard, (ii) safety is not endangered, (iii) Buyers’ crew do not interfere with the delivery and
(iv) no regulations are broached.
|
|
|
Clause 22 of the Framework Agreement shall apply mutatis mutandis to and form an integral part of this Agreement.
|
|
(a)
*This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.
|
|
|
The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.
|
|
|
The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other
party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so
within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the
requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both Parties as if the sole arbitrator had been
appointed by agreement.
|
|
|
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration
proceedings are commenced.
|
|
|
(b)
*This Agreement shall be governed by and the construed in accordance with Title 9 of the United States Code and the substantive law (not including the choice of law rules) of the State of New York and
any dispute arising out of or in connection with this Agreement shall be referred to three (3) persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen, their decision or that of any two of them
shall be final, and for the purposes of enforcing any award, judgment may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators,
Inc.
|
|
|
In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime
Arbitrators, Inc.
|
|
|
(c)
This Agreement shall be governed by and construed in accordance with the laws of
(
state place)
and any dispute-arising out of
or in connection with this Agreement shall be referred to arbitration at
(
state place)
, subject to the procedures applicable there.
|
*
|
16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 16(a) shall apply.
|
|
|
All notices to be provided under this Agreement shall be in writing.
|
|
|
Contact details for recipients of notices are as follows:
|
|
|
|
|
For the Buyers:
|
|
Euronav NV
|
|
|
|
20 De Gerlachekaai
2000
Antwerp
Belgium
For the attention of: Chief
Executive Officer
Email: management@euronav.com
c.c. For the attention of: General Counsel
Email:
legal@euronav.com
|
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.
|
9
|
|
|
|
|
For the Sellers:
|
|
c/o Maersk Tankers A/S
Esplanaden
50
1098 Copenhagen K
Denmark
For the attention of:
Email:
claus.gronborg@maersktankers.com
c.c. For the attention of: Head of
Legal
Email: anette.ryde@maersktankers.com
|
|
18.
|
Entire Agreement
Various
|
|
|
This Agreement constitutes an integrated part of the Framework Agreement. In case of conflict between this Agreement and the Framework Agreement, the latter shall prevail.
|
|
|
The written terms of this Agreement
together with the Framework Agreement
comprise the entire agreement
and understanding
between the Buyers and the Sellers in relation to the sale and purchase of the
Vessel and supersede
and extinguish
all previous
drafts,
agreements
, discussions, exchanges and understandings between them,
whether oral or written
between the Parties in relation thereto
relating to its
subject matter
.
|
|
|
Each of the Parties acknowledges that in entering into this Agreement it has not
and does not
rel
y
ied
on and shall have no right or remed
y
ies
in respect of any
statement, representation, assurance or warranty (whether
or not
made
innocently or
negligently) other than as is expressly set out in this Agreement.
|
|
|
Any terms implied into this Agreement by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For and on behalf of the Sellers
|
|
|
|
For and on behalf of the Buyers
|
|
|
|
|
|
Name:
|
|
Claus Granborg
|
|
|
|
Name:
|
|
Egied Verbeech
|
|
|
|
Hugo De Stoop
|
|
|
|
|
|
|
|
|
|
Title:
|
|
Attorney-in-fact
|
|
|
|
Title:
|
|
General Counsel
|
|
|
|
CFO
|
|
19.
|
Trading and delivery of the Vessel
|
The Sellers also undertake with the Buyers not to employ the
Vessel in contradiction with any sanctions against any sovereign nation issued by the European Union, United States of America or United Nations.
The Sellers shall indemnify the Buyers in relation to any fines or penalties which may be applied by any regulatory authorities in relation to the trading
of the Vessel prior to the date of delivery of the Vessel.
The days on which any notice is given by one party to the other will be excluded from the
total number of days required for such notice.
21. All fleet stock spares in Singapore and Rotterdam warehouses are included free of cost in the
sale, list to be provided by Sellers. Such spares will be delivered ex warehouses in Singapore and Rotterdam.
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.
|
10
22. All open purchase orders to be delivered by Sellers to Buyers warehouse after delivery.
|
|
|
This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.
|
11
Exhibit 14.1
Code of Conduct
Code of Conduct
|
•
|
|
Euronav acts through its Directors, officers and employees. This code of conduct provides guidelines about important areas where the conduct of persons becomes conduct of the company (You in this document means each and
every Officer, Director and Employee).
|
|
•
|
|
The conduct of individuals in the guidelines relate to the relationship with colleagues, customers, suppliers and government agencies with equal importance. As a starting point Euronav should present itself as a
professional, polite and responsible organisation. These guidelines are an addition or a clarification to that basic ethos and Euronav’s Managers, Board of Directors, lawyers and internal auditors are available to provide advice and assistance
where individuals or groups wish to seek advice or report breaches of this code.
|
Conflicts of Interest
|
•
|
|
You should avoid any conflict between your own interests and the interests of Euronav especially when dealing with suppliers, customers, and other third parties, and in the conduct of your personal affairs, including
transactions in securities of the Company.
|
|
•
|
|
You must separate your private interests from those of the company. Private interests or relationships must not influence your decisions made on behalf of the company. You must disclose conflicts of interest whether it
is your conflict or that of another Director, employee or officer at once to the head of department or to the Executive Committee. If a report is made to you, or you become aware of such a conflict of interest, as a Head of Department or as an
Executive Committee member you shall report and consult the Chairman of the Audit Committee immediately in the event of any irregularities apparently arising within the company.
|
|
•
|
|
Business relationships with third parties shall be governed solely by objective criteria. Suppliers shall be selected only on the basis of price, quality, reliability, technological standard, product suitability, the
existence of a continuing business relationship, ISO or ecological audit certification and the existence of a quality management system. In no circumstances shall personal relationships be determining factors in awarding a contract. Advice or
recommendations given by you must not be motivated by the prospect of a material or non-material advantage to you or another Director, officer or employee.
|
|
•
|
|
The procurement policy of the company requires that at least two bids are obtained for each procurement and unless there is risk as to quality or significant additional cost at least two suppliers are to be maintained.
|
|
•
|
|
You shall not directly or indirectly request, accept, offer or grant a personal advantage in connection with business activity - especially the negotiation, award or performance of a contract - regardless of whether the
other party to the transaction is an individual, a company or a government agency. No personal favours of any kind shall be offered or rendered to any domestic or foreign public official in direct or indirect, past, present or future relation to
company affairs. This prohibition applies to any kind of significant gift or other incentive except for customary gifts. This applies even if the transaction with the partner concerned would have been agreed without such an advantage having been
granted or has already been agreed or awarded. If such an offer is made to you, you must immediately report the matter to your head of department or to an Executive Committee member or to the Head of the Audit Committee. Your observation of such
behaviour on the part of others never justifies your violation of these rules.
|
|
•
|
|
You may not make use of company property (such as equipment, goods, vehicles, office supplies, documents, files, data storage media) or avail yourself of the services of company employees for private purposes without
the express permission of your head of department. Company property must not be removed from company premises without the express permission of your head of department or an Executive Committee member or the Head of the Audit Committee, other than
for work-related purposes. Data, programs or documents must be neither copied nor brought onto or removed from company premises without permission other than for work-related purposes.
|
|
•
|
|
Euronav welcomes its employees’ private involvement in clubs, political parties or other social or political institutions, provided that this does not adversely affect the performance of their duties under their
contracts of employment. However, you should not cite your roles within the company when expressing your personal opinions in public.
|
|
•
|
|
It is also a conflict of interest for you, during or after your employment or appointment and without proper authority, to give or make available to anyone, or use for your own benefit, information of a confidential
nature about the company and its nature.
|
Ethics Policy
|
•
|
|
You must observe all applicable laws in business.
|
|
•
|
|
You must act with integrity in the conduct of business.
|
|
•
|
|
Local customs, traditions, and mores differ from place to place, and whilst this should be recognised, honesty is not subject to criticism in any culture. A well-founded reputation for scrupulous dealing is hard won and
easily lost.
|
|
•
|
|
Euronav does care how results are obtained, not just that they are obtained. You must inform colleagues and management of all that you are doing,
record all transactions accurately in your books and records, and be
|
|
|
honest and forthcoming with the internal and external auditors. You are expected to report suspected violations of law or of Euronav policies to company management, or the audit committee or
both.
|
|
•
|
|
Euronav expects compliance with its standards of integrity throughout the organisation and will not tolerate Directors, officers or employees who achieve results at the cost of violation of laws or who deal
unscrupulously. Euronav continues to support, and expects each of its Directors, officers, or employees of the group to support, any employee who passes up an opportunity or advantage, which would otherwise sacrifice ethical standards.
|
|
•
|
|
Equally important, the group expects candour from Directors, officers and employees at all levels and compliance with Euronav policies, accounting rules, and controls. Our system of management will only work to the best
of its capability with honesty and accuracy.
|
Social behavior
|
•
|
|
You must realize that your behavior will be attributed to Euronav and can affect reputation. Euronav therefore expects you to be friendly, objective and fair in your dealings with colleagues and third parties.
|
|
•
|
|
You may not unfairly disadvantage, favour, harass or ostracize others because of race, colour, nationality, descent, religion, gender, sexual orientation, age, physical characteristics or appearance.
|
|
•
|
|
You have the right to be protected against harassment; and the obligation to allow others to feel freedom from harassment, regardless of whether you might consider your own behaviour to be normal or acceptable and
whether the harassed person has the opportunity to avoid the harassment.
|
|
•
|
|
You are entitled to work together with your colleagues in an atmosphere of safety, comfort and trust.
|
|
•
|
|
Communication forms the basis of all decision-making. You must endeavour to contribute as much as possible of your own expertise and of the expertise you can draw on from elsewhere within the company. Successful project
work, both demands work, in a team and on your own initiative.
|
Security of files and records
|
•
|
|
The documents and data storage media used in the workplace must not come into the possession of unauthorized persons. You must therefore keep them secure. You must secure computer data through the use and frequent
changing of passwords. You may not make copies of business papers or computer files other than for work-related purposes.
|
|
•
|
|
You do not have the right to access to information not relating to your own field of work or responsibility. You may not read messages addressed to others, except for work-related reasons.
|
|
•
|
|
You must keep all records and files (including electronic records) in such a way as to permit delegation to a colleague at any time. All significant information should be properly recorded. You must therefore keep files
in a manner that is complete, orderly and readily understandable.
|
Cooperating with the authorities while defending our
rights
|
•
|
|
Euronav will endeavour to be cooperative and open in its dealings with all authorities and government agencies. However, these agencies have limitations on their scope of activities and are subject to procedures and
certain rules. It is therefore not always the case that enquiries or requests from such agencies are to be complied with immediately or at all. Seeking legal advice or exercising the right to remain silent is not an admission of guilt nor is it
improper or unethical. Information should only be provided, or documents submitted to government agencies, outside the ordinary course of business, after consultation with the legal department. It is therefore your duty to inform the legal
department as soon as possible in the event of a request for information or questioning outside the ordinary course of business.
|
Enforcement and discipline
|
•
|
|
Euronav will offer you all the necessary sources of information and the counsel of its legal department to enable violations of law to be avoided. You will also be afforded protection in the event of unjustified actions
by authorities.
|
|
•
|
|
Violations of law will however not be tolerated. Violations may result in reprimand, claims for damages or in termination of employment, or loss of office. If you are unsure whether a violation has occurred you must
seek advice from the legal department. Complaints, suggestions for improvements or reports of alleged violations of law should be made to these departments.
|
|
•
|
|
It is not sufficient simply to take note of this code of conduct. You are requested to review your own behaviour in light of the above standards and to determine where improvements are possible.
|
|
•
|
|
You must organize your area of responsibility in such a way that legal violations can always be observed or reports of violations received. However, you must take the initiative to regularly monitor your
subordinates’ activities and actively communicate with them. You have a duty both to provide and to obtain information.
|
|
•
|
|
These principles must always form an active part of Euronav’s corporate culture. Adherence to them must be based on the necessary sensitivity to the legal limits of employees’ own actions and a willingness to
allow those actions to be judged against legal standards.
|
Euronav Shares
|
•
|
|
Euronav is pleased that many Directors, officers and employees have chosen to invest their own funds in Euronav’s securities. However, in order to ensure compliance with applicable insider trading laws, those of
you who possess material information which has not been publicly disclosed concerning Euronav or other contract parties with whom business is being conducted must refrain entirely from any purchases and sales of securities of Euronav or that
corporation. If you are considering buying or selling stock because of non-public information you possess as a result of your work at Euronav, you should assume that information is material.
|
|
•
|
|
In addition, problems can arise not only from transactions of yours, or your family and associates, but also purchases or sales by others who received relevant information furnished by you. As part of your duty to
maintain Euronav information confidential, you should not provide any advice to family or associates about buying or selling Euronav stock. You are cautioned that any decision by you or members of your family or associates to purchase or sell
securities may be misunderstood by others, and you should always be prepared to explain your transactions in Euronav securities.
|
|
•
|
|
Directors, officers and major stockholders are (and senior management personnel of subsidiaries, may be) subject to various reporting and insider trading requirements. Any persons subject to such requirements are urged
to discuss these matters with Euronav’s Legal Department contemplated securities transactions, including transaction involving stock options, and are required to comply with the Euronav Dealing Code which can be viewed on the company website:
www.euronav.com
.
|
Exhibit 21.1
Euronav NV Subsidiaries
|
|
|
|
|
Name of Subsidiary
|
|
Jurisdiction of
Incorporation or
Organization
|
|
Euronav (UK) Agencies Limited
|
|
UK
|
|
Euronav Luxembourg SA
|
|
Luxembourg
|
|
Euronav SAS
|
|
France
|
|
Euronav Ship Management SAS
|
|
France
|
|
Euronav Ship Management (Hellas) Ltd.
|
|
Liberia
|
|
Euronav Hong Kong Limited
|
|
Hong Kong
|
|
E.S.M.C. Euro-Ocean Ship Management (Cyprus) Ltd.
|
|
Cyprus
|
|
Euronav Shipping NV
|
|
Belgium
|
|
Euronav Tankers NV
|
|
Belgium
|
|
|
|
|
Joint ventures
|
|
|
|
Africa Conversion Corporation
|
|
Marshall Islands
|
|
Asia Conversion Corporation
|
|
Marshall Islands
|
|
Fiorano Shipholding Limited
|
|
Hong Kong
|
|
Fontvieille Shipholding Limited
|
|
Hong Kong
|
|
Great Hope Enterprises Limited
|
|
Hong Kong
|
|
Kingswood Co. Ltd.
|
|
Marshall Islands
|
|
Larvotto Shipholding Limited
|
|
Hong Kong
|
|
Moneghetti Shipholding Limited
|
|
Hong Kong
|
|
Seven Seas Shipping Ltd.
|
|
Marshall Islands
|
|
TI Africa Limited
|
|
Hong Kong
|
|
TI Asia Limited
|
|
Hong Kong
|
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors of Euronav NV:
We consent to the use of
our report dated April 25, 2014, with respect to the consolidated statements of financial position of Euronav NV and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of profit or loss, comprehensive
income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2013, included herein and to the reference to our firm under the heading “Experts” in the prospectus.
KPMG Bedrijfsrevisoren—Réviseurs d’Entreprises
/s/ Jos Briers
Bedrijfsrevisor / Réviseur d’Entreprises
Kontich, BELGIUM
September 8, 2014
Exhibit 23.5
September 8, 2014
Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium
Gentlemen:
Reference is made to the Form F-1
registration statement, including any amendments or supplements thereto (the “Registration Statement”) relating to the public offering of ordinary shares of Euronav NV (the “Company”). We hereby consent to all references to our
name in the Registration Statement and to the use of the statistical information supplied by us set forth in the section of the Registration Statement entitled “The International Tanker Shipping Industry” and the data specifically
attributed to us under the sections entitled “Prospectus Summary,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” and “Business.” We further advise the Company that our
role has been limited to the provision of such statistical data supplied by us. With respect to such statistical data, we advise you that:
(1) we have accurately described the seaborne transportation industry, subject to the availability and reliability of the data supporting the
statistical and graphical information presented; and
(2) our methodologies for collecting information and data may differ from those of
other sources and does not reflect all or even necessarily a comprehensive set of the actual transactions occurring in the tanker shipping industry.
We hereby consent to the filing of this letter as an exhibit to the Registration Statement to be filed with the U.S. Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, and to the references to our firm in the sections of the Registration Statement entitled “Prospectus Summary,” Management’s Discussion and Analysis of Financial Conditions
and Results of Operations,” “The International Tanker Shipping Industry,” “Business,” and “Experts.”
Yours faithfully,
Nigel Gardiner
Group
Managing Director
Drewry Shipping Consultants Ltd.
LONDON |
DELHI | SINGAPORE
Drewry Shipping Consultants, 15-17 Christopher Street, London EC2A 2BS, United Kingdom
t
: +44 (0) 20 7538 0191
f
: +44 (0) 20 7987 9396
e
: enquiries@drewry.co.uk
Registered in England No. 3289135 Registered VAT No. 830 3017 77
www.drewry.co.uk
Exhibit 23.6
|
|
|
|
|
Energy Maritime Associates Pte Ltd
E:
fps@energymaritimeassociates.com
W:www.energymaritimeassociates.com
|
|
|
|
|
September 8, 2014
Euronav
NV
De Gerlachekaai 20
2000 Antwerpen
Belgium
Gentlemen:
Reference is made to the Form F-1 registration statement, including any amendments or supplements thereto (the “Registration
Statement”) relating to the public offering of ordinary shares of Euronav NV (the “Company”). We hereby consent to all references to our name in the Registration Statement and to the use of the statistical information supplied by us
set forth in the section of the Registration Statement entitled “Overview of the Oil and Gas Industry.”
(1) we have accurately
described the offshore oil and gas industry, subject to the availability and reliability of the data supporting the statistical and graphical information presented; and
(2) our methodologies for collecting information and data may differ from those of other sources and does not reflect all or even necessarily
a comprehensive set of the actual transactions occurring in the offshore oil and gas industry.
We hereby consent to the filing of this
letter as an exhibit to the Registration Statement to be filed with the U.S. Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, and to the references to our firm in the sections of the Registration Statement
entitled “Overview of the Oil and Gas Industry” and “Experts”.
Yours faithfully,
David Boggs
Managing Director
Energy Maritime Associates
|
|
|
|
|
|
|
Westech Building, 237 Pandan Loop #08-04, Singapore 128424
|
