Amendment Agreement to Senior Facility Agreement among Boss Ltd., Stavanger Sun Ltd., and Christiania Bank (December 1999)

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Summary

This agreement, dated December 1999, is between Boss Ltd. and Stavanger Sun Ltd. (the Borrowers), Christiania Bank og Kreditkasse ASA (as Agent and Security Trustee), and other banks. It amends certain terms of a previous Senior Facility Agreement from October 1997 due to the Borrowers' liquidity issues. The agreement outlines new terms, waives certain past defaults, and requires the Borrowers to pay a restructuring fee and cover related expenses. The amendments take effect once specific conditions are met, and the original agreement remains in force except as modified here.

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EX-10.16 19 a2028388zex-10_16.txt EXHIBIT 10.16 DATED DECEMBER 1999 BETWEEN BOSS LTD. STAVANGER SUN LTD. AS BORROWER CHRISTIANIA BANK OG KREDITKASSE ASA AS AGENT AND SECURITY TRUSTEE AND OTHERS --------------------------------------------------------------------------- AMENDMENT AGREEMENT RELATING TO A SENIOR FACILITY AGREEMENT DATED 30 OCTOBER 1997 --------------------------------------------------------------------------- CLIFFORD CHANCE THIS AGREEMENT is made on December 1999 BETWEEN (1) BOSS LTD and STAVANGER SUN LTD., both companies duly incorporated in the Cayman Islands each having its registered office at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman, Cayman Islands (the "BORROWERS", and singly a "BORROWER") acting jointly and severally; (2) CHRISTIANIA BANK OG KREDITKASSE ASA as agent and security trustee for the Banks (the "AGENT"); and (3) THE BANKS (as defined in the Original Facility Agreement). RECITALS (A) The Banks made a facility available to the Borrowers pursuant to the Original Facility Agreement (as defined below) on the basis of certain projections and covenants. The total amount outstanding under the Original Facility Agreement as at the date hereof is $ . (B) Due to restricted liquidity and the current earnings of the Vessels, the Banks have agreed to amend certain provisions of the Original Facility Agreement. IT IS AGREED as follows. 1. DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS In this Agreement: "AMENDED AGREEMENT" means the Original Facility Agreement, as amended by this Agreement. "EFFECTIVE DATE" means the date on which the Agent confirms to the Banks and the Borrower that it has received each of the documents listed in Schedule 1 (CONDITIONS PRECEDENT) in a form and substance satisfactory to the Agent. "ORIGINAL FACILITY AGREEMENT" means the Senior Facility Agreement dated 30 October 1997 between the Borrowers, the Agent, and others. 1.2 INCORPORATION OF DEFINED TERMS Terms defined in the Original Facility Agreement shall, unless otherwise defined herein, have the same meaning herein and the principles of construction set out in the Original Facility Agreement shall have effect as if set out in this Agreement. 1.3 CLAUSES In this Agreement any reference to a "Clause" or "Schedule" is, unless the context otherwise requires, a reference to a Clause or Schedule hereof. Clause headings are for ease of reference only. 2. AMENDMENT 2.1 AMENDMENT OF THE ORIGINAL FACILITY AGREEMENT With effect from the Effective Date the Original Facility Agreement shall be amended as set out in Schedule 2 (AMENDMENTS TO ORIGINAL FACILITY AGREEMENT). 2.2 WAIVER The Finance Parties waive any Event of Default or Potential Event of Default which has been disclosed by the Borrower in writing to the Agent prior to the date hereof, PROVIDED THAT nothing herein shall affect the rights of the Finance Parties in respect of the occurrence of any other Event of Default or Potential Event of Default which has not been disclosed by the Borrower in writing prior to the date hereof or which arises on or after the date hereof. 3. REPRESENTATIONS The Borrowers make the representations set out in Clause 12 of the Original Facility Agreement as if each reference therein to "this Agreement" or "the Documents" includes a reference to (a) this Agreement and (b) the Amended Agreement. 4. CONTINUITY AND FURTHER ASSURANCE 4.1 CONTINUING OBLIGATIONS The provisions of the Facility Document shall, save as amended hereby, continue in full force and effect. 4.2 FURTHER ASSURANCE Each of the Borrowers shall, at the request of the Agent and at its own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be effected pursuant to this Agreement. 5. FEES, COSTS AND EXPENSES 5.1 RESTRUCTURING FEE The Borrowers shall pay to the Agent, for the account of the Banks, a restructuring fee in the amount of $10,000. 5.2 TRANSACTION EXPENSES The Borrowers shall, from time to time on demand of the Agent, reimburse the Agent and each of the Banks for all costs and expenses (including legal fees) together with any VAT thereon incurred by it in connection with the negotiation, preparation and execution of this Agreement, any other document referred to in this Agreement and the completion of the transactions herein contemplated. 5.3 PRESERVATION AND ENFORCEMENT OF RIGHTS The Borrowers shall, from time to time on demand of the Agent, reimburse the Finance Parties for all costs and expenses (including legal fees) on a full indemnity basis together with any VAT thereon incurred in or in connection with the preservation and/or enforcement of any of the rights of the Banks, the Agent or the Security Trustee under this Agreement and any other document referred to in this Agreement. 5.4 STAMP TAXES The Borrowers shall pay all stamp, registration and other taxes to which this Agreement, any other document referred to in this Agreement or any judgment given in connection herewith is or at any time may be subject and shall, from time to time on demand of the Agent, indemnify the Banks, the Agent or the Security Trustee against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying any such tax. 6. MISCELLANEOUS 6.1 INCORPORATION OF TERMS The provisions of clause 28 (REMEDIES AND WAIVER), clause 29 (PARTIAL INVALIDITY), clause 31 (LAW) and clause 32 (JURISDICTION) of the Original Facility Agreement shall be incorporated into this Agreement as if set out in full herein and as if references therein to "this Agreement" or "the Facility Documents" are references to this Agreement. 6.2 COUNTERPARTS This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. 7. CONSENT UNDER PRIORITY AGREEMENT The Banks in their capacity as Senior Creditors under the Priority Agreement hereby consent to the amendment made or to be made to the Junior Facility Agreement pursuant to an amendment agreement dated the date hereof. AS WITNESS the hands of duly authorised representatives of the parties hereto the day and year first before written. SCHEDULE 1 CONDITIONS PRECEDENT 1. In relation to each Borrower: (a) a copy, certified as at the date of this Agreement a true and up-to-date copy by a duly authorised officer of such Borrower, certifying that, as at the date hereof, there has been no change to the constitutional documents delivered by such Borrower pursuant to the Original Facility Agreement; (b) a copy, certified as at the date of this Agreement a true and up-to-date copy by an a duly authorised officer of a board resolution of such Borrower approving the execution, delivery and performance of this Agreement and the terms and conditions hereof and authorising a named person or persons to sign this Agreement and any documents to be delivered by such Borrower pursuant hereto; and (c) a certificate of an duly authorised officer of such Borrower setting out the names and signatures of the persons authorised to sign, on behalf of such Borrower, this Agreement and any documents to be delivered by such Borrower pursuant hereto. 2. A copy, certified a true copy by or on behalf of each Borrower, of each such law, decree, consent, licence, approval, registration or declaration as is, in the opinion of counsel to the Banks, necessary to render this Agreement legal, valid, binding and enforceable, to make this Agreement admissible in evidence in each Borrower's jurisdiction of incorporation and to enable each Borrower to perform its obligations hereunder. 3. An opinion of the Banks' Counsel in the jurisdiction of incorporation of each Borrower and the jurisdiction of the flag of the Vessels satisfactory in form and substance to the Agent and in substantially the form distributed to the Banks prior to the signing of this Agreement. 4. Evidence satisfactory to the Banks that the partners in the limited partnership Stavanger Sun Ltd. have made an additional capital contribution of a minimum of $1,250,000 which has been paid into Boss Ltd's Earnings Account, $825,000 (or such other amount as agreed between the Borrowers and the Banks) of which will be paid into Boss Ltd's Retention Account and may be released only for application in or towards the imminent dry docking expenses to be incurred in respect of MT Stavanger Sun, $175,000 (or such other amount as agreed between the Borrowers and the Banks) of which will remain in Boss Ltd's Earnings Account and $250,000 of which will be applied (in such proportions as the Agent shall require) in part payment of the repayment instalments due on 30 October 1998, 30 April 1999 and 31 July 1999 under the Original Facility Agreement. 5. Evidence satisfactory to the Banks that the partners in the limited partnership Boss Ltd. have made an additional capital contribution of a minimum of $1,250,000 which has been paid into Boss Ltd's Earnings Account, $650,000 (or such other amount as agreed between the Borrowers and the Banks) of which will be paid into Boss Ltd's Retention Account and may be released only for application in or towards the imminent dry docking expenses to be incurred in respect of the MT Boss $350,000 (or such other amount as agreed between the Borrowers and the Banks) of which will remain in Boss Ltd's Earnings Account and $250,000 of which will be applied (in such proportions as the Agent shall require) in part payment of the repayment instalments due on 30 October 1998, 30 April 1999 and 31 April 1999 under the Original Facility Agreement. 6. Payment of the restructuring fee pursuant to Clause 5.1 and the Banks' legal fees pursuant to Clause 5.2. SCHEDULE 2 AMENDMENTS TO ORIGINAL FACILITY AGREEMENT 1. The definition of "MARGIN" at clause 1.1 of the Original Facility Agreement shall be amended to read as follows: "MARGIN" means: (i) for any period during which the ratio of the Fair Market Value of the Vessels to the Loan under Clause 14.1 is less than 140%, one and five eighth per cent (15/8%) per annum; and (ii) at any other time, one and one quarter per cent (1 1/4%) per annum. 2. Clause 9.1 (REPAYMENT) shall be amended such that from where Repayment Date No. 8 appears in the current table onwards, shall be replaced with the following:
------------------------- ----------------------- ----------------------- ------------------------ REPAYMENT DATE NO. REPAYMENT DATE ADVANCE 1 ADVANCE 2 ------------------------- ----------------------- ----------------------- ------------------------ 8 OCT. 99 450,000 450,000 ------------------------- ----------------------- ----------------------- ------------------------ 9 JAN. 00 200,000 200,000 ------------------------- ----------------------- ----------------------- ------------------------ 10 APR. 00 200,000 200,000 ------------------------- ----------------------- ----------------------- ------------------------ 11 JUL. 00 200,000 200,000 ------------------------- ----------------------- ----------------------- ------------------------ 12 OCT. 00 200,000 200,000 ------------------------- ----------------------- ----------------------- ------------------------ 13 JAN. 01 650,000 650,000 ------------------------- ----------------------- ----------------------- ------------------------ 14 APR. 01 650,000 650,000 ------------------------- ----------------------- ----------------------- ------------------------ 15 JUL. 01 650,000 650,000 ------------------------- ----------------------- ----------------------- ------------------------ 16 OCT. 01 650,000 650,000 ------------------------- ----------------------- ----------------------- ------------------------ 17 JAN. 02 700,000 700,000 ------------------------- ----------------------- ----------------------- ------------------------ 18 APR. 02 700,000 700,000 ------------------------- ----------------------- ----------------------- ------------------------ 19 JUL. 02 700,000 700,000 ------------------------- ----------------------- ----------------------- ------------------------ 20 OCT. 02 6,500,000 together 6,500,000 together with any other with any other amounts amounts then then outstanding under outstanding under this Agreement this Agreement ------------------------- ----------------------- ----------------------- ------------------------
In addition, the Agent shall on each of the above Repayment Dates apply from the Retention Account the Senior Excess Cash Amount (as defined in Clause 9.7 below) which has been paid into that account in accordance with Clause 9.7. The provisions of this Clause shall, until the parties otherwise agree, override the provisions of Clauses 11.1 and 11.2 of the Assignments of Insurances and Earnings dealing with the application of amounts standing to the credit of the Retention Account. A new Clause 9.7 shall be added as follows: On the last date of each of the Borrower's financial quarters there shall be transferred from each Borrower's Earnings Account to that Borrower's Retention Account an amount (the "EXCESS CASH AMOUNT") being equal to the amount by which (a) the aggregate amount of cash standing to the credit of that Borrower's Earnings Account exceeds (b) the aggregate of (i) $500,000 (in aggregate for the Borrowers) and (ii) the next scheduled repayment of instalments and interest payable by the Borrowers under the Senior Facility Agreement. The Excess Cash Amount shall until the Repayment Compliance Date be applied firstly towards the instalments due under the Senior Facility Agreement in inverse order of maturity (such amount so applied being the "SENIOR EXCESS CASH AMOUNT") and secondly towards accrued non-paid interest under the Junior Facility Agreement (and, in each case, pro rata in respect of each Advance). After the Repayment Compliance Date the total amount of the Excess Cash Amount shall be applied towards accrued non-paid interest under the Junior Facility Agreement (pro rata in respect of each Advance). For the purposes of this Clause 9.7 "REPAYMENT COMPLIANCE DATE" means the date upon which the principal amount of the Loan is equal to the principal amount of the Loan that would have been outstanding had the Borrowers complied with the repayment schedule under the Original Facility Agreement. 3. A new Clause 13.7 shall be added as follows: "13.7 OTHER INFORMATION Each Borrower shall provide, at such intervals and in such form as the Agent may from time to time require, reports on its liquidity and working capital status including any unforeseen revenue or expenses" 4. The reference at clause 14.1 (FAIR MARKET VALUE OF VESSELS) of the Original Facility Agreement to the Fair Market Value of the Vessels being at least 140% of the Loan shall be amended such that the Borrowers shall be obliged to meet the following ratios during the following periods:
PERIOD RATIO From the date of this Agreement to 30 June 2000 100% From 1 July 2000 to 31 December 2000 110% Thereafter 140%
5. Clause 14.2 shall be deleted and replaced with the following: "FREE CASH BALANCE The Borrowers shall between them maintain at all times a Free Cash Balance of an amount in dollars equal to the Minimum Amount". 6. Clause 14.4 shall be deleted and replaced with the following: "For the purposes of Clause 14.2 "FREE CASH BALANCE" means at any relevant time the aggregate of all dollar denominated sums standing to the credit of the Borrowers' respective Earnings Account including any prepaid Earnings, but less any capital (being the amount of any repayment instalment, together with interest, due on the next Repayment Date) and operating costs (including docking costs) as reflected in the Borrowers' latest financial statements delivered to the Agent pursuant to Clause 13 (INFORMATION COVENANTS) for the period to which such prepaid Earnings relate. "EARNINGS" has the meaning given to it in the Assignments of Earnings and Insurances. "MINIMUM AMOUNT" means, subject to the proviso below; (i) when both Vessels are employed under an Existing Time Charter, $500,000; (ii) when one Vessel is employed under an Existing Time Charter, $750,000; and (iii) when neither Vessel is employed under an Existing Time Charter, $1,000,000 provided always that until 31 December 2000, the Minimum Amount shall, in any event, be $500,000. "EXISTING TIME CHARTER" means any time charter which is continuing in full force and effect and under which both parties are continuing to fulfil their obligations as and when they fall due." SIGNATURES THE BORROWERS BOSS LTD. By: STAVANGER SUN LTD. By: THE AGENT CHRISTIANIA BANK OG KREDITKASSE ASA By: THE SECURITY TRUSTEE CHRISTIANIA BANK OG KREDITKASSE ASA By: THE BANKS CHRISTIANIA BANKS OG KREDITKASSE ASA By: UNION BANK OF NORWAY By: SKANDINAVISKA ENSKILDA BANKEN By: