Exhibit 10.4
DATED THE 10TH DAY OF JULY 2006
-------------------------------
BETWEEN
XIAMEN INTERNATIONAL BANK
SHANGHAI BRANCH
as Lender
AND
YONGCHEN INTERNATIONAL SHIPPING LIMITED
as Borrower
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LOAN AGREEMENT
up to US$1,200,000
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XXXXXX XXXXXXX & XXXXXX
00xx Xxxxx,
Xxxxx Xxx,
Xxxxx Xxxxxx,
00 Xxxxxxxxx,
Xxxx Xxxx
Tel. 000 00000000
Fax. 000 00000000
Ref. CMF/2629673
INDEX
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CLAUSE
1. PURPOSE, DEFINITIONS AND INTERPRETATION
2. REPRESENTATIONS AND WARRANTIES
3. THE LOAN
4. DRAWDOWN AND ACCOUNTS
5. REPAYMENT AND PREPAYMENT
6. INTEREST
7. PAYMENTS AND APPLICATION OF FUNDS
8. SECURITY
9. RETENTIONS 10. VALUATIONS
11. FEES
12. CONDITIONS PRECEDENT
13. REVIEW OF INSURANCES
14. UNDERTAKINGS OF THE BORROWER
15. EVENTS OF DEFAULT
16. INDEMNITIES AND EXPENSES
17. ASSIGNMENTS AND TRANSFERS
18. CHANGES IN CIRCUMSTANCES
19. SET-OFF AND LIEN
20. MISCELLANEOUS
21. FURTHER ASSURANCE
22. NOTICES
23. APPLICABLE LAW AND JURISDICTION
24. AGENTS AND REPRESENTATIVES
THIS AGREEMENT is made the 10th day of July 2006
BETWEEN:
(1) XIAMEN INTERNATIONAL BANK, acting through its SHANGHAI BRANCH with its
place of business at 0X, Xxxxxxx Xxxxxxxx, 000 Xx Xxxx Xxxx, Xxxxxxxx,
XXX ("the Lender")
AND:
(2) YONGCHEN INTERNATIONAL SHIPPING LIMITED, a company incorporated in Hong
Kong with its registered office at 00X, XXX Xxxxxx, 00 Xxxxxx Xxxxxx,
Xxxx Xxxx ("the Borrower").
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. PURPOSE, DEFINITIONS AND INTERPRETATION
1.1 This Agreement sets out the terms and conditions upon which the Lender
will make available to the Borrower a loan of up to United States
Dollars One Million Two Hundred Thousand only (US$1,200,000) to
re-finance the acquisition costs of M.V. "XXXX XXX" currently flying
the Panamanian flag and provisionally registered under the name of the
Borrower with registration no.31755-PEXT-2.
1.2 In this Agreement the following expressions shall have the following
meanings:
"Banking Day" means a day (excluding Saturdays and Sundays) on which
dealings in deposits in Dollars may be carried out in the London
Interbank Market and on which banks and foreign exchange markets are
open for business in London and (if payment is required to be made on
such day) in New York City and the place to which such payment is
required to be made;
"Default Rate" means the annual rate of interest determined in
accordance with Clause 6.4;
"Dollars" (and the signs "$" or "US$") means the lawful currency for
the time being of the United States of America;
"Drawdown Date" means the Banking Day on which the Borrower specifies
that it requires funds to be made available pursuant to Clause 4;
"Earnings" means all moneys whatsoever (and all claims for such moneys)
due or to become due to or for the account of the Borrower at any time
during the Security Period arising out of
the use of or operation of the Vessel, including (but not limited to)
all freight, hire and passage moneys, compensation payable to the
Borrower 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, together with the benefit of any
guarantee, indemnity or other security which may at any time be given
to the Borrower as security for the payment of such moneys;
"Event of Default" means any of the events listed in Clause 15 or
described as such in any other of the Security Documents;
"Guarantors" means a) XXX XXXX INTERNATIONAL SHIPPING COMPANY LIMITED,
a company incorporated in the British Virgin Islands with its
registered office at [ ]; AND b) HUISHENG INTERNATIONAL SHIPPING
LIMITED, a company incorporated in Hong Kong with its registered office
at [ ]; AND c) Xx. XXXXX XXX XX, holder of PRC Identity Card No.
330106196712050119 and PRC Passport No.X00000000 of 0X, Xxxx 0,
Xx-Xxxxxxxx, 000 Xxxxxx Xxxx, Xxxxxxxx, XXX;
"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 the Security Documents)
and all benefits of such policies and contracts, including all claims
of whatsoever nature and return of premiums;
"Interest Date" means a date upon which interest is due and payable on
the Outstanding Principal or, as the context requires, any part
thereof, subject as provided in Clauses 6.1 and 18, the last day of
each Interest Period;]
"Interest Period" means, in relation to the Loan or the Outstanding
Principal or, as the context requires, any part thereof, each period
selected by the Borrower or otherwise determined under Clause 6.2 or
determined in accordance with Clause 18 as the period for the
calculation of the Interest Rate applicable thereto;
"Interest Rate" means, in relation to the Loan or the Outstanding
Principal or, as the context requires, any part thereof, the rate of
interest which is either (a) determined by the Lender as provided by
Clause 6.3 or (b) where the Lender is unable so to determine a rate in
accordance with Clause 6.3, determined in accordance with Clause 18;
"Loan" means the sum of up to US$1,200,000 to be advanced by the Lender
to the Borrower hereunder;
"Outstanding Indebtedness" means the aggregate of the Outstanding
Principal, all interest accrued on the Outstanding Principal, and all
other sums of money whatsoever from time to time due or owing to the
Lender under or pursuant to the Security Documents;
"Outstanding Principal" means the principal amount of the Loan advanced
and for the time being outstanding;
"PRC" means The People's Republic of China;
"Repayment Date" means each of the Banking Days upon which a Repayment
Instalment is due and payable in accordance with Clause 5.1;
"Repayment Instalment" means each of the instalments of the Outstanding
Principal becoming due on a Repayment Date in accordance with Clause
5.1;
"Requisition Compensation" means all moneys or other compensation
payable during the Security Period by reason of requisition for title
or other compulsory acquisition of the Vessel otherwise than by
requisition for hire;
"Security Documents" means this Agreement, the documents specified in
Clause 8 and any and every other document from time to time executed to
secure all or any of the obligations of the Borrower to the Lender
under this Agreement;
"Security Period" means the period from the date of this Agreement
until full and final discharge of the security created by the Security
Documents by payment of the Outstanding Indebtedness;
"Total Loss" means (a) actual, constructive, compromised, agreed or
arranged total loss of the Vessel; or (b) requisition for title or
other compulsory acquisition of the Vessel, otherwise than by
requisition for hire; or (c) capture, seizure, arrest, detention or
confiscation of the Vessel, by any government or by any persons acting
or purporting to act on behalf of any government, unless the Vessel be
released and restored to the Borrower within one (1) month thereafter;
and
"US$ PRIME" means such US$ lending rate as may form time to time be
determined / published by the Lender;
"Vessel" means the 1,907 XXX, 000 NRT Panamanian flagged "XXXX XXX"
currently registered under the ownership of the Borrower with
registration no.31755-PEXT-2.
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1.3 The following expressions shall be construed in the following manner:
"Lender" includes the successors and assigns of the Lender;
"Borrower" includes the successors and permitted assigns of the
Borrower;
"Guarantor" includes the successors and permitted assigns of the
Guarantor;
"person" includes a corporate entity and any body of persons, corporate
or unincorporate;
"subsidiary" and "holding company" have the meanings given to them by
the PRC Companies Law;
"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 thereon and penalties with respect thereto, if any, and any
payments of principal, interest, charges, fees or other amounts made on
or in respect thereof, and references to "tax" and "taxation" shall be
construed accordingly.
1.4 Unless the context otherwise requires, words in the singular include
the plural and vice versa.
1.5 References to any document include the same as varied, supplemented or
replaced from time to time.
1.6 References to any enactment include re-enactments, amendments and
extensions thereof.
1.7 Clause headings are for convenience of reference only and are not to be
taken into account in construction.
1.8 Unless otherwise specified, references to Clauses and Recitals are to
Clauses of and the Recitals to this Agreement.
2. REPRESENTATIONS AND WARRANTIES
2.1 The Borrower represents and warrants that the following matters are
true at the date of this Agreement, and agrees that the representations
and warranties set out in this Clause 2.1 shall survive the execution
of this Agreement and shall be deemed to be repeated on the Drawdown
Date and on each Interest Date with reference to the facts and
circumstances then subsisting, as if made on such date:
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2.1.1 the Borrower is a company duly incorporated with limited
liability, validly existing and in good standing under the
laws of Hong Kong, with full power to own its property and
assets and to carry on its business as it is now being
conducted;
2.1.2 the Borrower has complied with all statutory and other
requirements relevant to its business;
2.1.3 the entry into and performance by the Borrower of this
Agreement and the other Security Documents are within the
corporate powers of the Borrower and have been duly
authorised by all necessary corporate actions and approvals;
2.1.4 the entry into and performance by the Borrower of this
Agreement and the other Security Documents do not and will
not contravene in any respect any law, regulation or
contractual restriction which does, or may, bind the
Borrower or any of its assets, and do not and will not
result in the creation or imposition of any security
interest, lien, charge, or encumbrance on any of its assets
in favour of any party other than the Lender;
2.1.5 all licences, authorisations, approvals and consents
necessary for the entry into, performance, validity,
enforceability or admissibility in evidence of this
Agreement and the other Security Documents have been
obtained and are in full force and effect, true copies have
been delivered to the Lender and there has been no breach of
any condition or restriction imposed in this respect;
2.1.6 when duly executed and delivered, and where applicable
registered, each of this Agreement and the other Security
Documents will constitute the legal, valid and binding
obligations of the parties thereto and will create a
perfected security interest with the required priority in
the assets and revenues intended to be covered thereby,
enforceable against the parties thereto in accordance with
their respective terms, except insofar as enforcement may be
limited by any applicable laws relating to bankruptcy,
insolvency, administration and similar laws affecting
creditors' rights generally;
2.1.7 the Borrower is not in breach of any law, governmental
directive, guideline or policy statement, whether having the
force of law or not, and it is not in default under any
agreement to which it is party or by which it may be bound,
and no litigation, arbitration, tax claim or administrative
proceeding is current or pending or (to its knowledge)
threatened, which, if adversely determined, would have a
materially detrimental effect on its financial condition;
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2.1.8 there is no continuing Event of Default nor has any event
occurred which, with the giving of notice and/or lapse of
time and/or satisfaction of any other condition, would
constitute an Event of Default;
2.1.9 the choice of PRC law to govern this Agreement and, where
applicable, the other Security Documents and the submission
by the Borrower to the non-exclusive jurisdiction of the PRC
courts are valid and binding, and the Borrower is not
entitled to claim any immunity in relation to itself or its
assets under any law or in any jurisdiction in connection
with any legal proceedings, set-off or counterclaim relating
to this Agreement or the other Security Documents or in
connection with the enforcement of any judgement or order
arising from such proceedings;
2.1.10 the financial and other information supplied to the Lender
by or on behalf of the Borrower in connection with the
negotiation and the preparation of this Agreement or
delivered to the Lender pursuant to this Agreement is true
and accurate in all material respects when given, and does
not contain any misstatement of fact or omit any material
fact;
2.1.11 the Borrower's financial condition has suffered no material
deterioration since that condition was last disclosed to the
Lender;
2.1.12 all payments to be made by the Borrower under this Agreement
and the other Security 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 of the other
Security Documents is liable to any registration charge or
any stamp, documentary or similar taxes imposed by any
authority, including without limitation, in connection with
the admissibility in evidence of any thereof;
2.1.13 the Borrower does not have any established place of business
other than in Hong Kong;
2.1.14 the Borrower's obligations under this Agreement and the
other Security Documents will rank at least pari passu with
all of its other unsecured and unsubordinated obligations
and liabilities from time to time outstanding, other than as
preferred by statute.
2.2 The Borrower further represents and warrants that on the Drawdown Date:
2.2.1 the Vessel is / will be duly registered under and in
accordance with the laws of the Panama flag in the sole
ownership of the Borrower and will comply with all relevant
laws, regulations and requirements (statutory or otherwise)
applicable to
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ships registered under such flag and engaged in the service
in which the Vessel is or is to be engaged;
2.2.2 the Borrower is / will be the sole, legal and beneficial
owner of the Vessel, and neither the Vessel nor the
Insurances, Earnings or Requisition Compensation will be
subject to any lien, charge or encumbrance of any kind
whatsoever other than such as may be constituted by the
Security Documents; and
2.2.3 the Vessel will be insured in accordance with the provisions
of the Security Documents, and all the requirements
contained in the Security Documents relating to the
Insurances and the noting of the Lender's interest thereon
will have been satisfied.
3. THE LOAN
3.1 Subject to the provisions of this Agreement and in reliance upon (inter
alia) the representations and warranties in Clause 2, the Lender agrees
to advance the Loan to the Borrower on the Drawdown Date.
3.2 The Loan will be available to be drawn in one amount on the Drawdown
Date and is to be applied exclusively for the purposes referred to in
Clause 1.1 above.
3.3 The Lender will have no liability whatsoever to advance the Loan or any
part of the Loan after 30th November 2006 and any part of the Loan
which has not been advanced to the Borrower at close of business on
such date shall be cancelled.
4. DRAWDOWN AND ACCOUNTS
4.1 The Borrower may draw the Loan upon giving the Lender notice in writing
not later than 10:00 a.m. London time three (3) Banking Days before the
proposed Drawdown Date, which notice shall:
4.1.1 be effective on receipt by the Lender;
4.1.2 specify the Banking Day upon which the Loan is required,
which must be a Banking Day on or before 30th November 2006;
4.1.3 specify the Borrower's choice of duration of the first
Interest Period;
4.1.4 give full details of the place and account, which must be
acceptable to the Lender, to which the proceeds of the Loan
are to be paid;
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4.1.5 constitute a representation and warranty in the terms of
Clause 2; and
4.1.6 be irrevocable.
4.2 Notwithstanding the giving of notice pursuant to Clause 4.1, the Lender
will not be obliged to disburse any funds until all the conditions set
out in Clause 12 have been satisfied.
4.3 Subject to the provisions of this Agreement, the Lender will advance
the Loan to the Borrower on the Drawdown Date in Dollars in immediately
available funds by paying the same in accordance with the notice of
drawdown given by the Borrower.
4.4 The Lender will open and maintain on its books accounts showing the
amount advanced by it to the Borrower and the amounts of all payments
of principal, interest and other moneys falling due and received by the
Lender. The Borrower's obligation to repay the Outstanding Principal,
to pay interest thereon and to pay all other sums due under the
Security Documents shall be conclusively evidenced (in the absence of
manifest error) by the entries from time to time made in the accounts
opened and maintained under this Clause 4.4.
5. REPAYMENT AND PREPAYMENT
5.1 Subject to the provisions of this Agreement, the Borrower shall repay
the Outstanding Principal by 36 monthly instalments. The 1st to the
35th instalments shall be for US$33,000 each and the 36th (last)
instalments shall be for US$45,000. Each such instalments is to be paid
on last calendar day falling at successive monthly intervals and the
first instalment shall be paid on the last calendar day in the month
next after the Drawdown Date provided that, where the last calendar day
in any month is not a Banking Day, the relevant Repayment Date shall
fall on the immediately preceding Banking Day.
5.2 The Borrower shall have the right, upon giving not less than thirty
(30) Banking Days' notice in writing to the Lender, to prepay without
penalty (but upon reimbursements to the Lender all costs occasioned by
such early repayment to be determined by the Lender), the Outstanding
Principal, in whole or in part, on any Interest Date applicable
thereto, provided that:
5.2.1 any prepayment of part of the Outstanding Principal must be
in a minimum amount of US$100,000, or otherwise be an
integral multiple thereof, and will be applied by the Lender
in or towards the discharge of the remaining Repayment
Instalments in inverse order of maturity;
5.2.2 each prepayment must be made together with the accrued
interest on the amount
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prepaid and all other sums payable in respect thereof under
the provisions of this Agreement and, in the case of
prepayment of the whole of the Outstanding Principal, shall
be accompanied by payment of all other Outstanding
Indebtedness; and
5.2.3 any such notice of prepayment given by the Borrower under
this Clause 5.2 shall be effective on receipt by the Lender
and shall be irrevocable once given and the Borrower shall
be bound to make such prepayment in accordance therewith.
5.3 If the Vessel becomes a Total Loss the Borrower shall prepay the
Outstanding Principal together with all other Outstanding Indebtedness
within ninety (90) days following the occurrence of the Total Loss.
5.4 Except as specifically provided in this Agreement or in any other of
the Security Documents, in the absence of an Event of Default and
demand for repayment by the Lender, the Lender shall not be obliged to
accept any other prepayment of the whole or any part of the Outstanding
Principal.
5.5 Any part of the Outstanding Principal which is repaid or prepaid by the
Borrower may not be redrawn.
6. INTEREST
6.1 Subject to the provisions of this Agreement, the Borrower shall pay
interest on the Outstanding Principal, or on any part thereof, at the
Interest Rate applicable thereto, in arrears on the last day of each
Interest Period applicable thereto.
6.2 The Interest Period shall be three (3) calendar months save that the
first Interest Period shall be the number of days remaining in the
month of the Drawdown Date plus three (3) months such that the Interest
Date shall fall on the last calendar day of a month. Each subsequent
Interest Period shall commence on the last day of the immediately
preceding Interest Period. If the last day of any Interest Period would
otherwise fall on a day which is not a Banking Day, that Interest
period shall be shortened so as to end on the immediately preceding
Banking Day.
6.3 Subject to the provisions of this Agreement, the Interest Rate
applicable to the Loan or the Outstanding Principal or any part thereof
for each Interest Period relating thereto shall be US$ PRIME.
6.4 Without prejudice to any other remedy of the Lender, if the Borrower
fails to pay on the due date any sum (whether of principal, interest or
otherwise) due under any one or more of the
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Security Documents, interest will accrue, and become payable upon
demand by the Lender, upon the sum unpaid from and including the date
upon which it fell due for payment until the date of actual payment by
the Borrower (as well after as before judgment) at 150% of US$ PRIME.
Any such interest which is not paid when due shall be compounded at the
end of each such Interest Period or other period determined by the
Lender for so long as it remains unpaid.
6.5 The Lender will notify the Borrower of each determination of a rate of
interest under this Agreement and any of the other Security Documents
and the duration of each Interest Period, in each case promptly upon
the determination thereof. The certificate or determination of the
Lender as to the rate and amount of interest from time to time payable
by the Borrower under this Agreement and any of the other Security
Documents shall, except in the case of manifest error, for all purposes
be conclusive and binding on the Borrower.
7. PAYMENTS AND APPLICATION OF FUNDS
7.1 Unless otherwise specified by the Lender, all moneys to be paid by the
Borrower under this Agreement and any of the other Security Documents
shall be paid to the Lender on their due dates in Dollars, in funds
which are for same day settlement in the New York Clearing House
Interbank Payments System (or in such other Dollar funds as shall for
the time being be customary for settlement of international banking
transactions in Dollars), not later than 10:00 a.m. (London time), to:
[ ]
under advice to the Lender, and bear as reference the name "XXXX XXX -
mortgage repayment". The Lender shall have the right to change the
place or account for payment upon giving five (5) Banking Days' prior
written notice to the Borrower.
7.2 All payments due shall be made on a Banking Day. If the due date for
payment falls on a day which is not a Banking Day, the payment or
payments due shall be made on the immediately preceding Banking Day.
7.3 All payments to be made by the Borrower under this Agreement and any of
the other Security Documents shall be made without set-off or
counterclaim, and 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.
7.4 If the Borrower is compelled by law to make payment subject to such
taxes, the Borrower will pay the Lender such additional amounts as may
be necessary to ensure that the Lender
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receives a net amount equal to the full amount which the Lender would
have received had such payment not been subject to such taxes. The
Borrower shall promptly notify the Lender upon its becoming aware of
such requirement and deliver to the Lender copies of the receipts from
the relevant government authority or body evidencing the due and
punctual payment of such taxes.
7.5 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
three hundred and sixty (360) day year.
7.6 Except as otherwise specifically provided in this Agreement or in any
other of the Security Documents, all moneys received or recovered by
the Lender under the Security Documents will, after discharging the
cost (if any) incurred in collecting such moneys, be applied as
follows:
FIRST, in or towards payment of all moneys expended or liabilities
incurred by the Lender in respect of expenses, fees or charges relating
to the preparation, completion and registration of the Security
Documents or in respect of the protection, maintenance or enforcement
of the security they create;
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, in such order of
application as the Lender may think fit;
THIRDLY, at the Lender's discretion, in retention on suspense account
of such amount as the Lender may consider appropriate to secure the
discharge of any part of the Outstanding Indebtedness not then due and
payable, and, upon the same becoming due and payable, in or towards the
discharge thereof in accordance with the foregoing provisions of this
Clause 7.6; and
FOURTHLY, the balance (if any) shall be paid to the Borrower or other
person entitled.
The Borrower irrevocably waives any rights of appropriation to which it
may be entitled.
8. SECURITY
8.1 As security for the payment of the Outstanding Indebtedness the
Borrower shall execute, deliver to, and (where appropriate) register in
favour of, the Lender, in form and substance satisfactory to the
Lender:
8.1.1 a first priority Panamanian mortgage over the Vessel; and
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8.1.2 a first priority assignment of the Insurances, Earnings and
Requisition Compensation of the Vessel, incorporating, or
together with, such specific assignments of any
charterparties, contracts of affreightment or other
contracts of employment of the Vessel, as the Lender may at
its discretion require.
8.2 As further security for the payment of the Outstanding Indebtedness the
Borrower shall cause to be delivered to the Lender, and (where
appropriate) registered in favour of the Lender a guarantee(s) in form
and substance satisfactory to the Lender duly executed by the
Guarantors of the Borrower's obligations hereunder.
9. RETENTIONS
9.1 The Borrower shall establish and maintain with the Lender an account(s)
and shall procure that throughout the Security Period, unless and until
the Lender directs otherwise, all Earnings of the Vessel as they fall
due shall be paid and credited to such account.
9.2 Notwithstanding anything to the contrary contained in this Agreement,
so long as the Borrower remains under any liability (whether actual or
contingent) in respect of the Outstanding Indebtedness, the Lender
shall be entitled to withhold payment (up to the amount of such actual
or contingent liability) of any moneys from time to time standing to
the credit of any of the accounts for the time being of the Borrower
with the Lender and to refuse payment upon any negotiable instrument
(up to the amount of such actual or contingent liability).
9.3 The Lender is irrevocably authorised by the Borrower to apply, on each
Interest Date and Repayment Date, any and all amounts on the Borrower's
in pro tanto satisfaction of the Borrower's obligations to the Lender
under Clauses 5 and 6.
9.4 On or at any time after the happening of an Event of Default, or the
happening of any event which with the giving of notice and/or the lapse
of time and/or the satisfaction of any other condition would constitute
an Event of Default, the Lender shall forthwith become entitled to
direct that the Earnings of the Vessel be paid to such place and
account as the Lender may think fit, and following such Event of
Default (without prejudice to the Lender's rights under Clause 19) at
any time and without notice to the Borrower to appropriate all or any
of the moneys standing to the credit of the Borrower's account and any
moneys in respect of Earnings which may thereafter be received by the
Lender and apply the same in or towards the discharge of the
Outstanding Indebtedness in accordance with Clause 7.6.
9.5 All bank, exchange, telegraph and other charges in connection with the
inward and outward remittance of moneys to and from the Borrower's
accounts shall be for the account of the
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Borrower, and the Lender shall be entitled, and is irrevocably and
unconditionally authorised, to debit the amount of such charges to the
account concerned, as and when such charges are incurred.
9.6 Nothing in this Clause 9, whether express or implied, shall relieve the
Borrower of its absolute and unconditional obligations to repay the
Outstanding Principal, to pay interest thereon and to pay all other
sums from time to time due, owing or payable hereunder and under any of
the other Security Documents.
9.9 Unless otherwise agreed in writing, any amounts for the time being
standing to the credit of the Borrower's account held with the Lender
shall earn interest at the rate from time to time offered by the Lender
to its customers for deposits in Dollars in similar amounts and for
similar periods.
10. VALUATIONS
10.1 The Lender may at any time and from time to time arrange for valuations
of the Vessel to be carried out in order to determine its market value
in accordance with Clause 10.2 below. Such valuations (which, at the
discretion of the Lender, may be carried out with or without a physical
inspection of the Vessel) shall be made 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) by a shipbroker or shipbrokers
nominated or approved by the Lender. The cost of all such valuations
shall be for the account of the Borrower, and the Borrower shall
provide all such assistance as the Lender may require to enable such
valuations to be carried out.
10.2 For the purposes of this Clause 10.2, the "market value" of the Vessel
shall be determined by taking the average of the valuations of the
Vessel made by two shipbrokers nominated or approved by the Lender. The
Borrower agrees to accept any such average valuation as conclusive
evidence of the market value of the Vessel at the date of the
valuation. In the event that the market value of the Vessel, as
determined in the manner provided above, is less than 130% of the
amount of the Outstanding Principal, then the Borrower shall, within
fourteen (14) days of a demand by the Lender to that effect, at the
sole option of the Lender, either provide the Lender with additional
security for the Outstanding Indebtedness acceptable to the Lender, or
prepay such part of the Outstanding Principal as will ensure that
immediately following such prepayment the market value of the Vessel is
not less than Outstanding Principal.
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11. FEES
11.1 The Borrower shall pay to the Lender on the Drawdown Date or 30th
November 2006 (whichever is the earlier) all set-up fees, costs and
out-of pocket expenses including all inspections, valuations,
registration, documentation and legal fees in connection with the Loan.
11.2 The above mentioned fee shall be payable whether or not the Loan is
drawn and shall not be returnable in any event.
12. CONDITIONS PRECEDENT
12.1 The Lender will not be obliged to advance the Loan or any part thereof
unless and until it has received notice of drawdown from the Borrower
in accordance with Clause 4, as well as the fee payable to it under
Clause 11.1.
12.2 It shall be a further condition precedent to the advance of the Loan
that the Lender or its legal advisers have received the following, in
form and substance satisfactory to them.
12.2.1 copies, certified as true by the secretary or a director of
the Borrower, of the Certificate of Incorporation and the
Memorandum and Articles of Association or equivalent
constitutional documents of the Borrower;
12.2.2 a certificate of good standing or other evidence that the
Borrower is in good standing in its country of
incorporation;
12.2.3 a certificate of incumbency of the Borrower, signed by the
secretary or a director of the Borrower, stating its
officers and directors, and containing specimens of each of
their signatures;
12.2.4 a certificate as to the shareholding of the Borrower, signed
by the secretary or a director of the Borrower, stating the
full names and addresses of the person or persons legally
and beneficially entitled as shareholders/stockholders of
the entire issued and outstanding shares/stock of the
Borrower;
12.2.5 copies, certified as true by the secretary or a director of
the Borrower, of resolutions duly passed by the directors
and shareholders of the Borrower evidencing approval of the
transactions contemplated by this Agreement and the other
Security Documents and authorising the execution of the
same;
12.2.6 the original of any power of attorney issued by the Borrower
in favour of any person or persons
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executing this Agreement and the other Security Documents;
12.2.7 in respect of every other party to the Security Documents
(other than the Lender), the same documents, mutatis
mutandis, as those to be provided in Clause 12.2.1 to 12.2.6
inclusive above in respect of the Borrower (and in case of
an individual, a certified copy of his/her Identity Card or
Passport and proof of residential address);
12.2.8 copies, certified as true by the Secretary or a director of
the Borrower, of all licences, authorisations, approvals and
consents required in connection with the execution,
delivery, performance, validity and enforceability of the
Security Documents;
12.2.9 evidence, by way of copy policies, cover notes and
certificates of entry, that insurance (including mortgagee's
interest insurance; if applicable) in respect of the Vessel
has been effected in accordance with the stipulations of the
Security Documents and that the Lender's interest has been
or will be noted thereon, together with letters of
undertaking from the relevant brokers, protection and
indemnity and war risks associations and a favourable
written opinion from insurance brokers nominated by the
Lender as to the quality of the Insurances of the Vessel;
12.2.10 valuations of the Vessel conducted on the basis referred to
in Clause 10, dated not earlier than one (1) month prior to
the Drawdown Date, showing the market value of the Vessel to
be not less than 130% of the amount of the Loan;
12.2.11 a survey report in terms satisfactory to the Lender on the
physical condition of the Vessel from an independent marine
surveyor appointed or approved by the Lender;
12.2.12 a copy, certified as true by the secretary or a director of
the Borrower, of any management agreement entered into by
the Borrower in respect of the Vessel with managers approved
by the Lender;
12.2.13 evidence that the Vessel is duly registered under the
Panamanian flag in the sole ownership of the Borrower;
12.2.14 the Security Documents specified in Clause 8 and all
documents, instruments, notices and acknowledgements thereto
required under the Security Documents duly executed, and, in
the case of the first priority Panamanian mortgage of the
Vessel to be executed pursuant to Clause 8, evidence that
the same has been duly registered or is capable of immediate
registration with the required priority in the appropriate
register;
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12.2.15 such duly completed mandate forms and other documents as the
Lender may require for the opening of accounts by the
Borrower with the Lender;
12.2.16 confirmation from the agents in PRC nominated in this
Agreement and elsewhere in the Security Documents by the
Borrower, the Guarantor and any other party to the Security
Documents for the acceptance of service of process, that
they consent to such nomination;
12.2.17 favourable opinions from the Lender's legal advisers with
respect to the Borrower, the Guarantor and any other party
to the Security Documents, and the overall transaction
contemplated by this Agreement, in such terms as the Lender
may require;
12.2.18 such evidence as the Lender may require that the warranties
and representations contained in Clause 2 are true and
correct at the Drawdown Date, that none of the circumstances
specified in Clause 18.1 or 18.2 is subsisting and that no
Event of Default, or event which with the giving of notice
and/or lapse of time and/or the satisfaction of any other
condition would constitute an Event of Default, has occurred
or will arise following the advance of the Loan;
12.2.19 proof that there is a time charterparty in place in respect
of the Vessel in form and substance acceptable to the Lender
with a daily rate of not less than US$2,200 for a minimum
period of 36 calendar months from the Drawdown Date (and a
certified copy of such time charterparty).
12.3 Without prejudice to the foregoing provisions of this Clause 12, if the
Lender in its absolute discretion makes the Loan (or any part of the
Loan) available notwithstanding that one or more of the conditions
precedent specified above remains unsatisfied on the Drawdown Date,
then the Borrower shall procure the satisfaction of such condition or
conditions precedent within fourteen (14) days thereafter or such
longer period as the Lender may in its absolute discretion agree in
writing.
13. REVIEW OF INSURANCES
The Lender shall be entitled, at any time and from time to time, to
obtain from insurance brokers appointed by itself, at the Borrower's
expense, a written opinion as to the quality of the Insurances of the
Vessel. If the Lender is not satisfied that the Insurances provide the
Lender with good and adequate security, the Lender may, by written
notice to that effect, require the Borrower to place, or procure the
placing of, further and additional insurances and/or to amend or
procure the amendment of the existing Insurances, whether through the
existing brokers or otherwise. On receipt of such notice, the Borrower
must effect or procure
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the effecting of such additions and/or amendments to the Insurances
within fourteen (14) days.
14. UNDERTAKINGS OF THE BORROWER
14.1 The Borrower shall throughout the Security Period:
14.1.1 perform and observe the several covenants and obligations
imposed upon it under the Security Documents;
14.1.2 ensure that the Earnings of the Vessel are paid, and that
the persons from whom the Earnings are from time to time due
are instructed to pay them, to the Earnings Account, unless
and until the Lender directs otherwise;
14.1.3 inform the Lender 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 might materially adversely affect its
ability, or the ability of any other party to the Security
Documents, to perform their respective obligations under the
Security Documents, or which might materially adversely
affect the security constituted by the Security Documents;
14.1.4 maintain its corporate existence as a company duly organised
and validly existing in its place of incorporation, and
obtain and maintain in force, and promptly furnish certified
copies to the Lender 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
Security Documents or which may be required for the
validity, enforceability or admissibility in evidence of the
Security Documents;
14.1.5 ensure that its obligations under the Security Documents
rank at least pari passu with all its other present, future
and/or contingent unsecured and unsubordinated obligations;
14.1.6 conduct its business in a proper and efficient manner and
not change the nature, organisation or conduct of its
business or conduct any business other than that of
ownership of the Vessel;
14.1.7 promptly after the happening of any Event of Default or any
event which with the giving of notice and/or lapse of time
and/or satisfaction of any other condition would constitute
an Event of Default, notify the Lender of such event and of
the steps (if any) which are being taken to remedy it;
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14.1.8 maintain adequate and sufficient insurance on and over the
Vessel, in respect of hull, machinery and equipment, marine
and war risks (including excess risks), protection and
indemnity risks and (if appropriate) oil pollution
liability, on terms satisfactory to the Lender, and through
such brokers, and with such insurers, underwriters and war
risks and/or protection and indemnity associations as the
Lender in its discretion approves, in such amounts in
Dollars as shall from time to time be approved by the
Lender, but in any event:
(a) in respect of hull, machinery and equipment, marine
and war risks (including excess risks), for not
less than whichever is the greater of the full
market value of the Vessel and 130% of the amount
of the Loan; and
(b) in respect of protection and indemnity risks and
(if applicable) oil pollution liability, for an
unlimited amount if available and otherwise for the
maximum amount obtainable from the protection and
indemnity association in which the Vessel is from
time to time entered;
and otherwise in accordance with the provisions of the
Security Documents;
14.1.9 pay to the Lender on demand all premiums and other amounts
payable by the Lender in effecting and maintaining
mortgagees interest insurance policies in respect of the
Vessel, in the name of the Lender, in such amounts in
Dollars, on such terms and conditions and through such
brokers and with such insurers and underwriters as the
Lender may in its discretion determine, provided that the
amount insured in each case shall not exceed 130% of the
amount of the Loan;
14.1.10 pay all taxes, assessments and other governmental charges as
they fall due, except to the extent that the Borrower is
contesting the same in good faith by appropriate proceedings
and has set aside adequate reserves for their payment if
such proceedings fail;
14.1.11 keep proper books of account in respect of its business and
whenever so requested by the Lender make the same available
for inspection by or on behalf of the Lender;
14.1.12 provide the Lender within 120 days of the end of each
financial year of the Borrower with copies of the profit and
loss account and balance sheet of the Borrower, prepared in
a form consistent with generally accepted accounting
principles and practices consistently applied and audited by
auditors previously approved in writing by the Lender;
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14.1.13 provide the Lender with such other financial and other
information concerning the Borrower and its affairs and the
Vessel as the Lender may from time to time reasonably
require, including (but without limitation) full information
regarding the employment, condition, geographical position,
crewing and engagements of the Vessel and particulars of all
contracts concerning the Vessel;
14.1.14 (if the Lender considers that the financial position or
prospects of the Borrower are deteriorating), give
independent auditors appointed to carry out an audit and
inspection of its affairs every assistance in that regard;
14.1.15 promptly, at the request of the Lender from time to time,
provide the Lender with a certificate signed by the chief
financial officer or chief executive officer of the Borrower
confirming that the Borrower is, as at the date of such
certificate, in compliance with its obligations under the
Security Documents and that no Event of Default has
occurred, or, if any has occurred, none is continuing;
14.1.16 maintain at all times organisation and personnel which are
in the opinion of the Lender adequate to provide sufficient
management, agency, financial, secretarial and other
services for the Vessel;
14.1.17 to implement and maintain a safety management system ("SMS")
which complies with all laws, rules and regulations, and
with all the codes, guidelines and standards recommended by
the International Maritime Organisation (including without
limitation, 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.788(19) (as amended from time to time, the
"ISM Code")), the flag state of the Vessel and the Vessel's
Classification Society (if applicable), which may from time
to time be applicable to the Vessel and/or the Owner and/or
the approved manager, and which is otherwise appropriate
having regard to the Owner's obligations under this
Mortgage;
14.1.18 to obtain and maintain in force at all times valid
certificates evidencing compliance with the requirements of
Clause 14.1.17, including, without limitation, a valid
Document of Compliance in relation to itself and a valid
Safety Management Certificate in respect of the Vessel as
required by the ISM Code;
14.1.19 to provide the Mortgagee with copies of any such Document of
Compliance and Safety Management Certificate upon issuance;
and
14.1.20 to keep or procure that there is kept on board the Vessel at
all times a copy of any
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such Document of Compliance and the original of any such
Safety Management Certificate.
14.2 The Borrower shall not, at any time in the Security Period, without the
prior written consent of the Lender:
14.2.1 (unless in the ordinary course of its business) convey,
assign, transfer, sell or otherwise dispose of or deal with
any of its real or personal property, assets or rights,
whether present or future;
14.2.2 mortgage, charge, pledge, use as a lien or otherwise
encumber, any part of its undertaking, property, assets or
rights, whether present or future, (provided that where any
such lien arises in the ordinary course of business, the
Borrower shall promptly discharge the same);
14.2.3 make any loans or advances to, or any investments in, any
person (including, without limitation, any officer,
director, stockholder, employee or customer of the
Borrower);
14.2.4 borrow any money (other than that contemplated by this
Agreement) or enter into any agreement for payment on
deferred terms or any equipment lease or contract or hire
agreement (but so that this covenant shall not prevent it
from availing itself in the ordinary course of its business
of the usual trade credits available from suppliers of
necessaries to shipowners);
14.2.5 assume, guarantee or endorse, or otherwise become or remain
liable for, any obligation of any other person save pursuant
to the Security Documents;
14.2.6 authorise or accept any capital commitment;
14.2.7 make any payment of principal or interest to any of its
shareholders in respect of any loans or loan capital made
available to it by its shareholders, or declare or pay any
dividends upon any of its shares or stock or otherwise
distribute any assets to any of its shareholders whether in
cash or otherwise;
14.2.8 consolidate or subdivide or alter any of the rights attached
to, or reduce, any of its share capital, or capitalise,
repay or otherwise distribute any amount outstanding to the
credit of any capital or revenue reserves, redeem any of its
share capital in any way or enter into any arrangement with
its creditors;
14.2.9 issue any further shares or stock or register any transfer
of any of its shares or stock,
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or admit any new member, whether by subscription or
transfer;
14.2.10 consolidate, amalgamate or merge with any other entity;
14.2.11 form or acquire any subsidiary;
14.2.12 alter or extend its financial year for the purposes of the
preparation of its accounts, or change its auditors;
14.2.13 alter any of the provisions of its memorandum and articles
of association or other constitutional documents;
14.2.14 permit any changes to be made in the identity of its
directors, officers or senior management personnel.
15. EVENTS OF DEFAULT
15.1 There shall be an Event of Default should any one or ore of the
following happen:
15.1.1 the Borrower fails to make any payment due under any of the
Security Documents on its due date, or, in respect of moneys
payable on demand, (unless otherwise specifically provided)
within seven (7) days from the date of such demand;
15.1.2 the Borrower is in breach of any one or more of the
provisions of the Security Documents relating to the
Insurances;
15.1.3 the Borrower fails to comply with any provision of the
Security Documents other than those referred to in Clauses
15.1.1 and 15.1.2 and, in the case of any such default which
the Lender considers capable of remedy, such default
continues for a period of seven (7) days after the Lender,
by notice to the Borrower, requires the same to be remedied;
15.1.4 any licence, approval, consent, authorisation or
registration at any time necessary or desirable for the
validity, enforceability or admissibility in evidence of the
Security Documents, or for the Borrower to comply with its
obligations thereunder, or in connection with the ownership
or operation of the Vessel, is revoked, withheld or expires,
or is modified in what the Lender considers a material
respect;
15.1.5 the Vessel becomes a Total Loss and (without prejudice to
the Borrower's obligations under Clause 5.3) the Lender does
not receive, within ninety (90) days following the
occurrence of the Total Loss, the insurance proceeds
relating to the
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Total Loss in an amount not less than the amount for which
the Vessel is required to be insured under the Security
Documents as at the date of the event or circumstances
giving rise to the Total Loss or, if lower, the amount of
the Outstanding Indebtedness at the date of receipt by the
Lender;
15.1.6 a petition is filed, or an order made, or an effective
resolution passed, for the compulsory or voluntary
winding-up or dissolution of the Borrower (other than for
the purposes of amalgamation or reconstruction in respect of
which the prior written approval of the Lender has first
been obtained) or any proceedings analogous to winding-up
proceedings are begun in any jurisdiction in relation to the
Borrower, or if the Borrower suspends payment of, or is
unable to or admits inability to pay, its debts as they fall
due or makes any special arrangement or composition with its
creditors generally or any class of its creditors;
15.1.7 an administrator, administrative receiver, receiver or
trustee or similar official is appointed of the whole, or
what the Lender considers a material part, of the property,
assets or undertaking of the Borrower, or if the Borrower
applies for, or consents to, any such appointment;
15.1.8 an encumbrancer takes possession of, or distress or
execution is levied upon, the whole, or what the Lender
considers a material part, of the property, assets or
undertaking of the Borrower;
15.1.9 the Borrower ceases, or threatens to cease, to carry on its
business, or disposes or threatens to dispose of what the
Lender considers a material part of its property, assets or
undertaking, or such a part is seized or appropriated;
15.1.10 anything is done, suffered or omitted to be done or occurs
which, in the opinion of the Lender, would in any way
imperil the security created by the Security Documents;
15.1.11 an event of default occurs in relation to any obligation
whatsoever of the Borrower in respect of borrowed money,
whether from the Lender or any other lender or any guarantee
or indemnity given by the Borrower is not honoured when
called;
15.1.12 any representation or warranty made or deemed to be made in
any of the Security Documents, or in any certificate or
statement delivered in connection with any of the Security
Documents or in the negotiations leading up to the
conclusion of this Agreement is, or at any time becomes,
incorrect in any respect which the Lender considers
materially adverse to the Lender, as if such representation
or warranty were made as of such time;
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15.1.13 the Borrower ceases to be a company duly registered in good
standing in the place in which it was incorporated;
15.1.14 it becomes impossible or unlawful for the Borrower to fulfil
any of its obligations under the Security Documents, or for
the Lender to exercise any of the rights vested in it by, or
to enforce the security constituted by, the Security
Documents;
15.1.15 if, without the prior written consent of the Lender, there
is any change in the legal or beneficial ownership of the
shares/stock of the Borrower;
15.1.16 if, in the opinion of the Lender, there is any material
adverse change in the financial condition or prospects of
the Borrower;
15.1.17 if any of the events specified in Clauses 15.1.1 to 15.1.16
inclusive occurs (mutatis mutandis) in relation to the
Guarantor or to any other party to the Security Documents
(other than the Lender);
15.1.18 if any other party to the Security Documents, being an
individual, dies or becomes of unsound mind or is unable or
admits in writing his or her inability to pay his or her
debts as they fall due or makes a general assignment for the
benefit of his or her creditors, or is adjudged bankrupt or
insolvent, or files a voluntary petition in bankruptcy or a
petition or an answer to a petition seeking an arrangement
with his or her creditors;
15.1.19 any Event of Default (as so described in any other of the
Security Documents) occurs.
15.2 Upon the occurrence of an Event of Default and at any time thereafter
the Lender may, without prejudice to any of its rights and remedies
under any of the other Security Documents or otherwise, take any one or
more of the following actions:
15.2.1 by written notice to the Borrower declare its commitment to
advance the Loan cancelled, whereupon the same shall be
cancelled;
15.2.2 by written notice to the Borrower demand the immediate
repayment of the Outstanding Principal, all interest accrued
thereon and all other Outstanding Indebtedness, whereupon
the same shall become immediately due and payable, bearing
interest at the Default Rate in accordance with the
provisions of Clause 6.4;
15.2.3 take steps to enforce the security created by the Security
Documents and/or
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otherwise exercise the rights and remedies conferred upon it
by this Agreement and the other Security Documents and
exercisable on or after the occurrence of an Event of
Default.
16. INDEMNITIES AND EXPENSES
16.1 The Borrower shall indemnify the Lender, on demand, against any losses,
expenses or liabilities whether actual or contingent, (as to the amount
of which the Lender's certificate shall be conclusive and binding upon
the Borrower, except in case of manifest error) suffered or incurred by
the Lender in connection with or as a result of:
16.1.1 the Loan not being drawn in full on the Drawdown Date
specified in the Borrower's notice of drawdown for any
reason, other than as a result of a default by the Lender;
or
16.1.2 any repayment or prepayment of the whole or any part of the
Outstanding Principal being made on any date other than the
last day of the Interest Period applicable thereto; or
16.1.3 any default in payment by the Borrower of any sum due under
the Security Documents on its due date; or
16.1.4 the occurrence or continuance of an Event of Default and/or
any event which, with the giving of notice and/or lapse of
time, would constitute an Event of Default.
Without prejudice to its generality, the foregoing indemnity shall
extend to any interest, fees or other sums whatsoever paid or payable
on account of any funds borrowed by the Lender in order to fund any
unpaid amount and to any loss (including loss of profit), premium,
penalty or expense which may be incurred by the Lender in liquidating
or employing deposits from third parties taken to make, maintain or
fund the Loan or the Outstanding Principal (or any part thereof) or any
other amount due or to become due to the Lender under the terms of the
Security Documents.
16.2 The Borrower shall pay to the Lender on demand, and indemnify and keep
the Lender 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 incurred by the Lender:
16.2.1 in the negotiation, preparation, printing, execution and
registration of this Agreement and the other Security
Documents;
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16.2.2 in the enforcement or preservation or the attempted
enforcement or preservation of any of the Lender's rights
and powers under this Agreement and the other Security
Documents or of the security constituted by the Security
Documents;
16.2.3 in connection with any actual or proposed amendment of or
supplement to this Agreement or any other of the Security
Documents, or with any request of the Lender to grant any
consent or waiver in respect of any provision of this
Agreement or any other of the Security Documents, whether or
not the same is given;
16.2.4 arising out of any act or omission made by the Lender in
good faith in connection with any of the matters dealt with
in the Security Documents.
16.3 The Borrower shall pay any and all stamp, documentary, registration and
like taxes or charges imposed by governmental authorities in relation
to this Agreement and the other Security Documents, and shall indemnify
the Lender against any and all liabilities with respect to, or
resulting from, delay or omission on the part of the Borrower to pay
such taxes or charges.
16.4 Any amount received or recovered by the Lender in respect of any moneys
or liabilities due, owing or incurred by the Borrower to the Lender
(whether as a result of any judgment or order of any court or in the
bankruptcy, administration, reorganisation, liquidation or dissolution
of the Borrower or by way of damages for any breach of any obligation
to make any payment to the Lender) in a currency (the "Currency of
Payment") other than Dollars in whatever circumstances and for whatever
reason shall only constitute a discharge to the Borrower to the extent
of the amount in Dollars which the Lender is able or would have been
able, on the date or dates of receipt by it of such payment or payments
in the Currency of Payment (or, in the case of any such date which is
not a Banking Day, on the next succeeding Banking Day), to purchase in
the foreign exchange market of its choice with the amount or amounts so
received.
16.5 If the amount of Dollars which the Lender is so able to purchase falls
short of the amount originally due to the Lender hereunder, the
Borrower shall indemnify and hold the Lender harmless against any loss
or damage arising as a result by paying to the Lender that amount in
Dollars certified by the Lender as necessary to so indemnify and hold
harmless the Lender. This indemnity shall constitute a separate and
independent obligation from the other obligations contained in this
Agreement, shall give rise to a separate and independent cause of
action, shall apply irrespective of any indulgence granted by the
Lender from time to time and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum or sums in
respect of amounts due hereunder or under any such judgment or order.
The certificate of the Lender as to the amount of any such loss or
damage aforesaid (which shall be deemed to constitute a loss suffered
by the Lender) shall (save in case of manifest error) for all purposes
be conclusive and binding on the Borrower.
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17. ASSIGNMENTS AND TRANSFERS
17.1 This Agreement shall be binding upon and inure to the benefit of each
party hereto and its successors and assigns.
17.2 The Borrower may not assign or transfer all or any of its rights,
benefits or obligations under this Agreement or under any of the other
Security Documents without the Lender's prior written consent.
17.3 The Lender may freely assign and/or sub-participate all or any of its
rights and benefits under this Agreement and under the other Security
Documents.
17.4 The Lender may transfer all or any of its obligations under this
Agreement and under the other Security Documents subject to the prior
consent of the Borrower, which shall not be unreasonably withheld,
provided that no such consent shall be required in the case of a
transfer to a subsidiary, affiliate or holding company of the Lender.
17.5 The Lender may disclose to any potential transferee, assignee or
sub-participant, or to any other party with whom it may propose to
enter into contractual relations in connection with this Agreement or
any other of the Security Documents, such information about the
Borrower and its business, assets or financial condition as the Lender
shall consider appropriate.
17.6 The Lender may at any time and from time to time change its lending
office and/or delegate any one or more of its rights, powers and/or
obligations under this Agreement and the other Security Documents to
any person.
17.7 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 Lender may
reasonably require for the purpose of perfecting any such assignment,
transfer, sub-participation, change or delegation as aforesaid.
18. CHANGE IN CIRCUMSTANCES
18.1 If at any time prior to the commencement of any Interest Period, the
Lender shall determine that, by reason of circumstances affecting the
currencies market generally, adequate and reasonable means do not or
will not exist for ascertaining the Interest Rate applicable to such
Interest Period, then the Lender shall give notice thereof (hereinafter
called a "Determination Notice") to the Borrower. If the Determination
Notice shall be given prior to the Loan or any part thereof being
advanced by the Lender, then the Lender's obligation to advance the
Loan or any part thereof shall be suspended during the continuation of
such circumstances. The
- 26 -
Borrower and the Lender shall in any event negotiate in good faith in
order to agree a mutually satisfactory Interest Rate or Rates, Interest
Period or Periods and Interest Date or Dates to be substituted for
those which would otherwise have applied under this Agreement.
18.2 If the Lender shall determine that, by reason of circumstances
affecting the currencies market generally, deposits in Dollars are not
available to it in sufficient amounts in the ordinary course of
business and that accordingly the Lender will not be able to make, fund
or maintain the Loan or the Outstanding Principal, then the Lender may
serve written notice of such determination on the Borrower (whereupon
the obligation of the Lender to make, fund or maintain the Loan or the
Outstanding Principal or any part thereof shall cease) requiring the
Borrower to prepay the Outstanding Principal on the next Interest Date
following the date of such notice, and the Borrower shall prepay the
Outstanding Principal to the Lender on such Interest Date in accordance
with and subject to the provisions of Clause 18.6.
18.3 The Lender will not be liable for any failure on its part to provide
the Loan or maintain the Outstanding Principal or any part thereof
resulting, directly or indirectly, from any action, inaction or
purported action of any government or governmental agency or any
strike, boycott or blockade or any cause whatsoever outside its
control.
18.4 If, as a result of the introduction of or any change in any applicable
law, regulation or official directive (whether or not having the force
of law), or in the interpretation thereof by any authority charged with
the administration thereof or by any court of competent jurisdiction,
or compliance by the Lender with any directive, request or requirement
from any applicable governmental, fiscal or monetary authority (whether
or not having the force of law):
18.4.1 there is any change in the basis of taxation (other than the
basis of taxation of the Lender's overall net income) of
payments by the Borrower to the Lender of principal,
interest or otherwise; or
18.4.2 there is any change in the basis of taxation of payments by
the Lender of principal or interest on, or otherwise in
respect of, deposits taken from third parties to make, fund
or maintain the Loan or the Outstanding Principal; or
18.4.3 any reserve, special deposit, cash ratio, liquidity or other
requirements are imposed, modified or deemed applicable
against assets held by or deposits in or for the account of,
or loans by, the Lender; or
18.4.4 any other condition is imposed on the Lender in respect of
the transactions contemplated by this Agreement or any other
of the Security Documents;
and, as a result, the cost to the Lender of making, funding or
maintaining the Loan or the
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Outstanding Principal or any part thereof is increased, or the amount
payable or the effective return to the Lender under this Agreement is
reduced, then, and in any such case, the Lender shall notify the
Borrower as soon as practicable of the same and the Borrower shall pay
to the Lender from time to time upon demand such additional moneys as
the Lender shall specify to be necessary to indemnify the Lender for
any increased cost, reduction in principal or interest receivable or
other foregone return whatsoever. It shall not be a defence to a claim
by the Lender under this Clause that any such increased cost or
reduction could have been avoided by the Lender. Any amount due from
the Borrower under this Clause 18.4 shall be due as a separate debt and
shall not be affected by judgement being obtained for any other sums
due under or pursuant to this Agreement.
18.5 Notwithstanding anything to the contrary contained in this Agreement,
if the introduction of, or any change in, any applicable law or
regulation, or in the interpretation thereof by any authority charged
with the administration thereof or by any court of competent
jurisdiction, makes it unlawful for the Lender to maintain or give
effect to its obligations under this Agreement, then the Lender may
serve written notice on the Borrower declaring the Lender's obligations
under this Agreement terminated, whereupon the same shall terminate
forthwith and the Borrower shall immediately prepay the Outstanding
Principal to the Lender in accordance with and subject to the
provisions of Clause 18.6.
18.6 Where the Outstanding Principal is to be prepaid by the Borrower
pursuant to any of the provisions of this Clause 18, the Borrower shall
simultaneously with such prepayment pay to the Lender all accrued
interest on the Outstanding Principal and all other sums payable by the
Borrower to the Lender pursuant to this Agreement, together with such
amounts as may be certified by the Lender to be necessary to compensate
the Lender for any loss (including, without limitation, loss of
profit), penalty or expense incurred or to be incurred by it on account
of funds borrowed in order to make, fund or maintain the Loan or the
Outstanding Principal (or any part thereof) as a consequence of such
prepayment being made other than on the last day of an Interest Period
applicable to the whole amount prepaid.
18.7 The certificate or determination of the Lender as to any of the matters
referred to in this Clause 18 shall, save for any manifest error, for
all purposes be conclusive and binding on the Borrower.
19. SET-OFF AND LIEN
19.1 The Borrower authorises the Lender, without prejudice to any of the
Lender's rights at law, in equity or otherwise, at any time and without
notice to the Borrower:
19.1.1 to combine and/or consolidate all or any accounts (whether
current, deposit, loan or of any other nature whatsoever,
whether subject to notice or not and in whatever
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currency) of the Borrower with any branch of the Lender;
19.1.2 to apply any credit balance (whether or not then due) on any
such account or accounts of the Borrower in or towards
satisfaction of any sum due and payable but not paid to the
Lender and any other liability of the Borrower (whether
actual or contingent) under this Agreement and/or any of the
Security Documents; and
19.1.3 to do in the name of the Borrower and/or the Lender all such
acts and execute all such documents as may be necessary or
expedient to effect such application.
For all or any of the above purposes, the Lender is authorised to
purchase with the moneys standing to the credit of such account or
accounts any such other currency or currencies as may be necessary to
effect such application. The Lender shall not be obliged to exercise
any right given to it by this Clause 19.
19.2 The Lender shall have a lien on all property and assets of the Borrower
which, or the certificates of or the deeds of title for which, may from
time to time be held by the Lender, whether for safe-keeping or
otherwise.
20. MISCELLANEOUS
20.1 Time is of the essence as regards every obligation of the Borrower
under this Agreement and the other Security Documents, but no delay or
omission by the Lender to exercise any right, power or remedy vested in
it under this Agreement or any other of the Security Documents or by
law shall impair such right, power or remedy, or be construed as a
waiver of, or as an acquiescence in, any default by the Borrower. If
the Lender on any occasion agrees to waive any such right, power or
remedy, such waiver shall not in any way preclude or impair any further
exercise thereof or the exercise of any other right, power or remedy.
Any waiver by the Lender of any provision of this Agreement or any
other of the Security Documents, and any consent or approval given by
the Lender, 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 of the other Security Documents may be
amended or varied orally but only by an instrument signed by each of
the parties thereto.
20.2 The rights, powers and remedies of the Lender contained in this
Agreement and the other Security Documents are cumulative and not
exclusive of each other nor of any other rights, powers or remedies
conferred by law, and may be exercised from time to time and as often
as the Lender may think fit.
20.3 If at any time one or more of the provisions of this Agreement or any
other of the Security Documents is or becomes invalid, illegal or
unenforceable in any respect under any law by
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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.
20.4 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.
21. FURTHER ASSURANCE
21.1 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 Lender may require for the purpose of more
effectually accomplishing or perfecting the transaction or security
contemplated by this Agreement.
22. NOTICES
22.1 All notices (which expression includes any demand, request, consent or
other communication) to be given by one party to the other under this
Agreement and the other Security Documents 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:
22.1.1 in the case of the Lender, as follows:
0X, Xxxxxxx Xxxxxxxx,
000 Xx Xxxx Xxxx,
Xxxxxxxx, PRC
Attn. Xx. Xxxx Pan / Mr. Xxxx Xxx
Fax No.: 00-00-00000000
22.1.2 in the case of the Borrower, as follows:
0X, 000 Xxxxxx Xxxx,
Xxxxxxxx, PRC
Attn. Xx. Xx Guang
Fax No.: 00-00-00000000
22.2 If either the Lender or the Borrower wishes to change its address for
communication, the one shall give to the other not less than five (5)
Banking Days' notice in writing of the change desired.
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22.3 Notices to the Borrower addressed as provided above shall be deemed to
have been duly given when despatched (in the case of telex and
telefax), when delivered (in the case of personal delivery), two (2)
days after posting (in the case of letters sent within the same
country), or five (5) days after posting (in the case of letters sent
internationally). Notices to the Lender shall be effective only upon
their actual receipt by the Lender. In each of the above cases any
notice received on a non-working day or after business hours in the
country of receipt shall be deemed to be given on the next following
working day in such country.
22.4 All notices and documents to be given or delivered pursuant to or
otherwise in relation to this Agreement and the other Security
Documents shall be in the English language or be accompanied by a
certified English translation.
23. APPLICABLE LAW AND JURISDICTION
23.1 This Agreement shall be governed by and construed in accordance with
PRC law.
23.2 The Borrower irrevocably agrees for the exclusive benefit of the Lender
that the PRC courts shall have non-exclusive jurisdiction in relation
to any dispute and any suit, action or proceeding (referred to together
in this Clause 23 as "Proceedings") which may arise out of or in
connection with this Agreement and/or any of the other Security
Documents, and for such purposes irrevocably submits to the
jurisdiction of such courts.
23.3 The Borrower irrevocably agrees:
23.3.1 that, for the purpose of Proceedings in the PRC, any
summons, writ or other legal process may be served upon
YONGZHENG INERNATIONAL MARINE HOLDINGS CO., LTD., a company
incorporated in the PRC with its registered office at 0X,
000 Xxxxxx Xxxx, Xxxxxxxx, PRC who is authorised to accept
service on behalf of the Borrower, which shall be deemed to
be good service on the Borrower; and
23.3.2 that throughout the Security Period the Borrower will
maintain a duly appointed process agent in Hong Kong, duly
notified to the Lender, and that failure by any such process
agent to give notice thereof to the Borrower shall not
impair the validity of such service or of a judgment or
order based thereon.
23.4 Nothing in this Clause 23 shall affect the right of the Lender to serve
process in any manner permitted by law or limit the right of the Lender
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 the Lender in
any other jurisdiction, whether concurrently or not.
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23.5 The Borrower irrevocably waives any objection which it may now or
hereafter have on the grounds of inconvenient forum or otherwise to
Proceedings being brought in any such court as is referred to in this
Clause 23, and further irrevocably agrees that a judgment or order in
any Proceedings brought in the PRC courts shall be conclusive and
binding upon the Borrower and may be enforced without review in the
courts of any other jurisdiction.
23.6 The Borrower consents generally in respect of any Proceedings arising
out of or in connection with this Agreement and/or any of the other
Security Documents to the giving of any relief or the issue of any
process in connection with such 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 such Proceedings.
23.7 To the extent that the Borrower may be entitled in any jurisdiction to
claim for itself or its property or assets immunity in respect of its
obligations under this Agreement and/or any of the other Security
Documents from service of process, jurisdiction, suit, judgment,
execution, attachment (whether before judgment, in aid of execution or
otherwise) or legal process, or to the extent that in any such
jurisdiction there may be attributed to it or its property or assets
such immunity (whether or not claimed) the Borrower irrevocably agrees
not to claim and irrevocably waives such immunity to the fullest extent
permitted by the laws of such jurisdiction.
24. AGENTS AND REPRESENTATIVES IN PANAMA
24.1 The Owner and the Mortgagee each confer a special power of attorney
with right of substitution upon all partners from time to time of
Messrs. Xxxxxx Xxxxxxx & Xxxxxx and Messrs. Xxxxxx & Xxxxxx, empowering
any such partners to take all necessary steps to record this instrument
of mortgage in the appropriate registry, and to make any and all
amendments to this Mortgage which such firms or any such partners may
deem necessary or expedient for such registration.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
SIGNED for and on behalf of YONGCHEN ) YONGCHEN INTERNATIONAL
INTERNATIONAL SHIPPING LIMITED by ) SHIPPING LIMITED (Stamp)
XXXXX XXX XX, its duly authorised director ) /S/ XXXXX XXXXX
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Whose signature is verified by: )
XXXXX XX XXXX
Sollictor, HongKong SAR
c/x Xxxxxx, Fenwick & Xxxxxxx (Stamp)
XXXXX XXXX
SIGNED for and on behalf of XIAMEN ) XIAMEN INTERNATIONAL BANK
INTERNATIONAL BANK, SHANGHAI ) SHANGHAI BRANCH (Stamp)
BRANCH by ZHU Xxxx Xx, its duly ) /S/ XXXX PAN
authorised signatory whose signature is )
verified by )
XXXXX XX XXXX
Sollictor, HongKong SAR
c/x Xxxxxx, Fenwick & Xxxxxxx (Stamp)
XXXXX XXXX
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Yongchen International Shipping Limited
00X, XXX Xxxxxx,
00 Xxxxxx Xxxxxx,
Xxxx Xxxx
To: Xiamen International Bank (Shanghai Branch)
0X, Xxxxxxx Xxxxxxxx,
000 Xx Xxxx Xxxx,
Xxxxxxxx,
XXX
(Xx post)
Attn. Xx. Xxxx Pan
Dear Sirs,
Re: M.V. "Xxxx Xxx" - US$1,200,000 Loan Agreement dated 10th August 2006
We are the Borrower under the captioned Loan Agreement.
Reference is made to the negative undertakings under Clause 14.2 of the Loan
Agreement; particularly sub clauses 14.2.1, 14.2.7, 14.2.8, 14.2.9, 14.2.10 and
14.2.11.
Owing to the business development and possible company restructure and possible
listing of our holding company, we would like to remove these clauses in the
Loan Agreement (and other relevant loan documentation).
If you need further documents / information, please contact our Xxxxx Xxx at
(86) 21 - 55958601 ext 833.
Please confirm your agreement below.
Dated the 10th day of December 2006.
Yours faithfully,
FOR AND ON BEHALF OF
YONGCHEN INTERNATIONAL SHIPPING LIMITED (Stamp)
/S/ XXXXX XXXXX
----------------------------------
For and on behalf of
Yongchen International Shipping Limited
Agreed by
XIAMEN INTERNATIONAL BANK
SHANGHAI BRANCH (Stamp)
/S/ XXXX PAN
----------------------------------------------
For and on behalf of
XIAMEN INTERNATIONAL BANK (SHANGHAI BRANCH)
