Contract
EXHIBIT 4.12
Date 2007
TYLER
NAVIGATION INC.
and
PASEDENA
NAVIGATION INC.
as
joint and several Borrowers
-
and -
THE
GOVERNOR AND COMPANY OF
THE
BANK OF SCOTLAND
as
Lender
__________________________________
__________________________________
relating
to a loan facility
of
up to US$70,000,000
to
part-finance the acquisition of two 37,000 dwt
product
tankers from Hyundai Mipo Dockyard Co. Ltd., Korea
CONSTANT
& CONSTANT
2,
Defteras Xxxxxxxxxx
000
00 Xxxxxxx
Xxxxxx
INDEX
|
PAGE
NO.
|
||
|
1
|
INTERPRETATION
|
1
|
|
2
|
FACILITY
|
14
|
|
3
|
DRAWDOWN
|
14
|
|
4
|
INTEREST
|
15
|
|
5
|
INTEREST
PERIODS
|
16
|
|
6
|
DEFAULT
INTEREST
|
17
|
|
7
|
REPAYMENT
AND PREPAYMENT
|
18
|
|
8
|
CONDITIONS
PRECEDENT
|
20
|
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
21
|
|
10
|
GENERAL
UNDERTAKINGS
|
23
|
|
11
|
CORPORATE
UNDERTAKINGS
|
26
|
|
12
|
INSURANCE
|
27
|
|
13
|
SHIP
COVENANTS
|
32
|
|
14
|
SECURITY
COVER
|
36
|
|
15
|
PAYMENTS
AND CALCULATIONS
|
37
|
|
16
|
APPLICATION
OF RECEIPTS
|
38
|
|
17
|
APPLICATION
OF EARNINGS
|
37
|
|
18
|
EVENTS
OF DEFAULT
|
40
|
|
19
|
FEES
AND EXPENSES
|
44
|
|
20
|
INDEMNITIES
|
45
|
|
21
|
NO
SET-OFF OR TAX DEDUCTION
|
47
|
|
22
|
ILLEGALITY,
ETC
|
48
|
|
23
|
INCREASED
COSTS
|
48
|
|
24
|
SET
OFF
|
49
|
INDEX
|
CLAUSE
NO.
|
PAGE
NO.
|
|
25
|
TRANSFERS
AND CHANGES IN LENDING OFFICES
|
50
|
|
26
|
VARIATIONS
AND WAIVERS
|
50
|
|
27
|
NOTICES
|
51
|
|
28
|
JOINT
AND SEVERAL LIABILITY
|
52
|
|
29
|
SUPPLEMENTAL
|
53
|
|
30
|
LAW
AND JURISDICTION
|
53
|
|
SCHEDULE
1
|
DRAWDOWN
NOTICE
|
55
|
|
SCHEDULE
2
|
CONDITION
PRECEDENT DOCUMENTS
|
57
|
|
SCHEDULE
3
|
AMOUNT
OF EACH INSTALMENT UNDER EACH SHIPBUILDING CONTRACT
|
62
|
|
SCHEDULE
4
|
MANDATORY
COSTS
|
63
|
|
EXECUTION
PAGE
|
65
|
|
THIS LOAN AGREEMENT is made
on 2007
BETWEEN:
|
(1)
|
TYLER NAVIGATION INC.
and PASEDENA NAVIGATION
INC., each being a corporation incorporated in the Republic of the
Xxxxxxxx Islands and whose registered office is at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX 00000 as joint
and several Borrowers;
and
|
|
(2)
|
THE GOVERNOR AND COMPANY OF THE
BANK OF SCOTLAND acting through its office at Xxxxxxxx Xxxxx, 0
Xxxxxxxx Xxxxxx, Xxxxxxxxx XX00 0XX, Xxxxxxxx as Lender.
|
WHEREAS
|
(A)
|
The
Lender has agreed to make available to the Borrowers a facility of up to
US$70,000,000 in two Tranches (each in 6 Advances) each in an amount not
exceeding the lesser of (a) US$35,000,000 and (b) 75% of the Fair Market
Value of each Ship as at its Delivery Date, for the purpose of
part-financing the Contract Price of the Ships which are to be constructed
by the Builder for, and purchased by, the
Borrowers.
|
|
(B)
|
The
Lender may enter into interest rate swap transactions with the Borrowers
from time to time to hedge the Borrowers’ exposure under this Agreement to
interest rate fluctuations.
|
IT IS AGREED as
follows:
|
1
|
INTERPRETATION
|
|
1.1
|
Definitions. Subject to
Clause 1.5, in this Agreement:
|
“Accounts
Pledge” means a deed or deeds of pledge in respect of the
Earnings Accounts and the Retention Account, in such form as the Lender may
approve or require;
|
|
“Advance” means
the principal amount of each borrowing by the Borrowers under this
Agreement;
|
|
|
“Approved
Flag” means, in relation to a Ship, the Xxxxxxxx Islands
flag or such other flag as the Lender may, in its sole and absolute
discretion, approve as the flag on which a Ship shall be
registered;
|
|
|
“Approved Flag
State” means, in relation to a Ship, the Republic of the
Xxxxxxxx Islands or any other country in which the Lender may, in relation
to a Ship, in its sole and absolute discretion, approve that a Ship be
registered;
|
“Approved
Manager” means, in relation to a Ship, such company which the
Borrowers shall propose as the commercial and technical managers of each Ship
prior to the Delivery Date of each Ship and which shall be acceptable to the
Lender in its sole discretion;
|
|
“Approved Manager’s
Undertaking” means, in relation to each Ship, a letter
of undertaking executed by the Approved Manager in favour of the Lender in
the terms required by the Lender agreeing certain matters in relation to
the Approved Manager and subordinating the rights of the Approved Manager
against such Ship and the Borrower which is the owner thereof to the
rights of the Lender under the Finance Documents, in such form as the
Lender may approve or require;
|
|
|
“Availability
Period” means the period commencing on the date of this
Agreement and ending on:
|
|
|
(a)
|
31
August 2010 (or such later date as the Lender may agree with the
Borrowers, which agreement shall not be unreasonably withheld in relation
to any permissible delay under a Shipbuilding Contract);
or
|
|
|
(b)
|
if
earlier, the date on which the Commitment is fully borrowed, cancelled or
terminated;
|
|
|
“Borrower” means
each of Pasedena and Tyler and, in the plural, means all of
them;
|
|
|
“Builder” means
Hyundai Mipo Dockyard Co. Ltd., a corporation organised and existing under
the laws of the Republic of Korea, with its principal office at 0000
Xxxxxx-Xxxx, Xxxx-Xx, Xxxxx, Xxxxx;
|
|
|
“Business
Day” means a day on which banks are open in London,
Athens, Piraeus and (in relation to any payment to be made to the Builder)
Korea, and in respect of a day on which a payment is required to be made
under a Finance Document, also in New York City
;
|
|
|
“Commitment” means
the sum of up to $70,000,000 as such amount may be reduced, cancelled or
terminated in accordance with this
Agreement;
|
“Confirmation” and “Early Termination Date”, in
relation to any continuing Designated Transaction, have the meanings given in
the Master Agreement;
“Contract
Price” means, in respect of each Ship, $44,235,000 being the
amount payable by the relevant Borrower pursuant to the Shipbuilding Contract
relating thereto (as the same may be adjusted pursuant to the terms of such
Shipbuilding Contract);
|
|
“Contractual Currency”
has the meaning given in Clause
20.4;
|
|
|
“Corporate
Guarantee” means the guarantee to be given by the
Corporate Guarantor, in such form as the Lender may approve or
require;
|
|
|
“Corporate
Guarantor” means Omega Navigation Enterprises, Inc., a
corporation incorporated in The Republic of the Xxxxxxxx Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Xxxxxxxx Xxxxxxx XX
00000;
|
|
|
“Deferred
Interest” means the interest on the first two Advances
under each Tranche accruing from the Drawdown Date of each such Advance up
until the Drawdown Date of the third Advance under each
Tranche;
|
|
|
“Delivery
Advance” means, in relation to a Ship, the final Advance
in respect of each Tranche, the amount of which shall be calculated in
accordance with Clause 3.2(e);
|
|
|
“Delivery
Date” means, in relation to a Ship, the date on which
title to and possession of that Ship is transferred from the Builder to
the relevant Borrower;
|
“Designated Transaction” means
a Transaction which fulfils the following requirements:
|
|
(a)
|
it
is entered into by the Borrowers pursuant to the Master Agreement;
and
|
2
|
|
(b)
|
its
purpose is the hedging of the Borrower’s exposure under this Agreement to
fluctuations in LIBOR arising from the funding of the Loan or any part
thereof for a period expiring no later than the final Repayment
Date;
|
|
|
“Dollars” and “$” means the
lawful currency for the time being of the United States of
America;
|
|
|
“Drawdown
Date” means, in relation to an Advance, the date
requested by the Borrowers for an Advance to be made, or (as the context
requires) the date on which such Advance is actually
made;
|
|
|
“Drawdown
Notice” means a notice in the form set out in Schedule 1
(or in any other form which the Lender approves or reasonably
requires);
|
|
|
“Earnings” means,
in relation to a Ship, all moneys whatsoever which are now, or later
become, payable (actually or contingently) to the Borrower owning that
Ship or the Lender and which arise out of the use or operation of that
Ship, including (but not limited
to):
|
|
|
(a)
|
all
freight, hire and passage moneys, compensation payable to the Borrower
owning that Ship or the Lender in the event of requisition of that Ship
for hire, remuneration for salvage and towage services, demurrage and
detention moneys and damages for breach (or payments for variation or
termination) of any charterparty or other contract for the employment of
that Ship;
|
|
|
(b)
|
all
moneys which are at any time payable under Insurances in respect of loss
of earnings; and
|
|
|
(c)
|
if
and whenever that Ship is employed on terms whereby any moneys falling
within paragraphs (a) or (b) above are pooled or shared with any other
person, that proportion of the net receipts of the relevant pooling or
sharing arrangement which is attributable to that
Ship;
|
“Earnings Account” means, in
relation to each Ship, the account in the name of the Borrower owning such Ship
with the Lender in Glasgow designated “[name of
Borrower] - Earnings Account”, or any other account (with that or another
office of the Lender or with a bank or financial institution other than the
Lender) which is designated by the Lender as the Earnings Account for the
purposes of this Agreement;
|
|
“Environmental
Claim” means:
|
|
|
(a)
|
any
claim by any governmental, judicial or regulatory authority which arises
out of an Environmental Incident or an alleged Environmental Incident or
which relates to any Environmental Law;
or
|
|
|
(b)
|
any
claim by any other person which relates to an Environmental Incident or to
an alleged Environmental Incident,
|
|
|
and
“claim” means a
claim for damages, compensation, fines, penalties or any other payment of
any kind whether or not similar to the foregoing; an order or direction to
take, or not to take, certain action or to desist from or suspend certain
action; and any form of enforcement or regulatory action, including the
arrest or attachment of any
asset;
|
3
|
|
“Environmental
Incident” means:
|
|
|
(a)
|
any
release of Environmentally Sensitive Material from a Ship;
or
|
|
|
(b)
|
any
incident in which Environmentally Sensitive Material is released from a
vessel other than a Ship and which involves a collision between a Ship and
such other vessel or some other incident of navigation or operation, in
either case, in connection with which a Ship is actually or potentially
liable to be arrested, attached, detained or injuncted and/or a Ship or
either Borrower and/or any operator or manager is at fault or allegedly at
fault or otherwise liable to any legal or administrative action;
or
|
|
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from a Ship and in connection with which a Ship is actually
or potentially liable to be arrested and/or where either Borrower and/or
any operator or manager of a Ship is at fault or allegedly at fault or
otherwise liable to any legal or administrative
action;
|
|
|
“Environmental
Law” means any law relating to pollution or protection
of the environment, to the carriage of Environmentally Sensitive Material
or to actual or threatened releases of Environmentally Sensitive
Material;
|
|
|
“Environmentally Sensitive
Material” means oil, oil products and any other
substance (including any chemical, gas or other hazardous or noxious
substance) which is (or is capable of being or becoming) polluting, toxic
or hazardous;
|
|
|
“Event of
Default” means any of the events or circumstances
described in Clause 18.1;
|
|
|
“Fair Market Value”
means, in respect of each Ship, the market value thereof determined from
time to time in accordance with Clause
14.4;
|
|
|
“Finance
Documents” means:
|
|
|
(a)
|
this
Agreement;
|
|
|
(b)
|
the
Corporate Guarantee;
|
|
|
(c)
|
the
Pre Delivery Security Assignments;
|
|
|
(d)
|
the
Master Agreement;
|
|
|
(e)
|
the
Master Agreement Security Deed;
|
|
|
(f)
|
the
Mortgages;
|
|
|
(g)
|
the
General Assignments;
|
|
|
(h)
|
the
Accounts Pledge;
|
|
|
(i)
|
the
Approved Manager’s Undertakings;
and
|
|
|
(j)
|
any
other document (whether creating a Security Interest or not) which is
executed at any time by any Borrower or the Corporate Guarantor or any
other person as security for, or to establish any form of subordination or
priorities arrangement in relation to, any
amount
|
4
payable
to the Lender under this Agreement or any of the documents referred to in this
definition;
|
|
“Financial
Indebtedness” means, in relation to a person (the “debtor”), a
liability of the debtor:
|
|
|
(a)
|
for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
|
|
|
(b)
|
under
any loan stock, bond, note or other security issued by the
debtor;
|
|
|
(c)
|
under
any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
|
|
|
(d)
|
under
a financial lease, a deferred purchase consideration arrangement or any
other agreement having the commercial effect of a borrowing or raising of
money by the debtor;
|
|
|
(e)
|
under
any interest or currency swap or any other kind of derivative transaction
entered into by the debtor or, if the agreement under which any such
transaction is entered into requires netting of mutual liabilities, the
liability of the debtor for the net amount;
or
|
|
|
(f)
|
under
a guarantee, indemnity or similar obligation entered into by the debtor in
respect of a liability of another person which would fall within (a) to
(e) if the references to the debtor referred to the other
person;
|
|
|
“General
Assignment” means, in relation to a Ship, a general
assignment of the Earnings, the Insurances and any Requisition
Compensation of such Ship, in such form as the Lender may approve or
require;
|
“Hedging
Exposure” means, as at any relevant date, the amount certified
by the Lender to be the aggregate net amount in Dollars which would be payable
by the Borrowers to the Lender under (and calculated in accordance with) section
6(e) (Payments on Early Termination) of the Master Agreement if an Early
Termination Date had occurred on the relevant date in relation to all continuing
Designated Transactions;
“Hull 2189” means
the 37,000 dwt product tanker with Hull No. 2189 which is to be constructed by
the Builder for, and purchased by, Tyler under the Hull 2189 Shipbuilding
Contract;
|
|
“Hull
2190” means the 37,000 dwt product tanker with Hull No.
2190 which is to be constructed by the Builder for, and purchased by,
Pasedena under the Hull 2190 Shipbuilding
Contract;
|
“Hull 2189 Refund
Guarantee” means the irrevocable and unconditional guarantee
number M0902-706-LG-00299 dated 21 June 2007 issued by the Refund Guarantor in
favour of Tyler pursuant to the Hull 2189 Shipbuilding Contract;
|
|
“Hull 2190 Refund
Guarantee” means the irrevocable and unconditional
guarantee number M0902-706-LG-00300 dated 21 June 2007 issued by the
Refund Guarantor in favour of Pasedena pursuant to the Hull 2190
Shipbuilding Contract;
|
|
|
“Hull 2189 Shipbuilding
Contract” means the Shipbuilding Contract dated 15 June
2007 between the Builder and Tyler for the construction by the Builder of
Hull 2189 and its purchase by Tyler (as supplemented from time to
time);
|
5
|
|
“Hull 2190 Shipbuilding
Contract” means the Shipbuilding Contract dated 15 June
2007 made between the Builder and Pasedena for the construction by the
Builder of Hull 2190 and its purchase by Pasedena (as supplemented from
time to time);
|
|
|
“Insurances” means,
in relation to a Ship:
|
|
|
(a)
|
all
policies and contracts of insurance, including entries of such Ship in any
protection and indemnity or war risks association, which are effected in
respect of such Ship, her Earnings or otherwise in relation to her;
and
|
|
|
(b)
|
all
rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a
premium;
|
|
|
“Interest Period” means,
in relation to an Advance, a period determined in accordance with Clause
5;
|
“ISM Code” means the
International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organisation Assembly as
Resolutions A.741 (18) (as amended by XXX 000 (73)) and A.913(22) (superseding
Resolution A.788(19)), as the same may be amended, supplemented or superseded
from time to time (and the terms “safety management system”,
“Safety Management
Certificate” and “Document of Compliance” have
the same meanings as are given to them in the ISM Code);
“ISPS Code” means the
International Ship and Port Facility Security Code adopted by the International
Maritime Organisation (as the same may be amended, supplemented or superseded
from time to time);
“ISSC” means a valid and
current International Ship Security Certificate issued under the ISPS
Code;
“Lender” means:
|
|
(a)
|
The
Governor and Company of the Bank of Scotland, acting through its office at
Xxxxxxxx Xxxxx, 0 Xxxxxxxx Xxxxxx, Xxxxxxxxx XX00 0XX, Xxxxxxxx (or though
another branch notified to the Lender under Clause 25.6) or its direct or
indirect successor; or
|
|
|
(b)
|
a
direct or indirect assignee of such bank or financial institution or of a
successor of it; or
|
|
|
(c)
|
a
direct or indirect successor of an assignee such as its mentioned in (b),
unless any of the foregoing has assigned all its rights, and novated all
its obligations and liabilities, under the Finance
Department;
|
“LIBOR” means, for
an Interest Period:
|
|
(a)
|
the
rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as possible equal to, the relevant Interest
Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m.
(London time) on the second Business Day prior to the commencement of that
Interest Period (and, for the purposes of this Agreement, “REUTERS BBA
Page LIBOR 01” means the display designated as “REUTERS BBA Page LIBOR 01”
on the Telerate Service or such other page as may replace REUTERS BBA Page
LIBOR 01 on that service for the purpose of displaying rates comparable to
that rate or on such other service as may be nominated by the
British
|
6
|
|
Bankers’
Association for the purpose of displaying British Bankers’ Association
Interest Settlement Rates for
Dollars); or
|
|
|
(b)
|
if
no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
determined by the Lender to be the arithmetic mean (rounded upwards, if
necessary, to the nearest one-sixteenth of one per cent.) of the rates per
annum at which deposits in Dollars are offered to leading banks by other
leading banks in the London Interbank Market at or about 11.00 a.m.
(London time) on the second Business Day prior to the commencement of that
Interest Period for a period equal to that Interest Period and for
delivery on the first Business Day of
it;
|
|
|
“Loan” means
the principal amount for the time being outstanding under this
Agreement;
|
|
|
“Major
Casualty” means, in relation to a Ship, any casualty to
the Ship in respect of which the claim or the aggregate of the claims
against all insurers, before adjustment for any relevant franchise or
deductible, exceeds $250,000 or the equivalent in any other
currency;
|
“Mandatory Costs” means the
percentage rate per annum calculated by the Lender in accordance with Schedule
4;
|
|
“Margin” means,
in relation to a Tranche:
|
|
|
(a)
|
from
the date of this Agreement up to the date of payment of the third
instalment under each Shipbuilding Contract, one point one two five per
cent (1.125%) per annum;
|
|
|
(b)
|
from
the date of payment of the third instalment under each Shipbuilding
Contract up to the date of payment of the fifth instalment under each
Shipbuilding Contract, one point one per cent (1.1%) per
annum;
|
|
|
(c)
|
from
the date of payment of the fifth instalment under each Shipbuilding
Contract up to the date of payment of the sixth instalment under each
Shipbuilding Contract, one point zero five per cent (1.05%) per annum;
and
|
|
|
(d)
|
from
the date of delivery of each Ship under each Shipbuilding Contract, zero
point eight five per cent (0.85%) per
annum;
|
“Master
Agreement” means the master agreement (on the 1992 and/or 2002
ISDA (Multicurrency-Crossborder) form), together with the schedule thereto in
the form agreed, to be signed between the Borrowers and the Lender and includes
all Designated Transactions from time to time entered into (whether by way of
novation or otherwise) and Confirmations from time to time exchanged under such
master agreement;
“Master Agreement Security
Deed” means the deed to be executed by the Borrowers in favour
of the Lender in respect of all the Borrower’s rights under the Master
Agreement, in such form as the Lender may approve or require;
“Mortgage” means, in
relation to a Ship, the first preferred or priority ship mortgage in favour of
the Lender on that Ship under the Approved Flag (and deed of covenant collateral
thereto, if applicable), in such form as the Lender may approve or
require;
|
|
“Negotiation Period” has
the meaning given in Clause
4.7;
|
7
|
|
“Pasedena” means Pasedena
Navigation Inc., a corporation incorporated in the Republic of the
Xxxxxxxx Islands, whose registered office is at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX
00000;
|
|
|
“Payment Currency” has
the meaning given in Clause 20.4;
|
|
|
“Permitted Security
Interests” means:
|
|
|
(a)
|
Security
Interests created by the Finance
Documents;
|
|
|
(b)
|
liens
for unpaid crew’s wages in accordance with usual maritime
practice;
|
|
|
(c)
|
liens
for salvage;
|
|
|
(d)
|
liens
arising by operation of law for not more than 2 months’ prepaid hire
under any charter in relation to a Ship not prohibited by this
Agreement;
|
|
|
(e)
|
liens
for master’s disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary
course of the operation, repair or maintenance of a Ship, provided such
liens do not secure amounts more than 30 days overdue (unless the
overdue amount is being contested by the relevant Borrower in good faith
by appropriate steps) and subject, in the case of liens for repair or
maintenance, to
Clause 13.13(g);
|
|
|
(f)
|
any
Security Interest created in favour of a plaintiff or defendant in any
action of the court or tribunal before whom such action is brought as
security for costs and expenses where a Borrower is prosecuting or
defending such action in good faith by appropriate steps;
and
|
|
|
(g)
|
Security
Interests arising by operation of law in respect of taxes which are not
overdue for payment other than taxes being contested in good faith by
appropriate steps and in respect of which appropriate reserves have been
made;
|
|
|
“Pertinent Jurisdiction”,
in relation to a company, means:
|
|
|
(a)
|
England
and Wales;
|
|
|
(b)
|
the
country under the laws of which the company is incorporated or
formed;
|
|
|
(c)
|
a
country in which the company's central management and control is or has
recently been exercised;
|
|
|
(d)
|
a
country in which the overall net income of the company is subject to
corporation tax, income tax or any similar
tax;
|
|
|
(e)
|
a
country in which assets of the company (other than securities issued by,
or loans to, related companies) having a substantial value are situated,
in which the company maintains a permanent place of business, or in which
a Security Interest created by the company must or should be registered in
order to ensure its validity or priority;
and
|
|
|
(f)
|
a
country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would
have such jurisdiction if their
|
8
assistance
were requested by the courts of a country referred to in paragraphs (b) or (c)
above;
|
|
“Potential Event of
Default” means an event or circumstance which, with the
giving of any notice, the lapse of time, a determination of the Lender
and/or the satisfaction of any other condition, would constitute an Event
of Default;
|
|
|
“Pre Delivery Security
Assignment” means, in relation to a Shipbuilding
Contract and a Refund Guarantee, an assignment of such Shipbuilding
Contract and of such Refund Guarantee, in such form as the Lender may
approve or require;
|
“Refund
Guarantee” means each of the Hull 2189 Refund Guarantee and
the Hull 2190 Refund Guarantee and, in the plural, means all of
them;
|
|
“Refund
Guarantor” means Korea Export Import Bank (“KEXIM”) acting through
its office at 00-0, Xxxxx-Xxxx, Xxxxxxxxxxxx-Xx, Xxxxx 000-000,
Xxxxx;
|
|
|
“Relevant Person” has the
meaning given in Clause 18.7;
|
|
|
“Repayment
Date” means a date on which a repayment is required to
be made under Clause 7;
|
|
|
“Requisition
Compensation” includes all compensation or other moneys
payable by reason of any act or event such as is referred to in paragraph
(b) of the definition of “Total
Loss”;
|
|
|
“Retention
Account” means an account in the name of the Borrowers
with the Lender in Glasgow designated “Tyler Navigation Inc./Pasedena
Navigation Inc. - Retention Account”, or any other account (with that or
another office of the Lender or with a bank or financial institution other
than the Lender) which is designated by the Lender as the Retention
Account for the purposes of this
Agreement;
|
|
|
“Secured
Liabilities” means all liabilities which the Borrowers,
the Security Parties or any of them have, at the date of this Agreement or
at any later time or times, under or by virtue of the Finance Documents or
any judgment relating to the Finance Documents; and for this purpose,
there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other
procedure under the insolvency laws of any
country;
|
|
|
“Security
Interest” means:
|
|
|
(a)
|
a
mortgage, charge (whether fixed or floating) or pledge, any maritime or
other lien or any other security interest of any
kind;
|
|
|
(b)
|
the
rights of the plaintiff under an action in rem in which the
vessel concerned has been arrested or a writ has been issued or similar
step taken; and
|
|
|
(c)
|
any
arrangement entered into by a person (A) the effect of which is to place
another person (B) in a position which is similar, in economic terms, to
the position in which B would have been had he held a security interest
over an asset of A; but (c) does not apply to a right of set off or
combination of accounts conferred by the standard terms of business of a
bank or financial institution;
|
|
|
“Security
Party” means the Corporate Guarantor, the Approved
Manager and any other person (except the Lender) who, as a surety or
mortgagor, as a party to any subordination or
priorities
|
9
arrangement,
or in any similar capacity, executes a document falling within paragraph (i) of
the definition of “Finance Documents”;
|
|
“Security
Period” means the period commencing on the date of this
Agreement and ending on the date on which the Lender notifies the
Borrowers and the Security Parties
that:
|
|
|
(a)
|
all
amounts which have become due for payment by any Borrower or any Security
Party under the Finance Documents have been
paid;
|
|
|
(b)
|
no
amount is owing or has accrued (without yet having become due for payment)
under any Finance Document;
|
|
|
(c)
|
no
Borrower nor any Security Party has any future or contingent liability
under Clause 19, 20 or 21 below or any other provision of this Agreement
or another Finance Document; and
|
|
|
(d)
|
the
Lender does not consider that there is a significant risk that any payment
or transaction under a Finance Document would be set aside, or would have
to be reversed or adjusted, in any present or possible future bankruptcy
of a Borrower or a Security Party or in any present or possible future
proceeding relating to a Finance Document or any asset covered (or
previously covered) by a Security Interest created by a Finance
Document;
|
“Ship” means each of Hull 2189
and Hull 2190 and, in the plural, means all of them;
|
|
“Shipbuilding
Contract” means each of the Hull 2189 Shipbuilding
Contract and the Hull 2190 Shipbuilding Contract and, in the plural, means
all of them;
|
“Total Loss” means,
in relation to a Ship:
|
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of a
Ship;
|
|
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of a Ship, whether
for full consideration, a consideration less than her proper value, a
nominal consideration or without any consideration, which is effected by
any government or official authority or by any person or persons claiming
to be or to represent a government or official authority, excluding a
requisition for hire for a fixed period not exceeding one year without any
right to an extension;
|
|
|
(c)
|
any
condemnation of a Ship by any tribunal or by any person or person claiming
to be a tribunal;
|
|
|
(d)
|
any
arrest, capture, seizure or detention of a Ship (including any hijacking
or theft) unless she is within 30 days redelivered to the full control of
the Borrower owning such Ship;
|
|
|
“Total Loss
Date” means, in relation to a
Ship:
|
|
|
(a)
|
in
the case of an actual loss of a Ship, the date on which it occurred or, if
that is unknown, the date when such Ship was last heard
of;
|
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total loss of
a Ship, the earliest of:
|
10
|
|
(i)
|
the
date on which a notice of abandonment is given to the insurers;
and
|
|
|
(ii)
|
the
date of any compromise, arrangement or agreement made by or on behalf of
the Borrower owning such Ship, with such Ship's insurers in which the
insurers agree to treat such Ship as a total loss;
and
|
|
|
(c)
|
in
the case of any other type of total loss, on the date (or the most likely
date) on which it appears to the Lender that the event constituting the
total loss occurred;
|
|
|
“Tranche
A” means the aggregate of the six Advances to be made
available by the Lender to the Borrowers to assist Tyler in its
acquisition of Hull 2189;
|
|
|
“Tranche
B” means the aggregate of the six Advances to be made
available by the Lender to the Borrowers to assist Pasedena in its
acquisition of Hull 2190;
|
|
|
“Tranche” means
either of Tranche A or Tranche B, and in the plural means all of them;
and
|
|
|
“Tyler” means Tyler
Navigation Inc., a corporation incorporated in the Republic of the
Xxxxxxxx Islands, whose registered office is at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX
00000.
|
|
1.2
|
Construction of certain
terms. In this
Agreement:
|
|
|
“approved” means,
for the purposes of Clause 12, approved in writing by the
Lender;
|
|
|
“asset” includes every
kind of property, asset, interest or right, including any present, future
or contingent right to any revenues or other
payment;
|
|
|
“company” includes any
partnership, joint venture and unincorporated
association;
|
“consent” includes an
authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;
|
|
“contingent liability”
means a liability which is not certain to arise and/or the amount of which
remains unascertained;
|
|
|
“document” includes a
deed; also a letter, fax or telex;
|
|
|
“excess
risks” means, in relation to a Ship, the proportion of
claims for general average, salvage and salvage charges not recoverable
under the hull and machinery policies in respect of the Ship in
consequence of her insured value being less than the value at which the
Ship is assessed for the purpose of such
claims;
|
|
|
“expense” means any kind
of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other
tax;
|
|
|
“law” includes any form
of delegated legislation, any order or decree, any treaty or international
convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its Security
Council;
|
|
|
“legal or administrative
action” means any legal proceeding or arbitration and any
administrative or regulatory action or
investigation;
|
11
|
|
“liability” includes
every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or
otherwise;
|
|
|
“months” shall
be construed in accordance with Clause
1.3;
|
|
|
“obligatory
insurances” means, in relation to a Ship, all insurances
effected, or which the Borrower owning the Ship is obliged to effect,
under Clause 12 below or any other provision of this Agreement or another
Finance Document;
|
|
|
“parent
company” has the meaning given in Clause
1.4;
|
|
|
“person” includes
any company; any state, political sub-division of a state and local or
municipal authority; and any international
organisation;
|
|
|
“policy”, in relation to
any insurance, includes a slip, cover note, certificate of entry or other
document evidencing the contract of insurance or its
terms;
|
|
|
“protection and indemnity
risks” means the usual risks covered by a protection and
indemnity association managed in London, including pollution risks and the
proportion (if any) of any sums payable to any other person or persons in
case of collision which are not recoverable under the hull and machinery
policies by reason of the incorporation therein of clause 1 of the
Institute Time Clauses (Hulls)(1/10/83) or clause 8 of the Institute Time
Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause
(1/10/71) or any equivalent
provision;
|
“regulation” includes any
regulation, rule, official directive, request or guideline (either having the
force of law or compliance with which is reasonable in the ordinary course of
business of the party concerned) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;
|
|
“subsidiary” has
the meaning given in Clause 1.4;
|
“successor” includes any person
who is entitled (by assignment, novation, merger or otherwise) to any other
person’s rights under this Agreement or any other Finance Document (or any
interest in those rights) or who, as administrator, liquidator or otherwise, is
entitled to exercise those rights; and in particular references to a successor
include a person to whom those rights (or any interest in those rights) are
transferred or pass as a result of a merger, division, reconstruction or other
reorganisation of it or any other person;
|
|
“tax” includes
any present or future tax, duty, impost, levy or charge of any kind which
is imposed by any state, any political sub-division of a state or any
local or municipal authority (including any such imposed in connection
with exchange controls), and any connected penalty, interest or fine;
and
|
|
|
“war
risks” includes the risk of mines and all risks excluded
by clause 23 of the Institute Time Clauses (Hulls) (1/10/83) or clause 24
of the Institute Time Clauses (Hulls)
(1/11/1995).
|
|
1.3
|
Meaning of
“month”. A period of one or more “months” ends on the
day in the relevant calendar month numerically corresponding to the day of
the calendar month on which the period started (“the numerically corresponding
day”), but:
|
12
|
(a)
|
on
the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there is no
later Business Day in the same calendar month, on the Business Day
preceding the numerically corresponding day;
or
|
|
(b)
|
on
the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding
day;
|
and “month” and “monthly” shall be construed
accordingly.
|
1.4
|
Meaning of
“subsidiary”. A company (S) is a subsidiary of another
company (P) if:
|
|
(a)
|
a
majority of the issued shares in S (or a majority of the issued shares in
S which carry unlimited rights to capital and income distributions) are
directly owned by P or are indirectly attributable to P;
or
|
|
(b)
|
P
has direct or indirect control over a majority of the voting rights
attached to the issued shares of S;
or
|
|
(c)
|
P
has the direct or indirect power to appoint or remove a majority of the
directors of S; or
|
|
(d)
|
P
otherwise has the direct or indirect power to ensure that the affairs of S
are conducted in accordance with the wishes of
P;
|
and any company of which S is a
subsidiary is a parent company of S.
|
1.5
|
General
Interpretation.
|
|
(a)
|
In
this Agreement:
|
|
|
(i)
|
references
to, or to a provision of, a Finance Document or any other document are
references to it as amended or supplemented, whether before the date of
this Agreement or otherwise;
|
|
|
(ii)
|
references
to, or to a provision of, any law include any amendment, extension,
re-enactment or replacement, whether made before the date of this
Agreement or otherwise; and
|
|
|
(iii)
|
words
denoting the singular number shall include the plural and vice
versa.
|
|
(b)
|
Clauses
1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the contrary
intention appears.
|
|
(c)
|
References
in Clause 1.1 to a document being in the form of a particular Appendix
include references to that form with any modifications to that form which
the Lender approves or reasonably
requires.
|
|
(d)
|
The
clause headings shall not affect the interpretation of this
Agreement.
|
13
|
2
|
FACILITY
|
|
2.1
|
Amount of
facility. Subject to the other provisions of this
Agreement, the Lender shall make available to the Borrowers a loan
facility of up to $70,000,000 in two Tranches (each in six Advances), each
in an amount not exceeding the lesser of (a) $35,000,000 and (b) 75% of
the Fair Market Value of the relevant Ship as at its Delivery
Date.
|
|
2.2
|
Purpose of
Loan. Each Borrower undertakes with the Lender to use
each Advance only for the purpose stated in the preamble to this
Agreement.
|
|
3
|
DRAWDOWN
|
|
3.1
|
Request for
Advance. Subject to the following conditions, the
Borrowers may request an Advance to be made by ensuring that the Lender
receives a completed Drawdown Notice not later than 11.00 a.m. (London
time) 3 Business Days prior to the intended Drawdown
Date.
|
|
3.2
|
Availability. The
conditions referred to in Clause 3.1 are
that:
|
|
(a)
|
a
Drawdown Date has to be a Business Day during the Availability
Period;
|
|
(b)
|
the
amount of the first two Advances in respect of each Tranche shall not
exceed 90% of the amount of the first and second instalments under each
Shipbuilding Contract as stated in Schedule 3 hereto, together with
accrued interest on drawings hereunder up to payment of the third
instalment under each Shipbuilding
Contract;
|
|
(c)
|
the
amount of the third and fourth Advances of each Tranche shall not exceed
80% of the amount of the third and fourth instalments under each
Shipbuilding Contract, as stated in Schedule 3
hereto;
|
|
(d)
|
the
amount of the fifth Advance of each Tranche shall not exceed 62.5% of the
amount of the fifth instalment under each Shipbuilding Contract, as stated
in Schedule 3 hereto;
|
|
(e)
|
the
amount of each Tranche shall not exceed the lesser of (i) $35,000,000 and
(ii) 75% of the Fair Market Value of the Ship financed by such Tranche
(calculated as at the Delivery Date of the relevant
Ship);
|
|
(f)
|
the
aggregate amount of the Tranches shall not exceed $70,000,000;
and
|
|
(g)
|
the
Borrowers have complied with the provisions of Clause 8.1 with respect to
the relevant Advance.
|
|
3.3
|
Drawdown Notice
irrevocable. A Drawdown Notice must be signed by a
director or other authorised person of each Borrower; and once served, a
Drawdown Notice cannot be revoked without the prior consent of the
Lender.
|
|
3.4
|
Disbursement of
Advance. Subject to the provisions of this Agreement,
the Lender shall on each Drawdown Date pay to the Borrowers the amount of
the relevant Advance; and that payment to the Borrowers shall be made to
the account which the Borrowers specify in the Drawdown
Notice.
|
14
|
3.5
|
Disbursement of Advance to
third party. The payment by the Lender under
Clause 3.4 shall constitute the making of the Advance and the Borrowers
shall thereupon become indebted, as principal and direct obligor, to the
Lender in an amount equal to that
Advance.
|
|
4
|
INTEREST
|
|
4.1
|
Payment of normal
interest. Subject to Clause 4.2 and to the other
provisions of this Agreement, interest on each Advance in respect of each
Interest Period shall be paid by the Borrowers on the last day of that
Interest Period.
|
|
4.2
|
Payment of Deferred
Interest. The accrued Deferred Interest for each Tranche
will be due and payable by the Borrowers to the Lender as
follows:
|
|
(a)
|
the
Deferred Interest for Tranche A on the Delivery Date for Hull 2189;
and
|
|
(b)
|
the
Deferred Interest for Tranche B on the Delivery Date for Hull
2190.
|
The
Deferred Interest shall constitute a loan advanced from the Lender to the
Borrowers forming part of the Loan, secured by the Finance Documents, and due
and payable on the dates provided above. Such loan shall be (a) of a principal
amount equal to the amount of the Deferred Interest, (b) treated as advanced to
the Borrowers at the times of accrual thereof and (c) bearing interest at the
rate of interest provided for hereunder up and until full
repayment.
|
4.3
|
Normal rate of
interest. Subject to the provisions of this Agreement,
the rate of interest on each Advance in respect of an Interest Period
shall be the aggregate of (i) the applicable Margin, (ii) the Mandatory
Costs (if any) and (iii) LIBOR for that Interest
Period.
|
|
4.4
|
Payment of accrued
interest. In the case of an Interest Period longer than
3 months, accrued interest shall be paid every 3 months during that
Interest Period and on the last day of that Interest
Period.
|
|
4.5
|
Notification of market
disruption. The Lender shall promptly notify the
Borrowers if for any reason the Lender is unable to obtain Dollars in the
London Interbank Market in order to fund an Advance or the Loan during any
Interest Period, stating the circumstances which have caused such notice
to be given.
|
|
4.6
|
Suspension of
drawdown. If the Lender's notice under Clause 4.5 is
served before an Advance is made, the Lender’s obligation to make that
Advance shall be suspended while the circumstances referred to in the
Lender's notice continue.
|
|
4.7
|
Negotiation of alternative rate
of interest. If the Lender’s notice under Clause 4.5 is
served after an Advance or the Loan is made available, the Borrowers and
the Lender shall use reasonable endeavours to agree, within the 30 days
after the date on which the Lender serves its notice under Clause 4.5 (the
“Negotiation
Period”), an alternative interest rate or (as the case may be) an
alternative basis for the Lender to fund or continue to fund the Advance
or the Loan during the Interest Period
concerned.
|
|
4.8
|
Application of agreed
alternative rate of interest. Any alternative interest
rate or an alternative basis which is agreed during the Negotiation Period
shall take effect in accordance with the terms
agreed.
|
15
|
4.9
|
Alternative rate of interest in
absence of agreement. If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the
relevant circumstances are continuing at the end of the
Negotiation Period, then the Lender shall set an interest period and
interest rate representing the cost of funding of the Lender in Dollars or
in any available currency of the relevant Advance or the Loan plus the
applicable Margin and the Mandatory Costs (if any); and the procedure
provided for by this Clause 4.8 shall be repeated if the relevant
circumstances are continuing at the end of the interest period so set by
the Lender.
|
|
4.10
|
Notice of
prepayment. If the Borrowers do not agree with an
interest rate set by the Lender under Clause 4.9, the Borrowers may give
the Lender not less than 15 Business Days' notice of their intention to
prepay the relevant Advance or the Loan at the end of the interest period
set by the Lender.
|
|
4.11
|
Prepayment; termination of
Commitments. A notice under Clause 4.10 shall be irrevocable and on
the last Business Day of the interest period set by the Lender, the
Borrowers shall prepay (without premium or penalty) the Loan together with
accrued interest thereon at the applicable rate plus the applicable Margin
and the Mandatory Costs (if any).
|
|
4.12
|
Application of
prepayment. The provisions of Clause 7 shall apply in
relation to the prepayment.
|
|
4.13
|
Interest Rate Hedging.
The Borrowers shall enter into interest rate hedging arrangements pursuant
to the Master Agreement to fix the interest rate relative to at least 50%
of the amount of the Loan, following drawdown of the Delivery Advance with
respect to the last Ship to be delivered. Unless the Lender agrees
otherwise, any such hedging arrangements shall be from floating rate to
fixed rate only and shall not (i) exceed the amount of the Loan or (ii)
extend beyond the final Repayment
Date.
|
|
5
|
INTEREST
PERIODS
|
|
5.1
|
Commencement of Interest
Periods. The first Interest Period applicable to an
Advance shall commence on the Drawdown Date for that Advance and each
subsequent Interest Period shall commence on the expiry of the preceding
Interest Period.
|
|
5.2
|
Duration of normal Interest
Periods. Subject to Clauses 5.3 and 5.4, each Interest
Period in respect of each Advance shall
be:
|
|
(a)
|
1,
3 or 6 months as notified by the Borrowers to the Lender not later than
11.00 a.m. (London time) 3 Business Days before the commencement of the
Interest Period; or
|
|
(b)
|
in
the case of the first Interest Period applicable to the second and any
subsequent Advance of each Tranche, a period ending on the last day of the
then current Interest Period applicable to such Tranche, whereupon all of
the Advances in respect of such Tranche shall be consolidated and treated
as a single Advance;
|
|
(c)
|
3
months, if the Borrowers fail to notify the Lender by the time specified
in paragraph (a) above; or
|
|
(d)
|
such
other period as the Lender may agree with the
Borrowers.
|
16
|
5.3
|
Duration of Interest Periods
for repayment instalments. In respect of an amount due
to be repaid under Clause 7 on a particular Repayment Date, an Interest
Period in relation to the relevant Tranche shall end on that Repayment
Date.
|
|
5.4
|
Non-availability of matching
deposits for Interest Period selected. If, after the
Borrowers have selected an Interest Period longer than 3 months, the
Lender notifies the Borrowers by 11.00 a.m. (London time) on the second
Business Day before the commencement of the Interest Period that it is not
satisfied that deposits in Dollars for a period equal to the Interest
Period will be available to it in the London Interbank Market when the
Interest Period commences, the Interest Period shall be of 3 months
duration.
|
|
6
|
DEFAULT
INTEREST
|
|
6.1
|
Payment of default interest on
overdue amounts. The Borrowers shall pay interest in
accordance with the following provisions of this Clause 6 on any amount
payable by the Borrowers under any Finance Document which the Lender or
the other designated payee does not receive on or before the relevant
date, that is:
|
|
(a)
|
the
date on which the Finance Documents provide that such amount is due for
payment; or
|
|
(b)
|
if
a Finance Document provides that such amount is payable on demand, the
date on which the demand is served;
or
|
|
(c)
|
if
such amount has become immediately due and payable under Clause 18.4, the
date on which it became immediately due and
payable.
|
|
6.2
|
Default rate of
interest. Interest shall accrue on an overdue amount
from (and including) the relevant date until the date of actual payment
(as well after as before judgment) at the rate per annum determined by the
Lender to be two per cent. (2%)
above:
|
|
(a)
|
in
the case of an overdue amount of principal, the higher of the rates set
out at paragraphs (a) and (b) of Clause 6.3;
or
|
|
(b)
|
in
the case of any other overdue amount, the rate set out at paragraph (b) of
Clause 6.3.
|
|
6.3
|
Calculation of default rate of
interest. The rates referred to in Clause 6.2
are:
|
|
(a)
|
the
rate applicable to the overdue principal amount immediately prior to the
relevant date (but only for any unexpired part of any then current
Interest Period);
|
|
(b)
|
the
aggregate of the Mandatory Costs (if any) and the applicable Margin plus,
in respect of successive periods of any duration (including at call) up to
3 months which the Lender may select from time to
time:
|
|
|
(i)
|
LIBOR;
or
|
|
|
(ii)
|
if
the Lender determines that Dollar deposits for any such period are not
being made available to it by leading banks in the London Interbank Market
in the ordinary course of business, a rate from time to time determined by
the Lender by reference to the cost of funds to it from such other sources
as the Lender may from time to time
determine.
|
17
|
6.4
|
Notification of interest
periods and default rates. The Lender shall promptly
notify the Borrowers of each interest rate determined by the Lender under
Clause 6.3 and of each period selected by the Lender for the purposes of
paragraph (b) of that Clause; but this shall not be taken to imply that
the Borrowers are liable to pay such interest only with effect from the
date of the Lender's notification.
|
|
6.5
|
Payment of accrued default
interest. Subject to the other provisions of this
Agreement, any interest due under this Clause shall be paid on (i) the
last day of the period by reference to which it was determined and (ii)
the date on which any principal amount in respect of which it is accruing
is paid.
|
|
6.6
|
Compounding of default
interest. Any such interest which is not paid at the end
of the period by reference to which it was determined shall thereupon be
compounded.
|
|
7
|
REPAYMENT
AND PREPAYMENT
|
|
7.1
|
Amount of repayment
instalments. The Borrowers shall repay each Tranche by
forty (40) equal consecutive quarterly instalments of Five hundred and six
thousand seven hundred and fifty Dollars ($506,750) each and by a balloon
payment of fourteen million seven hundred and thirty thousand Dollars
($14,730,000).
|
|
7.2
|
Repayment
Dates.
|
|
(a)
|
The
first instalment in respect of Tranche A shall be repaid on the date
falling three (3) months after the Drawdown Date of the Delivery Advance
for Hull 2189, each subsequent instalment shall be repaid at three monthly
intervals thereafter and the balloon payment for Tranche A shall be repaid
on the date falling on the tenth anniversary of the Drawdown Date for the
Delivery Advance for Hull 2189.
|
|
(b)
|
The
first instalment in respect of Tranche B shall be repaid on the next
succeeding repayment date for Tranche A following the Drawdown Date of the
Delivery Advance for Hull 2190, each subsequent instalment shall be repaid
at three monthly intervals thereafter and the balloon payment for Tranche
B shall be repaid on the date falling on the tenth anniversary of the
Drawdown Date for the Delivery Advance for Hull
2190.
|
|
(c)
|
If
the amount of either Tranche drawdown hereunder is less than $35,000,000
then the amount of the relevant repayment instalments and the amount of
the balloon payment shall be reduced pro rata by the amount of such
difference.
|
|
7.3
|
Final Repayment
Date. On the final Repayment Date, the Borrowers shall
additionally pay to the Lender all other sums then accrued or owing under
any Finance Document.
|
|
7.4
|
Voluntary
prepayment. Subject to the following conditions, the
Borrowers may prepay the whole or part of a Tranche on the last day of an
Interest Period in respect thereof.
|
|
7.5
|
Conditions for voluntary
prepayment. The conditions referred to in Clause 7.4 are
that:
|
|
(a)
|
a
partial prepayment shall be in the minimum amount of one million Dollars
($1,000,000) or a multiple thereof;
|
18
|
(b)
|
the
Lender has received from the Borrowers at least one month’s prior written
notice specifying the amount to be prepaid and the date on which the
prepayment is to be made (such date shall be the last day of an Interest
Period of the relevant Tranche);
|
|
(c)
|
the
Borrowers have provided evidence satisfactory to the Lender that any
consent required by any Borrower or any Security Party in connection with
the prepayment has been obtained and remains in force, and that any
requirement relevant to this Agreement which affects any Borrower or any
Security Party has been complied
with.
|
|
7.6
|
Effect of notice of
prepayment. A prepayment notice may not be withdrawn or
amended without the consent of the Lender and the amount specified in the
prepayment notice shall become due and payable by the Borrowers on the
date for prepayment specified in the prepayment
notice.
|
|
7.7
|
Mandatory
prepayment. The Borrowers shall be obliged to cancel the
relevant portion of the Commitment and/or to prepay the relevant portion
of the Loan specified in Clause
7.8:
|
|
(a)
|
if
a Ship is sold (which sale shall be subject to the prior written consent
of the Lender) or becomes a Total
Loss:
|
|
|
(i)
|
in
the case of a sale, on or before the date on which the sale is completed
by delivery of such Ship to the buyer;
or
|
|
|
(ii)
|
in
the case of a Total Loss, on the earlier of the date falling 120 days
after the Total Loss Date and the date of receipt by the Lender of the
proceeds of insurance relating to such Total
Loss;
|
|
(b)
|
if
any of the following occurs, on demand by the
Lender:
|
|
|
(i)
|
any
of the events specified in Article XI of a Shipbuilding Contract or any
other default by a Borrower or the Builder under any Shipbuilding
Contract, giving a right of rescission or termination of the Shipbuilding
Contract either to the relevant Borrower and/or the
Builder;
|
|
|
(ii)
|
any
Shipbuilding Contract or any Refund Guarantee is cancelled, terminated,
rescinded or suspended or otherwise ceases to remain in force for any
reason (other than by way of expiry in accordance with its terms);
or
|
|
|
(iii)
|
any
Shipbuilding Contract is materially amended or varied without the prior
written consent of the Lender, except for any such amendment or variation
as is permitted by this Agreement or any other relevant Finance Document;
or
|
|
|
(iv)
|
any
Ship has not for any reason been delivered to and accepted by the relevant
Borrower under the relevant Shipbuilding Contract by the date falling 210
days after the applicable scheduled Delivery Date referred to in Article
VII of each Shipbuilding Contract,
|
together
with (if, following a prepayment under this Clause 7.7, the Borrowers would be
required to make a prepayment (or provide additional security) under Clause
14.1) the amount of any such prepayment due under Clause 14.1.
19
|
7.8
|
Amount of Mandatory
Prepayment. The relevant portion of the Commitment to be cancelled
and the relevant portion of the Loan to be prepaid in the circumstances
contemplated in Clause 7.7 is:
|
|
(a)
|
if
paragraph (a) of Clause 7.7
applies:
|
|
|
(i)
|
if
prior to the delivery of a Ship, the Advances made in relation to such
Ship shall be prepaid in full and the undrawn Advances for such Ship shall
be cancelled; and
|
|
|
(ii)
|
if
after delivery of a Ship, the Tranche relating to such Ship shall be
prepaid in full;
|
|
(b)
|
if
paragraph (b) of Clause 7.7 applies, the Advances made in relation to such
Ship shall be prepaid in full and the undrawn Advances for such Ship shall
be cancelled.
|
|
7.9
|
Amounts payable on
prepayment. A prepayment shall be made together with
accrued interest (and any other amount payable under Clause 20 or
otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period relating to the relevant
Tranche, together with any sums payable under Clause 20.1(b) but without
premium or penalty.
|
|
7.10
|
Application of partial
prepayment. Each partial prepayment made pursuant to
Clause 7.4 or any other provisions of this Agreement, shall be applied pro
rata against the repayment instalments (including the balloon payment)
specified in Clause 7.1.
|
|
7.11
|
No
reborrowing. Other than in respect of repayments of
Deferred Interest pursuant to Clause 4.2, no amount prepaid or repaid may
be reborrowed.
|
|
7.12
|
Unwinding of Designated
Transactions. On or prior to any repayment, cancellation
or prepayment under this Clause 7 or any other provision of this
Agreement, the Borrowers shall either (a) provide such additional security
to the Lender in respect of continuing Designated Transactions as shall be
acceptable to the Lender in its sole and absolute discretion or (b)
reverse, offset, unwind or otherwise terminate wholly or partially the
continuing Designated Transactions so that the notional principal amount
of the continuing Designated Transactions thereafter remaining does not
and will not in the future (taking into account the scheduled
amortisation) exceed the aggregate amount of the Loan as reducing from
time to time thereafter pursuant to Clause
7.1.
|
|
8
|
CONDITIONS
PRECEDENT
|
|
8.1
|
Documents, fees and no
default. The Lender's obligation to contribute to an
Advance is, in addition to the conditions set out in Clause 3.2, subject
to the following conditions
precedent:
|
|
(a)
|
that,
on or before the date of signing of this Agreement, the Lender receives
the documents described in Part A of Schedule 2 in form and substance
satisfactory to the Lender and its
lawyers;
|
|
(b)
|
that,
on or before the Drawdown Date of the first Advance of each Tranche, the
Lender receives the documents described in Part B of Schedule 2 in
relation to the relevant Ship, in form and substance satisfactory to the
Lender and its lawyers;
|
|
(c)
|
that,
on or before the Drawdown Date of the second Advance of each Tranche, the
Lender receives the documents described in Part C of Schedule 2 in
relation to the relevant Ship, in form and substance satisfactory to the
Lender and its lawyers;
|
20
|
(d)
|
that,
on or before the Drawdown Date of the third Advance of each Tranche, the
Lender receives the documents described in Part D of Schedule 2 in
relation to the relevant Ship, in form and substance satisfactory to the
Lender and its lawyers;
|
|
(e)
|
that,
on or before the Drawdown Date of the fourth Advance of each Tranche, the
Lender receives the documents described in Part E of Schedule 2 in
relation to the relevant Ship, in form and substance satisfactory to the
Lender and its lawyers;
|
|
(f)
|
that,
on or before the Drawdown Date of the fifth Advance of each Tranche, the
Lender receives the documents described in Part F of Schedule 2 in
relation to the relevant Ship, in form and substance satisfactory to the
Lender and its lawyers;
|
|
(g)
|
that,
on or before the Drawdown Date of the Delivery Advance of each Tranche,
the Lender receives the documents described in Part G of Schedule 2 in
relation to the relevant Ship, in form and substance satisfactory to the
Lender and its lawyers;
|
|
(h)
|
that,
on or before the service of the first Drawdown Notice in respect of each
Tranche, the Lender receives any fees payable pursuant to Clause 19.1 and
has received payment of the expenses referred to in Clause
19.2;
|
|
(i)
|
that
both at the date of each Drawdown Notice and at each Drawdown
Date:
|
|
|
(i)
|
no
Event of Default or Potential Event of Default has occurred and is
continuing or would result from the borrowing of the
Loan;
|
|
|
(ii)
|
the
representations and warranties in Clause 9 and those of the Borrowers or
any Security Party which are set out in the other Finance Documents would
be true and not misleading if repeated on each of those dates with
reference to the circumstances then
existing;
|
|
|
(iii)
|
none
of the circumstances contemplated by Clause 4.5 has occurred and is
continuing;
|
|
(j)
|
that,
if the ratio set out in Clause 14.1 were applied immediately following the
making of the relevant Advance, the Borrowers would not be obliged to
provide additional security or prepay part of the Loan under that Clause;
and
|
|
(k)
|
that
the Lender has received, and found to be acceptable to it, any further
opinions, consents, agreements and documents in connection with the
Finance Documents which the Lender may reasonably request by notice to the
Borrowers prior to the relevant Drawdown
Date.
|
|
8.2
|
Waiver of conditions
precedent. If the Lender, at its discretion, permits an
Advance to be borrowed before certain of the conditions referred to in
Clause 8.1 are satisfied, the Borrowers shall ensure that those conditions
are satisfied within 5 Business days after the relevant Drawdown Date (or
such longer period as the Lender may
specify).
|
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
|
9.1
|
General. Each
Borrower represents and warrants to the Lender as
follows.
|
|
9.2
|
Status. Each
Borrower is duly incorporated and validly existing and in good standing
under the laws of the Republic of the Xxxxxxxx
Islands.
|
21
|
9.3
|
Share capital and
ownership. Each Borrower has an authorised share capital
divided into 500 registered shares with a par value of $0.01 each, all of
which shares have been issued fully
paid.
|
|
9.4
|
Corporate
power. Each Borrower has the corporate capacity, and has
taken all corporate action and obtained all consents necessary for
it:
|
|
(a)
|
to
execute the Shipbuilding Contract to which it is a party, to purchase and
pay for the relevant Ship under the relevant Shipbuilding Contract and
register such Ship in its name under the Approved
Flag;
|
|
(b)
|
to
execute the Finance Documents to which that Borrower is a party;
and
|
|
(c)
|
to
borrow under this Agreement and to make all the payments contemplated by,
and to comply with, those Finance
Documents.
|
|
9.5
|
Consents in
force. All the consents referred to in Clause 10.4
remain in force and nothing has occurred which makes any of them liable to
revocation.
|
|
9.6
|
Legal validity; effective
Security Interests. The Finance Documents to which each
Borrower is a party, do now or, as the case may be, will, upon execution
and delivery (and, where applicable, registration as provided for in the
Finance Documents):
|
|
(a)
|
constitute
that Borrower's legal, valid and binding obligations enforceable against
that Borrower in accordance with their respective terms;
and
|
|
(b)
|
create
legal, valid and binding Security Interests enforceable in accordance with
their respective terms over all the assets to which they, by their terms,
relate,
|
subject to any relevant insolvency laws
affecting creditors' rights generally.
|
9.7
|
No third party Security
Interests. Without limiting the generality of Clause
9.6, at the time of the execution and delivery of each Finance
Document:
|
|
(a)
|
each
Borrower will have the right to create all the Security Interests which
that Finance Document purports to create;
and
|
|
(b)
|
no
third party will have any Security Interest (except for Permitted Security
Interests) or any other interest, right or claim over, in or in relation
to any asset to which any such Security Interest, by its terms,
relates.
|
|
9.8
|
No
conflicts. The execution by each Borrower of each
Finance Document to which it is a party, and the borrowing by that
Borrower of the Loan, and its compliance with each Finance Document to
which it is a party will not involve or lead to a contravention
of:
|
|
(a)
|
any
law or regulation; or
|
|
(b)
|
the
constitutional documents of that Borrower;
or
|
|
(c)
|
any
contractual or other obligation or restriction which is binding on that
Borrower or any of its assets.
|
22
|
9.9
|
No withholding
taxes. All payments which each Borrower is liable to
make under the Finance Documents to which it is a party may be made
without deduction or withholding for or on account of any tax payable
under any law of any Pertinent
Jurisdiction.
|
|
9.10
|
No
default. No Event of Default or Potential Event of
Default has occurred and is
continuing.
|
|
9.11
|
Information. All
information which has been provided in writing by or on behalf of the
Borrowers or any Security Party to the Lender in connection with any
Finance Document satisfied the requirements of Clause 10.5; all audited
and unaudited accounts which have been so provided satisfied the
requirements of Clause 10.7; and there has been no material adverse change
in the financial position or state of affairs of any of the Borrowers from
that disclosed in the latest of those
accounts.
|
|
9.12
|
No
litigation. No legal or administrative action involving
any Borrower (including action relating to any alleged or actual breach of
the ISM Code or the ISPS Code) has been commenced or taken or, to any
Borrower’s knowledge, is likely to be commenced or
taken.
|
|
9.13
|
Validity and completeness of
Shipbuilding Contracts/Refund
Guarantees.
|
|
(a)
|
The
copies of the Shipbuilding Contracts delivered to the Lender before the
date of this Agreement are true and complete
copies;
|
|
(b)
|
each
Shipbuilding Contract constitutes valid, binding and enforceable
obligations of the Builder and the relevant Borrower respectively in
accordance with its terms and each Refund Guarantee constitutes valid,
binding and enforceable obligations of the Refund Guarantor in accordance
with its terms; and
|
|
(c)
|
no
amendments or additions to any of the Shipbuilding Contracts or any of the
Refund Guarantees have been agreed (other than as disclosed to the Lender
prior to the date of this Agreement) nor have the Borrowers or the Builder
or the Refund Guarantor waived any of their respective rights under the
Shipbuilding Contracts and Refund
Guarantees.
|
|
9.14
|
No rebates
etc. There is no agreement or understanding to allow or
pay any rebate, premium, commission, discount or other benefit or payment
(howsoever described) to the Borrowers, the Builder or a third party in
connection with the purchase by each Borrower of the Ship owned by it,
other than as disclosed to the Lender in writing on or prior to the date
of this Agreement.
|
|
9.15
|
Compliance with certain
undertakings. At the date of this Agreement, the
Borrowers are in compliance with Clauses 10.2, 10.4, 10.9 and
10.13.
|
|
9.16
|
Taxes
paid. Each Borrower has paid all taxes applicable to, or
imposed on or in relation to that Borrower, its business or the Ship owned
by it.
|
|
9.17
|
ISM Code and ISPS Code
compliance. All requirements of the ISM Code and the
ISPS Code as they relate to the Borrowers, the Approved Manager and the
Ships have been complied with.
|
|
9.18
|
No Money
Laundering. Without prejudice to the generality of
Clause 2.3, in relation to the borrowing by each of the Borrowers of the
Loan, the performance and discharge of their respective obligations and
liabilities under the Finance Documents, and the transactions and other
arrangements effected or contemplated by the Finance Documents to which
each of the Borrowers is a party, each of the Borrowers confirms that (i)
it is acting for its own account, (ii) that it will use the proceeds of
the Loan for its own benefit, under its full responsibility
and
|
23
exclusively
for the purposes specified in this Agreement and (iii) that the foregoing will
not involve or lead to contravention of any law, official requirements or other
regulatory measure or procedure implemented to combat “money laundering” (as
defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities).
|
10
|
GENERAL
UNDERTAKINGS
|
|
10.1
|
General. Each
Borrower undertakes with the Lender to comply with the following
provisions of this Clause 10 at all times during the Security Period
except as the Lender may otherwise
permit.
|
|
10.2
|
Title; negative
pledge. Each Borrower
will:
|
|
(a)
|
hold
the legal title to, and own the entire beneficial interest in the Ship
owned by it, the Insurances and Earnings, free from all Security Interests
and other interests and rights of every kind, except for those created by
the Finance Documents and except for Permitted Security Interests;
and
|
|
(b)
|
not
create or permit to arise any Security Interest (except for Permitted
Security Interests) over any other asset, present or
future.
|
|
10.3
|
No disposal of
assets. No Borrower will transfer, lease or otherwise
dispose of:
|
|
(a)
|
all
or a substantial part of its assets, whether by one transaction or a
number of transactions, whether related or not (other than, in the case of
sale of a Ship, pursuant to the provisions of Clauses 7.7 and 7.8);
or
|
|
(b)
|
any
debt payable to it or any other right (present, future or contingent
right) to receive a payment, including any right to damages or
compensation, unless in the ordinary course of business or to the extent
that the same would not have a material adverse effect on the financial
position of such Borrower.
|
|
10.4
|
No other liabilities or
obligations to be incurred. No Borrower will incur any
liability or obligation except (i) liabilities and obligations under the
Shipbuilding Contract and the Finance Documents to which it is a party,
(ii) any funds borrowed from any shareholders of a Borrower,
which funds shall only be borrowed with the prior written consent of the
Lender and shall be fully subordinated on terms acceptable to the Lender
and (iii) liabilities or obligations incurred in the ordinary course of
its business of operating and chartering the Ship owned by
it.
|
|
10.5
|
Information provided to be
accurate. All financial and other information which is
provided in writing by or on behalf of a Borrower under or in connection
with any Finance Document will be true and not misleading and will not
omit any material fact or
consideration.
|
|
10.6
|
Provision of financial
statements. Each Borrower will send to the
Lender:
|
|
(a)
|
as
soon as possible, but in no event later than 120 days after the end of
each financial year of each Borrower, the annual audited accounts for such
financial year of each Borrower, duly certified by an international firm
of accountants acceptable to the
Lender;
|
|
(b)
|
as
soon as possible, but in no event later than 45 days after the end of each
of the three-month periods during each financial year of each Borrower,
the quarterly management accounts of each Borrower, certified as to their
correctness by the finance director of the relevant
Borrower;
|
24
|
(c)
|
as
soon as possible, but in no event later than 120 days after the end of
each financial year of the Corporate Guarantor, the annual audited
accounts of the Corporate Guarantor for such financial year, duly
certified by an international firm of accountants acceptable to the
Lender; and
|
|
(d)
|
as
soon as possible, but in no event later than 45 days after the end of each
of the three-month periods during each financial year of the Corporate
Guarantor, the quarterly management accounts of the Corporate Guarantor,
certified as to their correctness by the chief financial officer of the
Corporate Guarantor.
|
|
10.7
|
Form of financial
statements. All financial statements (audited and
unaudited) delivered under Clause 10.6
will:
|
|
(a)
|
be
prepared in accordance with all applicable laws and either international
accounting standards or generally accepted accounting principles in the
United States of America consistently
applied;
|
|
(b)
|
give
a true and fair view of the state of affairs of each of the Borrowers or
(as the case may be) the Corporate Guarantor at the date of those accounts
and of the profit for the period to which those accounts relate;
and
|
|
(c)
|
fully
disclose or provide for all significant liabilities of each of the
Borrowers or (as the case may be) the Corporate
Guarantor.
|
|
10.8
|
Consents. Each
Borrower will maintain in force and promptly obtain or renew, and will
promptly send certified copies to the Lender of, all consents
required:
|
|
(a)
|
for
that Borrower to perform its obligations under any Finance Document or
Shipbuilding Contract to which it is
party;
|
|
(b)
|
for
the validity or enforceability of any Finance Document or Shipbuilding
Contract to which it is party;
|
|
(c)
|
for
that Borrower to continue to own and operate its
Ship,
|
and
the Borrowers will comply with the terms of all such consents.
|
10.9
|
Maintenance of Security
Interests. Each Borrower
will:
|
|
(a)
|
at
its own cost, do all that it reasonably can to ensure that any Finance
Document validly creates the obligations and the Security Interests which
it purports to create; and
|
|
(b)
|
without
limiting the generality of paragraph (a) above, at its own cost, promptly
register, file, record or enrol any Finance Document with any court or
authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance
Document, give any notice or take any other step which, in the opinion of
the Lender, is or has become necessary or desirable for any Finance
Document to be valid, enforceable or admissible in evidence or to ensure
or protect the priority of any Security Interest which it
creates.
|
|
10.10
|
Notification of
litigation. Each Borrower will provide the Lender with
details of any legal or administrative action involving that Borrower, any
Security Party, the Approved Manager or the Ship owned by that Borrower,
its Earnings or its Insurances as soon as such action is instituted or it
becomes apparent to that Borrower that it is likely to be instituted,
unless it is clear that the legal or administrative action cannot be
considered material in the context of any Finance
Document.
|
25
|
10.11
|
No amendment to Shipbuilding
Contracts. No Borrower will agree to any material
amendment, change of price or material supplement to the Shipbuilding
Contract to which it is a party or any of its provisions, without the
prior written consent of the
Lender.
|
|
10.12
|
Principal place of
business. Each Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated at the commencement of this Agreement; and no Borrower will
establish, or do anything as a result of which it would be deemed to have,
a place of business in the United Kingdom or the United States of
America.
|
|
10.13
|
Confirmation of no
default. Each Borrower will, within 2 Business Days
after service by the Lender of a written request, serve on the Lender a
notice which is signed by 2 directors of that Borrower and
which:
|
|
(a)
|
states
that no Event of Default or Potential Event of Default has occurred;
or
|
|
(b)
|
states
that no Event of Default or Potential Event of Default has occurred,
except for a specified event or matter, of which all material details are
given.
|
|
10.14
|
Notification of
default. Each Borrower will notify the Lender as soon as
that Borrower becomes aware of:
|
|
(a)
|
the
occurrence of an Event of Default or a Potential Event of Default;
or
|
|
(b)
|
any
matter which indicates that an Event of Default or a Potential Event of
Default may have occurred,
|
and will thereafter keep the Lender fully
up-to-date with all developments.
|
10.15
|
Provision of further
information. Each Borrower will, as soon as practicable
after receiving the request, provide the Lender with any additional
financial or other information
relating:
|
|
(a)
|
to
that Borrower, the Ship owned by it, the Insurances or the Earnings;
or
|
|
(b)
|
to
any other matter relevant to, or to any provision of, a Finance
Document,
|
which
may be requested by the Lender at any time.
|
10.16
|
Translation of
documents. If the Lender so requires in respect of any
of the documents referred to in this Clause 10, the Borrowers will provide
a certified English translation prepared by a translator approved by the
Lender.
|
|
10.17
|
Treasury
Services. No Borrower shall, and shall procure that no
Security Party (other than the Corporate Guarantor) shall, enter into any
treasury related contract with a bank or financial institution without
first asking for quotes for such services or requirements from the
Lender.
|
|
10.18
|
Ownership. Each
Borrower shall ensure that, without the prior written consent of the
Lender, there shall be no change in the legal and beneficial ownership of
any Borrower throughout the Security Period, and shall procure that at all
times during the Security Period the Corporate Guarantor shall remain the
owner of 100% of the shares in each
Borrower.
|
26
|
11
|
CORPORATE
UNDERTAKINGS
|
|
11.1
|
General. Each
Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 11 at all times during the Security Period
except as the Lender may otherwise
permit.
|
|
11.2
|
Maintenance of
status. Each Borrower will maintain its separate
corporate existence and remain in good standing under the laws of the
Republic of the Xxxxxxxx Islands.
|
|
11.3
|
Negative
undertakings. No Borrower
will:
|
|
(a)
|
carry
on any business other than the ownership, chartering and operation of the
Ship owned by it; or
|
|
(b)
|
effect
any form of redemption, purchase or return of share capital;
or
|
|
(c)
|
without
the prior written consent of the Lender, provide any form of credit or
financial assistance or issue any guarantee to any person, or enter into
any transaction with or involving such a person, except credit or
financial assistance or guarantees provided to companies within the same
beneficial or ultimate beneficial ownership as the Borrowers on an arm’s
length basis in the normal course of
business;
|
|
(d)
|
without
the prior written consent of the Lender, open or maintain any account with
any bank or financial institution except accounts with the Lender for the
purposes of the Finance Documents;
|
|
(e)
|
issue,
allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share
capital;
|
|
(f)
|
acquire
any shares or other securities other than US or UK Treasury bills and
certificates of deposit issued by major North American or European banks,
or enter into any transaction in a derivative (other than to hedge the
Borrowers’ exposure to interest rate fluctuations in the context of this
Agreement, in accordance with a pre-agreed hedging strategy) or make any
other capital investment;
|
|
(g)
|
enter
into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation or change its name;
or
|
|
(h)
|
without
the prior written consent of the Lender, incur any other Financial
Indebtedness except indebtedness to companies within the same beneficial
or ultimate beneficial ownership as the Borrowers on a fully subordinated
basis.
|
|
11.4
|
Dividends. For
the avoidance of doubt, the Borrowers may pay dividends on an annual basis
during the Security Period provided (i) all debt service has been met
pursuant to the terms of this Agreement and (ii) no Event of Default or
Potential Event of Default has occurred or would occur as a result of any
such payment.
|
|
12
|
INSURANCE
|
|
12.1
|
General. Each
Borrower undertakes with the Lender to comply with the following
provisions of this Clause 12 at all times during the Security Period
(after the relevant Ship has been delivered to it under the relevant
Shipbuilding Contract) except as the Lender may otherwise
permit.
|
27
|
12.2
|
Maintenance of obligatory
insurances. Each Borrower shall keep the Ship owned by
it insured at the expense of that Borrower
against:
|
|
(a)
|
fire
and usual marine risks (including hull and machinery and excess
risks);
|
|
(b)
|
war
risks (including war protection and indemnity liabilities);
and
|
|
(c)
|
protection
and indemnity risks (including cover for oil pollution liability risks);
and
|
|
(d)
|
any
other risks against which the Lender considers, having regard to practices
and other circumstances prevailing at the relevant time, it would in the
opinion of the Lender be reasonable for that Borrower to insure and which
are specified by the Lender by notice to that
Borrower.
|
|
12.3
|
Terms of obligatory
insurances. Each Borrower shall effect such
insurances:
|
|
(a)
|
in
Dollars;
|
|
(b)
|
in
the case of fire and usual marine risks and war risks, in an amount on an
agreed value basis at least the greater of (i) the market value of the
Ship owned by it and (ii) an amount which, when aggregated with the
insured value of the other Ship at the relevant time subject to a
Mortgage, is equal to or greater than 120% of the amount of the Loan and
the Hedging Exposure;
|
|
(c)
|
in
the case of oil pollution liability risks, for an aggregate amount equal
to the highest level of cover from time to time available under basic
protection and indemnity club entry (with the international group of
protection and indemnity clubs) and the international marine insurance
market (currently $1,000,000,000);
|
|
(d)
|
in
relation to protection and indemnity risks in respect of the full value
and tonnage of the Ship owned by
it;
|
|
(e)
|
on
approved terms; and
|
|
(f)
|
through
approved brokers and with approved insurance companies and/or underwriters
or, in the case of war risks and protection and indemnity risks, in
approved war risks and protection and indemnity risks
associations.
|
|
12.4
|
Further protections for the
Lender. In addition to the terms set out in Clause 12.3,
each Borrower shall procure that the obligatory insurances
shall:
|
|
(a)
|
if
the Lender so requires, name (or be amended to name) the Lender as
additional named assured for its rights and interests, warranted no
operational interest and with full waiver of rights of subrogation against
the Lender, but without the Lender thereby being liable to pay (but having
the right to pay) premiums, calls or other assessments in respect of such
insurance;
|
|
(b)
|
name
the Lender as sole loss payee with such directions for payment as the
Lender may specify;
|
|
(c)
|
provide
that all payments by or on behalf of the insurers under the obligatory
insurances to the Lender shall be made without set-off, counterclaim or
deductions or condition whatsoever;
|
|
(d)
|
provide
that the insurers shall waive, to the fullest extent permitted by English
law, their entitlement (if any) (whether by statute, common law, equity,
or otherwise) to be subrogated to the rights and remedies of the Lender in
respect of any rights or interests (secured or not) held
by
|
28
or
available to the Lender in respect of the Secured Liabilities, until the Secured
Liabilities shall have been fully repaid and discharged, except that the
insurers shall not be restricted by the terms of this paragraph (d) from making
personal claims against persons (other than the Borrowers or the Lender) in
circumstances where the insurers have fully discharged their liabilities and
obligations under the relevant obligatory insurances;
|
(e)
|
provide
that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the
Lender;
|
|
(f)
|
provide
that the Lender may make proof of loss if the Borrowers fail to do so;
and
|
|
(g)
|
provide
that if any obligatory insurance is cancelled, or if any substantial
change is made in the coverage which adversely affects the interest of the
Lender, or if any obligatory insurance is allowed to lapse for non-payment
of premium, such cancellation, charge or lapse shall not be effective with
respect to the Lender for 30 days (or 7 days in the case of war risks)
after receipt by the Lender of prior written notice from the insurers of
such cancellation, change or lapse.
|
|
12.5
|
Renewal of obligatory
insurances. Each Borrower
shall:
|
|
(a)
|
at
least 21 days before the expiry of any obligatory
insurance:
|
|
|
(i)
|
notify
the Lender of the brokers (or other insurers) and any protection and
indemnity or war risks association through or with whom that Borrower
proposes to renew that insurance and of the proposed terms of renewal;
and
|
|
|
(ii)
|
in
case of any substantial change in insurance cover, obtain the Lender’s
approval to the matters referred to in paragraph (i)
above;
|
|
(b)
|
at
least 14 days before the expiry of any obligatory insurance, renew the
insurance; and
|
|
(c)
|
procure
that the approved brokers and/or the war risks and protection and
indemnity associations with which such a renewal is effected shall
promptly after the renewal notify the Lender in writing of the terms and
conditions of the renewal.
|
|
12.6
|
Copies of policies; letters of
undertaking. Each Borrower shall ensure that all
approved brokers provide the Lender with copies of all policies relating
to the obligatory insurances which they effect or renew and of a letter or
letters or undertaking in a form required by the Lender and including
undertakings by the approved brokers
that:
|
|
(a)
|
they
will have endorsed on each policy, immediately upon issue, a loss payable
clause and a notice of assignment complying with the provisions of Clause
12.4;
|
|
(b)
|
they
will hold such policies, and the benefit of such insurances, to the order
of the Lender in accordance with the said loss payable
clause;
|
|
(c)
|
they
will advise the Lender immediately of any material change to the terms of
the obligatory insurances;
|
|
(d)
|
they
will notify the Lender, not less than 14 days before the expiry of the
obligatory insurances, in the event of their not having received notice of
renewal instructions from that Borrower or its agents and, in the event of
their receiving instructions to renew, they will promptly notify the
Lender of the terms of the instructions;
and
|
29
|
(e)
|
they
will not set off against any sum recoverable in respect of a claim
relating to the Ship owned by that Borrower under such obligatory
insurances any premiums or other amounts due to them or any other person
whether in respect of that Ship or otherwise, they waive any lien on the
policies or, any sums received under them, which they might have in
respect of such premiums or other amounts, and they will not cancel such
obligatory insurances by reason of non-payment of such premiums or other
amounts, and will arrange for a separate policy to be issued in respect of
that Ship forthwith upon being so requested by the
Lender.
|
|
12.7
|
Copies of certificates of
entry. Each Borrower shall ensure that any protection
and indemnity and/or war risks associations in which the Ship owned by it
is entered provides the Lender
with:
|
|
(a)
|
a
certified copy of the certificate of entry for that
Ship;
|
|
(b)
|
a
letter or letters of undertaking in such form as may be required by the
Lender;
|
|
(c)
|
where
required to be issued under the terms of insurance/indemnity provided by
the Ship’s protection and indemnity association, a certified copy of each
United States of America voyage quarterly declaration (or other similar
document or documents) made by that Borrower in relation to it’s Ship in
accordance with the requirements of such protection and indemnity
association; and
|
|
(d)
|
a
certified copy of each certificate of financial responsibility for
pollution by oil or other Environmentally Sensitive Material issued by the
relevant certifying authority in relation to that
Ship.
|
|
12.8
|
Deposit of original
policies. Each Borrower shall ensure that all policies
relating to obligatory insurances are deposited with the approved brokers
through which the insurances are effected or
renewed.
|
|
12.9
|
Payment of
premiums. Each Borrower shall punctually pay all
premiums or other sums payable in respect of the obligatory insurances and
produce all relevant receipts when so required by the
Lender.
|
|
12.10
|
Guarantees. Each
Borrower shall ensure that any guarantees required by a protection and
indemnity or war risks association are promptly issued and remain in full
force and effect.
|
|
12.11
|
Restrictions on
employment. No Borrower shall employ the Ship owned by
it, nor permit her to be employed, outside the cover provided by any
obligatory insurances.
|
|
12.12
|
Compliance with terms of
insurances. No Borrower shall do or omit to do (or
permit to be done or not to be done) any act or thing which would or might
render any obligatory insurance invalid, void, voidable or unenforceable
or render any sum payable thereunder repayable in whole or in part; and,
in particular:
|
|
(a)
|
each
Borrower shall take all necessary action and comply with all requirements
which may from time to time be applicable to the obligatory insurances,
and (without limiting the obligation contained in Clause 12.7(c) above)
ensure that the obligatory insurances are not made subject to any
exclusions or qualifications to which the Lender has not given its prior
approval;
|
|
(b)
|
no
Borrower shall make any changes relating to the classification or
classification society or manager or operator of the Ship owned by it
approved by the underwriters of the obligatory
insurances;
|
30
|
(c)
|
each
Borrower shall make all quarterly or other voyage declarations which may
be required by the protection and indemnity risks association in which the
Ship owned by it is entered to maintain cover for trading to the United
States of America and Exclusive Economic Zone (as defined in the United
States Oil Pollution Act 1990 or any other applicable legislation);
and
|
|
(d)
|
no
Borrower shall employ the Ship owned by it, nor allow it to be employed,
otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the insurers
and complying with any requirements (as to extra premium or otherwise)
which the insurers specify.
|
|
12.13
|
Alteration to terms of
insurances. No Borrower shall either make or agree to
any alteration to the terms of any obligatory insurance or waive any right
relating to any obligatory insurance without the prior written consent of
the Lender.
|
|
12.14
|
Settlement of
claims. No Borrower shall settle, compromise or abandon
any claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents,
evidence and information to enable the Lender to collect or recover any
moneys which at any time become payable in respect of the obligatory
insurances.
|
|
12.15
|
Provision of copies of
communications. Each Borrower shall provide the Lender,
at the time of each such communication, copies of all written
communications between that Borrower
and:
|
|
(a)
|
the
approved brokers; and
|
|
(b)
|
the
approved protection and indemnity and/or war risks associations;
and
|
|
(c)
|
the
approved insurance companies and/or underwriters, which relate directly or
indirectly to:
|
|
|
(i)
|
that
Borrower's obligations relating to the obligatory insurances including,
without limitation, all requisite declarations and payments of additional
premiums or calls; and
|
|
|
(ii)
|
any
credit arrangements made between that Borrower and any of the persons
referred to in paragraphs (a) or (b) above relating wholly or partly to
the effecting or maintenance of the obligatory
insurances.
|
|
12.16
|
Provision of
information. In addition, each Borrower shall promptly
provide the Lender (or any persons which it may designate) with any
information which the Lender (or any such designated person) requests for
the purpose of:
|
|
(a)
|
obtaining
or preparing any report from an independent marine insurance broker as to
the adequacy of the obligatory insurances effected or proposed to be
effected; and/or
|
|
(b)
|
effecting,
maintaining or renewing any such insurances as are referred to in Clause
12.17 below or dealing with or considering any matters relating to any
such insurances,
|
|
|
and
the Borrowers shall, forthwith upon demand, indemnify the Lender in
respect of all fees and other expenses incurred by or for the account of
the Lender in
connection with any such report as is referred to in paragraph (a)
above.
|
|
12.17
|
Mortgagees’ interest,
additional perils. The Lender shall be entitled from
time to time to effect, maintain and renew a mortgagee’s interest
additional perils insurance and a mortgagees’ interest marine insurance in
an amount equal to not less than 120% of the amount of the Loan
and
|
31
the
Hedging Exposure and otherwise on such terms, through such insurers and
generally in such manner as the Lender may from time to time consider
appropriate and the Borrowers shall upon demand fully indemnify the Lender in
respect of all premiums and other expenses which are incurred in connection with
or with a view to effecting, maintaining or renewing any such insurance or
dealing with, or considering, any matter arising out of any such
insurance.
|
12.18
|
Review of insurance
requirements. The Lender shall be entitled to review the
requirements of this Clause 12 from time to time in order to take account
of any changes in circumstances after the date of this Agreement which
are, in the opinion of the Lender, significant and capable of affecting
any Borrower or any Ship and its or their insurance (including, without
limitation, changes in the availability or the cost of insurance coverage
or the risks to which the Borrowers may be subject), and may appoint
insurance consultants in relation to this review at the cost of the
Borrowers.
|
|
12.19
|
Modification of insurance
requirements. The Lender shall notify the Borrowers of
any proposed modification under Clause 12.18 to the requirements of this
Clause 12 which the Lender considers appropriate in the circumstances, and
such modification shall take effect on and from the date it is notified in
writing to the Borrowers as an amendment to this Clause 12 and shall bind
the Borrowers accordingly.
|
|
12.20
|
Compliance with
instructions. The Lender shall be entitled (without
prejudice to or limitation of any other rights which it may have or
acquire under any Finance Document) to require a Ship to remain at any
safe port or to proceed to and remain at any safe port designated by the
Lender until the Borrowers implement any amendments to the terms of the
obligatory insurances and any operational changes required as a result of
a notice served under Clause 12.19.
|
|
13
|
SHIP
COVENANTS
|
|
13.1
|
General. Each
Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 13 at all times during the Security Period
(after the Ship has been delivered to it under the relevant Shipbuilding
Contract) except as the Lender may otherwise
permit.
|
|
13.2
|
Ship's name and
registration. Each Borrower shall keep the Ship owned by
it registered in its name under the Approved Flag; shall not do or allow
to be done anything as a result of which such registration might be
cancelled or imperilled; and shall not change the name or port of registry
of that Ship without the prior written consent of the
Lender.
|
|
13.3
|
Repair and
classification. Each Borrower shall keep the Ship owned
by it in a good and safe condition and state of
repair:
|
|
(a)
|
consistent
with first-class ship ownership and management
practice;
|
|
(b)
|
so
as to maintain such Ship with the highest classification available for
vessels of the same age, type and specification as such Ship with Lloyd’s
Register of Shipping (or such other first class classification society as
may be approved by the Lender), free of outstanding recommendations and
conditions affecting such Ship’s class;
and
|
|
(c)
|
so
as to comply with all laws and regulations applicable to vessels
registered at ports in the Approved Flag State or to vessels trading to
any jurisdiction to which that Ship may trade from time to time, including
but not limited to the ISM Code and the ISPS
Code.
|
32
|
13.4
|
Modification. No
Borrower shall make any modification or repairs to, or replacement of, any
Ship or equipment installed on her which would or might materially alter
the structure, type or performance characteristics of that Ship or
materially reduce her value.
|
|
13.5
|
Removal of
parts. No Borrower shall remove any material part of any
Ship, or any item of equipment installed on, any Ship unless the part or
item so removed is forthwith replaced by a suitable part or item which is
in the same condition as or better condition than the part or item
removed, is free from any Security Interest or any right in favour of any
person other than the Lender and becomes on installation on the relevant
Ship the property of the relevant Borrower and subject to the security
constituted by the relevant Mortgage Provided that a Borrower
may install equipment owned by a third party if the equipment can be
removed without any risk of damage to the Ship owned by
it.
|
|
13.6
|
Surveys. Each
Borrower shall submit the Ship owned by it regularly to all periodical or
other surveys which may be required for classification purposes and, if so
required by the Lender, provide the Lender with copies of all survey
reports.
|
|
13.7
|
Inspection. Each
Borrower shall permit the Lender (by surveyors or other persons appointed
by it for that purpose) to board the Ship owned by it at all reasonable
times to inspect her condition or to satisfy themselves about proposed or
executed repairs and shall afford all proper facilities for such
inspections. Provided that the relevant Ship is found to be in
satisfactory condition, the cost of such inspections shall be borne by the
Borrowers not more than once per Ship per
year.
|
|
13.8
|
Prevention of and release from
arrest. Each Borrower shall promptly
discharge:
|
|
(a)
|
all
liabilities which give or may give rise to maritime or possessory liens on
or claims enforceable against the Ship owned by it, the Earnings or the
Insurances;
|
|
(b)
|
all
taxes, dues and other amounts charged in respect of the Ship owned by it,
the Earnings or the Insurances; and
|
|
(c)
|
all
other outgoings whatsoever in respect of the Ship owned by it, the
Earnings or the Insurances,
|
|
|
and,
forthwith upon receiving notice of the arrest of the Ship owned by it, or
of her detention in exercise or purported exercise of any lien or claim,
that Borrower shall procure her release by providing bail or otherwise as
the circumstances may require.
|
|
13.9
|
Compliance with laws
etc. Each Borrower
shall:
|
|
(a)
|
comply,
or procure compliance with the ISM Code, the ISPS Code, all Environmental
Laws and all other laws or regulations relating to the Ship owned by it,
its ownership, operation and management or to the business of that
Borrower (including, without limitation, the obtaining of all relevant
certificates of financial responsibility and any other matters required
for entering United States territorial waters or calling at any United
States Port);
|
|
(b)
|
not
employ the Ship owned by it nor allow her employment in any manner
contrary to any law or regulation in any relevant jurisdiction including
but not limited to the ISM Code and the ISPS Code;
and
|
|
(c)
|
in
the event of hostilities in any part of the world (whether war is declared
or not), not cause or permit the Ship owned by it to enter or trade to any
zone which is declared a war zone by any government or by the Ship's war
risks insurers unless the prior written consent of the Lender
has
|
33
been
given and that Borrower has (at its expense) effected any special, additional or
modified insurance cover which the Lender may require.
|
13.10
|
Provision of
information. Each Borrower shall promptly provide the
Lender with any information which the Lender requests
regarding:
|
|
(a)
|
the
Ship owned by it, her employment, position and
engagements;
|
|
(b)
|
the
Earnings and payments and amounts due to the master and crew of the Ship
owned by it;
|
|
(c)
|
any
expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship owned by it and any payments
made in respect of that Ship;
|
|
(d)
|
any
towages and salvages;
|
|
(e)
|
its
compliance, the Approved Manager’s compliance or the compliance of the
Ship owned by that Borrower with the ISM
Code
|
|
|
and,
upon the Lender's request, provide copies of any current charter relating
to the Ship owned by it and of any current charter guarantee, and copies
of the ISM Code and ISPS Code
documentation.
|
|
13.11
|
Notification of certain
events. Each Borrower shall immediately notify the
Lender by letter of:
|
|
(a)
|
any
casualty which is or is likely to be or to become a Major
Casualty;
|
|
(b)
|
any
occurrence as a result of which the Ship owned by it has become or is, by
the passing of time or otherwise, likely to become a Total
Loss;
|
|
(c)
|
any
requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
|
|
(d)
|
any
arrest or detention of the Ship owned by it, any exercise or purported
exercise of any lien on that Ship or her Earnings or any requisition of
that Ship for hire;
|
|
(e)
|
any
intended dry docking of the Ship owned by
it;
|
|
(f)
|
any
Environmental Claim made against that Borrower or in connection with the
Ship owned by it, or any Environmental
Incident;
|
|
(g)
|
any
claim for breach of the ISM Code or the ISPS Code being made against that
Borrower, the Approved Manager or otherwise in connection with the Ship
owned by it; or
|
|
(h)
|
any
other matter, event or incident, actual or threatened, the effect of which
will or could lead to the ISM Code or the ISPS Code not being complied
with,
|
|
|
and
that Borrower shall keep the Lender advised in writing on a regular basis
and in such detail as the Lender shall require of that Borrower's, the
Approved Manager’s or any other person's response to any of those events
or matters.
|
|
13.12
|
Restrictions on chartering,
appointment of managers, etc. No Borrower shall without
the prior written consent of the Lender (such consent not to be
unreasonably withheld):
|
|
(a)
|
let
the Ship owned by it on demise charter for any
period;
|
34
|
(b)
|
enter
into any time or consecutive voyage charter in respect of the Ship owned
by it for a term which exceeds, or which by virtue of any optional
extensions may exceed, 13 months;
|
|
(c)
|
enter
into any charter in relation to the Ship owned by it under which more than
2 months' hire (or the equivalent) is payable in
advance;
|
|
(d)
|
charter
the Ship owned by it otherwise than on bona fide arm's length terms at the
time when the Ship is fixed;
|
|
(e)
|
appoint
a manager of the Ship owned by it other than the Approved Manager or agree
to any alteration to the terms of the Approved Manager's
appointment;
|
|
(f)
|
de-activate
or lay up the Ship owned by it;
|
|
(g)
|
put
the Ship owned by it into the possession of any person for the purpose of
work being done upon her in an amount exceeding or likely to exceed the
Majority Casualty amount unless that person has first given to the Lender
and in terms satisfactory to it a written undertaking not to exercise any
lien on that Ship or her Earnings for the cost of such work or otherwise;
or
|
|
(h)
|
change
the flag on which its Ship is registered or the classification society
with which its Ship is classed.
|
|
13.13
|
Notice of
Mortgage. Each Borrower shall keep the Mortgage
registered against the Ship owned by it as a valid first priority
mortgage, carry on board that Ship a certified copy of the relevant
Mortgage and place and maintain in a conspicuous place in the navigation
room and the Master's cabin of that Ship a framed printed notice stating
that that Ship is mortgaged by that Borrower to the
Lender.
|
|
13.14
|
Sharing of
Earnings. No Borrower shall enter into any
agreement or arrangement for the sharing of any Earnings, other than
pursuant to time charters notified to and agreed by the Lender in writing
prior to entering into the same.
|
|
13.15
|
Ownership. Each
of the Borrowers shall procure that there shall be no change in the legal
or beneficial ownership of the shares in any of the Borrowers throughout
the Security Period.
|
|
13.16
|
Approved
Manager. If, in the opinion of the Lender, the Approved
Manager’s performance level falls below that expected of a prudent ship
manager (for example, without limiting the generality of the foregoing,
due to excessive off-hire periods in respect of a Ship), then the
Borrowers undertake to replace such Approved Manager (forthwith upon being
requested to do so by the Lender) with such other company as shall be
acceptable to the Lender in its sole
discretion.
|
|
13.17
|
ISPS
Code. Each of the Borrowers shall comply with the ISPS
Code and in particular, without limitation,
shall:
|
|
(a)
|
procure
that the Ship owned by it and the company responsible for such Ship’s
compliance with the ISPS Code, comply with the ISPS Code;
and
|
|
(b)
|
maintain
for each Ship an ISSC; and
|
|
(c)
|
notify
the Lender immediately in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
ISSC.
|
35
|
13.18
|
Time Charter
Assignment. If any Borrower enters into any time charter
in respect of its Ship which is of twelve (12) months or more in duration,
or is capable of exceeding twelve (12) months in duration, the relevant
Borrower shall, at the request of the Lender, execute in favour of the
Lender an assignment and notice of assignment (and shall use its best
endeavours to obtain acknowledgement of the same by the relevant
charterer) of such time charter in such form and on such terms as the
Lender may require, and shall deliver to the Lender such other documents
equivalent to those referred to at paragraphs 3, 4 and 5 of Part A of
Schedule 2 hereof as the Lender may
require.
|
|
13.19
|
No freight derivatives.
No Borrower shall enter into or agree to enter into without the
consent of the Lender any freight derivatives or any other instruments
which have the effect of hedging forward exposure to freight
derivatives.
|
|
13.20
|
General and administrative
costs. Each Borrower shall procure that (and, if
required, shall provide evidence to demonstrate that) all general and
administrative costs incurred in the ownership and operation of each Ship
are subordinated in full to the debt service obligations of the Borrowers
under this Agreement, to the extent permitted under applicable
laws.
|
|
14
|
SECURITY
COVER
|
|
14.1
|
Provision of additional
security cover; prepayment of Loan. Each Borrower
undertakes with the Lender that, if (after the Delivery Date of the second
Ship under the relevant Shipbuilding Contract) the Lender notifies the
Borrowers that:
|
|
(a)
|
the
aggregate Fair Market Value (determined as provided below) of the Ships
subject to a Mortgage; plus
|
|
(b)
|
the
net realisable value of any additional security previously provided under
this Clause 14;
|
|
|
is
below one hundred and twenty five per cent. (125%) of the amount of the
Loan and the Hedging Exposure, the Borrowers will, within 1 month after
the date on which the Lender's notice is served,
either:
|
|
|
(i)
|
provide,
or ensure that a third party provides, additional security which, in the
opinion of the Lender, has a net realisable value at least equal to the
shortfall and which consists of either (a) cash pledged to the Lender or
(b) a Security Interest (including, but not limited to, a first priority
mortgage over another vessel), covering such asset or assets and
documented in such terms as the Lender may approve or require;
or
|
|
|
(ii)
|
prepay
in accordance with Clause 7 such part (at least) of the Loan as will
eliminate the shortfall.
|
|
14.2
|
Meaning of additional
security. In Clause 14.1 “security” means a
Security Interest over an asset or assets (whether securing the Borrowers’
liabilities under the Finance Documents or a guarantee in respect of those
liabilities), or a guarantee, letter of credit or other security in
respect of the Borrowers’ liabilities under the Finance
Documents.
|
|
14.3
|
Requirement for additional
documents. The Borrowers shall not be deemed to have
complied with Clause 14.1(b)(i) above until the Lender has received in
connection with the additional security certified copies of documents of
the kinds referred to in paragraphs 2, 3, 4 and 5 of Schedule 2 Part A and
such legal opinions in terms acceptable to the Lender from such lawyers as
it may select.
|
36
|
14.4
|
Valuation of
Ships. The Fair Market Value of a Ship shall be
obtained:
|
|
(a)
|
in
Dollars;
|
|
(b)
|
with
or without physical inspection of the relevant Ship (as the Lender may
require);
|
|
(c)
|
by
taking the average of two written valuations prepared by two reputable
sale and purchase ship brokers appointed by the
Lender;
|
|
(d)
|
showing
the value of the relevant Ship as at the date of, or at a date no earlier
than 10 days prior to, such
valuations;
|
|
(e)
|
on
the basis of a sale for prompt delivery for cash on normal arm’s length
commercial terms as between a willing seller and a willing buyer, free of
any existing charter or other contract of employment;
and
|
|
(f)
|
after
deducting the estimated amount of the usual and reasonable expenses which
would be incurred in connection with the
sale.
|
|
14.5
|
Value of additional vessel
security. The net realisable value of any additional
security which is provided under Clause 14.2 and which consists of a
Security Interest over a vessel shall be that shown either by way of a
valuation complying with the requirements of Clause 14.3 or by a valuation
from an independent sale and purchase shipbroker approved or appointed by
the Lender (and on the basis of a sale for prompt delivery for cash on
normal arm’s length commercial terms as between a willing seller and
willing buyer, free of charter or other contract of
employment).
|
|
14.6
|
Valuations
binding. Any valuation under Clause 14.1(b)(i), 14.4 or
14.5 shall be binding and conclusive as regards the Borrowers, as shall be
any valuation which the Lender makes of a security which does not consist
of or include a Security Interest.
|
|
14.7
|
Provision of
information. The Borrowers shall promptly provide the
Lender and any shipbroker or expert acting under Clause 14.4 or 14.5 with
any information which the Lender or the shipbroker or expert may request
for the purposes of the valuation; and, if the Borrowers fail to provide
the information by the date specified in the request, the valuation may be
made on any basis and assumptions which the shipbroker or the Lender (or
the expert appointed by it) considers
prudent.
|
|
14.8
|
Payment of valuation
expenses. Without prejudice to the generality of the
Borrowers’ obligations under Clauses 19.2, 19.3 and 20.3, the Borrowers
shall, on demand, pay the Lender the amount of the fees and expenses of
any shipbroker or expert instructed by the Lender under this Clause and
all legal and other expenses incurred by the Lender in connection with any
matter arising out of this Clause.
|
|
14.9
|
Frequency of
valuations. The Lender shall be entitled to obtain a
valuation of each Ship at any time during the Security Period, provided
that the costs and expenses of such shall only be borne by the Borrowers
twice per year per Ship (in the absence of the occurrence of an Event of
Default).
|
37
|
15
|
PAYMENTS
AND CALCULATIONS
|
|
15.1
|
Currency and method of
payments. All payments to be made by the Borrowers to
the Lender under a Finance Document shall be
made:
|
|
|
(i)
|
by
not later than 11.00 a.m. (London time) on the due
date;
|
|
|
(ii)
|
in
same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or settled in
such other manner as the Lender shall specify as being customary at the
time for the settlement of international transactions of the type
contemplated by this Agreement);
and
|
|
|
(iii)
|
to
such account as the Lender may from time to time notify to the
Borrowers.
|
|
15.2
|
Payment on non-Business
Day. If any payment by any Borrower under a Finance
Document would otherwise fall due on a day which is not a Business
Day:
|
|
(a)
|
the
due date shall be extended to the next succeeding Business Day;
or
|
|
(b)
|
if
the next succeeding Business Day falls in the next calendar month, the due
date shall be brought forward to the immediately preceding Business
Day
|
and
interest shall be payable during any extension under paragraph (a) at the rate
payable on the original due date.
|
15.3
|
Basis for calculation of
periodic payments. All interest and commitment fee and
any other payments under any Finance Document which are of an annual or
periodic nature shall accrue from day to day and shall be calculated on
the basis of the actual number of days elapsed and a 360 day
year.
|
|
15.4
|
Lender
accounts. The Lender shall maintain accounts showing the
amounts owing to it by the Borrowers and each Security Party under the
Finance Documents and all payments in respect of those amounts made by the
Borrowers and any Security Party.
|
|
15.5
|
Accounts prima facie
evidence. If any accounts maintained under Clause 15.4
show an amount to be owing by the Borrowers or a Security Party to the
Lender, those accounts shall be prima facie evidence that that amount is
owing to the Lender.
|
|
16
|
APPLICATION
OF RECEIPTS
|
|
16.1
|
Normal order of
application. Except as any Finance Document may
otherwise provide, any sums which are received or recovered by the Lender
under or by virtue of any Finance Document shall be
applied:-
|
|
(a)
|
FIRST:
in or towards satisfaction of any amounts then due and payable under the
Finance Documents in the following order and
proportions:
|
|
|
(i)
|
first,
in or towards satisfaction pro rata of all amounts then due and payable to
the Lender under the Finance Documents other than those amounts referred
to at paragraphs (ii), (iii) and (iv) (including, but without limitation,
all amounts payable by the Borrowers
under
|
38
Clauses
19, 20 and 21 of this Agreement or by the Borrowers or any Security Party under
any corresponding or similar provision in any other Finance
Document);
|
|
(ii)
|
secondly,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Lender under the Finance
Documents;
|
|
|
(iii)
|
thirdly,
in or towards satisfaction pro rata of the Loan;
and
|
|
|
(iv)
|
fourthly,
in payment to the Lender of amounts then due and payable in respect of any
Designated Transactions;
|
|
(b)
|
SECONDLY:
in retention of an amount equal to any amount not then due and payable
under any Finance Document but which the Lender, by notice to the
Borrowers and the Security Parties, states in its opinion will or may
become due and payable in the future and, upon those amounts becoming due
and payable, in or towards satisfaction of them in accordance with the
provisions of Clause 16.1(a); and
|
|
(c)
|
THIRDLY:
any surplus shall be paid to the Borrowers or to any other person
appearing to be entitled to it.
|
|
16.2
|
Variation of order of
application. The Lender may by notice to the Borrowers and the
Security Parties provide for a different manner of application from that
set out in Clause 16.1 either as regards a specified sum or sums or as
regards sums in a specified category or
categories.
|
|
16.3
|
Notice of variation of order of
application. The Lender may give notices under Clause
16.2 from time to time; and such a notice may be stated to apply not only
to sums which may be received or recovered in the future, but also to any
sum which has been received or recovered on or after the third Business
Day before the date on which the notice is
served.
|
|
16.4
|
Appropriation rights
overriden. This Clause 16 and any notice which the
Lender gives under Clause 16.2 shall override any right of appropriation
possessed, and any appropriation made, by any Borrower or any Security
Party.
|
|
17
|
APPLICATION
OF EARNINGS
|
|
17.1
|
Payment and application of
Earnings. Each Borrower undertakes with the Lender to
ensure that, throughout the Security Period subject only to the provisions
of the relevant General Assignment, all the Earnings of the Ship owned by
it are paid to the Earnings Account relating to that
Ship.
|
|
17.2
|
Monthly
retentions. Each Borrower undertakes with the Lender to
ensure that, throughout the Security Period commencing on the date falling
one month after the Drawdown Date of the Delivery Advance for the first
Ship to be delivered and on the same day in each subsequent month, there
is transferred to the Retention Account out of the Earnings received in
the Earnings Accounts during the preceding calendar
month:
|
|
(a)
|
one-third
of the aggregate amount of the repayment instalments falling due under
Clause 7.1 on the next Repayment Date;
and
|
|
(b)
|
the
relevant fraction of the amount of interest accruing on the Loan which is
payable on the next due date for payment of interest under this Agreement
(increased or reduced to the extent necessary to take account of all
Designated Transactions then
operative).
|
39
The
“relevant fraction” is a
fraction of which the numerator is one and the denominator the number of months
comprised in the then current Interest Period (or, if the period is shorter, the
number of months from the later of the commencement of the current Interest
Period or the last due date for payment of interest to the next date for payment
of interest under this Agreement).
|
17.3
|
Shortfall in
Earnings. If the aggregate Earnings received in the
Earnings Accounts are insufficient at any time for the required amount to
be transferred to the Retention Account under Clause 17.2, the Borrowers
shall make up the amount of the insufficiency on demand from the Lender;
but, without thereby prejudicing the Lender's right to make such demand at
any time, the Lender may, if so authorised by the Lender, permit the
Borrowers to make up all or part of the insufficiency by increasing the
amount of any transfer under Clause 17.2 from the Earnings received in the
next or subsequent months.
|
|
17.4
|
Application of
retentions. Until an Event of Default or a Potential
Event of Default occurs, the Lender shall on each Repayment Date and on
each due date for the payment of interest under this Agreement apply in
accordance with Clause 15.1 so much of the then balance on the Retention
Account as equals:
|
|
(a)
|
the
repayment instalment due on that Repayment Date;
or
|
|
(b)
|
the
amount of interest payable on that interest payment
date,
|
in
discharge of the Borrowers’ liability for that repayment instalment or that
interest.
|
17.5
|
Interest accrued on Retention
Account. Any credit balance on the Retention Account
shall bear interest at the rate from time to time offered by the Lender to
its customers for Dollar deposits of similar amounts and for periods
similar to those for which such balances appear to the Lender likely to
remain on the Retention Account.
|
|
17.6
|
Release of accrued
interest. Interest accruing under Clause 17.5 on the
Retention Account shall be released to the Borrowers on each Repayment
Date unless an Event of Default has occurred or the then credit balance on
the Retention Account is less than what would have been the balance had
the full amount required by Clause 17.2 (and Clause 17.3, if applicable)
been transferred in that and each previous
month.
|
|
17.7
|
Location of
accounts. Each Borrower shall
promptly:
|
|
(a)
|
comply
with any requirement of the Lender as to the location or re-location of
the Earnings Accounts and the Retention Account (or any of
them);
|
|
(b)
|
execute
any documents which the Lender specifies to create or maintain in favour
of the Lender a Security Interest over (and/or rights of set-off,
consolidation or other rights in relation to) the Earnings Accounts and
the Retention Account.
|
|
17.8
|
Debits for expenses
etc. The Lender shall be entitled (but not obliged) from
time to time to debit any Earnings Accounts without prior notice in order
to discharge any amount due and payable under Clause 19 or 20 to the
Lender or payment of which the Lender has become entitled to demand under
Clause 19 or 20.
|
|
17.9
|
Borrowers’ obligations
unaffected. The provisions of this Clause 17 (as
distinct from a distribution effected under Clause 17.4) do not
affect:
|
40
|
(a)
|
the
liability of the Borrowers to make payments of principal and interest on
the due dates; or
|
|
(b)
|
any
other liability or obligation of the Borrowers or any Security Party under
any Finance Document.
|
|
18
|
EVENTS
OF DEFAULT
|
|
18.1
|
Events of
Default. An Event of Default occurs
if:
|
|
(a)
|
any
Borrower or any Security Party fails to pay when due or (if so payable) on
demand any sum payable under a Finance Document or under any document
relating to a Finance Document; or
|
|
(b)
|
any
breach occurs of Clause 8.2, 10.2, 10.3, 11.2, 11.3 or 14.1;
or
|
|
(c)
|
any
breach by any Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraphs (a) or (b)
above) if, in the opinion of the Lender, such default is capable of
remedy, and such default continues unremedied 5 Business Days after
written notice from the Lender requesting action to remedy the same;
or
|
|
(d)
|
(subject
to any applicable grace period specified in the Finance Documents) any
breach by any Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraphs (a), (b) or
(c) above); or
|
|
(e)
|
any
representation, warranty or statement made by, or by an officer of, a
Borrower or a Security Party in a Finance Document or in a Drawdown Notice
or any other notice or document relating to a Finance Document is untrue
or misleading when it is made; or
|
|
(f)
|
any
of the following occurs in relation to any Financial Indebtedness of a
Relevant Person:
|
|
|
(i)
|
any
Financial Indebtedness of a Relevant Person is not paid when due or, if so
payable, on demand; or
|
|
|
(ii)
|
any
Financial Indebtedness of a Relevant Person becomes due and payable or
capable of being declared due and payable prior to its stated maturity
date as a consequence of any event of default;
or
|
|
|
(iii)
|
a
lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or owner or
becomes capable of being terminated as a consequence of any termination
event; or
|
|
|
(iv)
|
any
overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other
derivative contract or transaction, relating to any Financial Indebtedness
of a Relevant Person ceases to be available or becomes capable of being
terminated as a result of any event of default, or cash cover is required,
or becomes capable of being required, in respect of such a facility as a
result of any event of default; or
|
|
|
(v)
|
any
Security Interest securing any Financial Indebtedness of a Relevant Person
becomes enforceable; or
|
|
(g)
|
any
of the following occurs in relation to a Relevant
Person:
|
41
|
|
(i)
|
a
Relevant Person becomes, in the opinion of the Lender, unable to pay its
debts as they fall due; or
|
|
|
(ii)
|
any
assets of a Relevant Person are subject to any form of execution,
attachment, arrest, sequestration or distress in respect of a sum of, or
sums aggregating, $250,000 or more or the equivalent in another currency
unless such execution, attachment, arrest, sequestration or distress is
being contested in good faith and on substantial grounds and is discussed
or withdrawn within thirty (30) days of the occurrence thereof;
or
|
|
|
(iii)
|
any
administrative or other receiver is appointed over any asset of a Relevant
Person; or
|
|
|
(iv)
|
an
administrator is appointed (whether by the court or otherwise) in respect
of a Relevant Person;
|
|
|
(v)
|
a
Relevant Person makes any formal declaration of bankruptcy or any formal
statement to the effect that it is insolvent or likely to become
insolvent, or a winding up or administration order is made in relation to
a Relevant Person, or the members or directors of a Relevant Person pass a
resolution to the effect that it should be wound up, placed in
administration or cease to carry on business, save that this paragraph
does not apply to a fully solvent winding up of a Relevant Person other
than a Borrower or the Corporate Guarantor which is, or is to be, effected
for the purposes of an amalgamation or reconstruction previously approved
by the Lender and effected not later than 3 months after the commencement
of the winding up; or
|
|
|
(vi)
|
a
petition is presented in any Pertinent Jurisdiction for the winding up or
administration, or the appointment of a provisional liquidator, of a
Relevant Person unless the petition is being contested in good faith and
on substantial grounds and is dismissed or withdrawn within 30 days of the
presentation of the petition; or
|
|
|
(vii)
|
a
Relevant Person petitions a court, or presents any proposal for, any form
of judicial or non-judicial suspension or deferral of payments,
reorganisation of its debt (or certain of its debt) or arrangement with
all or a substantial proportion (by number or value) of its creditors or
of any class of them or any such suspension or deferral of payments,
reorganisation or arrangement is effected by court order, contract or
otherwise; or
|
|
|
(viii)
|
any
meeting of the members or directors of a Relevant Person is summoned for
the purpose of considering a resolution or proposal to authorise or take
any action of a type described in paragraphs (iii), (iv), (v), (vi) or
(vii) above; or
|
|
|
(ix)
|
in
a Pertinent Jurisdiction other than England, any event occurs or any
procedure is commenced which, in the opinion of the Lender, is similar to
any of the foregoing; or
|
|
(h)
|
any
Borrower or any Security Party ceases or suspends carrying on its business
or a part of its business which, in the opinion of the Lender, is material
in the context of this Agreement;
or
|
|
(i)
|
it
becomes unlawful in any Pertinent Jurisdiction or
impossible:
|
|
|
(i)
|
for
any Borrower or any Security Party to discharge any liability under a
Finance Document or to comply with any other obligation which the Lender
considers material under a Finance Document;
or
|
42
|
|
(ii)
|
for
the Lender to exercise or enforce any right under, or to enforce any
Security Interest created by, a Finance Document;
or
|
|
(j)
|
any
consent necessary to enable any Borrower to own, operate or charter the
Ship owned by it or to enable any Borrower or any Security Party to comply
with any provision which the Lender considers material of a Finance
Document or a Shipbuilding Contract is not granted, expires without being
renewed, is revoked or becomes liable to revocation or any condition of
such a consent is not fulfilled; or
|
|
(k)
|
it
appears to the Lender that, without its prior consent, a change has
occurred or probably has occurred after the date of this Agreement in the
legal or beneficial ownership of any of the shares in any of the Borrowers
or in the ultimate control of the voting rights attaching to any of those
shares; or
|
|
(l)
|
any
provision which the Lender considers material of a Finance Document proves
to have been or becomes invalid or unenforceable, or a Security Interest
created by a Finance Document proves to have been or becomes invalid or
unenforceable or such a Security Interest proves to have ranked after, or
loses its priority to, another Security Interest or any other third party
claim or interest; or
|
|
(m)
|
the
security constituted by a Finance Document is in any way imperilled or in
jeopardy; or
|
|
(n)
|
any
of the Ships is not delivered by the Builder to the relevant Borrower
under the relevant Shipbuilding Contract by the date falling 210 days
after the scheduled delivery date of such Ship referred to in Article VII
of each Shipbuilding Contract;
|
|
(o)
|
a
default occurs under any time charter of any Ship or under the management
agreement with respect to any Ship;
|
|
(p)
|
any
other event occurs or any other circumstances arise or develop including,
without limitation:
|
|
|
(i)
|
a
change in the financial position, state of affairs or prospects of any
Borrower or the Corporate Guarantor;
or
|
|
|
(ii)
|
any
accident or other event involving any of the Ships or another vessel
owned, chartered or operated by a Relevant
Person,
|
|
|
in
the light of which the Lender considers that there is a significant risk
that any Borrower or any Security Party is, or will later become, unable
to discharge its liabilities under the Finance Documents to which it is a
party as they fall due.
|
|
18.2
|
Actions following an Event of
Default. On, or at any time after, the occurrence of an
Event of Default:
|
|
(a)
|
the
Lender may:
|
|
|
(i)
|
serve
on the Borrowers a notice stating that the Commitment and all other
obligations of the Lender to the Borrowers under this Agreement are
terminated; and/or
|
|
|
(ii)
|
serve
on the Borrowers a notice stating that the Loan, all accrued interest and
all other amounts accrued or owing under this Agreement are immediately
due and payable or are due and payable on demand;
and/or
|
43
|
|
(iii)
|
serve
on the Borrowers a notice declaring that an Event of Default has occurred
and reserving all rights of the Lender under this Agreement and all the
Finance Documents; and/or
|
|
|
(iv)
|
take
any other action which, as a result of the Event of Default or any notice
served under paragraph (i) or (ii) above, the Lender is entitled to take
under any Finance Document or any applicable law;
and/or
|
|
(b)
|
the
Lender may take any action which, as a result of the Event of Default or
any notice served under paragraph (a) (i) or (ii) above, the Lender is
entitled to take under any Finance Document or any applicable
law.
|
|
18.3
|
Termination of
Commitment. On the service of a notice under paragraph
(a)(i) of Clause 18.2, the Commitment and all other obligations of the
Lender to the Borrowers under this Agreement shall
terminate.
|
|
18.4
|
Acceleration of
Loan. On the service of a notice under paragraph (a)(ii)
of Clause 18.2, the Loan, all accrued interest and all other amounts
accrued or owing from the Borrowers or any Security Party under this
Agreement and every other Finance Document shall become immediately due
and payable or, as the case may be, payable on
demand.
|
|
18.5
|
Multiple notices; action
without notice. The Lender may serve notices under
paragraphs (a) (i) and (ii) of Clause 18.2 simultaneously or on different
dates and it may take any action referred to in that Clause if no such
notice is served or simultaneously with or at any time after the service
of both or either of such notices.
|
|
18.6
|
Exclusion of Lender’s
Liability. Neither the Lender nor any receiver or
manager appointed by it shall have any liability to any Borrower or any
Security Party:
|
|
(a)
|
for
any loss caused by an exercise of rights under, or enforcement of a
Security Interest created by, a Finance Document or by any failure or
delay to exercise such a right or to enforce such a Security Interest;
or
|
|
(b)
|
as
mortgagee in possession or otherwise, for any income or principal amount
which might have been produced by or realised from any asset comprised in
such a Security Interest or for any reduction (however caused) in the
value of such an asset,
|
except
that this does not exempt the Lender or a receiver or manager from liability for
losses shown to have been caused by the gross negligence or the wilful
misconduct of the Lender’s own officers and employees or (as the case may be)
such receiver's or manager's own partners or employees.
|
18.7
|
Relevant
Persons. In this Clause 18 “a Relevant Person” means
any Borrower, the Corporate Guarantor and any other Security Party and,
for the purposes of Clause 18.1 (g), any charterer of a
Ship.
|
|
18.8
|
Interpretation. In
Clause 18.1(f) references to an event of default or a termination event
include any event, howsoever described, which is similar to an event of
default in a facility agreement or a termination event in a finance lease;
and in Clause 18.1(g) “petition” includes an
application.
|
44
|
19
|
FEES
AND EXPENSES
|
|
19.1
|
Arrangement and commitment
fees. The Borrowers shall pay to the
Lender:
|
|
(a)
|
on
the Drawdown Date of the first Advance, a non-refundable arrangement fee
of $280,000; and
|
|
(b)
|
quarterly
in arrears (and on the last day of the Availability Period) during the
period from (and including) the date of this Agreement to the earlier of
(i) the final Drawdown Date and (ii) the last day of the Availability
Period, a commitment fee at the rate of 0.30% per annum on the undrawn
amount of the Commitment from time to
time.
|
|
19.2
|
Costs of negotiation,
preparation etc. The Borrowers shall pay to the Lender
on its demand the amount of all expenses incurred by the Lender in
connection with the negotiation, preparation, execution or registration of
any Finance Document or any related document or with any transaction
contemplated by a Finance Document or a related
document.
|
|
19.3
|
Costs of variations,
amendments, enforcement etc. The Borrowers shall pay to
the Lender, on the Lender's demand, the amount of all expenses incurred by
the Lender in connection with:
|
|
(a)
|
any
amendment or supplement to a Finance Document, or any proposal for such an
amendment to be made;
|
|
(b)
|
any
consent or waiver by the Lender under or in connection with a Finance
Document, or any request for such a consent or
waiver;
|
|
(c)
|
the
valuation of any security provided or offered under Clause 14 or any other
matter relating to such security;
|
|
(d)
|
any
step taken by the Lender concerned with a view to the protection, exercise
or enforcement of any right or Security Interest created by a Finance
Document or for any similar
purpose.
|
There
shall be recoverable under paragraph (d) the full amount of all reasonable legal
expenses, whether or not such as would be allowed under rules of court or any
taxation or other procedure carried out under such rules.
|
19.4
|
Documentary
taxes. The Borrowers shall promptly pay any tax payable
on or by reference to any Finance Document, and shall, on the Lender's
demand, fully indemnify the Lender against any liabilities and expenses
resulting from any failure or delay by the Borrowers (or any of them) to
pay such a tax.
|
|
19.5
|
Certification of
amounts. A notice which is signed by two officers of the
Lender, which states that a specified amount, or aggregate amount, is due
to the Lender under this Clause 19 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall, save for manifest
error, be prima facie evidence that the amount, or aggregate amount, is
due.
|
|
20
|
INDEMNITIES
|
|
20.1
|
Indemnities regarding borrowing
and repayment of Loan. The Borrowers shall fully
indemnify the Lender on its demand in respect of all expenses, liabilities
and losses which are incurred by the Lender or which the Lender reasonably
and with due diligence estimates that it will incur, as a result of or in
connection with:
|
45
|
(a)
|
an
Advance not being borrowed on the date specified in the relevant Drawdown
Notice for any reason other than a default by the
Lender;
|
|
(b)
|
the
receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant
period;
|
|
(c)
|
any
failure (for whatever reason) by the Borrowers to make payment of any
amount due under a Finance Document on the due date or, if so payable, on
demand (after giving credit for any default interest paid by the Borrowers
on the amount concerned under Clause
6);
|
|
(d)
|
the
occurrence and/or continuance of an Event of Default or a Potential Event
of Default and/or the acceleration of repayment of the Loan under Clause
18;
|
|
|
and
in respect of any tax (other than tax on its overall net income) for which
the Lender is liable in connection with any amount paid or payable to the
Lender (whether for its own account or otherwise) under any Finance
Document.
|
|
20.2
|
Breakage
costs. Without limiting its generality, Clause 20.1
covers any liability, expense or loss incurred by the
Lender:
|
|
(a)
|
in
liquidating or employing deposits from third parties acquired or arranged
to fund or maintain all or any part of the Loan and/or any overdue amount
(or an aggregate amount which includes the Loan or any overdue amount);
and
|
|
(b)
|
in
terminating, or otherwise in connection with, any interest and/or currency
swap or any other transaction entered into (whether with another legal
entity or with another office or department of the Lender) to hedge any
exposure arising under this Agreement or that part which the Lender
determines is fairly attributable to this Agreement of the amount of the
liabilities, expenses or losses (including losses of prospective profits)
incurred by it in terminating, or otherwise in connection with, a number
of transactions of which this Agreement is
one.
|
|
20.3
|
Miscellaneous
indemnities. The Borrowers shall fully indemnify the
Lender in respect of all claims, demands, proceedings, liabilities, taxes,
losses and expenses of every kind (“liability items”) which
may be made or brought against, or incurred by, the Lender, in any
country, in relation to:
|
|
(a)
|
any
action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by the Lender or by any receiver appointed under
a Finance Document;
|
|
(b)
|
any
other event, matter or question which occurs or arises at any time during
the Security Period and which has any connection with, or any bearing on,
any Finance Document, any payment or other transaction relating to a
Finance Document or any asset covered (or previously covered) by a
Security Interest created (or intended to be created) by a Finance
Document;
|
other
than liability items which are shown to have been caused by the gross negligence
or the wilful misconduct of the Lender's own
officers or employees.
Without
prejudice to its generality, this Clause 20.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code, the ISPS Code or any
Environmental Law.
46
|
20.4
|
Currency
indemnity. If any sum due from any Borrower or any
Security Party to the Lender under a Finance Document or under any order
or judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid
(the “Contractual
Currency”) into another currency (the “Payment Currency”) for
the purpose of:
|
|
(a)
|
making
or lodging any claim or proof against any Borrower or any Security Party,
whether in its liquidation, any arrangement involving it or otherwise;
or
|
|
(b)
|
obtaining
an order or judgment from any court or other tribunal;
or
|
|
(c)
|
enforcing
any such order or judgment;
|
the
Borrowers shall indemnify the Lender against
the loss arising when the amount of the payment actually received by the Lender
is converted at the available rate of exchange into the Contractual
Currency.
In
this Clause 20.5, the “available rate of exchange”
means the rate at which the Lender is able
at the opening of business (London time) on the Business Day after it receives
the sum concerned to purchase the Contractual Currency with the Payment
Currency.
This
Clause 20.5 creates a separate liability of the Borrowers which is distinct from
its other liabilities under the Finance Documents and which shall not be merged
in any judgment or order relating to those other liabilities.
|
20.5
|
Application to Master
Agreement. For the avoidance of doubt, Clause 20.4 does
not apply in respect of sums due from the Borrowers to the Lender under or
in connection with the Master Agreement as to which sums the provisions of
section 8(c) (Contractual Currency) of the Master Agreement shall
apply.
|
|
20.6
|
Certification of
amounts. A notice which is signed by an officer of the
Lender, which states that a specified amount, or aggregate amount, is due
to the Lender under this Clause 20 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is
due.
|
|
21
|
NO
SET-OFF OR TAX DEDUCTION
|
|
21.1
|
No
deductions. All amounts due from the Borrowers under a
Finance Document shall be paid:
|
|
(a)
|
without
any form of set-off, cross-claim or condition;
and
|
|
(b)
|
free
and clear of any tax deduction except a tax deduction which a Borrower is
required by law to make.
|
|
21.2
|
Grossing-up for
taxes. If a Borrower is required by law to make a tax
deduction from any payment:
|
|
(a)
|
that
Borrower shall notify the Lender as soon as it becomes aware of the
requirement;
|
|
(b)
|
that
Borrower shall pay the tax deducted to the appropriate taxation authority
promptly, and in any event before any fine or penalty
arises;
|
47
|
(c)
|
the
amount due in respect of the payment shall be increased by the amount
necessary to ensure that the Lender receives and retains (free from any
liability relating to the tax deduction) a net amount which, after the tax
deduction, is equal to the full amount which it would otherwise have
received.
|
|
21.3
|
Evidence of payment of
taxes. Within 1 month after making any tax deduction,
the Borrower concerned shall deliver to the Lender documentary evidence
satisfactory to the Lender that the tax had been paid to the appropriate
taxation authority.
|
|
21.4
|
Exclusion of tax on overall net
income. In this Clause 21 “tax deduction” means any
deduction or withholding for or on account of any present or future tax
except tax on the Lender's overall net
income.
|
|
21.5
|
Application to Master
Agreement. For the avoidance of doubt, Clause 21 does
not apply in respect of sums due from the Borrowers to the Lender under or
in connection with the Master Agreement as to which sums the provisions of
section 2(d) (Deduction or Withholding for Tax) of the Master Agreement
shall apply.
|
|
22
|
ILLEGALITY,
ETC
|
|
22.1
|
Illegality. This
Clause 22 applies if the Lender notifies the Borrowers that it has become,
or will with effect from a specified date,
become:
|
|
(a)
|
unlawful
or prohibited as a result of the introduction of a new law, an amendment
to an existing law or a change in the manner in which an existing law is
or will be interpreted or applied;
or
|
|
(b)
|
contrary
to, or inconsistent with, any
regulation,
|
|
|
for
the Lender to maintain or give effect to any of its obligations under this
Agreement in the manner contemplated by this
Agreement.
|
|
22.2
|
Prepayment; termination of
Commitment. On the Lender notifying the Borrowers under
Clause 22.1, the Commitment shall terminate; and thereupon or, if later,
on the date specified in the Lender's notice under Clause 22.1 as the date
on which the notified event would become effective the Borrowers shall
prepay the Loan in accordance with Clause
7.
|
|
23
|
INCREASED
COSTS
|
|
23.1
|
Increased
costs. This Clause 23 applies if the Lender notifies the
Borrowers that it considers that as a result
of:
|
|
(a)
|
the
introduction or alteration after the date of this Agreement of a law or an
alteration after the date of this Agreement in the manner in which a law
is interpreted or applied (disregarding any effect which relates to the
application to payments under this Agreement of a tax on the Lender's
overall net income); or
|
|
(b)
|
the
effect of complying with any regulation (including any which relates to
capital adequacy or liquidity controls or which affects the manner in
which the Lender allocates capital resources to its obligations under this
Agreement) which is introduced, or altered, or the interpretation or
application of which is altered, after the date of this
Agreement,
|
48
|
|
is
that the Lender (or a parent company of it) has incurred or will incur an
“increased cost”, that is to say,:
|
|
|
(i)
|
an
additional or increased cost incurred as a result of, or in connection
with, the Lender having entered into, or being a party to, this Agreement
or having taken an assignment of rights under this Agreement, of funding
or maintaining the Loan or performing its obligations under this
Agreement, or of having outstanding all or any part of the Loan or other
unpaid sums; or
|
|
|
(ii)
|
a
reduction in the amount of any payment to the Lender under this Agreement
or in the effective return which such a payment represents to the Lender
or on its capital;
|
|
|
(iii)
|
an
additional or increased cost of funding all or maintaining all or any of
the advances comprised in a class of advances formed by or including the
Loan or (as the case may require) the proportion of that cost attributable
to the Loan; or
|
|
|
(iv)
|
a
liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Lender under this
Agreement;
|
but
not an item attributable to a change in the rate of tax on the overall net
income of the Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 20.1 or by Clause 21.
For
the purposes of this Clause 23.1 the Lender may in good faith allocate or spread
costs and/or losses among its assets and liabilities (or any class thereof) on
such basis as it considers appropriate.
|
23.2
|
Payment of increased
costs. The Borrowers shall pay to the Lender, on its
demand, for the account of the Lender the amounts which the Lender from
time to time notifies the Borrowers that it has specified to be necessary
to compensate the Lender for the increased
cost.
|
|
23.3
|
Notice of
prepayment. If the Borrowers are not willing to continue
to compensate the Lender for the increased cost under Clause 23.2, the
Borrowers may give the Lender not less than 14 days' notice of their
intention to prepay the Loan at the end of an Interest
Period.
|
|
23.4
|
Prepayment; termination of
Commitment. A notice under Clause 23.3 shall be
irrevocable and on the date specified in its notice of intended
prepayment, the Borrowers shall prepay (without premium or penalty) the
Loan, together with accrued interest thereon at the applicable rate plus
the applicable Margin plus the Mandatory Costs (if
any).
|
|
23.5
|
Application of
prepayment. Clause 7 shall apply in relation to the
prepayment.
|
|
24
|
SET-OFF
|
|
24.1
|
Application of credit
balances. The Lender may without prior
notice:
|
|
(a)
|
apply
any balance (whether or not then due) which at any time stands to the
credit of any account in the name of the Borrowers or any of them at any
office in any country of the Lender in or towards satisfaction of any sum
then due from the Borrowers or any of them to the Lender under any of the
Finance Documents; and
|
|
(b)
|
for
that purpose:
|
49
|
|
(i)
|
break,
or alter the maturity of, all or any part of a deposit of the Borrowers or
any of them;
|
|
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance into
Dollars;
|
|
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance which the Lender considers
appropriate.
|
|
24.2
|
Existing rights
unaffected. The Lender shall not be obliged to exercise
any of its rights under Clause 24.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which it is entitled
(whether under the general law or any
document).
|
|
24.3
|
No Security
Interest. This Clause 24 gives the Lender a contractual
right of set off only, and does not create any equitable charge or other
Security Interest over any credit balance of the Borrowers or any of
them.
|
|
25
|
TRANSFERS
AND CHANGES IN LENDING OFFICES
|
|
25.1
|
Transfer by the
Borrowers. No Borrower may, without the consent of the
Lender:
|
|
(a)
|
transfer
any of its rights or obligations under any Finance Document;
or
|
|
(b)
|
enter
into any merger, de-merger or other reorganisation, or carry out any other
act, as a result of which any of its rights or liabilities would vest in,
or pass to, another person.
|
|
25.2
|
Assignment by Lender.
The Lender may assign all or any of the rights and interests which
it has under or by virtue of the Finance Documents without the consent of
the Borrowers.
|
|
25.3
|
Rights of
assignee. In respect of any breach
of a warranty, undertaking, condition or other provision of a
Finance Document, or any misrepresentation made in or in connection with a
Finance Document, a direct of indirect assignee of any of the Lender’s
rights or interests under or by virtue of the Finance Documents shall be
entitled to recover damages by reference to the loss incurred by that
assignee as a result of the breach or misrepresentation irrespective of
whether the Lender would have incurred a loss of that kind or
amount.
|
|
25.4
|
Sub-participation; subrogation
assignment. The Lender may sub-participate all or any
part of its rights and/or obligations under or in connection with the
Finance Documents, without the consent of, or any notice to, the Borrowers
or any Security Party; and the Lender may assign, in any manner and terms
agreed by it, all or any part of those rights to an insurer or surety who
has become subrogated to it.
|
|
25.5
|
Disclosure of
information. The Lender may disclose to a potential
assignee or sub-participant any information which the Lender has received
in relation to the Borrowers, any Security Party or their affairs under or
in connection with any Finance Document, provided that the potential
assignee or sub-participant shall first have executed a confidentiality
agreement in relation thereto.
|
|
25.6
|
Change of lending
office. The Lender may change its lending office by
giving notice to the Borrowers and the change shall become effective on
the later of:
|
50
|
(a)
|
the
date on which the Borrowers receive the notice;
and
|
|
(b)
|
the
date, if any, specified in the notice as the date on which the change will
come into effect.
|
|
26
|
VARIATIONS
AND WAIVERS
|
|
26.1
|
Variations, waivers etc. by
Lender. Subject to Clause 26.2, a document shall be
effective to vary, waive, suspend or limit any provision of a Finance
Document, or the Lender’s rights or remedies under such a provision or the
general law, only if the document is signed, or specifically agreed to by
fax or telex, by the Borrowers, by the Lender, and, if the document
relates to a Finance Document to which a Security Party is party, by that
Security Party.
|
|
26.2
|
Exclusion of other or implied
variations. Except for a document which satisfies the
requirements of Clauses 26.1 and 26.2, no document, and no act, course of
conduct, failure or neglect to act, delay or acquiescence on the part of
the Lender (or any person acting on behalf of it) shall result in the
Lender (or any person acting on behalf of it) being taken to have varied,
waived, suspended or limited, or being precluded (permanently or
temporarily) from enforcing, relying on or
exercising:
|
|
(a)
|
a
provision of this Agreement or another Finance Document;
or
|
|
(b)
|
an
Event of Default; or
|
|
(c)
|
a
breach by a Borrower or a Security Party of an obligation under a Finance
Document or the general law; or
|
|
(d)
|
any
right or remedy conferred by any Finance Document or by the general
law
|
and
there shall not be implied into any Finance Document any term or condition
requiring any such provision to be enforced, or such right or remedy to be
exercised, within a certain or reasonable time
|
27
|
NOTICES
|
|
27.1
|
General. Unless
otherwise specifically provided, any notice under or in connection with
any Finance Document shall be given by letter or fax; and references in
the Finance Documents to written notices, notices in writing and notices
signed by particular persons shall be construed
accordingly.
|
|
27.2
|
Addresses for
communications. A notice shall be
sent:
|
|
(a)
|
to
a Borrower:
|
c/o
|
Omega
Navigation Enterprises Inc.
|
|
00
Xxxxxxx Xxxxxx
|
|||
|
Xxxxxxxx
|
|||
|
Xxxxxxx
|
|||
|
Xxxxxx
|
|||
|
Fax
No: +30 210
[ ]
|
|||
|
Attn:
Xxxxxxxxx Xxxxxxxxxxx, Executive Vice
President
|
|||
51
|
(b)
|
to
the Lender:
|
The
Governor and Company of the Bank of Scotland
|
|
Xxxxxxxx
Xxxxx
|
||
|
0
Xxxxxxxx Xxxxxx
|
||
|
Xxxxxxxxx
XX00 0XX
|
||
|
Xxxxxxxx
|
||
|
Fax
No: x00 000 000 0000
|
or
to such other address as the relevant party may notify the Borrowers, the Lender
and the Security Parties.
|
27.3
|
Effective date of
notices. Subject to Clauses 27.4 and
27.5:
|
|
(a)
|
a
notice which is delivered personally or posted shall be deemed to be
served, and shall take effect, at the time when it is
delivered;
|
|
(b)
|
a
notice which is sent by fax shall be deemed to be served, and shall take
effect, 2 hours after its transmission is
completed.
|
|
27.4
|
Service outside business
hours. However, if under Clause 27.3 a notice would be
deemed to be served:
|
|
(a)
|
on
a day which is not a business day in the place of receipt;
or
|
|
(b)
|
on
such a business day, but after 5 p.m. local
time;
|
|
|
the
notice shall (subject to Clause 27.5) be deemed to be served, and shall
take effect, at 9 a.m. on the next day which is such a business
day.
|
|
27.5
|
Illegible
notices. Clauses 27.3 and 27.4 do not apply if the
recipient of a notice notifies the sender within one hour after the time
at which the notice would otherwise be deemed to be served that the notice
has been received in a form which is illegible in a material
respect.
|
|
27.6
|
Valid
notices. A notice under or in connection with a Finance
Document shall not be invalid by reason that its contents or the manner of
serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served
if:
|
|
(a)
|
the
failure to serve it in accordance with the requirements of this Agreement
or other Finance Document, as the case may be, has not caused any party to
suffer any significant loss or
prejudice; or
|
|
(b)
|
in
the case of incorrect and/or incomplete contents, it should have been
reasonably clear to the party on which the notice was served what the
correct or missing particulars should have
been.
|
|
27.7
|
English
language. Any notice under or in connection with a
Finance Document shall be in
English.
|
|
27.8
|
Meaning of
“notice”. In this Clause “notice” includes any demand,
consent, authorisation, approval, instruction, waiver or other
communication.
|
52
|
28
|
JOINT
AND SEVERAL LIABILITY
|
|
28.1
|
General. All
liabilities and obligations of the Borrowers under this Agreement shall,
whether expressed to be so or not, be several and, if and to the extent
consistent with Clause 28.2, joint.
|
|
28.2
|
No impairment of Borrowers’
obligations. The liabilities and obligations of a
Borrower shall not be impaired by:
|
|
(a)
|
this
Agreement being or later becoming void, unenforceable or illegal as
regards any other Borrower;
|
|
(b)
|
the
Lender entering into any rescheduling, refinancing or other arrangement of
any kind with any other Borrower;
|
|
(c)
|
the
Lender releasing any other Borrower or any Security Interest created by a
Finance Document; or
|
|
(d)
|
any
combination of the foregoing.
|
|
28.3
|
Principal
debtors. Each Borrower declares that it is and will,
throughout the Security Period, remain a principal debtor for all amounts
owing under this Agreement and the Finance Documents and no Borrower shall
in any circumstances be construed to be a surety for the obligations of
any other Borrower under this
Agreement.
|
|
28.4
|
Subordination. Subject
to Clause 28.5, during the Security Period, no Borrower
shall:
|
|
(a)
|
claim
any amount which may be due to it from any other Borrower whether in
respect of a payment made, or matter arising out of, this Agreement or any
Finance Document, or any matter unconnected with this Agreement or any
Finance Document; or
|
|
(b)
|
take
or enforce any form of security from any other Borrower for such an
amount, or in any other way seek to have recourse in respect of such an
amount against any asset of any other Borrower;
or
|
|
(c)
|
set
off such an amount against any sum due from it to any other Borrower;
or
|
|
(d)
|
prove
or claim for such an amount in any liquidation, administration,
arrangement or similar procedure involving any other Borrower or other
Security Party; or
|
|
(e)
|
exercise
or assert any combination of the
foregoing.
|
|
28.5
|
Borrower's required
action. If during the Security Period, the Lender, by
notice to a Borrower, requires it to take any action referred to in
paragraphs (a) to (d) of Clause 28.4, in relation to any other Borrower,
that Borrower shall take that action as soon as practicable after
receiving the Lender's notice.
|
|
29
|
SUPPLEMENTAL
|
|
29.1
|
Rights cumulative,
non-exclusive. The rights and remedies which the Finance
Documents give to the Lender are:
|
53
|
(a)
|
cumulative;
|
|
(b)
|
may
be exercised as often as appears expedient;
and
|
|
(c)
|
shall
not, unless a Finance Document explicitly and specifically states so, be
taken to exclude or limit any right or remedy conferred by any
law.
|
|
29.2
|
Severability of
provisions. If any provision of a Finance Document is or
subsequently becomes void, unenforceable or illegal, that shall not affect
the validity, enforceability or legality of the other provisions of that
Finance Document or of the provisions of any other Finance
Document.
|
|
29.3
|
Third party
rights. A person who is not a party to this Agreement
has no right under the Contracts (Rights of Third Parties) Xxx 0000 to
enforce or to enjoy the benefit of any term of this
Agreement.
|
|
29.4
|
Counterparts. A
Finance Document may be executed in any number of
counterparts.
|
|
30
|
LAW
AND JURISDICTION
|
|
30.1
|
English
law. This Agreement shall be governed by, and construed
in accordance with, English law.
|
|
30.2
|
Exclusive English
jurisdiction. Subject to Clause 30.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this
Agreement.
|
|
30.3
|
Choice of forum for the
exclusive benefit of the Lender. Clause 30.2 is for the
exclusive benefit of the Lender which reserves the
right:
|
|
(a)
|
to
commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter;
and
|
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
|
|
|
No
Borrower shall commence any proceedings in any country other than England
in relation to a matter which arises out of or in connection with this
Agreement.
|
|
30.4
|
Process
agent. Each Borrower irrevocably appoints Hill Xxxxxxxxx
LLP at their office for the time being, presently at Xxxxxxxx Xxxxx,
Xxxx’x Xxxxx, Xxxxxx XX0X 0XX, Xxxxxxx (attn: Electra Panayotopoulos), to
act as its agent to receive and accept on its behalf any process or other
document relating to any proceedings in the English courts which are
connected with this Agreement.
|
|
30.5
|
Lender’s rights
unaffected. Nothing in this Clause 30 shall exclude or
limit any right which the Lender may have (whether under the law of any
country, an international convention or otherwise) with regard to the
bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
|
|
30.6
|
Meaning of
“proceedings”. In this Clause 30, “proceedings” means
proceedings of any kind, including an application for a provisional or
protective measure.
|
AS WITNESS the hands of the
duly authorised officers or attorneys of the parties the day and year first
before written.
54
SCHEDULE
1
DRAWDOWN
NOTICE
To: The
Governor and Company of the Bank of Scotland
Pentland
House
0
Xxxxxxxx Xxxxxx
Xxxxxxxxx
XX00 0XX
Xxxxxxxx
Attention:
Loans
Administration 2007
DRAWDOWN
NOTICE
|
1
|
We
refer to the loan agreement (the “Loan Agreement”)
dated 2007
and made between (i) ourselves as Borrowers and (2) yourselves as Lender
in connection with a facility of up to US$70,000,000. Terms defined in the
Loan Agreement have their defined meanings when used in this Drawdown
Notice.
|
|
2
|
We
request to borrow an Advance as
follows:
|
|
|
(a)
|
Amount
of Advance:
US$[ ];
|
|
|
(b)
|
Drawdown
Date: [ ];
|
|
|
(c)
|
Duration
of the first Interest Period shall be
[ ]
months;
|
|
|
(d)
|
Payment
instructions : account of
[ ]
and numbered
[ ]
with
[ ]
of
[ ].
|
|
3
|
We
represent and warrant that:
|
|
|
(a)
|
the
representations and warranties in Clause 9 of the Loan Agreement would
remain true and not misleading if repeated on the date of this notice with
reference to the circumstances now
existing;
|
|
|
(b)
|
no
Event of Default or Potential Event of Default has occurred or will result
from the borrowing of the Loan.
|
|
4
|
This
notice cannot be revoked without the prior consent of the
Lender.
|
|
5
|
[We
authorise you to deduct from the Advance the amount of all accrued
arrangement and commitment fees payable pursuant to Clause
19.1].
|
___________________________________________
Attorney-in-Fact
for
and on behalf of
55
TYLER
NAVIGATION INC.
and
PASEDENA
NAVIGATION INC.
56
SCHEDULE
2
CONDITION
PRECEDENT DOCUMENTS
In
this Schedule 2 “Relevant
Ship” means, in relation to a Tranche, the Ship in respect of which an
Advance is being drawn.
PART
A
The
following are the documents referred to in Clause 8.1(a).
|
1.
|
A
duly executed original of each Predelivery Security Assignment (and all
notices and acknowledgements required thereunder) and of the Corporate
Guarantee.
|
|
2.
|
Copies
of the certificate of incorporation and constitutional documents of each
Borrower and of the Corporate
Guarantor.
|
|
3.
|
Copies
of resolutions of the directors and shareholders of each Borrower and of
the directors of the Corporate Guarantor, authorising the execution of
each of the Finance Documents referred to at 1 above to which that
Borrower or the Corporate Guarantor is a party and, in the case of a
Borrower, authorising named officers to give the Drawdown Notices and
other notices under this Agreement and ratifying the execution of the
Shipbuilding Contract to which it is a
party.
|
|
4.
|
The
original of any power of attorney under which any Finance Document
referred to at 1 above is executed on behalf of a Borrower or the
Corporate Guarantor.
|
|
5.
|
Copies
of all consents which any Borrower or any Security Party requires to enter
into, or make any payment under, any Finance Document or the Shipbuilding
Contract to which it is a party.
|
|
6.
|
Copies
of each of the Shipbuilding Contracts and of all documents signed or
issued by the Borrowers or the Builder (or any of them) under or in
connection with them, together with evidence of authorisation with respect
to the execution thereof by the
Builder.
|
|
7.
|
Originals
of each of the Refund Guarantees, together with evidence of authorisation
with respect to the execution thereof by the Refund
Guarantor.
|
|
8.
|
All
documentation required by the Lender in respect of any Borrower or
Security Party pursuant to the Lender’s “Know your customer” requirements,
together with such other documents or evidence as the Lender may
reasonably require with respect to money laundering
regulations.
|
|
9.
|
Evidence
satisfactory to the Lender in its sole discretion regarding the ownership
structure with respect to the
Ships.
|
|
10.
|
Documentary
evidence that the agent for service of process named in Clause 30 has
accepted its appointment.
|
|
11.
|
Favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of the Xxxxxxxx Islands and such other relevant
jurisdictions as the Lender may
require.
|
|
12.
|
If
the Lender so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Lender.
|
57
PART
B
The
following are the documents referred to in Clause 8.1(b).
|
1.
|
A
duly receipted invoice from the Builder with respect to the payment by the
relevant Borrower of the first instalment due under Article X2(a) of the
Shipbuilding Contract relating to the Relevant
Ship.
|
PART
C
The
following are the documents referred to in Clause 8.1(c).
|
1.
|
An
invoice from the Builder showing all sums due and payable to the Builder
pursuant to Article X2(b) of the Shipbuilding Contract relating to the
Relevant Ship.
|
PART
D
The
following are the documents referred to in Clause 8.1(d):
|
1.
|
An
invoice from the Builder showing all sums due and payable to the Builder
pursuant to Article X2(c) of the relevant Shipbuilding Contract upon
commencement of steel cutting for the Relevant
Ship.
|
|
2.
|
A
stage certificate issued by the Builder and countersigned by the
classification society approved by the Lender and in a form acceptable to
the Lender, confirming that steel cutting of the Relevant Ship has been
carried out to the satisfaction of such classification
society.
|
PART
E
The
following are the documents referred to in Clause 8.1(e):
|
1.
|
An
invoice from the Builder showing all sums due and payable to the Builder
pursuant to Article X2(d) of the relevant Shipbuilding Contract upon
keel-laying of the Relevant Ship.
|
|
2.
|
Written
confirmation from the relevant Borrower and the Approved Manager (if
appointed) that they have irrevocably accepted and approved the building
works which have been completed on the Relevant Ship up to the date of her
keel-laying.
|
|
3.
|
A
stage certificate issued by the Builder and countersigned by the
classification society approved by the Lender and in a form acceptable to
the Lender, confirming that keel-laying of the Relevant Ship has been
carried out to the satisfaction of such classification
society.
|
|
|
PART
F
|
|
|
The
following are the documents referred to in Clause
8.1(f):
|
|
1.
|
An
invoice from the Builder showing all sums due and payable to the Builder
pursuant to Article X2(e) of the relevant Shipbuilding Contract upon
launching of the Relevant Ship.
|
|
2.
|
Written
confirmation from the relevant Borrower and the Approved Manager (if
appointed) that they have irrevocably accepted and approved the building
works which have been completed on the Relevant Ship up to the date of her
launching.
|
58
|
3.
|
A
stage certificate issued by the Builder and countersigned by the
classification society approved by the Lender and in a form acceptable to
the Lender, confirming that launching of the Relevant Ship has been
carried out to the satisfaction of such classification
society.
|
PART
G
The
following are the documents referred to in Clause 8.1(g):
|
1.
|
A
duly executed original of the Mortgage and the General Assignment (and of
each document to be delivered under each of them) in respect of the
Relevant Ship, the Accounts Pledge, the Master Agreement and the Master
Agreement Security Deed.
|
|
2.
|
Documentary
evidence that:
|
|
|
(a)
|
the
Relevant Ship is in all respects ready to be delivered by the Builder to,
and accepted by, the relevant Borrower under the relevant Shipbuilding
Contract subject only to payment of the delivery instalment and that upon
such payment the builder’s certificate, xxxx of sale and other documents
to be delivered by the Builder to the relevant Borrower upon delivery of
the Relevant Ship to that Borrower will be so
delivered;
|
|
|
(b)
|
the
Relevant Ship will on its Delivery Date be definitively and permanently
registered in the name of the relevant Borrower under the Approved
Flag;
|
|
|
(c)
|
the
Relevant Ship will on its Delivery Date be in the absolute and
unencumbered ownership of the relevant Borrower save as contemplated by
the Finance Documents;
|
|
|
(d)
|
the
Relevant Ship will on its Delivery Date be classed with the highest
available class with Lloyds Register of Ships (or equivalent) free of all
overdue recommendations and conditions of such Classification
Society;
|
|
|
(e)
|
the
Mortgage in respect of the Relevant Ship has been executed by the relevant
Borrower and has been, or will immediately following drawdown of the
Delivery Advance for such Ship be, registered against the Relevant Ship as
a valid first priority ship mortgage in accordance with the laws of the
Approved Flag State; and
|
|
|
(f)
|
the
Relevant Ship will on its Delivery Date be insured in accordance with the
provisions of this Agreement and all requirements therein in respect of
insurances have been complied with.
|
|
3.
|
Documents
establishing that the Relevant Ship will, as from its Delivery Date, be
managed by the Approved Manager on terms acceptable to the Lender,
together with:
|
|
|
(a)
|
the
Approved Manager’s Undertaking in respect of the Relevant Ship, together
with a copy of the ship management agreement for the Relevant
Ship;
|
|
|
(b)
|
copies
of the Document of Compliance and Safety Management Certificate and
ISSC;
|
|
|
(c)
|
copies
of such other ISM Code or ISPS Code documentation as the Lender may by
written notice to the relevant Borrower have requested not later than 2
days before the relevant Drawdown Date, certified as true and complete in
all material respects by the relevant Borrower and the Approved
Manager.
|
59
|
4.
|
Valuations
of the Relevant Ship addressed to the Lender, prepared in accordance with
Clause 14 and in a form satisfactory to the
Lender.
|
|
5.
|
The
originals of any mandates or other documents required in connection with
the opening or operation of the Earnings Accounts and the Retention
Account.
|
|
6.
|
A
favourable opinion from an independent insurance consultant appointed by
the Lender on such matters relating to the insurances for the Relevant
Ship as the Lender may require, and at the cost and expense of the
Borrowers.
|
|
7.
|
A
certified true copy of any time charter for the Relevant Ship in excess of
twelve months, in a form and substance and with a charterer acceptable to
the Lender in its sole discretion.
|
|
8.
|
Satisfactory,
in the opinion of the Lender, Approved Flag State and classification
society records as the Lender may request in respect of the Relevant
Ship.
|
|
9.
|
Evidence
satisfactory to the Lender that there has been no material adverse change
in the financial condition of any Borrower or the Corporate Guarantor
which could materially affect the Lender’s agreement to make available the
Delivery Advance relating to the Relevant
Ship.
|
Every
copy document delivered under this Schedule shall be certified as a true and up
to date copy by a director or the secretary (or equivalent officer) of a
Borrower.
60
SCHEDULE
3
AMOUNT
OF EACH INSTALMENT UNDER EACH SHIPBUILDING CONTRACT
|
Hull
2189
|
Hull
2190
|
|||||||
|
First
Instalment
(already
paid)
|
$ | 4,423,500 | $ | 4,423,500 | ||||
|
Second
Instalment
(six
months after Contract signing)
|
$ | 4,423,500 | $ | 4,423,500 | ||||
|
Third
Instalment
(on
steel cutting)
|
$ | 8,847,000 | $ | 8,847,000 | ||||
|
Fourth
Instalment
(on
keel-laying)
|
$ | 8,847,000 | $ | 8,847,000 | ||||
|
Fifth
Instalment
(on
launching)
|
$ | 8,847,000 | $ | 8,847,000 | ||||
|
Delivery
Instalment
|
$ | 8,847,000 | $ | 8,847,000 | ||||
|
Total
|
$ | 44,235,000 | $ | 44,235,000 | ||||
61
SCHEDULE
4
MANDATORY
COSTS
|
1.
|
Mandatory
Costs are an addition to the interest rate to compensate the Lender for
the cost of compliance with (a) the requirements of the Bank of England
and/or the Financial Services Authority (or, in either case, any other
authority which replaces all or any of its functions) or (b) the
requirements of the European Central
Bank.
|
|
2.
|
On
the first day of each Interest Period (or as soon as possible thereafter)
the Lender shall calculate, as a percentage rate, a rate (the “Additional
Cost Rate”) in accordance with the paragraphs set out
below.
|
|
3.
|
If
the Lender is lending from an office in a Participating Member State, the
Additional Cost Rate will be the percentage certified by the Lender to be
its reasonable determination of the cost of complying with the minimum
reserve requirements of the European Central Bank in respect of loans made
from that office.
|
|
4.
|
If
the Lender is lending from an office in the United Kingdom the Additional
Cost Rate will be calculated by the Lender as
follows:
|
|
|
(a)
|
if
the Loan is denominated in pounds
sterling:
|
|
AB
+ C ( B - D) + E x 0.01
|
per cent. per annum
|
|
|
100
- (A + C)
|
|
|
(b)
|
if
the Loan is denominated in any currency other than pounds
sterling:
|
|
E
x 0.01
|
per cent. per annum
|
|
|
300
|
Where:
|
|
A
|
is
the percentage of Eligible Liabilities (assuming these to be in excess of
any stated minimum) which the Lender is from time to time required to
maintain as an interest free cash ratio deposit with the Bank of England
to comply with cash ratio
requirements.
|
|
|
B
|
is
the percentage rate of interest (excluding the applicable Margin and the
Mandatory Costs and any additional rate of interest specified in Clause 6)
payable for the relevant Interest Period on the
Loan.
|
|
|
C
|
is
the percentage (if any) of Eligible Liabilities which the Lender is
required from time to time to maintain as interest bearing Special
Deposits with the Bank of England.
|
|
|
D
|
is
the percentage rate per annum payable by the Bank of England to the Lender
on interest bearing Special
Deposits.
|
|
|
E
|
is
designed to compensate the Lender for amounts payable under the Fees Rules
and is calculated by the Lender as being the average of the Fee Tariffs
applicable to the Lender for that financial year and expressed in pounds
per £1,000,000 of the Tariff Base of the
Lender.
|
62
|
5.
|
For
the purposes of this Schedule:
|
|
|
(a)
|
“Eligible Liabilities”
and “Special
Deposits” have the meanings given to them from time to time under
or pursuant to the Bank of England Act 1998 or (as may be appropriate) by
the Bank of England;
|
|
|
(b)
|
“Fees Rules” means the
rules on periodic fees contained in the FSA Supervision Manual or such
other law or regulation as may be in force from time to time in respect of
the payment of fees fro the acceptance of
deposits;
|
|
|
(c)
|
“Fee Tariffs” means the
fee tariffs specified in the Fees Rules under the activity group A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required
pursuant to the Fees Rules but taking into account any applicable discount
rate); and
|
|
|
(d)
|
“Tariff Base” has the
meaning given to it in, and will be calculated in accordance with, the
Fees Rules.
|
|
6.
|
In
application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5 per cent. will be included in the formula
as 5 and not as 0.05). A negative result obtained by subtracting D from B
shall be taken as zero. The resulting figures shall be rounded to four
decimal places.
|
|
7.
|
Any
determination by the Lender pursuant to this Schedule in relation to a
formula, the Mandatory Costs, an Additional Cost Rate or any amount
payable to the Lender shall, in the absence of manifest error, be
conclusive and binding on the Lender and the
Borrowers.
|
|
8.
|
The
Lender may from time to time, after consultation with the Borrowers,
determine any amendments which are required to be made to this Schedule in
order to comply with any change in law, regulation or any requirements
from time to time imposed by the Bank of England, the Financial Services
Authority or the European Central Bank (or, in any case, any other
authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and
binding on the Lender and the
Borrowers.
|
63
EXECUTION
PAGE
|
BORROWERS
|
||
|
SIGNED
by
|
)
|
|
|
for
and on behalf of
|
)
|
|
|
TYLER
NAVIGATION INC.
|
)
|
|
|
in
the presence of:
|
)
|
|
|
SIGNED
by
|
)
|
|
|
for
and on behalf of
|
)
|
|
|
PASEDENA
NAVIGATION INC.
|
)
|
|
|
in
the presence of:
|
)
|
|
|
LENDER
|
||
|
SIGNED
by
|
)
|
|
|
for
and on behalf of
|
)
|
|
|
THE
GOVERNOR AND
|
)
|
|
|
COMPANY
OF THE BANK
|
)
|
|
|
OF
SCOTLAND
|
)
|
|
|
in
the presence of:
|
)
|
SK
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