MULTI-CURRENCY REDUCING REVOLVING CREDIT FACILITY AGREEMENT
EXHIBIT
10.27
DATED
January 11, 2008
EFRAGEL
SHIPPING CORPORATION
(as
Borrower)
-
and -
DnB
NOR BANK ASA
(as
Lender)
US$42,000,000
SECURED
MULTI-CURRENCY
REDUCING REVOLVING
CREDIT
FACILITY AGREEMENT
XXXXXXXXXX
XXXXXXX
Xxx
Xx. Xxxx’x Xxxxxxxxxx
Xxxxxx
XX0X SSH
Tel:
000 0000 0000
Fax:
000 0000 0000
Ref:
04.126
CONTENTS
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Page
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1
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Definitions
and Interpretation
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1
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2
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The
Loan and its Purpose
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11
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3
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Conditions
of Utilisation
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11
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4
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Advance
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13
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5
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Currency
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14
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6
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Repayment
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14
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7
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Prepayment
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15
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8
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Interest
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16
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9
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Indemnities
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19
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10
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Fees
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23
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11
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Security
and Application of Moneys
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23
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12
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Representations
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28
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13
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Undertakings
and Covenants
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31
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14
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Events
of Default
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38
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15
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Assignment
and Sub-Participation
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43
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16
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Set-Off
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43
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17
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Payments
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44
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18
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Notices
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45
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19
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Partial
Invalidity
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47
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20
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Remedies
and Waivers
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47
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21
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Miscellaneous
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47
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22
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Law
and Jurisdiction
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48
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| SCHEDULE 1: Conditions Precedent and Subsequent |
50
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Part
1: Conditions precedent
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50
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Part
II: Conditions subsequent
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54
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| SCHEDULE 2: Calculation of Mandatory Cost |
55
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| SCHEDULE 3: Form of Drawdown Notice |
58
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LOAN
AGREEMENT
Dated:
January 11, 2008
BETWEEN:
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(1)
|
EFRAGEL
SHIPPING CORPORATION,
a
company incorporated under the laws of the Republic of Liberia whose
registered office is at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (the
“Borrower”);
and
|
|
(2)
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DnB
NOR BANK ASA,
acting through its office at 00 Xx. Xxxxxxx’x Xxxx, Xxxxxx XX0X 0XX,
Xxxxxxx (the “Lender”).
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WHEREAS:
|
(A)
|
The
Borrower is the registered owner of the Vessel which is registered
under
the flag of Cyprus.
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|
(B)
|
The
Lender has agreed to advance to the Borrower a secured multi-currency
reducing revolving credit facility of up to forty two million Dollars
($42,000,000) to assist the Borrower in re-financing its Existing
Indebtedness and for its general working capital
purposes.
|
IT
IS AGREED
as
follows:
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1
|
Definitions
and Interpretation
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|
1.1
|
In
this Agreement:
|
“Accounts”
means
the Operating Account and the Cash Collateral Account.
“Account
Charge”
means
the deed of charge referred to in Clause 11.1.3.
“Administration”
has
the
meaning given to it in paragraph 1.1.3 of the ISM Code.
“Annex
VI”
means
Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the
International Convention for the Prevention of Pollution from Ships 1973 (as
modified in 1978 and 1997).
“Assignment”
means
the deed of assignment referred to in Clause 11.1.2.
1
“Availability
Termination Date”
means
three (3) months prior to the Final Maturity Date or such later date as the
Lender may in its discretion agree.
“Break
Costs”
means
all sums payable by the Borrower from time to time under Clause
9.3.
“Broker”
means
any one of Arrow Chartering (UK), Braemer Seascope Group, Clarksons PLC and
Fearnleys and “Brokers”
means
more than one of them.
“Business
Day”
means
a
day (other than a Saturday or Sunday) on which banks are open for general
business in New York and London and Tokyo (only if an amount in Japanese Yen
is
involved) and Zurich (only if an amount in Swiss Francs is involved) and any
other financial centre which the Lender may consider appropriate for the
operation of the provisions of this Agreement, and in the case of Euro, a day
on
which the Trans-European Automated Real Time Gross Settlement Express Transfer
Payment System (TARGET) is operating.
“Cash
Collateral Account”
means
the bank account to be opened (if and when required) in the name of the Borrower
with the Lender and designated “Efragel Shipping Corporation-Cash Collateral
Account”.
“Converted”
means
actually or notionally (as the case may require) converted by the Lender at
the
rate at which the Lender, in accordance with its usual practice, is able in
the
London Interbank market to purchase the Permitted Currency in which any part
of
the Loan is to be denominated with the Permitted Currency in which the Loan
is
then denominated, on the second Business Day before the value date for that
conversion pursuant to Clause 5, and the words “Convert”
and
“Conversion”
shall
be interpreted accordingly.
“Credit
Support Document”
means
any document described as such in the Master Agreement and, where the context
permits, any other document referred to in any Credit Support Document which
has
the effect of creating an Encumbrance in favour of the Lender.
“Credit
Support Provider”
means
any person (other than the Borrower) described as such in the Master
Agreement.
2
“Currency
of Account”
means,
in relation to any payment to be made to the Lender under a Finance Document,
the currency in which that payment is required to be made by the terms of that
Finance Document.
“Deed
of Covenants”
means
the deed of covenants referred to in Clause 11.1.1.
“Default”
means
an Event of Default or any event or circumstance specified in Clause 14.1 which
would (with the expiry of a grace period, the giving of notice, the making
of
any determination under the Finance Documents or any combination of any of
the
foregoing) be an Event of Default.
“DOC”
means,
in relation to the ISM Company, a valid Document of Compliance issued for the
ISM Company by the Administration under paragraph 13.2 of the ISM
Code.
“Dollars”
and
“$”
each
means available and freely transferable and convertible funds in lawful currency
of the United States of America.
“Drawdown
Date”
means
the date on which a Drawing is advanced under Clause 4.
“Drawdown
Notice”
means
a
notice substantially in the form set out in Schedule 3.
“Drawing”
means
any one amount advanced or to be advanced pursuant to a Drawdown Notice or,
where the context permits, the amount advanced and for the time being
outstanding and “Drawings”
means
more than one of them.
“Earnings”
means
all hires, freights, pool income and other sums payable to or for the account
of
the Borrower in respect of the Vessel including (without a limitation) all
remuneration for salvage and towage services, demurrage and detention moneys,
contributions in general average, compensation in respect of any requisition
for
hire, and damages and other payments (whether awarded by any court or arbitral
tribunal or by agreement or otherwise) for breach, termination or variation
of
any contract for the operation, employment or use of the Vessel.
3
“Encumbrance”
means
a
mortgage, charge, assignment, pledge, lien, or other security interest securing
any obligation of any person or any other agreement or arrangement having a
similar effect.
“Euro”
and
“€“
means
the single currency of the Participating Member States.
“Event
of Default”
means
any of the events or circumstances set out in Clause 14.1.
“Existing
Agreement”
means
the loan agreement dated 11 November 2004 as amended and supplemented by a
first
supplemental agreement 2 February 2006 each made between the Borrower and the
Lender pursuant to which the Bank has agreed, inter alia, to make available
to
the Borrower the Loan (as such term is defined in the Existing Agreement) upon
the terms and conditions therein contained.
“Existing
Indebtedness”
means
the Indebtedness (as such term is defined in the Existing Agreement) secured
over the Vessel.
“Facility
Period”
means
the period beginning on the date of this Agreement and ending on the date when
the whole of the Indebtedness has been paid in full and the Security Parties
have ceased to be under any further actual or contingent liability to the Lender
under or in connection with the Finance Documents.
“Final
Maturity Date”
means
the date falling ten (10) years from the date of this Agreement.
“Finance
Documents”
means
this Agreement, the Master Agreement, the Security Documents and any other
document designated as such by the Lender and the Borrower and “Finance
Document”
means
any one of them.
“Financial
Indebtedness”
means
any obligation for the payment or repayment of money, whether present or future,
actual or contingent, in respect of:
|
(a)
|
moneys
borrowed;
|
|
(b)
|
any
acceptance credit;
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4
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(c)
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any
bond, note, debenture, loan stock or similar
instrument;
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|
(d)
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any
finance or capital lease;
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(e)
|
receivables
sold or discounted (other than on a non-recourse basis);
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(f)
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deferred
payments for assets or services;
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(g)
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any
derivative transaction protecting against or benefiting from fluctuations
in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into
account);
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(h)
|
any
amount raised under any other transaction (including any forward
sale or
purchase agreement) having the commercial effect of a
borrowing;
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(i)
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any
counter-indemnity obligation in respect of a guarantee, indemnity,
bond,
standby or documentary letter of credit or any other instrument issued
by
a bank or financial institution;
and
|
|
(j)
|
the
amount of any liability in respect of any guarantee or indemnity
for any
of the items referred to in paragraphs (a) to (i)
above.
|
“IAPPC”
means
a
valid international air pollution prevention certificate for the Vessel issued
under Annex VI.
“Indebtedness”
means
the aggregate from time to time of: the amount of the Loan outstanding; all
accrued and unpaid interest on the Loan; and all other sums of any nature
(together with all accrued and unpaid interest on any of those sums) payable
to
the Lender under all or any of the Finance Documents.
“Insurances”
means
all policies and contracts of insurance (including all entries in protection
and
indemnity or war risks associations) which are from time to time taken out
or
entered into in respect of or in connection with the Vessel or her increased
value or the Earnings and (where the context permits) all benefits under such
contracts and policies, including all claims of any nature and returns of
premium.
5
“Interest
Payment Date”
means
each date for the payment of interest in accordance with Clause
8.7.
“Interest
Period”
means
each period for the determination and payment of interest selected by the
Borrower or agreed or selected by the Lender pursuant to Clause 8.
“ISM
Code”
means
the International Management Code for the Safe Operation of Ships and for
Pollution Prevention.
“ISM
Company”
means,
at any given time, the company responsible for the Vessel’s compliance with the
ISM Code under paragraph 1.1.2 of the ISM Code.
“ISPS”
Code”
means
the International Ship and Port Facility Security Code.
“ISPS
Company”
means,
at any given time, the company responsible for the Vessel’s compliance with the
ISPS Code.
“ISSC”
means
a
valid international ship security certificate for the Vessel issued under the
ISPS Code.
“LIBOR”
means:
|
(a)
|
the
applicable Screen Rate; or
|
|
(b)
|
(if
no Screen Rate is available for any Interest Period) the arithmetic
mean
of the rates (rounded upwards to four decimal places) quoted to the
Lender
in the London interbank market,
|
at
11.00
a.m. two (2) Business Days before the first day of the relevant Interest Period
for the offering of deposits in Dollars or its equivalent in a Permitted
Currency in an amount comparable to the Loan (or any relevant part of the Loan)
and for a period comparable to the relevant Interest Period.
“Loan”
means
the aggregate amount advanced or to be advanced by the Lender to the Borrower
under Clause 4 or, where the context permits, the amount advanced and for the
time being outstanding.
6
“Management Agreement”
means the agreement(s) for the commercial and/or technical management of the
Vessel between the Borrower and the Managers.
“Managers”
means
Safety Management Overseas S.A., or such other commercial and/or technical
managers of the Vessel nominated by the Borrower as the Lender may
approve.
“Mandatory
Cost”
means
the percentage rate per annum calculated by the Lender in accordance with
Schedule 2.
“Margin”
means
zero point six five per cent (0.65%) per annum.
“Master
Agreement”
means
any ISDA Master Agreement (or any other form of master agreement relating to
interest or currency exchange transactions) entered into between the Lender
and
the Borrower during the Facility Period, including each Schedule to any Master
Agreement and each Confirmation exchanged pursuant to any Master
Agreement.
“Maximum
Amount”
means
forty two million Dollars ($42,000,000) reduced from time to time in accordance
with Clause 3.4 and/or Clause 7.4 and/or Clause 8.9.5.
“Mortgage”
means
the first priority statutory mortgage referred to in Clause 11.1.1 together
with the Deed of Covenants.
“Mortgagee’s
Insurances”
means
all policies and contracts of mortgagee’s interest insurance, mortgagee’s
additional perils (oil pollution) insurance and any other insurance from time
to
time taken out by the Lender in relation to the Vessel.
“Operating
Account”
means
the bank account opened in the name of the Managers with the Lender and
designated “Safety Management Overseas S.A. Operating Account” with account
number 00000000.
“Participating
Member States”
means
any member state of the European Community that adopts or has adopted the Euro
as its lawful currency in
7
accordance
with legislation of the European Community relating to Economic and Monetary
Union.
“Permitted
Currency”
means
Japanese Yen, Swiss Francs and Euro.
“Reduction
Date”
means
each date falling at consecutive six monthly intervals after the first Drawdown
Date.
“Relevant
Documents”
means
the Finance Documents, the Management Agreement and the Managers’ confirmation
specified in Part I of Schedule 1.
“Requisition
Compensation”
means
all compensation or other money which may from time to time be payable to the
Borrower as a result of the Vessel being requisitioned for title or in any
other
way compulsorily acquired (other than by way of requisition for
hire).
“Screen
Rate”
means
in relation to LIBOR, the British Bankers’ Association Interest Settlement Rate
for the relevant currency and period displayed on the appropriate page of the
Reuters screen. If the agreed page is replaced or the service ceases to be
available, the Lender may specify another page or service displaying the
appropriate rate after consultation with the Borrower.
“Security
Documents”
means
the Mortgage, the Deed of Covenants, the Assignment, the Account Charge, any
other Credit Support Documents or (where the context permits) any one or more
of
them and any other agreement or document which may at any time be executed
by
any person as security for the payment of all or any part of the Indebtedness
and “Security Document” means any one of them.
“Security
Parties”
means
the Borrower, any other Credit Support Provider and any other person who may
at
any time during the Facility Period be liable for, or provide security for,
all
or any part of the Indebtedness, and “Security Party” means any one of
them.
“SMC”
means
a
valid safety management certificate issued for the Vessel by or on behalf of
the
Administration under paragraph 13.7 of the ISM Code.
8
“SMS”
means
a
safety management system for the Vessel developed and implemented in accordance
with the ISM Code.
“Swiss
Francs”
and
“SFr”
means
available and freely transferable and convertible funds in non-resident currency
of Switzerland.
“Tax”
means
any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to
pay
or any delay in paying any of the same).
“Total
Loss”
means:
|
(a)
|
an
actual, constructive, arranged, agreed or compromised total loss
of the
Vessel; or
|
|
(b)
|
the
requisition for title or compulsory acquisition of the Vessel by
any
government or other competent authority (other than by way of requisition
for hire); or
|
|
(c)
|
the
capture, seizure, arrest, detention or confiscation of the Vessel
by any
government or by persons acting or purporting to act on behalf of
any
government, unless the Vessel is released and returned to the possession
of the Borrower within one month after the capture, seizure, arrest,
detention or confiscation in
question.
|
“Transaction”
means
a
transaction entered into between the Lender and the Borrower governed by the
Master Agreement.
“Vessel”
means
the approximately 76, 015 dwt panamax dry bulk carrier vessel “EFROSSINI” with
IMO number 9252412 which was built in 2003 by Tsuneishi Shipbuilding Company
Ltd. in Japan and which is registered in the ownership of the Borrower under
the
laws and flag of the Republic of Cyprus together with everything now or in
the
future belonging to her on board and ashore.
“Japanese
Yen”
and
“Y”
means
available and freely transferable and convertible funds in non-resident currency
of Japan.
9
|
1.2
|
In
this Agreement:
|
| 1.2.1 |
words
denoting the plural number include the singular and vice
versa;
|
| 1.2.2 |
words
denoting persons include corporations, partnerships, associations
of
persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice
versa;
|
| 1.2.3 |
references
to Recitals, Clauses and Schedules are references to recitals, clauses
and
schedules to or of this Agreement;
|
| 1.2.4 |
references
to this Agreement include the Recitals and the
Schedules;
|
| 1.2.5 |
the
headings and contents page(s) are for the purpose of reference only,
have
no legal or other significance, and shall be ignored in the interpretation
of this Agreement;
|
| 1.2.6 |
references
to any document (including, without limitation, to all or any of
the
Relevant Documents) are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or replaced from
time
to time;
|
| 1.2.7 |
references
to statutes or provisions of statutes are references to those statutes,
or
those provisions, as from time to time amended, replaced or
re-enacted;
|
| 1.2.8 |
references
to the Lender include its successors, transferees and
assignees;
|
| 1.2.9 |
a
time of day (unless otherwise specified) is a reference to London
time;
and
|
| 1.2.10 |
words
and expressions defined in the Master Agreement, unless the context
otherwise requires, have the same
meaning.
|
10
|
1.3
|
Offer
letter
|
This
Agreement supersedes the terms and conditions contained in any correspondence
relating to the subject matter of this Agreement exchanged between the Lender
and the Borrower or their representatives prior to the date of this
Agreement.
|
2
|
The
Loan and its Purpose
|
|
2.1
|
Amount
Subject to the terms of this Agreement, the Lender agrees to make
available to the Borrower a revolving credit in an aggregate amount
not
exceeding the Maximum Amount at any one
time.
|
|
2.2
|
Purpose
The Borrower shall apply the Loan for the purpose referred to in
Recital
(B).
|
|
2.3
|
Monitoring
The Lender shall not be bound to monitor or verify the application
of any
amount borrowed under this
Agreement.
|
|
3
|
Conditions
of Utilisation
|
|
3.1
|
Conditions
precedent
The Borrower is not entitled to have any Drawing advanced unless
the
Lender has received all of the documents and other evidence listed
in Part
I of Schedule 1.
|
|
3.2
|
Further
conditions precedent
The Lender will only be obliged to advance a Drawing if on the date
of the
Drawdown Notice and on the proposed Drawdown
Date:
|
| 3.2.1 |
no
Default is continuing or would result from the advance of that Drawing;
and
|
| 3.2.2 |
the
representations made by the Borrower under Clause 12 are true in
all
material respects.
|
|
3.3
|
Drawing
limit
The Lender will only be obliged to advance a Drawing
if:
|
| 3.3.1 |
no
other Drawing has been made on the same Business
Day;
|
11
| 3.3.2 |
that
Drawing is not less than one million Dollars ($1,000,000) or, if
in excess
of one million Dollars ($1,000,000), integral multiples of five hundred
thousand Dollars ($500,000); and
|
| 3.3.3 |
that
Drawing will not increase the outstanding amount of the Loan to a
sum in
excess of the Maximum Amount.
|
|
3.4
|
Reduction
of Maximum Amount
The Maximum Amount:
|
| 3.4.1 |
shall
be reduced by twenty (20) reduction amounts, the first six (6) reduction
amounts on each of the Reduction Dates, each reduction amount in
the
amount of seven hundred and fifty thousand Dollars ($750,000), the
following six (6) reduction amounts each in the amount of one million
Dollars ($1,000,000), the following seven (7) reduction amounts each
in
the amount of one million six hundred and eighty seven thousand five
hundred Dollars ($1,687,500) and the final reduction amount in the
amount
of nineteen million six hundred and eighty seven thousand five hundred
Dollars ($19,687,500)(comprising of a reduction amount of one million
six
hundred and eighty seven thousand five hundred Dollars ($1,687,500)
and a
balloon reduction of eighteen million Dollars ($18,000,000)), the
first
Reduction Date being the date which is six (6) calendar months from
the
date of this Agreement and subsequent Reduction Dates being at consecutive
intervals of six (6) calendar months thereafter, with the last Reduction
Date being on the Final Maturity Date;
and
|
| 3.4.2 |
may
(in addition to any reduction required under Clause 3.4.1) be reduced
by
the Borrower by five hundred thousand Dollars ($500,000) or an integral
multiple of that amount with effect from any Business Day by written
notice to the Lender given not fewer than fourteen (14) days prior
to that
Business Day, which notice shall be irrevocable. Any voluntary reduction
in the Maximum Amount shall be in addition to, and without prejudice
to,
the mandatory reductions in the Maximum Amount made pursuant to Clause
3.4.1 and may not be reversed. Any reduction under this Clause 3.4.2
shall
satisfy the
|
12
|
obligations
under Clause 3.4.1 in order of maturity. Amounts repaid by the Borrower
pursuant to this Clause shall not be available for
reborrowing.
|
|
3.5
|
Conditions
subsequent
The Borrower undertakes to deliver or to cause to be delivered to
the
Lender on, or as soon as practicable after, the first Drawdown Date
the
additional documents and other evidence listed in Part II of
Schedule 1.
|
|
3.6
|
No
Waiver If
the Lender in its sole discretion agrees to advance a Drawing to
the
Borrower before all of the documents and evidence required by Clause
3.1
have been delivered to or to the order of the Lender, the Borrower
undertakes to deliver all outstanding documents and evidence to or
to the
order of the Lender no later than the date specified by the
Lender.
|
The
advance of a Drawing under this Clause 3.6 shall not be taken as a waiver of
the
Lender’s right to require production of all the documents and evidence required
by Clause 3.1.
|
3.7
|
Form
and content
All documents and evidence delivered to the Lender under this Clause
3
shall:
|
| 3.7.1 |
be
in form and substance acceptable to the
Lender;
|
| 3.7.2 |
if
required by the Lender, be certified, notarised, legalised or attested
in
a manner acceptable to the Lender;
and
|
| 3.7.3 |
if
copies, be certified as true and complete copies by a director or
the
secretary or the legal advisor or a duly authorised attorney-in-fact
of
the Borrower.
|
|
4
|
Advance
|
The
Borrower may request a Drawing to be advanced in one amount on any Business
Day
prior to the Availability Termination Date by delivering to the Lender a duly
completed Drawdown Notice not more than ten (10) and not fewer than three (3)
Business Days before the proposed Drawdown Date.
13
|
5
|
Currency
|
|
5.1
|
Conversion
The Borrower may Convert all or any part of the Loan into a Permitted
Currency not later than five (5) Business Days before the Drawdown
Date or
at any time during the Facility Period, subject to there being no
Event of
Default which is continuing and subject to the Permitted Currency
being
available to the Lender. Upon conversion, that part of the Loan shall
remain denominated in, and shall be repayable in, the Permitted Currency
until the end of the relevant Interest Payment Date. Clause 3.4 shall
be
amended so that the Maximum Amount of the Loan shall be reduced in
the
Permitted Currency or Permitted Currencies selected under this Clause,
provided that the Reduction Dates specified in Clause 3.4 shall not
be
changed.
|
|
5.2
|
Indemnity
The Borrower shall indemnify the Lender from time to time on demand
against all Break Costs, other losses, costs, claims, damages and
expenses
which the Lender may from time to time suffer, incur or sustain by
reason
of the Lender agreeing to and/or implementing the terms of this Clause
(including, without limitation, all costs and expenses incurred by
the
Lender in effecting any
conversion).
|
|
6
|
Repayment
|
|
6.1
|
Repayment
of each Drawing
The Borrower agrees to repay each Drawing to the Lender on the last
day of
the Interest Period in respect of that Drawing. On the Final Maturity
Date
the Borrower shall repay to the Lender all amounts then outstanding
under
or pursuant to this Agreement. Without limitation to the repayments
required by Clause 3.4, in addition the Borrower may repay any Drawing
in
whole or in part in integral multiples of five hundred thousand Dollars
($500,000) (or the equivalent in the Permitted Currency in which
the
Drawing in question is then denominated) and no repayment shall be
made in
an amount which is less than one million Dollars ($1,000,000) (or
the
equivalent in the Permitted Currency in which the Drawing in question
is
then denominated) (or as otherwise may be agreed by the Lender) provided
that it has first given to the Lender not fewer than two (2) Business
Days’ prior written notice expiring on a Business Day of its intention
to
do so. Any notice pursuant to this Clause once given shall be irrevocable
and shall oblige the Borrower to make the
|
14
|
repayment
referred to in the notice on the Business Day specified in the notice,
together with all interest accrued on the amount repaid up to and
including that Business Day.
|
|
6.2
|
Reborrowing
Amounts of the Loan which are repaid or prepaid shall be available
for
reborrowing in accordance with Clause 3 prior to the Availability
Termination Date.
|
|
7
|
Prepayment
|
|
7.1
|
Illegality
If
it becomes unlawful in any jurisdiction for the Lender to perform
any of
its obligations as contemplated by this Agreement or to fund or maintain
the Loan:
|
| 7.1.1 |
the
Lender shall promptly notify the Borrower of that event;
and
|
| 7.1.2 |
the
Borrower shall repay any Drawing on the last day of its current Interest
Period or, if earlier, the date specified by the Lender in the notice
delivered to the Borrower (being no earlier than the last day of
any
applicable grace period permitted by
law).
|
|
7.2
|
Voluntary
prepayment of Loan
The Borrower may prepay the whole or any part of a Drawing (but,
if in
part, being an amount that reduces that Drawing by a minimum amount
of
five hundred thousand Dollars ($500,000) or an integral multiple
of that
amount (or as otherwise may be agreed by the Lender) provided that
it
gives the Lender not less than fourteen (14) Business Days’ (or such
shorter period of the notice as the Lender may agree) prior notice.
Amounts prepaid by the Borrower pursuant to this Clause shall be
available
for reborrowing. Any prepayment under this Clause 7.2 shall satisfy
the
obligations under Clause 6.1 in order of
maturity.
|
|
7.3
|
Mandatory
prepayment on sale or Total Loss
Upon the sale or Total Loss of the Vessel, the Maximum Amount shall
reduce
to zero and the Borrower shall repay the Indebtedness in full, in
the case
of a sale of the Vessel, by not later than the date of the sale of
the
Vessel or, in the case of a Total Loss, by not later than the date
falling
one hundred and eighty (180) days from the date of the casualty giving
rise to the Total Loss (or such longer period as the Lender may in
its
|
15
|
discretion
agree). Amounts prepaid by the Borrower pursuant to this Clause shall
not
be available for reborrowing.
|
|
7.4
|
Mandatory
prepayment on reduction of Maximum Amount
If
the Maximum Amount is reduced in accordance with Clause 3.4 to an
amount
which is less than the aggregate amount of the Drawings then outstanding,
the Borrower shall, simultaneously with that reduction, prepay one
or more
outstanding Drawings to the extent required to ensure that the aggregate
amount of the Drawings outstanding does not exceed the reduced Maximum
Amount.
|
|
7.5
|
Restrictions
Any notice of prepayment given under this Clause 7 shall be irrevocable
and, unless a contrary indication appears in this agreement, shall
specify
the date or dates upon which the relevant prepayment is to be made
and the
amount of that prepayment.
|
Any
prepayment under this Agreement shall be made together with accrued interest
on
the amount prepaid and, subject to any Break Costs, without premium or
penalty.
|
8
|
Interest
|
|
8.1
|
Interest
Periods
The period during which each Drawing shall be outstanding under this
Agreement shall be an Interest Period of one (1), three (3), six
(6), nine
(9) or twelve (12) months’ duration, as selected by the Borrower in the
Drawdown Notice in respect of the Drawing in question, or such other
duration as may be agreed by the
Lender.
|
|
8.2
|
Beginning
and end of Interest Periods
Each Interest Period shall start on the Drawdown Date of the Drawing
in
question and end on the date which numerically corresponds to that
Drawdown Date in the relevant calendar month except that, if there
is no
numerically corresponding date in that calendar month, the Interest
Period
shall end on the last Business Day in that
month.
|
|
8.3
|
Interest
Periods to meet Maturity Date
If
an Interest Period for a Drawing would otherwise expire after the
Maturity
Date, the Interest Period for that Drawing shall expire on the Maturity
Date.
|
16
|
8.4
|
Non-Business
Days
If
an Interest Period would otherwise end on a day which is not a Business
Day, that Interest Period will instead end on the next Business Day
in
that calendar month (if there is one) or the preceding Business Day
(if
there is not).
|
|
8.5
|
Interest
rate During
each Interest Period interest shall accrue on the relevant Drawing
at the
rate determined by the Lender to be the aggregate of (a) the Margin,
(b)
LIBOR and (c) the Mandatory Cost, if
any.
|
|
8.6
|
Failure
to select Interest Period If
the Borrower at any time fails to select or agree to an Interest
Period in
accordance with Clause 8.1, the interest rate applicable shall be
the rate
determined by the Lender in accordance with Clause 8.5 for an Interest
Period of such duration (not exceeding six months) as the Lender
may
select.
|
|
8.7
|
Accrual
and payment of interest
Interest shall accrue from day to day, shall be calculated on the
basis of
a 360 day year and the actual number of days elapsed (or, in any
circumstance where market practice differs, in accordance with the
prevailing market practice) and shall be paid by the Borrower to
the
Lender on the last day of each Interest Period and, if the Interest
Period
is longer than six (6) months, on the dates falling at six (6) monthly
intervals after the first day of that Interest
Period.
|
|
8.8
|
Default
interest
If
the Borrower fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue amount
from
the due date up to the date of actual payment (both before and after
judgment) at a rate which is one per cent (1%) higher than the rate
which
would have been payable if the overdue amount had, during the period
of
non-payment, constituted a Drawing in the currency of the overdue
amount
for successive Interest Periods, each selected by the Lender (acting
reasonably). Any interest accruing under this Clause 8.8 shall be
immediately payable by the Borrower on demand by the Lender. If unpaid,
any such interest will be compounded with the overdue amount at the
end of
each Interest Period applicable to that overdue amount but will remain
immediately due and payable.
|
17
|
8.9
|
Changes
in market circumstances If
at any time the Lender determines (which determination shall be final
and
conclusive and binding on the Borrower) that, by reason of changes
affecting the London interbank market, adequate and fair means do
not
exist for determining the rate of interest on a Drawing for any Interest
Period:
|
| 8.9.1 |
the
Lender shall give notice to the Borrower of the occurrence of such
event;
and
|
| 8.9.2 |
the
rate of interest on the relevant Drawing for that Interest Period
shall be
the rate per annum which is the sum
of:
|
| (a) |
the
Margin; and
|
| (b) |
the
rate which expresses as a percentage rate per annum the cost to the
Lender
of funding the relevant Drawing from whatever source it may reasonably
select; and
|
| (c) |
the
Mandatory Cost, if any,
|
PROVIDED
THAT if the resulting rate of interest is not acceptable to the
Borrower:
| 8.9.3 |
the
Lender will negotiate with the Borrower in good faith with a view
to
modifying this Agreement to provide a substitute basis for determining
the
rate of interest which is financially a substantial equivalent to
the
basis provided for in this
Agreement;
|
| 8.9.4 |
any
substitute basis agreed pursuant to Clause 8.9.3 shall be binding
on the
parties to this Agreement; and
|
| 8.9.5 |
if,
within thirty (30) days of the giving of the notice referred to in
Clause
8.9.1, the Borrower and the Lender fail to agree in writing on a
substitute basis for determining the rate of interest in respect
of the
relevant Drawing, the Lender shall cease to be obliged to advance
that
Drawing, but, if it has already been advanced, the Borrower will
|
18
|
immediately
prepay it, together with any Break Costs, and the Maximum Amount
shall be
reduced by the amount of that
Drawing.
|
|
8.10
|
Determinations
conclusive
The Lender shall promptly notify the Borrower of the determination
of a
rate of interest under this Clause 8 and each such determination
shall
(save in the case of manifest error) be final and
conclusive.
|
|
9
|
Indemnities
|
|
9.1
|
Transaction
expenses
The Borrower will, within fourteen (14) days of the Lender’s written
demand, pay the Lender the amount of all costs and expenses (including
legal fees and Value Added Tax or any similar or replacement tax
if
applicable) incurred by the Lender in connection with:
|
| 9.1.1 |
the
negotiation, preparation, printing, execution and registration of
the
Finance Documents (whether or not any Finance Document is actually
executed or registered and whether or not a Drawing is
advanced);
|
| 9.1.2 |
any
amendment, addendum or supplement to any Finance Document (whether
or not
completed); and
|
| 9.1.3 |
any
other document which may at any time be required by the Lender to
give
effect to any Finance Document or which the Lender is entitled to
call for
or obtain under any Finance Document (including, without limitation,
all
premiums and other sums from time to time payable by the Lender in
relation to the Mortgagee’s
Insurances).
|
|
9.2
|
Funding
costs
The Borrower shall indemnify the Lender on the Lender’s written demand
against all losses and costs incurred or sustained by the Lender
if, for
any reason, a Drawing is not advanced to the Borrower after the relevant
Drawdown Notice has been given to the Lender, or is advanced on a
date
other than that requested in the Drawdown Notice (unless, in either
case,
as a result of any default by the
Lender).
|
|
9.3
|
Break
Costs
The Borrower shall indemnify the Lender on the Lender’s written demand
against all costs, losses, premiums or penalties incurred by the
Lender as
a result of its receiving any prepayment of all or any part of a
Drawing
(whether
|
19
|
pursuant
to Clause 7 or otherwise) on a day other than the last day of an
Interest
Period for that Drawing, or any other payment under or in relation
to the
Finance Documents on a day other than the due date for payment of
the sum
in question, including (without limitation) any losses or costs incurred
in liquidating or re- employing deposits from third parties acquired
to
effect or maintain all or any part of a Drawing, and any liabilities,
expenses or losses incurred by the Lender in terminating or reversing,
or
otherwise in connection with, any Transaction or any other interest
rate
and/or currency swap, transaction or arrangement entered into by
the
Lender to hedge any exposure arising under this Agreement, or in
terminating or reversing, or otherwise in connection with, any open
position arising under this Agreement or the Master
Agreement.
|
|
9.4
|
Currency
indemnity In
the event of the Lender receiving or recovering any amount payable
under a
Finance Document in a currency other than the Currency of Account,
and if
the amount received or recovered is insufficient when Converted into
the
Currency of Account at the date of receipt to satisfy in full the
amount
due, the Borrower shall, on the Lender’s written demand, pay to the Lender
such further amount in the Currency of Account as is sufficient to
satisfy
in full the amount due and that further amount shall be due to the
Lender
as a separate debt under this
Agreement.
|
|
9.5
|
Increased
costs (subject to Clause 9.6)
If, by reason of the introduction of any law, or any change in any
law, or
any change in the interpretation or administration of any law, or
compliance with any request or requirement from any central bank
or any
fiscal, monetary or other authority occurring after the date of this
Agreement:
|
| 9.5.1 |
the
Lender (or the holding company of the Lender) shall be subject to
any Tax
with respect to payment of all or any part of the Indebtedness (other
than
Tax on overall net income); or
|
| 9.5.2 |
the
basis of Taxation of payments to the Lender in respect of all or
any part
of the Indebtedness shall be changed;
or
|
20
| 9.5.3 |
any
reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans
by
any branch of the Lender; or
|
| 9.5.4 |
the
manner in which the Lender allocates capital resources to its obligations
under this Agreement and/or the Master Agreement or any ratio (whether
cash, capital adequacy, liquidity or otherwise) which the Lender
is
required or requested to maintain shall be affected;
or
|
| 9.5.5 |
there
is imposed on the Lender (or on the holding company of the Lender)
any
other condition in relation to the Indebtedness or the Finance
Documents;
|
and
the
result of any of the above shall be to increase the cost to the Lender (or
to
the holding company of the Lender) of the Lender making or maintaining the
Loan,
or its obligations under the Master Agreement to cause the Lender to suffer
(in
its opinion) a material reduction in the rate of return on its overall capital
below the level which it reasonably anticipated at the date of this Agreement
and which it would have been able to achieve but for its entering into this
Agreement or the Master Agreement and/or performing its obligations under this
Agreement or the Master Agreement, then, subject to Clause 9.6, the Lender
shall
notify the Borrower and the Borrower shall from time to time pay to the Lender
on demand the amount which shall compensate the Lender (or the holding company
of the Lender) for such additional cost or reduced return. A certificate signed
by an authorised signatory of the Lender setting out the amount of that payment
and the basis of its calculation shall be submitted to the Borrower and shall
be
conclusive evidence of such amount save for manifest error or on any question
of
law.
|
9.6
|
Exceptions
to increased costs
Clause 9.5 does not apply to the extent any additional cost or reduced
return referred to in that Clause
is:
|
| 9.6.1 |
compensated
for by a payment made under Clause 9.10;
or
|
| 9.6.2 |
compensated
for by a payment made under Clause 17.3;
or
|
| 9.6.3 |
compensated
for by the payment of the Mandatory Cost;
or
|
21
| 9.6.4 |
attributable
to the wilful breach by the Lender (or the holding company of the
Lender)
of any law or regulation.
|
|
9.7
|
Events
of Default
The Borrower shall indemnify the Lender from time to time on the
Lender’s
written demand against all losses, costs and liabilities incurred
or
sustained by the Lender as a consequence of any Event of
Default.
|
|
9.8
|
Enforcement
costs
The Borrower shall pay to the Lender on the Lender’s written demand the
amount of all costs and expenses (including legal fees) incurred
by the
Lender in connection with the enforcement of, or the preservation
of any
rights under, any Finance Document including (without limitation)
any
losses, costs and expenses which the Lender may from time to time
sustain,
incur or become liable for by reason of the Lender being mortgagee
of the
Vessel and/or a lender to the Borrower, or by reason of the Lender
being
deemed by any court or authority to be an operator or controller,
or in
any way concerned in the operation or control, of the
Vessel.
|
|
9.9
|
Other
costs
The Borrower shall pay to the Lender on the Lender’s written demand the
amount of all sums which the Lender may pay or become actually or
contingently liable for on account of the Borrower in connection
with the
Vessel (whether alone or jointly or jointly and severally with any
other
person) including (without limitation) all sums which the Lender
may pay
or guarantees which it may give in respect of the Insurances, any
expenses
incurred by the Lender in connection with the maintenance or repair
of the
Vessel or in discharging any lien, bond or other claim relating in
any way
to the Vessel, and any sums which the Lender may pay or guarantees
which
it may give to procure the release of the Vessel from arrest or
detention.
|
|
9.10
|
Taxes
The Borrower shall pay all Taxes to which all or any part of the
Indebtedness or any Finance Document may be at any time subject (other
than Tax on the Lender’s overall net income) and shall indemnify the
Lender on the Lender’s written demand against all liabilities, costs,
claims and expenses resulting from any omission to pay or delay in
paying
any such Taxes.
|
22
|
10
|
Fees
|
|
10.1
|
Commitment
fee
The Borrower shall pay to the Lender a fee computed at the rate of
zero
point two per cent (0.2%) per annum on the undrawn Maximum Amount
from
time to time from the date of this Agreement until the Availability
Termination Date. The accrued commitment fee is payable on the last
day of
each successive period of three (3) months from the date of this
Agreement
and on the Availability Termination
Date.
|
|
10.2
|
Arrangement
fee
The Borrower shall pay to the Lender on the date of this Agreement
an
arrangement fee in the amount of sixty two thousand five hundred
Dollars
($62,500).
|
|
11
|
Security
and Application of Moneys
|
|
11.1
|
Security
Documents
As
security for the payment of the Indebtedness, the Borrower shall
execute
and deliver to the Lender or cause to be executed and delivered to
the
Lender the following documents in such forms and containing such
terms and
conditions as the Lender shall
require:
|
| 11.1.1 |
a
first priority Cypriot statutory mortgage over the Vessel together
with a
collateral deed of covenants;
|
| 11.1.2 |
a
first priority deed of assignment of the Insurances, Earnings and
Requisition Compensation of the Vessel;
and
|
| 11.1.3 |
a
first priority deed of charge over the Cash Collateral Account and
all
amounts from time to time standing to the credit of the Cash Collateral
Account.
|
|
11.2
|
Accounts
The Borrower shall maintain the Accounts with the Lender for the
duration
of the Facility Period free of Encumbrances and rights of set off
other
than those created by or under the Finance
Documents.
|
|
11.3
|
Earnings
The Borrower shall procure that all Earnings and any Requisition
Compensation are credited to the Operating
Account.
|
23
|
11.4
|
Application
of Operating Account
The Borrower shall procure that there is transferred from the Operating
Account to the Lender:
|
| 11.4.1 |
on
the due date for repayment of each Drawing, the amount of that Drawing;
and
|
| 11.4.2 |
on
each Interest Payment Date in respect of a Drawing, the amount of
interest
due in respect of that Drawing,
|
and
the
Borrower irrevocably authorises the Lender to make those transfers.
|
11.5
|
Borrower’s
obligations not affected
If
for any reason the amount standing to the credit of the Operating
Account
is insufficient to repay any Drawing or to make any payment of interest
when due, the Borrower’s obligation to repay that Drawing or to make that
payment of interest shall not be
affected.
|
|
11.6
|
Release
of surplus
Any amount remaining to the credit of the Operating Account following
the
making of any transfer required by Clause 11.4 shall (unless a Default
shall have occurred and be continuing) be released to or to the order
of
the Borrower, subject to an amount of one hundred and fifty thousand
Dollars ($150,000) remaining credited to the Operating Account at
all
times during the Facility Period.
|
|
11.7
|
Relocation
of Accounts
At
any time following the occurrence and during the continuation of
a
Default, the Lender may without the consent of the Borrower relocate
either or both of the Accounts to any other branch of the Lender,
without
prejudice to the continued application of this Clause 11 and the
rights of
the Lender under the Finance
Documents.
|
|
11.8
|
Application
after acceleration
From and after the giving of notice to the Borrower by the Lender
under
Clause 14.2, the Borrower shall procure that all sums from time to
time
standing to the credit of either of the Accounts are immediately
transferred to the Lender for application in accordance with
Clause 11.14 and the Borrower irrevocably authorises the Lender to
make those transfers.
|
24
|
11.9
|
General
application of moneys
The Borrower, subject to Clause 11.10, irrevocably authorises the
Lender
to apply all sums which the Lender may
receive:
|
| 11.9.1 |
pursuant
to a sale or other disposition of the Vessel or any right, title
or
interest in the Vessel; or
|
| 11.9.2 |
by
way of payment of any sum in respect of the Insurances, Earnings
or
Requisition Compensation; or
|
| 11.9.3 |
by
way of transfer of any sum from either of the Accounts;
or
|
| 11.9.4 |
otherwise
arising under or in connection with any Security
Document,
|
in
or
towards satisfaction, or by way of retention on account, of the Indebtedness,
in
such manner as the Lender may determine.
| 11.10 |
Application
of moneys on sale or Total Loss
The Borrower irrevocably
authorises the Lender to apply all sums which the Lender may receive
pursuant to a sale by the Borrower of the Vessel or a Total Loss
in or
towards satisfaction of the prepayment due and payable by virtue
of that
sale or Total Loss under Clause 7.3, but the Borrower’s obligation to make
that prepayment shall not be affected if those sums are insufficient
to
satisfy that obligation.
|
|
11.11
|
Determination
of market value
For the purpose of the Security Documents, the market value of the
Vessel
shall be the average value certified by the Brokers, who shall report
directly to the Lender and shall be appointed by the Borrower not
later
than five (5) days after the Lender’s request for the Borrower to appoint
such Brokers. In the event that the Borrower fails to appoint such
Brokers
within five (5) days after the Lender’s request so to do or if a Broker
appointed by the Borrower is not approved by the Lender and the Borrower
fails to appoint an alternative Broker who is approved by the Lender
within such five (5) day period, the Borrower irrevocably authorises
the
Lender to appoint a Broker in its discretion to conduct such valuations.
All valuations pursuant to this Clause shall be made on the basis
of a
sale of the Vessel for prompt delivery for cash at arm’s length on normal
commercial terms by a willing seller to a willing buyer and free
of any
existing charter or-other contract of employment. The
Borrower-
|
25
|
agrees
to accept each valuation obtained pursuant to this Clause as conclusive
evidence of the Vessel’s market value at the date of such
valuation.
|
|
11.12
|
Cost
of valuation
The Borrower shall be liable for all costs and expenses incurred
by the
Lender in obtaining up to two valuations in each year of the Facility
Period one upon each anniversary of the date of this Agreement and
the
other six (6) months after every calendar year unless there is an
Event of
Default in which case the Borrower shall be liable for all costs
and
expenses incurred by the Lender in obtaining any number of valuations
required by it pursuant to Clause 11.11 and shall reimburse the Lender
in
respect of all such costs and expenses on
demand.
|
|
11.13
|
Provision
of information
The Borrower undertakes promptly to supply the Lender with such
information concerning the Vessel’s condition, location and employment as
the Lender may reasonably require.
|
|
11.14
|
Additional
security
If
and so often as the aggregate of the market value of the Vessel
(determined in accordance with Clause 11.11) plus the value of any
additional security for the time being provided to the Lender pursuant
to
this Clause shall be less than (a) one hundred per cent (100%) of
the
amount of the Loan, for the period commencing on the first Drawdown
Date
and ending on the third anniversary of the first Drawdown Date, (b)
one
hundred and ten per cent (110%) of the amount of the Loan from the
third
anniversary of the first Drawdown Date until the sixth anniversary
of the
first Drawdown Date and (c) one hundred and twenty per cent (120%)
of the
amount of the Loan thereafter, the Borrower will, within fourteen
(14)
days of the request of the Lender to do so, at the Borrower’s
option:-
|
|
(a)
|
pay
to the credit of the Cash Collateral Account such amount as shall
be
necessary to establish that the aggregate of the market value of
the
Vessel (determined in accordance with Clause 11.11) plus the value
of any
additional security for the time being provided to the Lender pursuant
to
this Clause shall be no less than (a) one hundred per cent (100%)
of the
amount of the Loan, for the period commencing on the first
|
26
|
Drawdown
Date and ending on the third anniversary of the first Drawdown Date,
(b)
one hundred and ten per cent (110%) of the amount of the Loan from
the
third anniversary of the first Drawdown Date until the sixth anniversary
of the first Drawdown Date and (c) one hundred and twenty per cent
(120%)
of the amount of the Loan thereafter;
or
|
|
(b)
|
give
to the Lender other security in amount and form acceptable to the
Lender
in its discretion; or
|
|
(c)
|
repay
such amount of the Loan as shall be necessary to establish that the
aggregate of the market value of the Vessel (determined in accordance
with
Clause 11.11) plus the value of any additional security for the time
being
provided to the Lender pursuant to this Clause shall be no less than
(a)
one hundred per cent (100%) of the amount of the Loan, for the period
commencing on the first Drawdown Date and ending on the third anniversary
of the first Drawdown Date, (b) one hundred and ten per cent (110%)
of the
amount of the Loan from the third anniversary of the first Drawdown
Date
until the sixth anniversary of the first Drawdown Date and (c) one
hundred
and twenty per cent (120%) of the amount of the Loan
thereafter.
|
Clauses
7.2, 7.3 and 7.4 shall apply, mutatis mutandis, to any repayment made pursuant
to this Clause and the value of any additional security provided pursuant to
this Clause shall be determined by the Lender in its discretion.
|
11.15
|
Return
of additional security
If
and so often as the aggregate of the market value of the Vessel
(determined in accordance with Clause 11.11) plus the value of any
additional security for the time being provided to the Lender pursuant
to
Clause 11.14 shall exceed (a) one hundred per cent (100%) of the
amount of
the Loan, for the period commencing on the first Drawdown Date and
ending
on the third anniversary of the first Drawdown Date, (b) one hundred
and
ten per cent (110%) of the amount of the Loan from the third anniversary
of the first Drawdown Date until the sixth anniversary of the first
Drawdown Date and (c) one hundred and twenty per cent (120%) of the
amount
of the Loan thereafter, then the Lender shall, within fourteen (14)
days
of the request of the Borrower to do so, release to the Borrower
such
portion of the amount standing to the credit
|
27
|
of
the Cash Collateral Account in accordance with Clause 11.14 and/or
such
amount of the security referred to in Clause 11.14(b) as shall be
required
to ensure that the aggregate of the market value of the Vessel (determined
as aforesaid) plus the value of any additional security for the time
being
provided to the Lender pursuant to Clause 11.14 is equal to, but
not less
than (a) one hundred per cent (100%) of the amount of the Loan, for
the
period commencing on the first Drawdown Date and ending on the third
anniversary of the first Drawdown Date, (b) one hundred and ten per
cent
(110%) of the amount of the Loan from the third anniversary of the
first
Drawdown Date until the sixth anniversary of the first Drawdown Date
and
(c) one hundred and twenty per cent (120%) of the amount of the Loan
thereafter.
|
|
12
|
Representations
|
|
12.1
|
Representations
The Borrower makes the representations and warranties set out in
this
Clause 12.1 to the Lender on the date of this
Agreement.
|
| 12.1.1 |
Status
Each Security Party (which is not an individual) which is a corporation,
duly incorporated and validly existing under the law of its jurisdiction
of incorporation and has the power to own its assets and carry on
its
business as it is being conducted.
|
| 12.1.2 |
Binding
obligations
The obligations expressed to be assumed by each Security Party in
each
Finance Document to which it is a party are legal, valid, binding
and
enforceable obligations.
|
| 12.1.3 |
Non-conflict
with other obligations
The entry into and performance by each Security Party of, and the
transactions contemplated by, the Finance Documents do not conflict
with:
|
(a) any
law
or regulation applicable to that Security Party;
(b) the
constitutional documents of that Security Party; or
(c) any
document binding on that Security Party or any of its assets,
and
in
borrowing the Loan, the Borrower is acting for its own account.
28
| 12.1.4 |
Power
and authority
Each Security Party has the power to enter into, perform and deliver
and
has taken all necessary action to authorise its entry into, performance
and delivery of, the Finance Documents to which it is a party and
the
transactions contemplated by those Finance
Documents.
|
| 12.1.5 |
Validity
and admissibility in evidence
All consents, licences, approvals, authorisations, filings and
registrations required or
desirable:
|
| (a) |
to
enable each Security Party lawfully to enter into, exercise its rights
and
comply with its obligations in the Finance Documents to which it
is a
party or to enable the Lender to enforce and exercise all its rights
under
the Finance Documents; and
|
| (b) |
to
make the Finance Documents to which any Security Party is a party
admissible in evidence in its jurisdiction of
incorporation,
|
have
been
obtained or effected and are in full force and effect, with the exception only
of the registrations referred to in Part II of Schedule 1.
| 12.1.6 |
Governing
law and enforcement
The choice of English law as the governing law of any Finance Document
expressed to be governed by English law will be recognised and enforced
in
the jurisdiction of incorporation of each relevant Security Party,
and any
judgment obtained in England in relation to any such Finance Document
will
be recognised and enforced in the jurisdiction of incorporation of
each
relevant Security Party.
|
| 12.1.7 |
Deduction
of Tax
No
Security Party is required under the law of its jurisdiction of
incorporation to make any deduction for or on account of Tax from
any
payment it may make under any Finance
Document.
|
29
| 12.1.8 |
No
filing or stamp taxes
Under the law of jurisdiction of incorporation of each relevant Security
Party it is not necessary that the Finance Documents be filed, recorded
or
enrolled with any court or other authority in that jurisdiction or
that
any stamp, registration or similar tax be paid on or in relation
to the
Finance Documents or the transactions contemplated by the Finance
Documents.
|
| 12.1.9 |
No
default
No
Event of Default is continuing or might reasonably be expected to
result
from the advance of a Drawing.
|
| 12.1.10 |
No
misleading information
Any factual information provided by any Security Party to the Lender
was
true and accurate in all material respects as at the date is was
provided.
|
| 12.1.11 |
Pari
passu ranking
The payment obligations of each Security Party under the Finance
Documents
to which it is a party rank at least pari passu with the claims of
all its
other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies
generally.
|
| 12.1.12 |
No
proceedings pending or threatened
No
litigation, arbitration or administrative proceedings of or before
any
court, arbitral body or agency have been started or (to the best
of the
Borrower’s knowledge threatened) which, if adversely determined, might
reasonably be expected to have a materially adverse effect on the
business, assets, financial condition or credit worthiness of any
Security
Party.
|
| 12.1.13 |
Disclosure
of material facts
The Borrower is not aware of any material facts or circumstances
which
have not been disclosed to the Lender and which might, if disclosed,
have
adversely affected the decision of a person considering whether or
not to
make loan facilities of the nature contemplated by this Agreement
available to the Borrower.
|
30
| 12.1.14 |
No
established place of business in the UK or US
No
Security Party has an established place of business in the United
Kingdom
or the United States of America.
|
| 12.1.15 |
Completeness
of Relevant Documents
The copies of any Relevant Documents provided or to be provided by
the
Borrower to the Lender in accordance with Clause 3 are, or will be,
true
and accurate copies of the originals and represent, or will represent,
the
full agreement between the parties to those Relevant Documents in
relation
to the subject matter of those Relevant Documents and there are no
commissions, rebates, premiums or other payments due or to become
due in
connection with the subject matter of those Relevant Documents other
than
in the ordinary course of business or as disclosed to, and approved
in
writing by, the Lender.
|
|
12.2
|
Repetition
Each representation and warranty in Clause 12.1 is deemed to be repeated
by the Borrower by reference to the facts and circumstances then
existing
on the date of each Drawdown Notice and the first day of each Interest
Period.
|
|
13
|
Undertakings
and Covenants
|
The
undertakings and covenants in this Clause 13 remain in force for the duration
of
the
Facility
Period.
|
13.1
|
Information
Undertakings
|
| 13.1.1 |
Financial
statements
The Borrower or the Managers will supply to the Lender, on request
within
sixty (60) days of the end of each calendar year during the Facility
Period the unaudited management accounts for the Vessel prepared
by the
Managers showing the income and expenditure for the Vessel for such
calendar year, with the first such accounts to be supplied by not
later
than sixty (60) days of the end of
2007.
|
31
| 13.1.2 |
Information:
miscellaneous
The Borrower shall supply to the
Lender:
|
| (a) |
promptly
upon becoming aware of them, details of any litigation, arbitration
or
administrative proceedings which are current, threatened or pending
against any Security Party, and which might, if adversely determined,
have
a materially adverse effect on the business, assets, financial condition
or credit worthiness of that Security Party;
and
|
| (b) |
promptly,
such further information regarding the financial condition, business
and
operations of any Security Party as the Lender may reasonably request
including, without limitation, cash flow analyses and details of
the
operating costs of the Vessel.
|
| 13.1.3 |
Notification
of default
|
| (a) |
The
Borrower shall notify the Lender of any Default (and the steps, it
any,
being taken to remedy it) promptly upon becoming aware of its
occurrence.
|
| (b) |
Promptly
upon a request by the Lender, the Borrower shall supply to the Lender
a
certificate signed by two of its directors or senior officers on
its
behalf certifying that no Default is continuing (or if a Default
is
continuing, specifying the Default and the steps, if any, being taken
to
remedy it).
|
| 13.1.4 |
“Know
your customer” checks If:
|
| (a) |
the
introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this
Agreement;
|
| (b) |
any
change in the status of the Borrower after the date of this Agreement;
or
|
32
| (c) |
a
proposed assignment or transfer by the Lender of any of its rights
and
obligations under this Agreement,
|
obliges
the Lender (or, in the case of (c) above, any prospective new Lender) to comply
with “know your customer” or similar identification procedures in circumstances
where the necessary information is not already available to it, the Borrower
shall promptly upon the request of the Lender supply, or procure the supply
of,
such documentation and other evidence as is reasonably requested by the Lender
(for itself or, in the case of (c) above, on behalf of any prospective new
Lender) in order for the Lender (or, in the case of (c) above, any prospective
new Lender) to carry out and be satisfied it has complied with all necessary
“know your customer” or other similar checks under all applicable laws and
regulations pursuant to the transactions contemplated in the Finance
Documents.
|
13.2
|
General
undertakings
|
| 13.2.1 |
Authorisations
The Borrower shall promptly:
|
| (a) |
obtain,
comply with and do all that is necessary to maintain in full force
and
effect; and
|
| (b) |
supply
certified copies to the Lender of,
|
any
consent, licence, approval or authorisation required under any law or regulation
to enable each Security Party to perform its obligations under the Finance
Documents to which it is a party and to ensure the legality, validity,
enforceability or admissibility in evidence in the jurisdiction of incorporation
of each relevant Security Party of any Finance Document.
| 13.2.2 |
Compliance
with laws The
Borrower shall comply in all respects with all laws to which it may
be
subject, if failure so to comply would materially impair its ability
to
perform its obligations under the Finance
Documents.
|
33
| 13.2.3 |
Conduct
of business
The Borrower shall carry on and conduct its business in a proper
and
efficient manner, file all requisite tax returns and pay all tax
which
becomes due and payable (except where contested in good
faith).
|
| 13.2.4 |
Evidence
of good standing
The Borrower will from time to time if requested by the Lender provide
the
Lender with evidence in form and substance satisfactory to the Lender
that
the Security Parties and all corporate shareholders of any Security
Party
remain in good standing.
|
| 13.2.5 |
Liquidity
The Borrower will throughout the Facility Period maintain or procure
that
the Managers maintain in the Operating Account at all times a minimum
positive account balance free of any Encumbrances (other than in
favour of
the Lender) of not less than one hundred and fifty thousand Dollars
($150,000). Any undrawn amounts under this Agreement may be included
for
the purpose of this calculation and this calculation shall exclude
cash
deposited with the Lender as security for any other facility or in
connection with Clause 5.
|
| 13.2.6 |
Negative
pledge and no disposals
The Borrower shall not create nor permit to subsist any Encumbrance
or
other third party rights over any of its present or future assets
or
undertaking nor dispose of any those assets or of all or part of
that
undertaking.
|
| 13.2.7 |
Merger
The Borrower shall not without the prior written consent of the Lender
enter into any amalgamation, demerger, merger or corporate
reconstruction.
|
| 13.2.8 |
Change
of business
The Borrower shall not without the prior written consent of the Lender
make any substantial change to the general nature of its business
from
that carried on at the date of this
Agreement.
|
| 13.2.9 |
No
other business
The Borrower shall not without the prior written consent of the Lender
engage in any business other than the ownership, operation, chartering
and
management of the Vessel.
|
34
| 13.2.10 |
No
place of business in UK or US
The Borrower shall not have an established place of business in the
United
Kingdom or the United States of America at any time during the Facility
Period.
|
| 13.2.11 |
No
borrowings
The Borrower shall not without the prior written consent of the Lender
borrow any money (except for the Loan and unsecured Financial Indebtedness
subordinated to the Loan) nor incur any obligations under
leases.
|
| 13.2.12 |
No
substantial liabilities Except
in the ordinary course of business, the Borrower shall not without
the
prior written consent of the Lender incur any liability to any third
party
which is in the Lender’s opinion of a substantial
nature.
|
| 13.2.13 |
No
loans or other financial commitments
The Borrower shall not without the prior written consent of the Lender
make any loan nor enter into any guarantee or indemnity or otherwise
voluntarily assume any actual or contingent liability in respect
of any
obligation of any other person.
|
| 13.2.14 |
No
dividends
The Borrower shall not without the prior written consent of the Lender
pay
any dividends or make any other distributions to shareholders or
issue any
new shares.
|
| 13.2.15 |
Inspection
of records
The Borrower will permit the inspection of its financial records
and
accounts from time to time by the Lender or its
nominee.
|
| 13.2.16 |
No
change in Relevant Documents
The Borrower shall procure that, without the prior written consent
of the
Lender, there shall be no termination of, alteration to, or waiver
of any
term of, any of the Relevant
Documents.
|
| 13.2.17 |
No
change in ownership or control of the Borrower or the Managers
The
Borrowers shall not permit any change in its beneficial ownership
and
|
35
|
control
and the beneficial ownership and control of the Managers from that
advised
to the Lender at the date of this
Agreement.
|
| 13.2.18 |
No
purchase of a vessel The
Borrower shall not purchase any vessel or any shares in any
vessel.
|
| 13.2.19 |
No
dealings with Master Agreement The
Borrower shall not assign, novate or encumber or in any other way
transfer
any of its rights or obligations under the Master Agreement, nor
enter
into any interest rate exchange or hedging agreement with anyone
other
than the Lender.
|
|
13.3
|
Vessel
undertakings
|
| 13.3.1 |
No
sale of Vessel
The Borrower shall not sell or otherwise dispose of the Vessel or
any
shares in the Vessel nor agree to do so without the prior written
consent
of the Lender.
|
| 13.3.2 |
No
chartering after Event of Default
Following the occurrence and during the continuation of an Event
of
Default the Borrower shall not without the prior written consent
of the
Lender let the Vessel on charter or renew or extend any charter or
other
contract of employment of the Vessel (nor agree to do
so).
|
| 13.3.3 |
No
change in management
The Borrower shall procure that, without the prior written consent
of the
Lender, there shall be no termination of, alteration to, or waiver
of any
term of, the Management Agreement and the Borrower shall not without
the
prior written consent of the Lender permit the Managers to sub-contract
or
delegate the commercial or technical management of the Vessel to
any third
party.
|
| 13.3.4 |
Registration
of Vessel
The Borrower undertakes to maintain the registration of the Vessel
under
the flag stated in Recital (A) for the duration of the Facility Period
unless the Lender agrees otherwise in
writing.
|
36
| 13.3.5 |
Evidence
of current COFR
The Borrower will, if and for so long as the Vessel trades in the
United
States of America and Exclusive Economic Zone (as defined in the
United
States Oil Pollution Act 1990), obtain, retain and provide the Lender
with
a copy of, a valid Certificate of Financial Responsibility for the
Vessel
under that Act and will comply strictly with the requirements of
that
Act.
|
| 13.3.6 |
ISM
Code compliance
The Borrower will:
|
| (a) |
procure
that the Vessel remains for the duration of the Facility Period subject
to
a SMS;
|
| (b) |
maintain
a valid and current SMC for the Vessel throughout the Facility Period
and
provide a copy to the Lender;
|
| (c) |
procure
that the ISM Company maintains a valid and current DOC throughout
the
Facility Period and provide a copy to the Lender;
and
|
| (d) |
immediately
notify the Lender in writing of any actual or `threatened withdrawal,
suspension, cancellation or modification of the SMC of the Vessel
or of
the DOC of the ISM Company.
|
| 13.3.7 |
ISPS
Code compliance
The Borrower will:
|
| (a) |
for
the duration of the Facility Period comply with the ISPS Code in
relation
to the Vessel and procure that the Vessel and the ISPS Company comply
with
the ISPS Code;
|
| (b) |
maintain
a valid and current ISSC for the Vessel throughout the Facility Period
and
provide a copy to the Lender; and
|
| (c) |
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
ISSC.
|
37
| 13.3.8 |
Annex
VI compliance
The Borrower will:
|
| (a) |
for
the duration of the Facility Period comply with Annex VI in relation
to
the Vessel and procure that the Vessel’s master and crew are familiar
with, and that the Vessel complies with, Annex
VI;
|
| (b) |
maintain
a valid and current IAPPC for the Vessel throughout the Facility
Period
and provide a copy to the Lender;
and
|
| (c) |
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
IAPPC.
|
|
14
|
Events
of Default
|
|
14.1
|
Events
of Default
Each of the events or circumstances set out in this Clause 14.1 is
an
Event of Default.
|
| 14.1.1 |
Non-payment
The Borrower does not pay on the due date any amount payable by it
under a
Finance Document at the place at and in the currency in which it
is
expressed to be payable.
|
| 14.1.2 |
Other
obligations
A
Security Party or any other person (except the Lender) does not comply
with any provision of any of the Relevant Documents to which that
Security
Party or person is a party (other than as referred to in Clause
14.1.1).
|
| 14.1.3 |
Misrepresentation
Any representation, warranty or statement made or deemed to be repeated
by
a Security Party in any Finance Document or any other document delivered
by or on behalf of a Security Party under or in connection with any
Finance Document is or proves to have been incorrect or misleading
in any
material respect when made or deemed to be
repeated.
|
| 14.1.4 |
Cross
default
Any Financial Indebtedness of a Security
Party:
|
38
| (a) |
is
not paid when due or within any originally applicable grace period;
or
|
| (b) |
is
declared to be, or otherwise becomes, due and payable before its
specified
maturity as a result of an event of default (however described);
or
|
| (c) |
is
declared by a creditor to be due and payable before its specified
maturity
as a result of such an event.
|
| 14.1.5 |
Insolvency
|
| (a) |
A
Security Party is unable or admits inability to pay its debts as
they fall
due, suspends making payments on any of its debts or, by reason of
actual
or anticipated financial difficulties, commences negotiations with
one or
more of its creditors with a view to rescheduling any of its Financial
Indebtedness.
|
| (b) |
The
value of the assets of a Security Party is less than its liabilities
(taking into account contingent and prospective
liabilities).
|
| (c) |
A
moratorium is declared in respect of any Financial Indebtedness of
a
Security Party.
|
| 14.1.6 |
Insolvency
proceedings
Any corporate action, legal proceedings or other procedure or step
is
taken for:
|
| (a) |
the
suspension of payments, a moratorium of any Financial Indebtedness,
winding-up, dissolution, administration, bankruptcy or reorganisation
(by
way of voluntary arrangement, scheme of arrangement or otherwise)
of a
Security Party;
|
| (b) |
a
composition, compromise, assignment or arrangement with any creditor
of a
Security Party;
|
| (c) |
the
appointment of a liquidator, receiver, administrative receiver,
administrator, compulsory manager, or trustee or other
|
39
|
similar
officer in respect of any Security Party or any of its assets;
or
|
| (d) |
enforcement
of any Encumbrance over any assets of a Security Party,
|
or
any
analogous procedure or step is taken in any jurisdiction.
| 14.1.7 |
Creditors’
process
Any expropriation, attachment, sequestration, distress or execution
affects any asset or assets of a Security
Party.
|
| 14.1.8 |
Change
in ownership or control of the Borrower or the
Managers
There is any change in the beneficial ownership or control of the
Borrower
or the Managers from that advised to the Lender by the Borrower at
the
date of this Agreement.
|
| 14.1.9 |
Repudiation
A
Security Party or any other person (except the Lender) repudiates
any of
the Relevant Documents to which that Security Party or person is
a party
or evidences an intention to do so.
|
| 14.1.10 |
Impossibility
or illegality
Any event occurs which would, or would with the passage of time,
render
performance of any of the Relevant Documents by a Security Party
or any
other party to any such document impossible, unlawful or unenforceable
by
the Lender or a Security Party.
|
| 14.1.11 |
Conditions
subsequent
Any of the conditions referred to in Clause 3.5 is not satisfied
within
the time reasonably required by the
Lender.
|
| 14.1.12 |
Revocation
or modification of authorization
Any consent, license, approval, authorization, filing, registration
or
other requirement of any governmental, judicial or other public body
or
authority which is now, or which at any time during the Facility
Period
becomes, necessary to enable a Security Party or any other person
(except
the Lender) to comply with any of its obligations under any of the
Relevant Documents is not obtained, is revoked, suspended, withdrawn
or
withheld, or is modified in a manner which the Lender considers is,
or
|
40
|
may
be, prejudicial to the interests of the Lender, or ceases to remain
in
full force and effect.
|
| 14.1.13 |
Curtailment
of business
A
Security Party ceases, or threatens to cease, to carry on all or
a
substantial part of its business or, as a result of intervention
by or
under the authority of any government, the business of a Security
Party is
wholly or partially curtailed or suspended, or all or a substantial
part
of the assets or undertaking of a Security Party is seized, nationalised,
expropriated or compulsorily
acquired.
|
| 14.1.14 |
Reduction
of capital
A
Security Party reduces its authorised or issued or subscribed
capital.
|
| 14.1.15 |
Loss
of Vessel
The Vessel suffers a Total Loss or is otherwise destroyed, abandoned,
confiscated, forfeited or condemned as prize, or a similar event
occurs in
relation to any other vessel which may from time to time be mortgaged
to
the Lender as security for the payment of all or any part of the
Indebtedness, except that a Total Loss, or event similar to a Total
Loss
in relation to any other vessel, shall not be an Event of Default
if:
|
| (a) |
the
Vessel or other vessel is insured in accordance with the Security
Documents; and
|
| (b) |
no
insurer has refused to meet or has disputed the claim for Total Loss
and
it is not apparent to the Lender in its discretion that any such
refusal
or dispute is likely to occur; and
|
| (c) |
payment
of all insurance proceeds in respect of the Total Loss is made in
full to
the Lender within one hundred and eighty (180) days of the occurrence
of
the casualty giving rise to the Total Loss in question or such longer
period as the Lender may in its discretion
agree.
|
41
| 14.1.16 |
Challenge
to registration
The registration of the Vessel or the Mortgage is contested or becomes
void or voidable or liable to cancellation or termination, or the
validity
or priority of the Mortgage is
contested.
|
| 14.1.17 |
War
The country of registration of the Vessel becomes involved in war
(whether
or not declared) or civil war or is occupied by any other power and
the
Lender in its discretion considers that, as a result, the security
conferred by the Security Documents is materially
prejudiced.
|
| 14.1.18 |
Master
Agreement termination
A
notice is given by the Lender under section 6(a) of the Master Agreement,
or by any person under section 6(b)(iv) of the Master Agreement,
in either
case designating an Early Termination Date for the purpose of the
Master
Agreement, or the Master Agreement is for any other reason terminated,
cancelled, suspended, rescinded, revoked or otherwise ceases to remain
in
full force and effect.
|
| 14.1.19 |
Material
adverse change
Any event or series of events occurs which, in the opinion of the
Lender,
is likely to have a materially adverse effect on the business, assets,
financial condition or credit worthiness of a Security
Party.
|
|
14.2
|
Acceleration
If
an Event of Default is continuing the Lender may by notice to the
Borrower
cancel any part of the Maximum Amount not then advanced
and:
|
| 14.2.1 |
declare
that the Loan, together with accrued interest, and all other amounts
accrued or outstanding under the Finance Documents are immediately
due and
payable, whereupon they shall become immediately due and payable;
and/or
|
| 14.2.2 |
declare
that the Loan is payable on demand, whereupon it shall immediately
become
payable on demand by the Lender.
|
42
|
15
|
Assignment
and Sub-Participation
|
|
15.1
|
Right
to assign
The Lender may, subject to the prior approval of the Borrower (such
approval not to be unreasonably withheld) and subject to the Lender
giving
prior notice of such intention to the Borrower, and without additional
costs to the Borrower, assign or transfer all or any of its rights
under
or pursuant to the Security Documents to any other bank or financial
institution, and may grant sub- participations in all or any part
of the
Loan. The Lender may, without the prior approval of the Borrower,
assign
or transfer all or any of its rights under or pursuant to the Security
Documents to any other branch of the Lender, and may grant
sub-participations in all or any part of the
Loan:
|
|
15.2
|
Borrower’s
co-operation
The Borrower will co-operate fully with the Lender in connection
with any
assignment, transfer or sub-participation; will execute and procure
the
execution of such documents as the Lender may require in that connection;
and irrevocably authorises the Lender to disclose to any proposed
assignee, transferee or sub-participant (whether before or after
any
assignment, transfer or sub-participation and whether or not any
assignment, transfer or sub- participation shall take place) all
information relating to the Security Parties, the Loan, the Relevant
Documents and the Vessel which the Lender may in its discretion consider
necessary or desirable.
|
|
15.3
|
Rights
of assignee or transferee
Any assignee or transferee of the Lender shall (unless limited by
the
express terms of the assignment or novation) take the full benefit
of
every provision of the Finance Documents benefitting the
Lender.
|
|
15.4
|
No
assignment or transfer by the Borrower
The Borrower may not assign any of its rights or transfer any of
its
rights or obligations under the Finance
Documents.
|
|
16
|
Set-Off
|
|
16.1
|
The
Lender may set off any matured obligation due from the Borrower under
any
Finance Document against any matured obligation owed by the Lender
to the
Borrower, regardless of the place of payment, booking branch or currency
of either obligation. If the obligations are in different currencies,
the
Lender may
|
43
|
Convert
either obligation at a market rate of exchange in its usual course
of
business for the purpose of the
set-off.
|
|
16.2
|
Master
Agreement rights
The rights conferred on the Lender by this Clause 16 shall be in
addition
to, and without prejudice to or limitation of, the rights of netting
and
set off conferred on the Lender by the Master
Agreement.
|
|
17
|
Payments
|
|
17.1
|
Payments
Each amount payable by the Borrower under a Finance Document shall be paid
to such account at such bank as the Lender may from time to time
direct to
the Borrower in the Currency of Account and in such funds as are
customary
at the time for settlement of transactions in the relevant currency
in the
place of payment. Payment shall be deemed to have been received by
the
Lender on the date on which the Lender receives authenticated advice
of
receipt, unless that advice is received by the Lender on a day other
than
a Business Day or at a time of day (whether on a Business Day or
not) when
the Lender in its discretion considers that it is impossible or
impracticable for the Lender to utilise the amount received for value
that
same day, in which event the payment in question shall be deemed
to have
been received by the Lender on the Business Day next following the
date of
receipt of advice by the Lender.
|
|
17.2
|
No
deductions or withholdings
Each payment (whether of principal or interest or otherwise) to be
made by
the Borrower under a Finance Document shall, subject only to Clause
17.3,
be made free and clear of and without deduction for or on account
of any
Taxes or other deductions, withholdings, restrictions, conditions
or
counterclaims of any nature.
|
|
17.3
|
Grossing-up
If
at any time any law requires the Borrower to make any deduction
or
withholding from any payment, or to change the rate or manner in
which any
required deduction or withholding is made, the Borrower will promptly
notify the Lender and, simultaneously with making that payment,
will pay
to the Lender whatever additional amount (after taking into account
any
additional Taxes on, or deductions or withholdings from, or restrictions
or conditions on, that additional amount) is necessary to ensure
that,
after making the deduction or withholding, the Lender receives
a net sum
equal to the sum
|
44
|
which
the Lender would have received had no deduction or withholding been
made.
|
|
17.4
|
Evidence
of deductions
If
at any time the Borrower is required by law to make any deduction
or
withholding from any payment to be made by it under a Finance Document,
the Borrower will pay the amount required to be deducted or withheld
to
the relevant authority within the times allowed under the applicable
law
and will, no later than thirty (30) days after making that payment,
deliver to the Lender an original receipt issued by the relevant
authority, or other evidence acceptable to the Lender, evidencing
the
payment to that authority of all amounts required to be deducted
or
withheld.
|
| 17.5 |
Adjustment
of due dates
If
any payment or transfer of funds to be made under a Finance Document,
other than a payment of interest on a Drawing, or a payment under
the
Master Agreement, shall be due on a day which is not a Business
Day, that
payment shall be made on the next succeeding Business Day (unless
the next
succeeding Business Day falls in the next calendar month in which
event
the payment shall be made on the next preceding Business Day).
Any such
variation of time shall be taken into account in computing any
interest in
respect of that payment.
|
|
17.6
|
Control
Account
The Lender shall open and maintain on its books a control account
in the
name of the Borrower showing the advance of the Loan and the computation
and payment of interest and all other sums due under this Agreement
and
the Master Agreement. The Borrower’s obligations to repay the Loan and to
pay interest and all other sums due under this Agreement and the
Master
Agreement shall be evidenced by the entries from time to time made
in the
control account opened and maintained under this Clause 17.6 and
those
entries will, in the absence of manifest error, be conclusive and
binding.
|
|
18
|
Notices
|
|
18.1
|
Communications
in writing
Any communication to be made under or in connection with this Agreement
shall be made in writing and, unless otherwise stated, may be made
by fax
or letter.
|
45
|
18.2
|
Addresses
The address and fax number (and the department or officer, if any,
for
whose attention the communication is to be made) of each party to
this
Agreement for any communication or document to be made or delivered
under
or in connection with this Agreement
are:
|
| 18.2.1 |
in
the case of the Borrower, c/o Safety Management Overseas S.A., 00
Xxxxxx
Xxxxxxxxx, XX-000 00 Xxxxx, Xxxxxx, Xxxxxx (telex no: 215050 answerback:
SAFE GR, fax no: x00 000 000 0000) marked for the attention of Mr
Xxxxxx
Xxxxxxxxxxxx; and
|
| 18.2.2 |
in
the case of the Lender, to the Lender at its address at the head
of this
Agreement (fax no: x00 000 000 0000 tel no: x00 000 000 0000) marked
for
the attention of: Shipping
Department;
|
or
any
substitute address, fax number, department or officer as either party may notify
to the other by not less than five (5) Business Days’ notice.
|
18.3
|
Delivery
Any communication or document made or delivered by one party to this
Agreement to the other under or in connection this Agreement will
only be
effective:
|
| 18.3.1 |
if
by way of fax, when received in legible form;
or
|
| 18.3.2 |
if
by way of letter, when it has been left at the relevant address or
five
(5) Business Days after being deposited in the post postage prepaid
in an
envelope addressed to it at that
address;
|
and,
if a
particular department or officer is specified as part of its address details
provided under Clause 18.2, if addressed to that department or
officer.
Any
communication or document to be made or delivered to the Lender will be
effective only when actually received by the Lender.
|
18.4
|
English
language
Any notice given under or in connection with this Agreement must
be in
English. All other documents provided under or in connection with
this
Agreement must be:
|
46
| 18.4.1 |
in
English; or
|
| 18.4.2 |
if
not in English, and if so required by the Lender, accompanied by
a
certified English translation and, in this case, the English translation
will prevail unless the document is a constitutional, statutory or
other
official document.
|
|
19
|
Partial
Invalidity
|
If,
at
any time, any provision of a Finance Document is or becomes illegal, invalid
or
unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.
|
20
|
Remedies
and Waivers
|
No
failure to exercise, nor any delay in exercising, on the part of the Lender,
any
right or remedy under a Finance Document shall operate as a waiver, nor shall
any single or partial exercise of any right or remedy prevent any further or
other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
|
21
|
Miscellaneous
|
|
21.1
|
No
oral variations
No
variation or amendment of a Finance Document shall be valid unless
in
writing and signed on behalf of the
Lender.
|
|
21.2
|
Further
Assurance
If
any provision of a Finance Document shall be invalid or unenforceable
in
whole or in part by reason of any present or future law or any decision
of
any court, or if the documents at any time held by or on behalf of
the
Lender are considered by the Lender for any reason insufficient to
carry
out the terms of this Agreement, then from time to time the Borrower
will
promptly, on demand by the Lender, execute or procure the execution
of
such further
|
47
|
documents
as in the opinion of the Lender are necessary to provide adequate
security
for the repayment of the
Indebtedness.
|
|
21.3
|
Rescission
of payments etc.
Any discharge, release or reassignment by the Lender of any of the
security constituted by, or any of the obligations of a Security
Party
contained in, a Finance Document shall be (and be deemed always to
have
been) void if any act (including, without limitation, any payment)
as a
result of which such discharge, release or reassignment was given
or made
is subsequently wholly or partially rescinded or avoided by operation
of
any law.
|
|
21.4
|
Certificates
Any certificate or statement signed by an authorised signatory of
the
Lender purporting to show the amount of the Indebtedness (or any
part of
the Indebtedness) or any other amount referred to in any Finance
Document
shall, save for manifest error or on any question of law, be conclusive
evidence as against the Borrower of that
amount.
|
|
21.5
|
Counterparts
This Agreement may be executed in any number of counterparts each
of which
shall be original but which shall together constitute the same
instrument.
|
|
21.6
|
Contracts
(Rights of Third Parties) Xxx 0000
A
person who is not a party to this Agreement has no right under the
Contracts (Rights Of Third Parties) Act 1999 to enforce or to enjoy
the
benefit of any term of this
Agreement.
|
|
22
|
Law
and Jurisdiction
|
|
22.1
|
Governing
law
This Agreement shall in all respects be governed by and interpreted
in
accordance with English law.
|
|
22.2
|
Jurisdiction
For the exclusive benefit of the Lender, the parties to this Agreement
irrevocably agree that the courts of England are to have jurisdiction
to
settle any disputes which may arise out of or in connection with
this
Agreement and that any proceedings may be brought in those
courts.
|
|
22.3
|
Alternative
jurisdictions
Nothing contained in this Clause 22 shall limit the right of the
Lender to
commence any proceedings against the Borrower in any other court
of
competent jurisdiction nor shall the commencement of any
|
48
|
proceedings
against the Borrower in one or more jurisdictions preclude the
commencement of any proceedings in any other jurisdiction, whether
concurrently or not.
|
|
22.4
|
Waiver
of objections
The Borrower irrevocably waives any objection which it may now or
in the
future have to the laying of the venue of any proceedings in any
court
referred to in this Clause 22, and any claim that those proceedings
have
been brought in an inconvenient or inappropriate forum, and irrevocably
agrees that a judgment in any proceedings commenced in any such court
shall be conclusive and binding on it and may be enforced in the
courts of
any other jurisdiction.
|
|
22.5
|
Service
of process
Without prejudice to any other mode of service allowed under any
relevant
law, the Borrower:
|
| 22.5.1 |
irrevocably
appoints Cheeswrights Notaries Public, Bankside House, 000 Xxxxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx as its agent for service
of
process in relation to any proceedings before the English courts
in
connection with this Agreement; and
|
| 22.5.2 |
agrees
that failure by a process agent to notify the Borrower of the process
will
not invalidate the proceedings
concerned.
|
49
SCHEDULE
1: Conditions Precedent and Subsequent
Part
1: Conditions precedent
| 1 |
Security
Parties
|
| (a) |
Constitutional
Documents
Copies of the constitutional documents of each Security Party together
with such other evidence as the Lender may reasonably require that
each
Security Party is duly incorporated in its country of incorporation
and
remains in existence with power to enter into, and perform its obligations
under, the Relevant Documents to which it is or is to become a
party.
|
| (b) |
Certificates
of good standing
A
certificate of good standing in respect of each Security Party (if
such a
certificate can be obtained).
|
| (c) |
Board
resolutions
A
copy of a resolution of the board of directors of each Security
Party:
|
|
(i)
|
approving
the terms of, and the transactions contemplated by, the Relevant
Documents
to which it is a party and resolving that it execute those Relevant
Documents; and
|
|
(ii)
|
authorising
a specified person or persons to execute those Relevant Documents
(and all
documents and notices to be signed and/or despatched under those
documents) on its behalf.
|
| (d) |
Officer’s
certificates
A
certificate of a duly authorised officer of each Security Party certifying
that each copy document relating to it specified in this Part I of
Schedule 1 is correct, complete and in full force and effect as at
a date
no earlier than the date of this Agreement and setting out the names
of
the directors and officers of that Security
Party.
|
| (e) |
Powers
of attorney
The notarially attested and legalised power of attorney of each Security
Party under which any documents are to be executed or transactions
undertaken by that Security Party.
|
50
| 2 |
Security
and related documents
|
| (a) |
Vessel
documents
Photocopies, certified as true by a director or the secretary or
the duly
authorised attorney of the Borrower, of:
|
| (i) |
the
Management Agreement;
|
| (ii) |
the
Vessel’s current Safety Construction, Safety Equipment, Safety Radio, Oil
Pollution Prevention and Load Line
Certificates;
|
| (iii) |
the
Vessel’s current Certificate of Financial Responsibility issued pursuant
to the United States Oil Pollution Act 1990 (if required for the
Vessel);
|
| (iv) |
the
Vessel’s current SMC;
|
| (v) |
the
ISM Company’s current DOC;
|
| (vi) |
the
Vessel’s current ISSC;
|
| (vii) |
the
Vessel’s current IAPPC;
|
| (viii) |
the
Vessel’s current Tonnage
Certificate;
|
in
each
case together with all addenda, amendments or supplements.
| (b) |
Evidence
of Borrower’s title
Evidence that on the Drawdown Date (i) the Vessel will be at least
provisionally registered under the flag stated in Recital (A) in
the
ownership of the Borrower and (ii) the Mortgage will be capable of
being
registered against the Vessel with first
priority.
|
| (c) |
Evidence
of insurance
Evidence that the Vessel is insured in the manner required by the
Security
Documents and that letters of undertaking will be issued in the manner
required by the Security Documents, together with (if required by
the
Lender) the written approval of the Insurances by an insurance adviser
appointed by the Lender.
|
| (d) |
Confirmation
of class
A
Certificate of Confirmation of Class for hull and machinery confirming
that the Vessel is classed with the highest class applicable
|
51
|
to
vessels of her type with Lloyd’s Register of Shipping or such other
classification society as may be acceptable to the Lender free of
recommendations affecting class.
|
| (e) |
Security
Documents
The Security Documents, together with all other documents-required-by
any
of them, including, without limitation, all notices of assignment
and/or
charge and evidence that those notices will be duly acknowledged
by the
recipients.
|
| (f) |
Mandates
Such duly signed forms of mandate, and/or other evidence of the opening
of
the Accounts, as the Lender may
require.
|
| (g) |
Managers’
confirmation
The written confirmation of the Managers that, throughout the Facility
Period unless otherwise agreed by the Lender, they will remain the
commercial and technical managers of the Vessel and that they will
not,
without the prior written consent of the Lender, sub-contract or
delegate
the commercial or technical management of the Vessel to any third
party
and confirming in terms acceptable to the Lender that, following
the
occurrence of an Event of Default, all claims of the Managers against
the
Borrower shall be subordinated to the claims of the Lender under
the
Finance Documents.
|
| (h) |
No
disputes
The written confirmation of the Borrower that there is no dispute
under
any of the Relevant Documents as between the parties to any such
document.
|
|
3
|
Legal
opinions
|
| (a) |
If
a Security Party is incorporated in a jurisdiction other than England
and
Wales or if any Finance Document is governed by the laws of a jurisdiction
other than England and Wales, a legal opinion of the legal advisers
to the
Lender in each relevant jurisdiction, substantially in the form or
forms
provided to the Lender prior to signing this Agreement or confirmation
satisfactory to the Lender that such an opinion will be
given.
|
| 4 |
Other
documents and evidence
|
| (a) |
Drawdown
Notice
A
duly completed Drawdown Notice.
|
52
| (b) |
Process
agent
Evidence that any process agent referred to in Clause 22.5 and any
process
agent appointed under any other Finance Document has accepted its
appointment.
|
| (c) |
Other
authorisations
A
copy of any other consent, licence, approval, authorisation or other
document, opinion or assurance which the Lender considers to be necessary
or desirable (if it has notified the Borrower accordingly) in connection
with the entry into and performance of the transactions contemplated
by
any of the Relevant Documents or for the validity and enforceability
of
any of the Relevant Documents.
|
| (d) |
Fees
Evidence that the fees, costs and expenses then due from the Borrower
under Clause 9 and Clause 10 have been paid or will be paid by the
Drawdown Date.
|
| (e) |
“Know
your customer” documents Such
documentation and other evidence as is reasonably requested by the
Lender
in order for the Lender to comply with all necessary “know your customer”
or similar identification procedures in relation to the transactions
contemplated in the Finance
Documents.
|
53
Part
II: Conditions subsequent
| 1 |
Evidence
of Borrower’s title
Certificate of ownership and encumbrance (or equivalent) issued by
the
Registrar of Ships (or equivalent official) of the flag stated in
Recital
(A) confirming that (a) the Vessel is permanently registered
under that flag in the ownership of the Borrower, (b) the Mortgage
has been registered with first priority against the Vessel and
(c) there are no further Encumbrances registered against the
Vessel.
|
| 2 |
Letters
of undertaking
Letters of undertaking in respect of the Insurances as required by
the
Security Documents together with copies of the relevant policies
or cover
notes or entry certificates duly endorsed with the interest of the
Lender.
|
| 3 |
Acknowledgements
of notices
Acknowledgements of all notices of assignment and/or charge given
pursuant
to the Security Documents.
|
| 4 |
Legal
opinions
Such of the legal opinions specified in Part I of this Schedule
1 as have
not already been provided to the
Lender.
|
| 5 |
Companies
Act registrations
Evidence that the prescribed particulars of the Security Documents
have
been delivered to the Registrar of Companies of Cyprus within the
statutory time limit.
|
| 6 |
Mortgagee’s
Insurance Fees
Payment to the Lender of all fees in relation to inspections, valuations,
legal fees and premiums for Mortgagee’s
Insurances.
|
54
SCHEDULE
2: Calculation of Mandatory Cost
| 1 |
The
Mandatory Cost is 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.
|
| (a) |
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.
|
| (b) |
The
Additional Cost Rate for the Lender if lending from an office in
the
euro-zone will be the percentage notified by the Lender to the Borrower
to
be its reasonable determination of the cost (expressed as a percentage
of
the Loan) of complying with the minimum reserve requirements of the
European Central Bank as a result of making the Loan from that
office.
|
| (c) |
The
Additional Cost Rate for the Lender if lending from an office in
the
United Kingdom will be calculated by the Lender as
follows:
|
| (d) |
where
the Loan is denominated in
sterling:
|
BY
+
S(Y-Z) + F x 0.01
per cent
per annum
100
- (B
+ S)
| (e) |
where
the Loan is denominated in any currency other than
sterling:
|
F
x
0.01
per cent
per annum
300
where:
| B |
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;
|
55
| Y |
is
the percentage rate of interest (excluding the Margin and the Mandatory
Cost and, if the Loan is an overdue amount, the additional rate of
interest specified in Clause 7.8) payable for the relevant Interest
Period
on the Loan;
|
| S |
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;
|
| Z |
is
the interest rate per annum payable by the Bank of England to the
Lender
on special deposits; and
|
| F |
is
the charge payable by the Lender to the Financial Services Authority
under
paragraph 2.02 or 2.03 (as appropriate) of the Fees Regulations or
the
equivalent provisions in any replacement regulations (with, for this
purpose, the figure for the minimum amount in paragraph 2.02b or
such
equivalent provision deemed to be zero), expressed in pounds per
£l
million of the fee base of the
Lender.
|
| 2 |
For
the purpose of this Schedule:
|
| (a) |
“eligible
liabilities”
and “special
deposits”
have the meanings given to them at the time of application of the
formula
by the Bank of England;
|
| (b) |
“fee
base”
has the meaning given to it in the Fees
Regulations;
|
| (c) |
“Fees
Regulations”
means the regulations governing periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force
from
time to time in respect of the payment of fees for the acceptance
of
deposits.
|
| 3 |
In
the application of the formula B, Y, S and Z are included in the
formula
as figures and not as percentages, e.g. if B = 0.5% and Y = 15%,
BY is
calculated as 0.5. x 15. Each rate calculated in accordance with
the
formula is, if necessary, rounded upward to four decimal
places.
|
| 4 |
If
a change in circumstances has rendered, or will render, the formula
inappropriate, the Lender shall notify the Borrower of the manner
in which
the Mandatory Cost will subsequently be calculated. The manner of
calculation so
|
56
|
notified
by the Lender shall, in the absence of manifest error, be binding
on the
Borrower.
|
57
SCHEDULE
3: Form of Drawdown Notice
To: DnB
NOR BANK ASA
From: Efragel
Shipping Corporation
2008
Dear
Sirs,
Drawdown
Notice
We
refer
to the Loan Agreement dated
2008
made between ourselves and yourselves (the “Agreement”).
Words
and
phrases defined in the Agreement have the same meaning when used in this
Drawdown Notice.
Pursuant
to Clause 4 of the Agreement, we irrevocably request that you advance a Drawing
in the sum of [ ]
to us
on 200 , which is a Business Day, by paying the amount of the advance
to
[ ].
We
warrant that the representations and warranties contained in Clause 12.1 of
the
Agreement are true and correct at the date of this Drawdown Notice and will
be
true and correct on 200 , that
no Default has occurred and is continuing, and that no Default will result
from
the advance of the sum requested in this Drawdown Notice.
We
select
the period of
[ ]
months as the Interest Period in respect of the said Drawing.
Yours
faithfully
For
and
on behalf of
Efragel
Shipping Corporation
58
IN
WITNESS
of which
the parties to this Agreement have executed this Agreement the day and year
first before written.
|
SIGNED
by
duly
authorised for and on behalf
of
EFRAGEL SHIPPING
CORPORATION
|
)
)
)
)
|
 |
|
|
SIGNED
by
duly
authorised for and on behalf
of
DnB NOR BANK ASA
|
)
)
)
|
 |
|
59
