DATED APRIL 19, 2006 and others (as borrowers) - and - FORTIS BANK (NEDERLAND) N.V. and KfW (as lenders) - and - FORTIS BANK (NEDERLAND) N.V. (as agent and security trustee)
EXHIBIT
10.1
DATED
APRIL 19, 2006
MC
HERON SHIPPING LIMITED
and
others
(as
borrowers)
-
and -
FORTIS
BANK (NEDERLAND) N.V.
and
KfW
(as
lenders)
-
and -
FORTIS
BANK (NEDERLAND) N.V.
(as
agent and security trustee)
US$31,750,000
SECURED
XXXXXXXXXX
XXXXXXX
Xxx,
Xx Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
Tel:
x00 000 0000 0000
Fax:
x00 000 0000 0000
(Ref:
814)
CONTENTS
Page
|
||
1
|
Definitions
and Interpretation
|
5
|
2
|
The
Loan and its Purpose
|
17
|
3
|
Conditions
Precedent and Subsequent
|
18
|
4
|
Representations
and Warranties
|
23
|
5
|
Repayment
and Prepayment
|
25
|
6
|
Interest
|
26
|
7
|
Fees
|
28
|
8
|
Security
Documents
|
29
|
9
|
Agency
and Trust
|
30
|
10
|
Covenants
|
39
|
11
|
Earnings
Account
|
44
|
12
|
Events
Of Default
|
45
|
13
|
Set-Off
And Lien
|
49
|
14
|
Assignment
and Sub-Participation
|
50
|
15
|
Payments,
Mandatory Prepayment, Reserve Requirements and Illegality
|
52
|
16
|
Communications
|
56
|
17
|
General
Indemnities
|
57
|
18
|
Miscellaneous
|
59
|
19
|
Law
and Jurisdiction
|
64
|
SCHEDULE
1
|
65
|
The
Borrowers and the Vessels
|
65
|
SCHEDULE
2
|
67
|
The
Banks and the Commitments
|
67
|
SCHEDULE
3
|
68
|
General
Terms and Conditions
|
68
|
APPENDIX
A
|
71
|
APPENDIX
B
|
72
|
Form
of Transfer Certificate
|
72
|
3
LOAN
AGREEMENT
Dated:
April 19, 2006
BETWEEN:-
(1)
|
the
companies listed in Schedule 1, each of which is a company incorporated
according to the law of the country indicated against its name in
Schedule
1, with its registered office at the address indicated against its
name in
Schedule 1 (together "the
Borrowers"
and each a "Borrower");
and
|
(2)
|
the
banks listed in Schedule 2, each acting through its office at the
address
indicated against its name in Schedule 2 (together "the
Banks"
and each a "Bank");
and
|
(3)
|
FORTIS
BANK (NEDERLAND) N.V.,
acting as agent and security trustee through its office at Xxxxxxxxxx
00,
0000 XX Rotterdam, The Netherlands (in that capacity "the
Agent").
|
(A)
|
Each
of the Borrowers is the registered owner of the Vessel listed against
its
name in Schedule 1.
|
(B)
|
Each
of the Vessels is or will be registered in the ownership of her Owner
under the flag of the country indicated against its name in Schedule
1.
|
(C)
|
Each
of the Banks has agreed to advance to the Borrowers, as joint and
several
debtors and obligors, its respective Commitment of an aggregate amount
not
exceeding thirty one million seven hundred and fifty thousand Dollars
($31,750,000). The Loan will be divided into two tranches, Tranche
A and
Tranche B. Tranche A, in the maximum amount of twenty three million
seven
hundred and fifty thousand Dollars ($23,750,000) shall be used by
the
Borrowers in re-financing certain existing indebtedness and Tranche
B, in
the maximum amount of eight million Dollars ($8,000,000) shall be
used by
the Borrowers in financing part of the purchase price of the New
Vessels.
|
4
IT IS AGREED
as
follows:-
1.1
|
Definitions
|
In
this
Agreement:-
1.1.1
|
"the
Account Security Deed"
means the Account Security Deed referred to in Clause
8.1.4.
|
1.1.2
|
"the
Address for Service"
means c/o Marine Legal Services Limited, Xxxx Xxxxx, 0 Xxxxxxxxxx
Xxxxxx,
Xxxxxx XX0X 0XX or, in relation to any of the Security Parties, such
other
address in England and Wales as that Security Party may from time
to time
designate by no fewer than ten days' written notice to the
Agent.
|
1.1.3 |
"the
Administration" has
the meaning given to it in paragraph 1.1.3 of the ISM
Code.
|
1.1.4
|
the
"Advance
Date",
in relation to any Drawing, means the date on which that Drawing
is
advanced by the Banks to the Borrowers pursuant to Clause
2.
|
1.1.5
|
"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).
|
1.1.6
|
"the
Assignments"
means the deeds of assignment of the Insurances, Earnings, Requisition
Compensation and Charter referred to in Clause 8.1.2 (each an
"Assignment").
|
1.1.7
|
the
"Attributable
Amount",
in relation to any Vessel and at any time, means the amount which
is
obtained by dividing the Index Amount of that Vessel set out against
the
name of that Vessel in Schedule 1 by the sum of the Index Amounts of
the Vessels then mortgaged to the Banks or to the Agent on their
behalf as
security for the repayment of the Indebtedness, and multiplying the
result
by the amount of the Loan outstanding at that
time.
|
5
1.1.8
|
"the
Availability Termination Date"
means 24 April 2006 or such later date as the Banks may in their
discretion agree (such consent not to be unreasonably
withheld).
|
1.1.9
|
"Break
Costs"
means all costs, losses, premiums or penalties incurred by the Agent
or
any Bank in the circumstances contemplated by Clause 17.4, or as
a result
of it receiving any prepayment of all or any part of the Loan (whether
pursuant to Clause 5 or otherwise), or any other payment under or
in
relation to the Security Documents on a day other than the due date
for
payment of the sum in question, and includes (without limitation)
any
losses or costs incurred in liquidating or re-employing deposits
from
third parties acquired to effect or maintain the Loan, and any
liabilities, expenses or losses incurred by the Agent or any Bank
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 Agent or any Bank 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.
|
1.1.10
|
"Business
Day"
means a day on which banks are open for the transaction of business
of the
nature contemplated by this Agreement (and not authorised by law
to close)
in New York, United States of America; Amsterdam, The Netherlands;
London,
England and any other financial centre which any Bank may consider
appropriate for the operation of the provisions of this
Agreement.
|
1.1.11
|
"Charterers"
means the
charterers listed in Schedule 1 as Charterers of the Vessels and
each a
"Charterer".
|
1.1.12
|
"Charters"
means the Existing Charters and any other charters approved in writing
by
the Agent.
|
1.1.13
|
"Commitment"
means, in relation to each Bank, the amount of the Loan which that
Bank
agrees to advance to the Borrowers as its several liability as indicated
against the name of that Bank in Schedule 2 and/or, where the context
permits, the amount of the Loan advanced by that Bank and remaining
outstanding.
|
6
1.1.14
|
a
"Communication"
means any notice, approval, demand, request or other communication
from
one party to this Agreement to any other party to this
Agreement.
|
1.1.15
|
"the
Communications Address"
means c/o MC Shipping Inc Aigue Marine 00, xxxxxx xx Xxxxxxxxxxx,
XX Xxx
000, XX 00000, Xxxxxx, Cedex Fax no.: x000 0000 0000, marked for
the
attention of Xx Xxxxxxxxx Xxxxxxx,
email:xxxxxxxxx.xxxxxxx@xxxxxxxxxx.xxx
|
1.1.16
|
"the
Company"
means, at any given time and in relation to any Vessel, the company
responsible for the Vesselβs compliance with the ISM Code pursuant to
paragraph 1.1.2 of the ISM Code.
|
1.1.17
|
"Currency
of Account"
means, in relation to any payment to be made to the Agent or a Bank
under
or pursuant to any of the Security Documents, the currency in which
that
payment is required to be made by the terms of the relevant Security
Document.
|
1.1.18
|
"the
Deeds of Covenants"
means the deeds of covenants referred to in Clause 8.1.1 (each a
"Deed
of Covenants").
|
1.1.19
|
"Default
Rate"
means the rate of three per centum (3%) per annum above the cost
to the
Agent of obtaining funds in amount similar to the amount of the
Indebtedness or any relevant part of the Indebtedness for such periods
as
the Agent shall determine.
|
1.1.20
|
"DOC"
means, in relation to each Company, a valid Document of Compliance
issued
for the Company
by
the Administration pursuant to paragraph 13.2 of the ISM
Code.
|
1.1.21
|
"Dollars"
and "$"
each means available and freely transferable and convertible funds
in
lawful currency of the United States of
America.
|
1.1.22
|
"Drawdown
Notice"
means a notice complying with Clause
2.3.
|
1.1.23
|
"Drawing"
means a part of the Loan advanced by the Banks to the Borrowers in
accordance with Clause 2.3.
|
7
1.1.24
|
"Earnings",
in relation to a Vessel, means all hires, freights, pool income and
other
sums payable to or for the account of the Owner in respect of that
Vessel
including (without 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.
|
1.1.25
|
"the
Earnings Account"
means a bank account to be opened in the joint names of the Borrowers
with
the Agent and designated "MC SHIPPING - Earnings
Account".
|
1.1.26
|
"Encumbrance"
means any mortgage, charge (fixed or floating), pledge, lien, assignment,
hypothecation, preferential right, option, title retention or trust
arrangement or any other agreement or arrangement which has the effect
of
creating security or payment
priority.
|
1.1.27
|
"Event
of Default"
means any of the events set out in
Clause 12.2.
|
1.1.28
|
"Existing Charters"
means the charters for each Vessel made between the relevant Owner
and the
relevant Charterer listed in Schedule 1 (together with any option
periods)
and each a "Charter".
|
1.1.29
|
"the
Existing Lenders"
means Fortis Bank (Nederland) N.V. and
KfW.
|
1.1.30
|
"the
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 repaid in full and
the
Borrowers have ceased to be under any further actual or contingent
liability to the Banks or the Agent under or in connection with the
Security Documents.
|
1.1.31
|
"the
Guarantee"
means the guarantee and indemnity of the Guarantor referred to in
Clause
8.1.3.
|
1.1.32
|
"the
Guarantor"
means MC Shipping Inc. a corporation incorporated under the laws
of
Liberia with its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx
and/or (where the context permits) any other person or company who
shall
at any time during the Facility Period give to the Banks or to the
Agent
on their behalf a guarantee and/or indemnity for the repayment of
all or
part of the Indebtedness.
|
8
1.1.33
|
"the
Indebtedness"
means the Loan; all other sums of any nature (together with all interest
on any of those sums) which from time to time may be payable by any
of the
Borrowers to the Agent or the Banks pursuant to the Security Documents;
any damages payable as a result of any breach by any of the Borrowers
of
any of the Security Documents; and any damages or other sums payable
as a
result of any of the obligations of any of the Borrowers under or
pursuant
to any of the Security Documents being disclaimed by a liquidator
or any
other person, or, where the context permits, the amount thereof for
the
time being outstanding.
|
1.1.34
|
"the
Index Amount",
in relation to any Vessel, means the number indicated against the
name of
that Vessel in Schedule 1 and, in relation to any other vessel, means
such
number as the Borrowers and the Agent may
agree.
|
1.1.35
|
an
"Instructing
Group"
means any one or more Banks whose combined Proportionate Shares exceed
sixty six point six per centum
(66.6%).
|
1.1.36
|
"Insurances",
in relation to a Vessel, 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 that Vessel or her increased value
or her
Earnings and (where the context permits) all benefits thereof, including
all claims of any nature and returns of
premium.
|
1.1.37
|
"Interest
Payment Date"
means each date for the payment of interest in accordance with
Clause 6.
|
1.1.38
|
"Interest
Period"
means each interest period selected by the Borrowers or agreed by
the
Agent pursuant to Clause 6.
|
1.1.39
|
"IAPPC"
means a valid international air pollution prevention certificate
for the
Vessel issued under Annex VI.
|
9
1.1.40
|
"the
ISM Code"
means the International Management Code for the Safe Management of
Ships
and for Pollution Prevention, as adopted by the Assembly of the
International Maritime Organisation on 4 November 1993 by resolution
A.741
(18) and incorporated on 19 May 1994 as chapter IX of the Safety
of Life
at Sea Convention 1974.
|
1.1.41
|
"ISPS
Code"
means the International Ship and Port Facility Security
Code.
|
1.1.42
|
"ISPS
Company"
means, at any given time, the company responsible for each Vessel's
compliance with the ISPS Code.
|
1.1.43
|
"ISSC"
means, in relation to a Vessel, a valid International Ship Security
Certificate for that Vessel issued under the ISPS
Code.
|
1.1.44
|
"law"
means any law, statute, treaty, convention, regulation, instrument
or
other subordinate legislation or other legislative or quasi-legislative
rule or measure, or any order or decree of any government, judicial
or
public or other body or authority, or any directive, code of practice,
circular, guidance note or other direction issued by any competent
authority or agency (whether or not having the force of
law).
|
1.1.45
|
"LIBOR"
means the rate, rounded to the nearest four decimal places downwards
(if
the digit displayed in the fifth decimal place is 1,2,3 or 4) or
upwards
(if the digit displayed in the fifth decimal place is 5,6,7,8 or
9)
displayed as the British Bankers' Association Interest Settlement
Rate on
Telerate Page 3750 or any other information service selected by the
Agent
on which that rate is displayed, for deposits in Dollars of amounts
equal
to the amount of the Loan or any relevant part of the Loan for a
period
equal in length to the relevant Interest Period, or (if the Agent
is for
any reason unable to ascertain that rate) the rate (rounded upwards
to the
nearest whole multiple of one-sixteenth of one per centum) at which
deposits in Dollars of amounts comparable to the amount of the Loan
(or
any relevant part of the Loan) are offered to the Agent in the London
Interbank market for a period equal in length to the relevant Interest
Period.
|
10
1.1.46
|
"the
Loan"
means the aggregate amount from time to time advanced by the Banks
to the
Borrowers pursuant to Clause 2 or, where the context permits, the
amount
advanced and for the time being
outstanding.
|
1.1.47
|
"the
Managers"
means V. Ships (Cyprus) Limited and, in respect of the New Vessels,
Wallem
Ship Management Limited, or such other commercial and/or technical
managers of the Vessels nominated by the Borrowers as the Agent may
approve.
|
1.1.48
|
"the
Management Agreements"
means the management agreements between the Borrowers and the Managers
relating to the Vessels.
|
1.1.49
|
"the
Margin"
means one point two five per centum (1.25%) per
annum.
|
1.1.50
|
"Market
Value"
means, in respect to a valuation of a Vessel, (i) on the Advance
Date, the
arithmetic average of two valuations provided by two independent
sale and
purchase brokers appointed by the Agent and (ii) commencing on the
first
December following the anniversary of the Advance Date and thereafter
on a
semi-annual basis throughout the Facility Period and at any other
time,
the arithmetic average of two valuations provided by two independent
sale
and purchase brokers appointed by the Agent. The initial valuations
and
any valuations following an Event of Default shall be at the Borrowers'
expense. The two valuations each year during the Facility Period
shall be
at the Agent's expense. Any valuation shall be made without physical
inspection and on the basis of a charter free sale for prompt delivery
for
cash at arms' length on normal commercial terms as between a willing
seller and a willing buyer.
|
1.1.51
|
"the
Maximum Loan Amount"
means thirty one million seven hundred and fifty thousand Dollars
($31,750,000).
|
1.1.52
|
"the
MOA"
means the memorandum of agreement in respect of each New Vessel,
each
dated 24 February 2006 on the terms and subject to the conditions
of which
the Seller has agreed to sell each New Vessel to the relevant
Owner.
|
1.1.53
|
"the
Mortgagees' Insurances"
means all policies and contracts of mortgagees' interest insurance,
mortgagees' additional perils (oil pollution) insurance and any other
insurance from time to time taken out by the Agent on behalf of the
Banks
in relation to the Vessels.
|
11
1.1.54
|
"the
Mortgages"
means the first priority and first preferred mortgages referred to
in
Clause 8.1 (each a "Mortgage").
|
1.1.55
|
"New
Vessels"
means m.v. "Blackfriars Bridge" (ex "Xxxxxxxx Xxxxxxx") and m.v.
"London
Bridge" (ex "Xxxxxxx Xxxxxxx").
|
1.1.56
|
"Operating
Expenses"
means expenses properly and reasonably incurred by the Borrowers
in
connection with the operation, employment, maintenance, repair and
insurance of the Vessels.
|
1.1.57
|
"Owner"
means, in relation to a Vessel, the Borrower against whose name the
name
of that Vessel appears in Schedule
1.
|
1.1.58
|
"Potential
Event of Default"
means any event which, with the giving of notice and/or the passage
of
time and/or the satisfaction of any materiality test, would constitute
an
Event of Default.
|
1.1.59
|
"Proceedings"
means any suit, action or proceedings begun by the Agent or any of
the
Banks arising out of or in connection with the Security
Documents.
|
1.1.60
|
"Proportionate
Share"
means, at any time, the proportion which that Bankβs Commitment (whether
or not advanced) then bears to the aggregate Commitments of all the
Banks
(whether or not advanced).
|
1.1.61
|
"Repayment
Date"
means the date for payment of any Repayment Instalment in accordance
with
Clause 5.
|
1.1.62
|
"Repayment
Instalment"
means any instalment of the Loan to be repaid by the Borrowers pursuant
to
Clause 5.
|
1.1.63
|
"Requisition
Compensation",
in relation to a Vessel, means all compensation or other money which
may
from time to time be payable to the Owner 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).
|
12
1.1.64
|
"the
Security Documents"
means this Agreement, the Mortgages, the Deeds of Covenants, the
Assignments, the Guarantee, the Account Security Deed 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.
|
1.1.65
|
"Security
Parties"
means the Borrowers, the Guarantor and any other person or company
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.
|
1.1.66 |
"the
Seller"
means Xxxx Limited of Douglas, Isle of Man and Monet Trading Limited
of
Xxxxxxx, Isle of Man.
|
1.1.67 |
"SMC"
means, in relation to each Vessel, a valid safety management certificate
issued for that Vessel by or on behalf of the relevant Administration
pursuant to paragraph 13.4 of the ISM
Code.
|
1.1.68 |
"SMS"
means, in relation to each Vessel, a safety management system for
that
Vessel developed and implemented in accordance with the ISM Code
and
including the functional requirements, duties and obligations required
by
the ISM Code.
|
1.1.69
|
"Taxes"
means all taxes, levies, imposts, duties, charges, fees, deductions
and
withholdings (including any related interest, fines, surcharges and
penalties) and any restrictions or conditions resulting in any charge,
other than taxes on the overall net income of the Agent or of a Bank,
and
"Tax"
and "Taxation"
shall be interpreted accordingly.
|
1.1.70
|
"Total
Loss",
in relation to a Vessel, means:-
|
(a)
|
an
actual, constructive, arranged, agreed or compromised total loss
of that
Vessel; or
|
(b)
|
the
requisition for title or compulsory acquisition of that Vessel by
or on
behalf of any government or other authority (other than by way of
requisition for hire); or
|
13
(c)
|
the
capture, seizure, arrest, detention or confiscation of that Vessel,
unless
the Vessel is released and returned to the possession of the Owner
within
one month after the capture, seizure, arrest, detention or confiscation
in
question.
|
1.1.71
|
"Tranche
A"
means a maximum amount of twenty three million seven hundred and
fifty
thousand Dollars ($23,750,000).
|
1.1.72
|
"Tranche
B"
means a maximum amount of eight million Dollars
($8,000,000).
|
1.1.73
|
"Tranches"
means Tranche A and Tranche B
together.
|
1.1.74
|
"Transfer
Certificate"
means a certificate materially in the form of Appendix
B.
|
1.1.75
|
"Transfer
Date",
in relation to a transfer of any of a Bank's rights and/or obligations
under or pursuant to this Agreement, means the fifth Business Day
after
the date of delivery of the relevant Transfer Certificate to the
Agent, or
such later Business Day as may be specified in the relevant Transfer
Certificate.
|
1.1.76
|
"Transferee"
means any bank or financial institution to which a Bank transfers
any of
its rights and/or obligations under or pursuant to this
Agreement.
|
1.1.77
|
"the
Trust Property"
means:-
|
(a)
|
the
benefit of the covenant contained in Clause 9;
and
|
(b)
|
all
benefits arising under (including, without limitation, all proceeds
of the
enforcement of) each of the Security Documents (other than this
Agreement), with the exception of any benefits arising solely for
the
benefit of the Agent.
|
1.1.78
|
"Underlying
Documents"
means the MOAs, the Charters and the Management
Agreements.
|
14
1.1.79
|
"the
Vessels" means
the vessels listed in Schedule 1 and everything now or in the future
belonging to them on board and ashore (each a "Vessel").
|
1.2
|
Interpretation
|
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, Schedules and Appendices are references to
recitals
and clauses of, and schedules and appendices to, this Agreement;
|
1.2.4
|
references
to this Agreement include the Recitals, the Schedules and the
Appendices;
|
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
Security 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 a Bank or to the Agent include its successors, transferees and
assignees;
|
1.2.9
|
references
to times of day are to London time.
|
15
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 Agent
or
any of the Banks and the Borrowers or their representatives prior to the date
of
this Agreement. It shall be read in conjunction with the Agent's General Terms
and Conditions (a copy of which is attached at Schedule 3 and which shall form
an integral part hereof). In the case of any conflict between this Agreement
and
the said General Terms and Conditions, this Agreement shall prevail.
1.4
|
Joint and several liability |
1.4.1
|
All
obligations, covenants, representations, warranties and undertakings
in or
pursuant to the Security Documents assumed, given, made or entered
into by
the Borrowers shall, unless otherwise expressly provided, be assumed,
given, made or entered into by the Borrowers jointly and
severally.
|
1.4.2
|
Each
of the Borrowers agrees that any rights which it may have at any
time
during the Facility Period by reason of the performance of its obligations
under the Security Documents to be indemnified by any other Borrower
and/or to take the benefit of any security taken by the Banks or
by the
Agent pursuant to the Security Documents shall be exercised in such
manner
and on such terms as the Agent may require. Each of the Borrowers
agrees
to hold any sums received by it as a result of its having exercised
any
such right on trust for the Agent (as agent for the Banks)
absolutely.
|
1.4.3
|
Each
of the Borrowers agrees that it will not at any time during the Facility
Period claim any set-off or counterclaim against any other Borrower
in
respect of any liability owed to it by that other Borrower under
or in
connection with the Security Documents, nor prove in competition
with the
Banks or the Agent in any liquidation of (or analogous proceeding
in
respect of) any other Borrower in respect of any payment made under
the
Security Documents or in respect of any sum which includes the proceeds
of
realisation of any security held by the Banks or the Agent for the
repayment of the Indebtedness.
|
16
2.1
|
Agreement
to lend Subject
to the terms and conditions of this Agreement, and in reliance on
each of
the representations and warranties made or to be made in or in accordance
with each of the Security Documents, each of the Banks agrees to
advance
to the Borrowers its Commitment of an aggregate amount not exceeding
the
Maximum Loan Amount to be used by the Borrowers for the purposes
referred
to in Recital (C).
|
2.2
|
Drawings
Subject
to satisfaction by the Borrowers of the conditions set out in
Clause 3, and subject to Clause 2.3, the Loan shall be advanced to
the Borrowers in no more than one Drawing.
The
Agent shall transfer the amount of the Loan to the Borrowers or their
order, by such method of funds transfer as the Agent and the Borrowers
shall agree.
|
2.3
|
Advance
of Loan The
Loan shall be advanced in Dollars on a Business Day, provided that
the
Borrowers shall have given to the Agent not more than ten and not
fewer
than three Business Days' notice in writing materially in the form
set out
in Appendix A of the required Advance Date of the Loan. The Drawdown
Notice once given shall be irrevocable and shall constitute a warranty
by
the Borrowers that:-
|
2.3.1
|
all
conditions precedent to the advance of the Loan will have been satisfied
on or before the Advance Date requested;
|
2.3.2
|
no
Event of Default or Potential Event of Default will then have occurred;
|
2.3.3
|
no
Event of Default or Potential Event of Default will result from the
advance of the Loan; and
|
2.3.4
|
there
has been no material adverse change in the business, affairs or financial
condition of any of the Security Parties from that pertaining at
the date
of this Agreement.
|
The
Agent
shall promptly notify each Bank of the receipt of the Drawdown Notice, following
which each Bank will make its Proportionate Share of the amount of the requested
Drawing available to the Borrowers through the Agent on the Advance Date
requested.
17
2.4
|
Availability
Termination Date No
Bank shall be under any obligation to advance all or any part of
its
Commitment after the Availability Termination
Date.
|
2.5
|
Several
obligations The
obligations of the Banks under this Agreement are several. The failure
of
a Bank to perform its obligations under this Agreement shall not
affect
the obligations of the Borrowers to the Agent or to the other Banks,
nor
shall the Agent or any other Bank be liable for the failure of a
Bank to
perform any of its obligations under or in connection with this
Agreement.
|
2.6
|
Application
of Loan Without
prejudice to the obligations of the Borrowers under this Agreement,
neither the Banks nor the Agent shall be obliged to concern themselves
with the application of the Loan by the
Borrowers.
|
2.7
|
Loan
and control accounts The
Borrowers will open and maintain with the Agent such loan and control
accounts as the Agent shall consider necessary or desirable.
|
3.1
|
Conditions
Precedent
Before the Borrowers shall be entitled to issue a Drawdown Notice
pursuant
to Clause 2.3, and before any Bank shall have any obligation to advance
any part of its Commitment, the Borrowers shall deliver or cause
to be
delivered to or to the order of the Agent in form and substance
satisfactory to the Agent the following documents and
evidence:
|
3.1.1
|
Evidence
of incorporation Such
evidence as the Agent may reasonably require that each Security Party
was
duly incorporated in its country of incorporation and remains in
existence
and, where appropriate, in good standing, with power to enter into,
and
perform its obligations under, those of the Security Documents to
which it
is, or is intended to be, a party, including (without limitation)
a copy,
certified by a director or the secretary of the Security Party in
question
as true, complete, accurate and unamended, of all documents establishing
or limiting the constitution of each Security Party.
|
3.1.2
|
Corporate
authorities A
copy, certified by a director or the secretary of the Security Party
in
question as true, complete, accurate and neither amended nor revoked,
of a
resolution of the directors and a resolution of the shareholders
(or
members, as the case may be) of each Security Party (together, where
appropriate, with signed waivers of notice of any directors' or
shareholders' (or members', as the case may be) meetings) approving,
and
authorising or ratifying the execution of, those of the Security
Documents
to which that Security Party is or is intended to be a party and
all
matters incidental thereto.
|
18
3.1.3
|
Officer's
certificate A
certificate signed by a duly authorised officer of each of the Security
Parties setting out the names of the directors, officers and
shareholders/members of that Security Party or, a power of attorney
otherwise duly authorised and executed in accordance with all relevant
formalities of the jurisdiction of domicile of the relevant Security
Party.
|
3.1.4
|
Power
of attorney The
notarially attested and legalised power of attorney of each of the
Security Parties under which any documents are to be executed or
transactions undertaken by that Security
Party.
|
3.1.5
|
Vessel
documents Photocopies,
certified as true, accurate and complete by a director or the secretary
of
the Owner, of (in respect of each
Vessel):-
|
(a)
|
the
relevant Charter;
|
(b)
|
the
management agreement between the Owner and the Managers relating
to that
Vessel;
|
(c)
|
that
Vessel's current Safety Construction, Safety Equipment, Safety Radio
and
Load Line Certificates;
|
(d)
|
that
Vessel's current Certificate of Financial Responsibility issued pursuant
to the United States Oil Pollution Xxx
0000;
|
(e)
|
that
Vesselβs current SMC;
|
(f)
|
that
Vessel's current ISSC;
|
(g)
|
the
relevant Companyβs current DOC;
|
(h)
|
the
MOA, xxxx of sale and protocol of delivery and acceptance evidencing
delivery of the New Vessels from the Seller to the relevant Owner;
in each
case together with all addenda, amendments or
supplements.
|
19
3.1.6
|
IAPPC
The
written confirmation of the Managers undertaking that the IAPPC in
respect
of each Vessel will be duly obtained and delivered to the Agent as
soon as
possible following the date of this Agreement.
|
3.1.7
|
Evidence
of ownership Certificate(s)
of ownership and encumbrance (or equivalent) issued by the Registrar
of
Ships (or equivalent official) at each Vessel's port of registry
confirming that each Vessel is on the Advance Date owned by her Owner
and
free of registered Encumbrances.
|
3.1.8
|
Evidence
of insurance Evidence
that each 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 the written approval
of
the Insurances by an insurance adviser appointed by the Agent, such
written approval to be at the expense of the
Borrowers.
|
3.1.9
|
Confirmation
of class A
Certificate of Confirmation of Class for hull and machinery confirming
that each Vessel is classed with the highest class applicable to
vessels
of her type with Lloyd's Register of Shipping or such other classification
society as may be acceptable to the
Agent.
|
3.1.10 |
Instruction
to classification society
A
letter of instruction from the Owner of each Vessel to that Vessel's
classification society in the form required by the
Agent.
|
3.1.11
|
Survey
report A
report by surveyors instructed by the Agent to inspect any one New
Vessel,
such New Vessel to be selected in the Agent's absolute discretion,
confirming that the condition of such New Vessel is in all respects
acceptable to the Agent, such survey to be at the expense of the
Borrowers.
|
3.1.12
|
Valuations
Two valuations of each Vessel addressed to the Agent from a broker
acceptable to the Agent and appointed by the Agent certifying a value
for
each Vessel, assessed in such manner as the Agent may require, acceptable
to the Agent, such valuations to be at the expense of the
Borrowers.
|
20
3.1.13
|
The
Security Documents The
Security Documents, together with all notices and other documents
required
by any of them, duly executed and, in the case of the Mortgages,
registered with first priority through the Registrar of Ships (or
equivalent official) at the port of registry of the Vessel
concerned.
|
3.1.14
|
Drawdown
Notice A
Drawdown Notice.
|
3.1.15
|
Process
agent A
letter from Marine Legal Services Limited accepting their appointment
by
each of the Security Parties as agent for service of Proceedings
pursuant
to the Security Documents.
|
3.1.16
|
Mandates
Such duly signed forms of mandate, and/or other evidence of the opening
of
the Earnings Account, as the Agent or any of the Banks may
require.
|
3.1.17
|
Managers'
confirmation The
written confirmation of the Managers that, throughout the Facility
Period
unless otherwise agreed by the Agent, they will remain the commercial
and
technical managers of the Vessels and that they will not, without
the
prior written consent of the Agent, sub-contract or delegate the
commercial or technical management of any Vessel to any third
party.
|
3.1.18
|
Fees
Payment
of the fees payable pursuant to Clause 7
hereof.
|
3.1.19
|
Underlying
Documents
Photocopies, certified as true, accurate and complete, of the Underlying
Documents.
|
3.1.20
|
Legal
opinions Confirmation
satisfactory to the Agent that opinions on the laws of the Cayman
Islands
and the Isle of Man required by the Agent will be given substantially
in
the form required by the Agent.
|
3.2
|
Conditions
Subsequent
The Borrowers undertake to deliver or to cause to be delivered to
the
Agent on, or as soon as practicable after, the Advance Date, the
following
additional documents and evidence:-
|
3.2.1
|
Evidence
of registration Evidence
of registration of the Mortgages, in each case with first priority,
with
the Registrar of Ships (or equivalent official) at the port of registry
of
the Vessel concerned.
|
21
3.2.2
|
Letters
of undertaking Letters
of undertaking as required by the Security Documents in form and
substance
acceptable to the Agent.
|
3.2.3
|
Legal
opinions Such
legal opinions as the Agent shall
require.
|
3.2.4
|
Companies
Act registrations
Evidence that the prescribed particulars of the Security Documents
have
been delivered to the Registrar of Companies of England and Wales
and the
Isle of Man Financial Supervision Commission within the statutory
time
limit.
|
3.3
|
No
waiver If
the Banks in their sole discretion agree to advance any part of the
Loan
to the Borrowers before all of the documents and evidence required
by
Clauses 3.1 have been delivered to or to the order of the Agent,
the
Borrowers undertake to deliver all outstanding documents and evidence
to
or to the order of the Agent no later than the date specified by
the
Agent, and the advance of any part of the Loan shall not be taken
as a
waiver of the Agent's right to require production of all the documents
and
evidence required by Clauses 3.1.
|
3.4
|
Form
and content All
documents and evidence delivered to the Agent pursuant to this Clause
shall:-
|
3.4.1
|
be
in form and substance acceptable to the Agent;
|
3.4.2
|
be
accompanied, if required by the Agent, by translations into the English
language, certified in a manner acceptable to the Agent;
|
3.4.3
|
if
required by the Agent, be certified, notarised, legalised or attested
in a
manner acceptable to the Agent.
|
3.5
|
Event
of Default
No
Bank shall be under any obligation to advance any part of its Commitment
nor to act on the Drawdown Notice if, at the date of the Drawdown
Notice
or at the date on which the advance of the Loan is requested in the
Drawdown Notice, an Event of Default or Potential Event of Default
shall
have occurred, or if an Event of Default or Potential Event of Default
would result from the advance of the
Loan.
|
22
Each
of
the Borrowers represents and warrants to each of the Banks and to the Agent
at
the date of this Agreement and (by reference to the facts and circumstances
then
pertaining) at the date of each Drawdown Notice, at each Advance Date and at
each Interest Payment Date as follows:-
4.1
|
Incorporation
and capacity Each
of the Security Parties is a body corporate duly constituted and
existing
and (where applicable) in good standing under the law of its country
of
incorporation, in each case with perpetual corporate existence and
the power to xxx and be sued, to own its assets and to carry on its
business, and all of the corporate shareholders (if any) of each
Security
Party are duly constituted and existing under the laws of their countries
of incorporation with perpetual corporate existence and the power
to xxx
and be sued, to own their assets and to carry on their business.
|
4.2
|
Solvency
None
of the Security Parties is insolvent or in liquidation or administration
or subject to any other insolvency procedure, and no receiver,
administrative receiver, administrator, liquidator, trustee or analogous
officer has been appointed in respect of any of the Security Parties
or
all or any part of their assets.
|
4.3
|
Binding
obligations The
Security Documents when duly executed and delivered will constitute
the
legal, valid and binding obligations of the Security Parties enforceable
in accordance with their respective
terms.
|
4.4
|
Satisfaction
of conditions All
acts, conditions and things required to be done and satisfied and
to have
happened prior to the execution and delivery of the Security Documents
in
order to constitute the Security Documents the legal, valid and binding
obligations of the Security Parties in accordance with their respective
terms have been done, satisfied and have happened in compliance with
all
applicable laws.
|
4.5
|
Registrations
and consents With
the exception only of the registrations referred to in Clause 3.2,
all (if
any) consents, licences, approvals and authorisations of, or registrations
with or declarations to, any governmental authority, bureau or agency
which may be required in connection with the execution, delivery,
performance, validity or enforceability of the Security Documents
have
been obtained or made and remain in full force and effect and none
of the
Borrowers is aware of any event or circumstance which could reasonably
be
expected adversely to affect the right of any of the Borrowers to
hold
and/or obtain renewal of any such consents, licences, approvals or
authorisations.
|
23
4.6
|
Disclosure
of material facts None
of the Borrowers is aware of any material facts or circumstances
which
have not been disclosed to the Agent 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 Borrowers.
|
4.7
|
No
material litigation There
is no action, suit, arbitration or administrative proceeding pending
or to
its knowledge about to be pursued before any court, tribunal or
governmental or other authority which in the reasonable opinion of
the
Agent would, or would be likely to, have a materially adverse effect
on
the business, assets, financial condition or creditworthiness of
any of
the Security Parties.
|
4.8
|
No
breach of law or contract The
execution, delivery and performance of the Security Documents will
not
contravene any contractual restriction or any law binding on any
of the
Security Parties or on any shareholder (whether legal or beneficial)
of
any of the Security Parties, or the constitutional documents of any
of the
Security Parties, nor result in the creation of, nor oblige any of
the
Security Parties to create, any Encumbrance over all or any of its
assets,
with the exception of the Encumbrances created by or pursuant to
the
Security Documents, and, in entering into those of the Security Documents
to which it is, or is to be, a party, and in borrowing the Loan,
each of
the Borrowers is acting for its own
account.
|
4.9
|
No
deductions
None of the Borrowers is required to make any deduction or withholding
from any payment which it may be obliged to make to the Agent or
any of
the Banks under or pursuant to the Security
Documents.
|
4.10
|
No
established place of business in the United Kingdom or United
States
None of the Security Parties has, nor will any of them have during
the
Facility Period, an established place of business in the United Kingdom
or
the United States of America.
|
24
4.11
|
Use
of Loan The
Loan will be used for the purposes specified in Recital
(C).
|
4.12
|
Underlying
Documents
The certified copies of the Underlying Documents delivered to the
Agent
are true and complete copies, and there are no side agreements or
other
documents thereto which have not been disclosed to the
Agent.
|
5.1
|
Repayment
The
Borrowers agree to repay the Loan to the Agent as agent for the Banks
by
nineteen (19) consecutive quarterly Repayment Instalments. The first
Repayment Instalment will be in the sum of one million two hundred
and
fifty thousand Dollars ($1,250,000) and the following eighteen Repayment
Instalments will each be in the sum of one million six hundred and
ninety
four thousand four hundred and forty four Dollars ($1,694,444). The
first
Repayment Date will be 27 April 2006 and subsequent Repayment Dates
will
be at consecutive intervals of three calendar months
thereafter.
|
5.2
|
Reduction
of Repayment Instalments If
the aggregate amount advanced to the Borrowers is less than the Maximum
Loan Amount, the amount of each Repayment Instalment shall be reduced
pro
rata to the amount actually
advanced.
|
5.3
|
Voluntary
Prepayment The
Borrowers may prepay the Loan in whole or in part (without penalty
save as
provided in clause 5.5) in an amount equal to five hundred thousand
Dollars ($500,000) or an integral multiple of that amount (or as
otherwise
may be agreed by the Agent) provided that they have first given to
the
Agent not fewer than fifteen (15) days' prior written notice expiring
on a
Business Day of their intention to do so. Any such prepayment shall
be
applied in accordance with Clause 5.6. Any notice pursuant to this
Clause
once given shall be irrevocable and shall oblige the Borrowers to
make the
prepayment referred to in the notice on the Business Day specified
in the
notice, together with all interest accrued on the amount prepaid
up to and
including that Business Day.
|
5.4
|
Involuntary
Prepayment
The net proceeds from the refinancing, sale, scrap or Total Loss
of any
Vessel shall be applied promptly upon receipt in or towards prepayment
of
the Indebtedness then outstanding. If such net proceeds are less
than the
Attributable Amount for that Vessel, the net proceeds together with
such
additional amount as may be required to ensure that an amount equal
to the
Attributable Amount shall be prepaid. If the net proceeds exceed
the
Attributable Amount for that Vessel, any surplus shall be released
to the
Borrowers provided that no Event of Default or Potential Event of
Default
shall have occurred and be continuing. Any such prepayment shall
be
applied in accordance with Clause
5.6.
|
25
5.5
|
Prepayment
indemnity If
the Borrowers shall, subject always to Clause 5.3, make a prepayment
on a
Business Day other than the last day of an Interest Period in respect
of
the whole of the Loan, they shall, in addition to the amount prepaid
and
accrued interest, pay to the Agent on behalf of the Banks any amount
which
the Agent may certify is necessary to compensate the Banks for any
Break
Costs incurred by the Agent or any of the Banks as a result of the
making
of the prepayment in question.
|
5.6
|
Application
of prepayments Any
prepayment made pursuant to Clause 5.3 or Clause 5.4 in an amount
less
than the Indebtedness shall be applied in satisfaction or reduction
first
of any costs and other amounts outstanding; secondly of all interest
outstanding; thirdly of the Repayment Instalments in inverse order
of
maturity.
|
5.7
|
No
reborrowing No
amount repaid or prepaid pursuant to this Agreement may in any
circumstances be reborrowed.
|
6.1
|
Interest
Periods
Other than the first Interest Period, which shall be determined according
to Clause 6.10, the period during which the Loan shall be outstanding
pursuant to this Agreement shall be divided into consecutive Interest
Periods of one, three, six, nine or twelve months' duration, as selected
by the Borrowers by written notice to the Agent not later than 11.00
a.m.
on the third Business Day before the beginning of the Interest Period
in
question, or such other duration as may be agreed by the Banks in
their
discretion PROVIDED
THAT
the Borrowers may not elect to have more than three (3) one month
Interest
Periods in any calendar year.
|
6.2
|
Beginning
and end of Interest Periods The
first Interest Period shall begin on the Advance Date, the next shall
begin on 27 April 2006 and the final Interest Period shall end on
the
Repayment Date applicable to the final Repayment
Instalment.
|
26
6.3
|
Interest
Periods to meet Repayment Dates If
the Borrowers shall select, or the Borrowers and the Banks shall
agree, an
Interest Period which does not expire on the next Repayment Date,
there
shall, in respect of each part of the Loan equal to a Repayment Instalment
falling due for payment before the expiry of that Interest Period,
be a
separate Interest Period which shall expire on the relevant Repayment
Date, and the Interest Period selected or agreed shall apply to the
balance of the Loan only.
|
6.4
|
Interest
rate
Subject to Clause 6.10, during each Interest Period interest shall
accrue
on the Loan at the rate determined by the Agent to be the aggregate
of
(a) the Margin and (b) LIBOR determined at or about 11.00 a.m.
on the second Business Day prior to the beginning of that Interest
Period.
|
6.5
|
Failure
to select Interest Period If
the Borrowers at any time fail to select or agree an Interest Period
in
accordance with Clause 6.1, the interest rate applicable after the
expiry
of the then current Interest Period shall be the rate determined
by the
Agent in accordance with Clause 6.4 for consecutive Interest Periods
each
of such duration (not exceeding three months) as the Agent may
select.
|
6.6
|
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 Borrowers to the Agent on behalf
of the
Banks on the last day of each Interest Period and additionally, during
any
Interest Period exceeding three (3) months, on the last day of each
successive three (3) month period of that Interest
Period.
|
6.7
|
Ending
of Interest Periods Each
Interest Period shall, subject to Clauses 6.2 and 6.3, end on the
date
which numerically corresponds to the date on which the immediately
preceding Interest Period ended (or, in the case of the first Interest
Period, to the Advance Date) in the calendar month which is the number
of
months selected or agreed after the calendar month in which the
immediately preceding Interest Period ended (or, in the case of the
first
Interest Period, in which the Advance Date occurred), except
that:-
|
27
6.7.1
|
if
there is no numerically corresponding date in the calendar month
in which
the Interest Period ends, the Interest Period shall end on the last
Business Day in that calendar month;
and
|
6.7.2
|
if
any Interest Period would end on a day which is not a Business Day,
that
Interest Period shall end on the next succeeding Business Day (unless
the
next succeeding Business Day falls in the next calendar month, in
which
event the Interest Period in question shall end on the next preceding
Business Day).
|
Any
adjustment made pursuant to Clause 6.7.1 or 6.7.2 shall be ignored for the
purpose of determining the date on which any subsequent Interest Period shall
end.
6.8 |
Default
Rate If
an Event of Default shall occur, the whole of the Indebtedness shall,
from
the date of the occurrence of the Event of Default, bear interest
up to
the date of actual payment (both before and after judgment) at the
Default
Rate, compounded at such intervals as the Agent shall determine,
which
interest shall be payable from time to time by the Borrowers to the
Agent
on behalf of the Banks on demand.
|
6.9
|
Determinations
conclusive Each
determination of an interest rate made by the Agent in accordance
with
Clause 6 shall (save in the case of manifest error or on any question
of law) be final and conclusive.
|
6.10
|
First
Interest Period In
respect of Tranche A, the first Interest Period shall begin on the
Advance
date and shall be fixed until 27 April 2006 at a rate of 5.8898%
so that
on 27 April 2006 interest (which shall include interest due and payable
to
the Existing Lenders) in the sum of three hundred and forty nine
thousand
seven hundred and three Dollars ninety one cents ($349,703.91) is
payable
to the Agent. In respect of Tranche B, the first Interest Period
shall
begin on the Advance Date and shall end on 27 April 2006. The interest
on
Tranche B shall accrue in that period at the rate determined by the
Agent
to be the aggregate of (a) the Margin and (b) LIBOR determined at
or about
11:00am on the second Business Day prior to the Advance
Date.
|
7
|
The
Borrowers shall pay to or to the order of the Agent:-
28
7.1
|
on
the date of signing of this Agreement (for distribution amongst the
Banks
at a rate of fifteen thousand Dollars ($15,000) per Bank) an arrangement
fee of thirty thousand Dollars
($30,000).
|
7.2
|
an
agency fee of five thousand Dollars ($5,000) per annum per Bank,
with a
maximum of ten thousand Dollars ($10,000) per annum payable in October
2006 for the first time and annually
thereafter.
|
8.1
|
As
security for the repayment of the Indebtedness, the Borrowers shall
execute and deliver to the Agent or cause to be executed and delivered
to
the Agent, on or before the Advance Date, the following Security
Documents
in such forms and containing such terms and conditions as the Agent
shall
require:-
|
8.1.1
|
the
Mortgages a
first priority statutory mortgage over each Vessel together in each
case
with a collateral deed of
covenants;
|
8.1.2
|
the
Assignments a
deed of assignment of the Insurances, Earnings, Requisition Compensation
and Charter of each Vessel;
|
8.1.3
|
the
Guarantee the
guarantee and indemnity of the
Guarantor;
|
8.1.4
|
the
Account Security Deed an
account security deed in respect of all amounts from time to time
standing
to the credit of the Earnings
Account.
|
8.2
|
In
consideration of the Banks making the Loan available to the Borrowers,
the
Borrowers agree to procure, at any time during the Facility Period,
execution in favour of the Agent (as agent and security trustee of
the
Banks) by the Guarantor of pledges over and/or charges of all the
Guarantor's right, title and interest in and to the shares of each
of the
Borrowers, and the Borrowers agree, if and when required to do so
by the
Agent, promptly to procure the execution and delivery to the Agent
of all
documents which the Agent may require to obtain the full benefit
of such
pledges and/or charges.
|
29
9.1
|
Appointment
Each
of the Banks appoints the Agent its agent for the purpose of administering
the Loan and the Security
Documents.
|
9.2
|
Authority
Each
of the Banks irrevocably authorises the Agent (subject to Clauses
9.4 and
9.19):-
|
9.2.1
|
to
execute the Security Documents (other than this Agreement) on its
behalf;
|
9.2.2
|
to
collect, receive,
release or pay any money on its
behalf;
|
9.2.3
|
acting
on the instructions from time to time of an Instructing Group to
give or
withhold
any waivers, consents or approvals under or pursuant to any of the
Security Documents;
|
9.2.4
|
acting
on the instructions from time to time of an Instructing Group to
exercise,
or refrain
from exercising, any discretions under or pursuant to any of the
Security
Documents; and
|
9.2.5
|
to
enforce the Security Documents on its
behalf.
|
The
Agent
shall have no duties or responsibilities as agent or as security trustee other
than those expressly conferred on it by the Security Documents and shall not
be
obliged to act on any instructions from the Banks or an Instructing Group if
to
do so would, in the opinion of the Agent, be contrary to any provision of the
Security Documents or to any law, or would expose the Agent to any actual or
potential liability to any third party.
9.3
|
Trust
The
Agent agrees and declares, and each of the Banks acknowledges, that,
subject to the terms and conditions of this Clause, the Agent holds
the
Trust Property on trust for the Banks, in accordance with their respective
Proportionate Shares, absolutely. Each of the Banks agrees that the
obligations, rights and benefits vested in the Agent in its capacity
as
security trustee shall be performed and exercised in accordance with
this
Clause. The Agent in its capacity as security trustee shall have
the
benefit of all of the provisions of this Agreement benefiting it
in its
capacity as agent for the Banks, and all the powers and discretions
conferred on trustees by the Trustee Xxx 0000 (to the extent not
inconsistent with this Agreement). In
addition:-
|
30
9.3.1
|
the
Agent (and any attorney, agent or delegate of the Agent) may indemnify
itself or himself out of the Trust Property against all liabilities,
costs, fees, damages, charges, losses and expenses sustained or incurred
by it or him in relation to the taking or holding of any of the Trust
Property or in connection with the exercise or purported exercise
of the
rights, trusts, powers and discretions vested in the Agent or any
other
such person by or pursuant to the Security Documents or in respect
of
anything else done or omitted to be done in any way relating to the
Security Documents; and
|
9.3.2
|
the
Banks acknowledge that the Agent shall be under no obligation to
insure
any property nor to require any other person to insure any property
and
shall not be responsible for any loss which may be suffered by any
person
as a result of the lack or insufficiency of any insurance;
and
|
9.3.3
|
the
Agent and the Banks agree that the perpetuity period applicable to
the
trusts declared by this Agreement shall be the period of eighty years
from
the date of this Agreement.
|
9.4 |
Limitations
on authority Except
with the prior written consent of each of the Banks, the Agent shall
not
be entitled to :-
|
9.4.1
|
release
or vary any security given for the Borrowers' obligations under this
Agreement; nor
|
9.4.2
|
waive
the payment of any sum of money payable by any of the Security Parties
under the Security Documents; nor
|
9.4.3
|
change
the meaning of the expressions "Instructing
Group"
or "Margin";
nor
|
9.4.4
|
exercise,
or refrain from exercising, any discretion, or give or withhold any
consent, the exercise or giving of which is, by the terms of this
Agreement, expressly reserved to the Banks;
nor
|
31
9.4.5
|
extend
the due date for the payment of any sum of money payable by any of
the
Security Parties under the Security Documents;
nor
|
9.4.6
|
take
or refrain from taking any step if the effect of such action or inaction
may lead to the increase of the obligations of a Bank under any of
the
Security Documents; nor
|
9.4.7
|
agree
to change the currency in which any sum is payable under the Security
Documents (other than in accordance with the terms of the Security
Documents); nor
|
9.4.8
|
agree
to amend this Clause 9.4.
|
9.5
|
Liability
Neither
the Agent nor any of its directors, officers, employees or agents
shall be
liable to the Banks for anything done or omitted to be done by the
Agent
under or in connection with the Security Documents unless as a result
of
the Agent's wilful misconduct or gross
negligence.
|
9.6
|
Acknowledgement
Each
of the Banks acknowledges that:-
|
9.6.1
|
it
has not relied on any representation made by the Agent or any of
the
Agent's directors, officers, employees or agents or by any other
person
acting or purporting to act on behalf of the Agent to induce it to
enter
into any of the Security Documents;
|
9.6.2
|
it
has made and will continue to make without reliance on the Agent,
and
based on such documents and other evidence as it considers appropriate,
its own independent investigation of the financial condition and
affairs
of the Security Parties in connection with the making and continuation
of
the Loan;
|
9.6.3
|
it
has made its own appraisal of the creditworthiness of the Security
Parties;
|
9.6.4
|
the
Agent shall not have any duty or responsibility at any time to provide
it
with any credit or other information relating to any of the Security
Parties unless that information is received by the Agent pursuant
to the
express terms of the Security Documents.
|
32
Each
of
the Banks agrees that it will not assert nor seek to assert against any
director, officer, employee or agent of the Agent or against any other person
acting or purporting to act on behalf of the Agent any claim which it might
have
against them in respect of any of the matters referred to in this
Clause.
9.7
|
Limitations
on responsibility The
Agent shall have no responsibility to any of the Security Parties
or to
the Banks on account of:-
|
9.7.1
|
the
failure of a Bank or of any of the Security Parties to perform any
of
their respective obligations
under the Security Documents;
|
9.7.2
|
the
financial condition of any of the Security Parties;
|
9.7.3
|
the
completeness or accuracy of any statements, representations or warranties
made in or pursuant to any of the Security Documents, or in or pursuant
to
any document delivered pursuant to or in connection with any of the
Security Documents;
|
9.7.4
|
the
negotiation, execution, effectiveness, genuineness, validity,
enforceability, admissibility in evidence or sufficiency of any of
the
Security Documents or of any document executed or delivered pursuant
to or
in connection with any of the Security
Documents.
|
9.8 |
The
Agent's rights The
Agent may:-
|
9.8.1
|
assume
that all representations or warranties made or deemed repeated by
any of
the Security Parties in or pursuant to any of the Security Documents
are
true
and complete, unless, in its capacity as the Agent, it has acquired
actual
knowledge to the contrary; and
|
9.8.2
|
assume
that no Event of Default or Potential Event of Default has occurred
unless, in its capacity as the Agent, it has acquired actual knowledge
to
the contrary; and
|
9.8.3
|
rely
on any document
or
Communication believed by it to be genuine;
and
|
9.8.4
|
rely
as to legal or
other professional matters on opinions and statements of any legal
or
other professional advisers selected or approved by it;
and
|
33
9.8.5
|
rely
as to any factual matters which might reasonably be expected to be
within
the knowledge
of
any of the Security Parties on a certificate signed by or on behalf
of
that Security Party; and
|
9.8.6
|
refrain
from exercising
any right, power, discretion or remedy unless and until instructed
to
exercise that right, power, discretion or remedy and as to the manner
of
its exercise by the Banks (or, where applicable, by an Instructing
Group)
and unless and until the Agent has received from the Banks any payment
which the Agent may require on account of, or any security which
the Agent
may require for, any costs, claims, expenses (including legal and
other
professional fees) and liabilities which it considers it may incur
or
sustain in complying with those
instructions.
|
9.9 |
The
Agent's duties The
Agent shall:-
|
9.9.1
|
if
requested in writing to do so by a Bank, make enquiry and advise
the Banks
as to the performance or observance of any of the provisions of the
Security Documents by any of the Security Parties or as to the existence
of an Event of Default; and
|
9.9.2
|
inform
the Banks promptly of any Event of Default of which the Agent has
actual
knowledge.
|
9.10
|
No
deemed knowledge The
Agent shall not be deemed to have actual knowledge of the falsehood
or
incompleteness of any representation or warranty made or deemed repeated
by any of the Security Parties or actual knowledge of the occurrence
of
any Event of Default or Potential Event of Default unless a Bank
or any of
the Security Parties shall have given written notice thereof to the
Agent
in its capacity as the Agent. Any information acquired by the Agent
other
than specifically in its capacity as the Agent shall not be deemed
to be
information acquired by the Agent in its capacity as the Agent.
|
9.11
|
Other
business The
Agent may, without any liability to account to the Banks, generally
engage
in any kind of banking or trust business with any of the Security
Parties
or any of their respective subsidiaries or associated companies or
with a
Bank as if it were not the Agent.
|
34
9.12
|
Indemnity
The
Banks shall, promptly on the Agent's request, reimburse the Agent
in their
respective Proportionate Shares, for, and keep the Agent fully indemnified
in respect of:-
|
9.12.1 |
all amounts
payable by the Borrowers to the Agent pursuant to Clause 17 to the
extent
that those
amounts are not paid by the Borrowers;
|
9.12.2 |
all
liabilities, damages, costs and claims sustained or incurred by the
Agent
in connection
with the Security Documents, or the performance of its duties and
obligations, or the exercise of its rights, powers, discretions or
remedies under or pursuant to any of the Security Documents; or in
connection with any action taken or omitted by the Agent under or
pursuant
to any of the Security Documents, unless in any case those liabilities,
damages, costs or claims arise solely from the Agent's wilful
misconduct.
|
9.13
|
Employment
of agents In
performing its duties and exercising its rights, powers, discretions
and
remedies under or pursuant to the Security Documents, the Agent shall
be
entitled to employ and pay agents to do anything which the Agent
is
empowered to do under or pursuant to the Security Documents (including
the
receipt of money and documents and the payment of money) and to act
or
refrain from taking action in reliance on the opinion of, or advice
or
information obtained from, any lawyer, banker, broker, accountant,
valuer
or any other person believed by the Agent in good faith to be competent
to
give such opinion, advice or
information.
|
9.14
|
Distribution
of payments The
Agent shall pay promptly to the order of each of the Banks that Bank's
Proportionate Share of every sum of money received by the Agent pursuant
to the Security Documents or the Mortgagees' Insurances (with the
exception of any amounts payable pursuant to Clause 7 and any amounts
which, by the terms of the Security Documents, are paid to the Agent
for
the account of the Agent alone or specifically for the account of
one or
more Banks) and until so paid such amount shall be held by the Agent
on
trust absolutely for that Bank.
|
9.15
|
Reimbursement
The
Agent shall have no liability to pay any sum to a Bank until it has
itself
received payment of that sum. If, however, the Agent does pay any
sum to a
Bank on account of any amount prospectively due to that Bank pursuant
to
Clause 9.14 before it has itself received payment of that amount, and
the Agent does not in fact receive payment within five Business Days
after
the date on which that payment was required to be made by the terms
of the
Security Documents or the Mortgagees' Insurances, each Bank receiving
any
such payment will, on demand by the Agent, refund to the Agent an
amount
equal to the amount received by it, together with an amount sufficient
to
reimburse the Agent for any amount which the Agent may certify that
it has
been required to pay by way of interest on money borrowed to fund
the
amount in question during the period beginning on the date on which
that
amount was required to be paid by the terms of the Security Documents
or
the Mortgagees' Insurances and ending on the date on which the Agent
receives reimbursement.
|
35
9.16
|
Redistribution
of payments Unless
otherwise agreed between the Banks and the Agent, if at any time
a Bank
receives or recovers by way of set-off, the exercise of any lien
or
otherwise (other than from any assignee or transferee of or
sub-participant in that Bank's Commitment), an amount greater than
that
Bank's Proportionate Share of any sum due from any of the Security
Parties
under the Security Documents (the amount of the excess being referred
to
in this Clause as the "Excess
Amount")
then:-
|
9.16.1
|
that
Bank shall promptly notify the Agent (which shall promptly notify
each
other Bank);
|
9.16.2
|
that
Bank shall pay to the Agent an amount equal to the Excess Amount
within
ten days of its receipt or recovery of the Excess Amount;
and
|
9.16.3
|
the
Agent shall treat that payment as if it were a payment by the Security
Party in question on account of the sum owed to the Banks as aforesaid
and
shall account to the Banks in respect of the Excess Amount in accordance
with the provisions of this Clause.
|
However,
if a Bank has commenced any Proceedings to recover sums owing to it under the
Security Documents and, as a result of, or in connection with, those Proceedings
has received an Excess Amount, the Agent shall not distribute any of that Excess
Amount to any other Bank which had been notified of the Proceedings and had
the
legal right to, but did not, join those Proceedings or commence and diligently
prosecute separate Proceedings to enforce its rights in the same or another
court.
36
9.17
|
Rescission
of Excess Amount If
all or any part of any Excess Amount is rescinded or must otherwise
be
restored to any of the Security Parties or to any other third party,
the
Banks which have received any part of that Excess Amount by way of
distribution from the Agent pursuant to this Clause shall repay to
the
Agent for the account of the Bank which originally received or recovered
the Excess Amount, the amount which shall be necessary to ensure
that the
Banks share rateably in accordance with their Proportionate Shares
in the
amount of the receipt or payment retained, together with interest
on that
amount at a rate equivalent to that (if any) paid by the Bank receiving
or
recovering the Excess Amount to the person to whom that Bank is liable
to
make payment in respect of such amount, and Clause 9.16.3 shall apply
only
to the retained amount.
|
9.18
|
Proceedings
Each
of the Banks and the Agent shall notify one another of the proposed
commencement of any Proceedings under any of the Security Documents
prior
to their commencement.
|
9.19
|
Instructions
Where
the Agent is authorised or directed to act or refrain from acting
in
accordance with the instructions of the Banks or of an Instructing
Group
each of the Banks shall provide the Agent with instructions within
three
Business Days of the Agent's request (which request may be made orally or
in writing). If a Bank does not provide the Agent with instructions
within
that period, that Bank shall be bound by the decision of the Agent.
Nothing in this Clause shall limit the right of the Agent to take,
or
refrain from taking, any action without obtaining the instructions
of the
Banks or an Instructing Group if the Agent in its discretion considers
it
necessary or appropriate to take, or refrain from taking, such action
in
order to preserve the rights of the Banks under or in connection
with the
Security Documents. In that event, the Agent will notify the Banks
of the
action taken by it as soon as reasonably practicable, and the Banks
agree
to ratify any action taken by the Agent pursuant to this
Clause.
|
9.20
|
Communications
Any
Communication under this Clause shall be given, delivered, made or
served,
in the case of the Agent (in its capacity as Agent or as one of the
Banks), and in the case of the other Banks, at the address or fax
number
indicated in Schedule 2.
|
37
9.21
|
Payments
All amounts payable to a Bank under this Clause shall be paid to
such
account at such bank as that Bank may from time to time direct in
writing
to the Agent.
|
9.22
|
Retirement
Subject
to a successor being appointed in accordance with this Clause, the
Agent
may retire as agent and/or security trustee at any time without assigning
any reason by giving to the Borrowers and the Banks notice of its
intention to do so, in which event the following shall apply:-
|
9.22.1
|
the
Banks may within thirty days after the date of the Agent's notice
appoint
a successor
to
act as agent and/or security trustee or, if they fail to do so, the
Agent
may appoint any other bank or financial institution as its
successor;
|
9.22.2
|
the
resignation of the Agent shall take effect simultaneously with the
appointment of its successor on written notice of that appointment
being
given to the Borrowers
or
the Banks;
|
9.22.3
|
the
Agent shall thereupon be discharged from all further obligations
as agent
and/or security trustee but shall remain entitled to the benefit
of the
provisions of this Clause;
|
9.22.4
|
the
Agent's successor
and each of the other parties to this Agreement shall have the same
rights
and obligations amongst themselves as they would have had if that
successor had been a party to this
Agreement.
|
9.23
|
No
fiduciary relationship Except
as provided in Clauses 9.3 and 9.14, the Agent shall not have any
fiduciary relationship with or be deemed to be a trustee of or for
a Bank
and nothing contained in any of the Security Documents shall constitute
a
partnership between any two or more Banks or between the Agent and
any
Bank.
|
9.24
|
The
Agent as a Bank The
expression "the
Banks"
when used in the Security Documents includes the Agent in its capacity
as
one of the Banks. The Agent shall be entitled to exercise its rights,
powers, discretions and remedies under or pursuant to the Security
Documents in its capacity as one of the Banks in the same manner
as any
other Bank and as if it were not also the
Agent.
|
38
9.25
|
The
Agent as security trustee
Unless the context otherwise requires, the expression "the
Agent"
when used in the Security Documents includes the Agent acting in
its
capacities both as agent and security
trustee.
|
The
Borrowers covenant with the Banks and with the Agent in the following
terms.
10.1
|
Negative
covenants
|
None
of
the Borrowers will without the Agent's prior written consent:-
10.1.1
|
no
disposals or third party rights dispose
of or create or permit to arise or continue any Encumbrance or other
third
party right on or over all or any part of its present or future assets
or
undertaking; nor
|
10.1.2
|
no
borrowings borrow
any money or incur any obligations under leases;
nor
|
10.1.3
|
no
repayments repay
any loans made to it; nor
|
10.1.4
|
no
substantial liabilities except
in the ordinary course of business, incur any liability to any third
party
which is in the opinion of the Agent of a substantial nature;
nor
|
10.1.5
|
no
other business engage
in any business other than the ownership, operation, chartering and
management of the Vessel owned by it;
nor
|
10.1.6
|
no
loans or other financial commitments 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; nor
|
10.1.7
|
no
dividends pay
any dividends or make any other distributions to shareholders or
issue any
new shares during the continuance of an Event of Default or Potential
Event of Default; nor
|
10.1.8
|
no
sale of Vessels sell
or otherwise dispose of the Vessel owned by it or any shares in that
Vessel nor agree to do so unless the relevant Attributable Amount
of the
Outstanding Indebtedness is prepaid on the date of sale or disposal;
nor
|
39
10.1.9
|
no
chartering after Event of Default
following the occurrence and during the continuation of an Event
of
Default let its Vessel on charter or renew or extend any charter
or other
contract of employment of its Vessel (nor agree to do so);
nor
|
10.1.10
|
no
change in management appoint
anyone other than the Managers as commercial or technical managers
of the
Vessels, nor terminate or materially vary the arrangements for the
commercial or technical management of the Vessels, nor permit the
Managers
to sub-contract or delegate the commercial or technical management
of any
Vessel to any third party; nor
|
10.1.11
|
no
change in ownership or control permit
any change in its beneficial ownership and control from that advised
to
the Agent at the date of this Agreement;
nor
|
10.1.12
|
no
change in class or flag
permit any change in the classification society or flag of any of
the
Vessels.
|
10.1.13
|
Charter
obligations
breach its obligations under any Charter to which it is a party,
or cancel
or purport to cancel such Charter, or amend, vary or waive performance
under such Charter in a manner adverse to the interests of the Bank;
nor
|
10.1.14
|
no
chartering save
for any Charter or any extension of such a Charter on terms acceptable
to
the Agent, permit the Vessels to be let on any demise charter, or
on any
time charter, consecutive voyage charter or other contract of employment
which (inclusive of any extension option) is capable of exceeding
twelve
(12) months, nor to employ any Vessel in any way which might impair
the
security created by the Security Documents; if the terms of any such
proposed time charter, consecutive voyage charter or other contract
of
employment are equal to or better than the Existing Charter for the
relevant Vessel (which test shall include the creditworthiness of
the
charterer) the Agent will give its approval;
and
|
10.1.15
|
no
acquisition of assets
except in the ordinary course of business, acquire any asset or
undertaking.
|
40
10.2
|
Positive
covenants
|
10.2.1
|
Registration
and Class of Vessels The
Borrowers undertake to maintain the registration of the Vessels under
the
flags and with the class indicated in Schedule 1 for the duration
of the
Facility Period.
|
10.2.2
|
Additional
security If
and so often as the aggregate of the Market Values of the Vessels
(determined in accordance with Clause 1.1.50) plus the value of any
additional security for the time being provided to the Banks (or
to the
Agent on their behalf) pursuant to this Clause shall be less than one
hundred and thirty per cent. (130%) of the amount of the Indebtedness
then
outstanding, the Borrowers will, within thirty days of the request
of the
Agent to do so, at the Borrowers' option:-
|
(a)
|
pay
to the Agent or to its nominee a cash deposit in the amount of the
shortfall to be secured in favour of the Banks (or of the Agent on
their
behalf) as additional security for the payment of the Indebtedness;
or
|
(b)
|
give
to the Banks (or to the Agent on their behalf) other additional security
in amount and form acceptable to the Banks in their discretion; or
|
(c)
|
prepay
the amount of the Indebtedness which will ensure that the aggregate
of the
Market Values of the Vessels (determined as aforesaid) plus the value
of
any such additional security is not less than one hundred and thirty
per
cent. (130%) of the amount of the Loan.
|
Clauses 5.3,
5.5 and 5.6 shall apply, mutatis
mutandis,
to any
prepayment made pursuant to this Clause and the value of any additional security
provided pursuant to this Clause shall be determined by the Agent in its
discretion.
10.2.3
|
Financial
statements The
Borrowers will supply to the Agent, without request, the annual
consolidated financial statements of the Guarantor for each financial
year
of the Guarantor ending during the Facility Period, containing (amongst
other things) the Guarantor's profit and loss account for, and balance
sheet at the end of, each such financial year, prepared in accordance
with
generally accepted accounting principles and practices applicable
in the
USA consistently applied, and audited by a firm of chartered accountants
(or equivalent) acceptable to the Agent, in each case within one
hundred
and eighty (180) days of the end of the financial year to which they
relate and semi-annual management accounts within ninety (90) days
of the
end of the half year to which they relate.
|
41
10.2.4
|
Other
information The
Borrowers will promptly supply to the Agent copies of all financial
and
other information from time to time given by any of the Borrowers
to its
shareholders and such information and explanations as the Agent may
from
time to time require in connection with the operation of the Vessels
and
the Borrowers' profit and liquidity, and will procure that the Agent
be
given the like information and explanations relating to all other
Security
Parties.
|
10.2.5
|
Evidence
of goodstanding
The Borrowers will on the request of the Agent (which shall be made
no
more than once in each calendar year unless an Event of Default is
in
existence) provide the Agent with evidence in form and substance
satisfactory to the Agent that the Security Parties and all corporate
shareholders of any of the Security Parties remain in good
standing.
|
10.2.6
|
Evidence
of current COFR
Without limiting the Borrowers' obligations under Clause 10.2.4,
the
Borrowers will from time to time on the request of the Agent provide
the
Agent with such evidence as the Agent may reasonably require that
each
Vessel (if required) has a valid and current Certificate of Financial
Responsibility pursuant to the United States Oil Pollution Xxx
0000.
|
10.2.7
|
ISM
Code compliance
The Borrowers will:-
|
(a)
|
procure
that each of the Vessels remains for the duration of the Facility
Period
subject to a SMS;
|
(b)
|
maintain
a valid and current SMC for each of the Vessels throughout the Facility
Period;
|
42
(c)
|
procure
that each Company maintains a valid and current DOC throughout the
Facility Period;
|
(d)
|
immediately
notify the Agent in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the SMC of any Vessel
or of
the DOC of any Company;
|
(e)
|
immediately
notify the Agent in writing of any βaccidentβ
or βmajor non-conformityβ,
as each of those terms is defined in the Guidelines on the Implementation
of the International Safety Management Code by Administrations adopted
by
the Assembly of the International Maritime Organisation pursuant
to
Resolution A.788(19), and of the steps being taken to remedy the
situation; and
|
(f)
|
not
without the prior written consent of the Agent (which will not be
unreasonably withheld) change the identity of any
Company.
|
10.2.8
|
ISPS
Code compliance The
Borrowers will:-
|
(a)
|
for
the duration of the Facility Period comply with the ISPS Code in
relation
to each of the Vessels and procure that each of the Vessels and the
ISPS
Company comply with the ISPS Code;
|
(b)
|
maintain
a valid and current ISSC for each of the Vessels throughout the Facility
Period; and
|
(c)
|
immediately
notify the Agent in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of any
ISSC.
|
10.2.9
|
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
|
43
(c)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
IAPPC.
|
10.2.10
|
Inspection
of records The
Borrowers will permit the inspection of their financial records and
accounts from time to time by the Agent or its nominee, such inspection
to
take place on reasonable notice and no more than once in each calendar
year unless an Event of Default shall
occur.
|
10.2.11
|
Pari
passu obligations The
Borrowers will ensure that, throughout the Facility Period, the
obligations of the Security Parties under or pursuant to the Security
Documents rank at least pari
passu
with all other existing or future indebtedness, obligations or liabilities
of the Security Parties, other than any mandatorily preferred by
law.
|
10.2.12
|
Notification
of Event of Default
The Borrowers will immediately notify the Agent in writing of the
occurrence of any Event of Default or Potential Event of
Default.
|
10.2.13 |
Future
transactions The
Borrowers undertake to give the Agent a right to be involved in any
future
transactions in relation to the Borrowers or the Vessels on market
conditions.
|
11.1
|
Maintenance
of account The
Borrowers shall maintain the Earnings Account with the Agent for
the
duration of the Facility Period free of Encumbrances and rights of
set off
other than as created by or pursuant to the Security
Documents.
|
11.2
|
Earnings
The
Borrowers shall procure that there is credited to the Earnings Account
all
Earnings and any Requisition Compensation which are to be applied
as
follows:
|
(i) |
firstly,
in or towards Operating Expenses;
|
(ii) |
secondly,
in or towards payment of any costs, outstanding fees and commissions
or
other monies owed to the Banks relating to the
Indebtedness;
|
44
(iii)
|
thirdly,
in or towards payment of all due Interest accrued but unpaid in respect
of
the Loan; and
|
(iv) |
fourthly,
in or towards payment of the Repayment
Instalments.
|
11.3
|
Borrowers'
obligations not affected If
for any reason the amount standing to the credit of the Earnings
Account
shall be insufficient to pay any Repayment Instalment or to make
any
payment of interest when due, the Borrowers' obligation to pay that
Repayment Instalment or to make that payment of interest shall not
be
affected.
|
11.4
|
Release
of surplus Any
amount remaining to the credit of the Earnings Account following
the
making of any payment required by Clause 11.2 shall (unless an Event
of
Default or Potential Event of Default shall have occurred and be
continuing) be released to or to the order of the
Borrowers.
|
11.5
|
Restriction
on withdrawal During
the Facility Period no sum may be withdrawn from the Earnings Account
(except in accordance with this Clause) without the prior written
consent
of the Agent.
|
11.6
|
Relocation
of Earnings
Account At
any time following the occurrence and during the continuation of
an Event
of Default, the Agent may without the consent of the Borrowers relocate
the Earnings
Account to
any other branch of the Agent, without prejudice to the continued
application of this Clause and the rights of the Banks under or pursuant
to the Security Documents.
|
12.1
|
The
Agent's rights If
any of the events set out in Clause 12.2 occurs, the Agent may (and,
if
instructed to do so by an Instructing Group, shall) by notice to
the
Borrowers declare the Banks to be under no further obligation to
the
Borrowers under or pursuant to this Agreement and may (and, if instructed
to do so by an Instructing Group shall) declare all or any part of
the
Indebtedness (including such unpaid interest as shall have accrued)
to be
immediately payable, in which event the Indebtedness (or the part
of the
Indebtedness referred to in the Agent's notice) shall immediately
become
due and payable without any further demand or notice of any
kind.
|
45
12.2
|
Events
of Default The
events referred to in Clause 12.1
are:-
|
12.2.1
|
payment
default if
the Borrowers default in the payment of any part of the Indebtedness
when
due; or
|
12.2.2
|
other
default if
any of the Security Parties fails to observe or perform any of the
covenants, conditions, undertakings, agreements or obligations on
its part
contained in any of the Security Documents or shall in any other
way be in
breach of or do or cause to be done any act repudiating or evidencing
an
intention to repudiate any of the Security Documents; or
|
12.2.3
|
misrepresentation
or breach of warranty if
any representation or warranty made or repeated, or any other information
given, by any of the Security Parties to the Banks or the Agent in
or
leading up to or during the currency of any of the Security Documents,
or
in or pursuant to any notice or other document delivered to the Agent
under or pursuant to any of the Security Documents, is false or incorrect
or misleading in any respect which the Agent in its discretion considers
to be material; or
|
12.2.4
|
execution
if
a distress or execution or other process of a court or authority
is levied
on any of the property of any of the Security Parties before or after
final judgment or by order of any competent court or authority and
is not
satisfied within seven days of levy;
or
|
12.2.5
|
insolvency
events if
any of the Security Parties:-
|
(a)
|
resolves
to appoint, or applies for, or consents to, the appointment of a
receiver,
administrative receiver, trustee, administrator or liquidator of
itself or
of all or part of its assets; or
|
(b)
|
is
unable or admits its inability to pay its debts as they fall due;
or
|
(c)
|
makes
a general assignment for the benefit of creditors or enters into
a
moratorium on payment of any of its indebtedness;
or
|
(d)
|
ceases
trading or threatens to cease trading;
or
|
46
(e)
|
has
appointed an Inspector under the Companies Xxx 0000 or any statutory
provision which the Agent in its discretion considers analogous thereto;
or
|
12.2.6
|
insolvency
proceedings if
any proceedings are commenced or threatened, or any order or judgment
is
given by any court, for the bankruptcy, liquidation, winding up,
administration or re-organisation of any of the Security Parties
or for
the appointment of a receiver, administrative receiver, administrator,
liquidator or trustee of any of the Security Parties or of all or
part of
the assets of any of the Security Parties, or if any person appoints
or
purports to appoint such receiver, administrative receiver, administrator,
liquidator or trustee; or
|
12.2.7
|
impossibility
or illegality if
any event occurs which would, or would with the passage of time,
render
performance of any of the Security Documents by any of the Security
Parties impossible, unlawful or unenforceable by the Banks or the
Agent;
or
|
12.2.8
|
conditions
subsequent if
any of the conditions set out in Clause 3.2 is not satisfied within
the
time reasonably required by the Agent;
or
|
12.2.9
|
revocation
or modification of consents etc. if
any consent, licence, approval, authorisation, 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 any of the Security Parties to comply
with
any of their obligations in or pursuant to any of the Security Documents
is not obtained or is revoked, suspended, withdrawn or withheld,
or is
modified in a manner which the Agent considers is, or may be, prejudicial
to the interests of the Banks, or ceases to remain in full force
and
effect; or
|
12.2.10
|
curtailment
of business if
the business of any of the Security Parties is wholly or partially
curtailed or suspended by any intervention by or under authority
of any
government, or if all or a substantial part of the undertaking, property
or assets of any of the Security Parties is seized, nationalised,
expropriated or compulsorily acquired by or under authority of any
government; or
|
47
12.2.11
|
loss
of Vessel if
any Vessel or any other vessel which may from time to time be mortgaged
to
the Banks (or to the Agent on their behalf) as security for the repayment
of all or any part of the Indebtedness is destroyed, abandoned,
confiscated, forfeited, condemned as prize or becomes a Total Loss
except
that a Total Loss shall not be an Event of Default if each
of:-
|
(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
unless the Agent has reasonable grounds to believe that any such
refusal
or dispute is unlikely to succeed in a court of law;
and
|
(c)
|
payment
of all insurance proceeds in respect of the Total Loss is made in
full to
the Agent on behalf of the Banks (or, if such insurance proceeds
are not
so received, the Borrowers procure payment to the Agent of the relevant
Attributable Amount) within one hundred and twenty days of the occurrence
of the casualty giving rise to the Total Loss in question or such
longer
period as the Agent may in its sole discretion agree;
or
|
12.2.12
|
cross
default if
the Borrowers or the Guarantor commit a default under any other agreement
to which they are a party concerning any kind of financial liability;
or
|
12.2.13
|
reduction
of capital if
any of the Security Parties reduces its authorised or issued or subscribed
capital; or
|
12.2.14
|
challenge
to registration if
the registration of any Vessel or any Mortgage is contested or becomes
void or voidable or liable to cancellation or termination, or if
the
validity or priority of any Mortgage is contested;
or
|
12.2.15
|
war
if
the country of registration of any Vessel becomes involved in war
(whether
or not declared) or civil war or is occupied by any other power and
the
Agent in its discretion considers that, as a result, the security
conferred by the Security Documents is materially prejudiced;
or
|
48
12.2.16
|
notice
of termination if
the Guarantor gives notice to the Agent to determine its obligations
under
the Guarantee; or
|
12.2.17
|
material
adverse change etc.
if
anything is done or permitted or omitted to be done by any of the
Security
Parties (other than the Managers) which in the reasonable opinion
of the
Agent jeopardises or imperils (or may jeopardise or imperil) the
rights
conferred on the Agent and the Banks by the Security Documents, or
if
there occurs (in the opinion of the Agent) any material adverse change
in
the business, affairs or financial condition of any of the Security
Parties from that pertaining at the date of this Agreement;
or
|
12.2.18
|
material
adverse change
or cancellation of an Existing Charter if
at any time any Existing Charter is subject to a material adverse
amendment (in the opinion of the Agent) or is terminated, revoked,
cancelled, repudiated or otherwise ceases to be in full force and
effect
other than by effluxion of time and has not been replaced by another
Charter within ten (10) Business Days; or
|
12.2.19
|
analogous
events if
any event which (in the opinion of the Agent) is analogous to any
of the
events set out above shall occur.
|
13.1
|
Set-off
The
Borrowers irrevocably authorise the Agent and the Banks at any time
after
all or any part of the Indebtedness shall have become due and payable
to
set off without notice any liability of any of the Borrowers to any
of the
Banks or to the Agent (whether present or future, actual or contingent,
and irrespective of the branch or office, currency or place of payment)
against any credit balance from time to time standing on any account
of
any of the Borrowers (whether current or otherwise and whether or
not
subject to notice) with any branch of the Agent or of any Bank in
or
towards satisfaction of the Indebtedness and, in the name of the
Agent or
that Bank or that Borrower, to do all acts (including, without limitation,
converting or exchanging any currency) and execute all documents
which may
be required to effect such
application.
|
13.2
|
Lien
The
Agent and each Bank shall have a lien on and be entitled to retain
and
realise as additional security for the repayment of the Indebtedness
any
cheques, drafts, bills, notes or negotiable or non-negotiable instruments
and any stocks, shares or marketable or other securities and property
of
any kind of any of the Borrowers (or of the Agent or that Bank as
agent or
nominee of any of the Borrowers) from time to time held by the Agent
or
that Bank, whether for safe custody or
otherwise.
|
49
13.3
|
Application
Each
of the Borrowers irrevocably authorises the Agent to apply all
sums which
the Agent may receive:-
|
13.3.1
|
pursuant
to a sale or other disposition of a Vessel or any right, title
or interest
in a Vessel; or
|
13.3.2
|
by
way of payment to the Agent of any sum in respect of the Insurances,
Earnings or Requisition Compensation of a Vessel;
or
|
13.3.3
|
otherwise
arising under or in connection with any of the Security Documents
|
in
or towards satisfaction, or by way of retention on
account, of the Indebtedness, in such manner as the Agent may
determine.
14.1
|
Right
to assign Each
of the Banks may assign or transfer any of its rights and/or obligations
under or pursuant to this Agreement to any other branch or subsidiary
of
that Bank or (with the prior written consent of the Borrowers, such
consent not to be unreasonably withheld or delayed) to any other
bank or
financial institution, and may grant sub-participations in all or
any part
of its Commitment.
|
14.2
|
Borrowers'
co-operation The
Borrowers will co-operate fully with the Banks in connection with
any
assignment, transfer or sub-participation; will execute and procure
the
execution of such documents as the Banks may require in connection
therewith; irrevocably authorise the Agent to sign any Transfer
Certificate on their behalf; and irrevocably authorise the Agent
and the
Banks (subject to any proposed assignee, transferee or sub-participant
signing a suitable confidentiality undertaking) 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 or the Security
Documents which the Agent or the Banks may in its discretion consider
necessary or desirable.
|
50
14.3
|
Rights
of assignee Any
assignee, transferee or sub-participant of a Bank shall (unless limited
by
the express terms of the assignment, transfer or sub-participation)
take
the full benefit of every provision of the Security Documents benefiting
that Bank.
|
14.4
|
Transfer
Certificates If
any Bank wishes to transfer any of its rights and/or obligations
under or
pursuant to this Agreement, it may do so by delivering to the Agent
a duly
completed Transfer Certificate, in which event on the Transfer
Date:-
|
14.4.1
|
to
the extent that that Bank seeks to transfer its rights and/or obligations,
the Borrowers (on the one hand) and the Bank in question (on the
other)
shall be released from all further obligations towards the
other(s);
|
14.4.2
|
the
Borrowers (on the one hand) and the Transferee (on the other) shall
assume
obligations towards the other(s) identical to those released pursuant
to
Clause 14.4.1;
|
14.4.3
|
the
Agent, each of the Banks and the Transferee shall have the same rights
and
obligations between themselves as they would have had if the Transferee
had been an original party to this Agreement as a Bank;
and
|
14.4.4
|
the
Transferee shall pay to the Agent for its own account a transfer
fee of
two thousand ($2,000) Dollars.
|
Each
Bank
irrevocably authorises the Agent to sign on its behalf any Transfer Certificate
relating to the transfer of any of the rights and/or obligations of any other
Bank.
14.5
|
Security
Documents Unless
otherwise expressly provided in any Security Document or otherwise
expressly agreed between a Bank and any proposed Transferee and notified
by that Bank to the Agent on or before the relevant Transfer Date,
there
shall automatically be assigned to the Transferee with any transfer
of a
Bank's rights and/or obligations under or pursuant to this Agreement
the
rights of that Bank under or pursuant to the Security Documents (other
than this Agreement) which relate to the portion of the Bank's rights
and/or obligations transferred by the relevant Transfer
Certificate.
|
51
15.1
|
Payments
All
amounts payable by any of the Borrowers under or pursuant to any
of the
Security Documents shall be paid to such accounts at such banks as
the
Agent may from time to time direct to the Borrowers, and (unless
payable
in any other Currency of Account) shall be paid in Dollars in same
day
funds (or such funds as are required by the authorities in the United
States of America for settlement of international payments for immediate
value). Payments shall be deemed to have been received by the Agent
on the
date on which the Agent receives authenticated advice of receipt,
unless
that advice is received by the Agent on a day other than a Business
Day or
at a time of day (whether on a Business Day or not) when the Agent
in its
discretion considers that it is impossible or impracticable for the
Agent
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
Agent on
the Business Day next following the date of receipt of advice by
the
Agent.
|
15.2
|
No
deductions or withholdings All
payments (whether of principal or interest or otherwise) to be made
by any
of the Borrowers pursuant to the Security Documents shall, subject
only to
Clause 15.3, 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.
|
15.3
|
Grossing-up
If
at any time any law requires (or is interpreted to require) a 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,
that
Borrower will promptly notify the Agent and, simultaneously with
making
that payment, will pay to the Agent 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
Agent and the Banks receive a net sum equal to the sum which they
would
have received had no deduction or withholding been made.
|
52
15.4
|
Evidence
of deductions If
at any time a Borrower is required by law to make any deduction or
withholding from any payment to be made by it pursuant to any of
the
Security Documents, that Borrower will pay the amount required to
be
deducted or withheld to the relevant authority within the time allowed
under the applicable law and will, no later than thirty days after
making
that payment, deliver to the Agent an original receipt issued by
the
relevant authority, or other evidence acceptable to the Agent, evidencing
the payment to that authority of all amounts required to be deducted
or
withheld.
|
15.5
|
Adjustment
of due dates If
any payment or transfer of funds to be made under any of the Security
Documents, other than a payment of interest on the Loan, 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.
|
15.6
|
Change
in law If,
by reason of the introduction of any law, or any change in any law,
or the
interpretation or administration of any law, or in compliance with
any
request or requirement from any central bank or any fiscal, monetary
or
other authority:-
|
15.6.1
|
any
Bank or the Agent (or the holding company of any Bank or the Agent)
shall
be subject to any Tax with respect to payments of all or any part
of the
Indebtedness; or
|
15.6.2
|
the
basis of Taxation of payments to any Bank or to the Agent in respect
of
all or any part of the Indebtedness shall be changed;
or
|
15.6.3
|
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 any Bank; or
|
15.6.4
|
the
manner in which any Bank or the Agent allocates capital resources
to its
obligations under this Agreement or any ratio (whether cash, capital
adequacy, liquidity or otherwise) which any Bank or the Agent is
required
or requested to maintain shall be affected;
or
|
53
15.6.5
|
there
is imposed on any Bank or on the Agent (or on the holding company
of any
Bank or the Agent) any other condition in relation to the Indebtedness
or
the Security Documents;
|
and
the result of any of the above shall be to
increase the cost to any Bank (or to the holding company of any Bank) of that
Bank making or maintaining its Commitment or to cause any Bank or the Agent
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, and/or performing its obligations under this Agreement,
then:
(i) |
the
Bank affected shall notify the
Agent,
|
(ii)
|
the
Agent shall negotiate with the Borrowers in good faith with a view
to
restructuring the transaction constituted by the Security Documents
in a
way which will (in the reasonable opinion of the Agent) satisfactorily
avoid either the unlawfulness or increased costs concerned (each
as the
case may be) without either decreasing the amounts or net returns
due to
the Agent and the Banks under the Security Documents or which would,
but
for such unlawfulness or such increased costs (each as the case may
be),
have been so due, or otherwise adversely affecting the rights, interests
and security of the Banks under the transaction as presently constituted
and will not (in the reasonable opinion of the Agent) increase the
cost to
the Borrowers of or otherwise adversely affect the rights and interests
of
the Borrowers under the transaction and unless the Agent nominates
a
longer period (which it shall be at liberty to do), such negotiations
shall continue for a period of thirty (30) days after the Borrowers
have
been given notice under this clause or for such lesser period as
is
permitted under applicable law having regard to either the unlawfulness
or
the increased costs concerned (such period called the "Negotiation
Period");
|
(iii)
|
if
at the end of the Negotiation Period the Agent and the Borrowers
have not
reached agreement on a restructuring of the transaction on the basis
described in sub-clause (ii) above, then the Borrowers shall on demand,
made at any time after expiry of the Negotiation Period whether or
not the
relevant Bank's Contribution has been repaid, pay to such Bank the
amount
which such Bank specifies (in a certificate (which shall be conclusive
in
the absence of manifest error) setting forth the basis of the computation
of such amount but not including any matters which such Bank regards
as
confidential in relation to its funding arrangements) is required
to
compensate such Bank for such alternative funding, increased cost,
reduction, payment or forgone
return.
|
54
15.7
|
Illegality
and impracticality Notwithstanding
anything contained in the Security Documents, the obligations of
the Banks
to advance or maintain the Loan shall terminate in the event that
a change
in any law or in the interpretation of any law by any authority charged
with its administration shall make it unlawful or, in the opinion
of any
Bank, impracticable for that Bank to advance or maintain its Commitment.
In that event the Bank affected shall notify the Agent and the Agent
shall, by written notice to the Borrowers, declare the Banks' obligations
to be immediately terminated. If all or any part of the Loan shall
have
been advanced by the Banks to the Borrowers, the Indebtedness (including
all accrued interest) shall be prepaid within thirty days from the
date of
such notice. Clause 5.5 shall apply to that prepayment if it is made
on a
day other than the last day of an Interest Period. The Agent and
the Banks
shall consult in good faith (as per the provisions of clause 15.6)
with
the Borrowers (but without incurring any legal obligations) with
a view to
trying to establish an alternative means of funding such Commitment,
in a
manner which does not breach any applicable law or
regulation.
|
15.8
|
Changes
in market circumstances If
at any time a Bank determines (which determination shall be final
and
conclusive and binding on the Borrowers) that, by reason of changes
affecting the London Interbank market, adequate and fair means do
not
exist for ascertaining the rate of interest on the Loan pursuant
to this
Agreement:-
|
15.8.1
|
that
Bank shall give notice to the Agent and the Agent shall give notice
to the
Borrowers of the occurrence of such event;
and
|
15.8.2
|
the
Agent shall as soon as reasonably practicable certify to the Borrowers
in
writing the effective cost to the Banks of maintaining the Loan for
such
further period as shall be selected by the Banks and the rate of
interest
payable by the Borrowers for that period; or, if that is not acceptable
to
the Borrowers,
|
55
15.8.3
|
the
Agent on behalf of the Banks will negotiate with the Borrowers in
good
faith with a view to modifying this Agreement to provide a substitute
basis for the Loan which is financially a substantial equivalent
to the
basis provided for in this Agreement.
|
If,
within thirty days of the giving of the notice referred to in
Clause 15.8.1, the Borrowers and the Agent fail to agree in writing on a
substitute basis for the Loan, the Borrowers will immediately prepay the
Indebtedness. Clause 5.5 shall apply to that prepayment if it is made on a
day
other than the last day of an Interest Period.
15.9
|
Non-availability
of currency If
a Bank is for any reason unable to obtain Dollars in the London Interbank
market and is, as a result, or as a result of any other contingency
affecting the London Interbank market, unable to advance or maintain
its
Commitment in Dollars, that Bank shall give notice to the Agent and
the
Agent shall give notice to the Borrowers and the Banks' obligations
to
make the Loan available shall immediately cease. In that event, if
all or
any part of the Loan shall have been advanced by the Banks to the
Borrowers, the Agent on behalf of the Banks will negotiate with the
Borrowers in good faith with a view to establishing a mutually acceptable
basis for funding the Loan from an alternative source. If the Agent
and
the Borrowers have failed to agree in writing on a basis for funding
the
Loan from an alternative source by 11.00 a.m. on the second Business
Day
prior to the end of the then current Interest Period, the Borrowers
will
(without prejudice to their other obligations under or pursuant to
this
Agreement, including, without limitation, their obligation to pay
interest
on the Loan, arising on the expiry of the then current Interest Period)
prepay the Indebtedness to the Agent on behalf of the Banks on the
expiry
of the then current Interest Period.
|
16.1
|
Method
Except for Communications pursuant to Clause 9, which shall be made
or
given in accordance with Clause 9.20, any Communication may be given,
delivered, made or served (as the case may be) under or in relation
to
this Agreement by letter or fax and shall be in the English language
and
sent addressed:-
|
16.1.1
|
in
the case of the Banks or the Agent to the Agent at its address at
the head
of this Agreement (fax no: x00 00 000 0000) marked for the attention
of:
The Global Shipping Group;
|
56
16.1.2
|
in
the case of the Borrowers to the Communications Address; or to such
other
address or fax number as the Banks, the Agent or the Borrowers may
designate for themselves by written notice to the
others.
|
16.2
|
Timing
A
Communication shall be deemed to have been duly given, delivered,
made or
served to or on, and received by, the Borrowers:-
|
16.2.1
|
in
the case of a fax when the sender receives one or more transmission
reports showing the whole of the Communication to have been transmitted
to
the correct fax number;
|
16.2.2
|
if
delivered to an officer of any of the Borrowers or left at the
Communications Address at the time of delivery or leaving; or
|
16.2.3
|
if
posted, at 9.00 a.m. on the Business Day after posting by prepaid
first
class post.
|
A
Communication shall only be deemed to have been duly given, delivered, made
or
served to or on, and received by, the Banks or the Agent on actual receipt
of
the whole of that Communication by the Agent.
16.3
|
Indemnity
The Borrowers shall indemnify the Agent and each Bank against any
cost,
claim, liability, loss or expense (including legal fees and any Value
Added Tax or any similar or replacement tax (if applicable)) which
the
Agent or any of the Banks may sustain or incur as a consequence of
any
Communication sent by or on behalf of any of the Borrowers by fax
not
being received by its intended recipient, or being received incomplete,
or
by reason of any Communication purportedly having been sent by or
on
behalf of any of the Borrowers having been sent
fraudulently.
|
17.1
|
Currency
In
the event of the Agent or a Bank receiving or recovering any amount
payable under any of the Security Documents 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 Borrowers shall, on
the
Agent's written demand, pay to the Agent 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 Agent on behalf of the Banks
as a
separate debt under this Agreement.
|
57
17.2
|
Costs
and expenses The
Borrowers will, within fourteen days of the Agent's written demand,
reimburse the Agent (on behalf of itself and the Banks) for all costs
and
expenses (including Value Added Tax or any similar or replacement
tax if
applicable) of and incidental to:-
|
17.2.1
|
the
negotiation, preparation, execution and registration of the Security
Documents (whether or not any of the Security Documents are actually
executed or registered and whether or not all or any part of the
Loan is
advanced);
|
17.2.2
|
any
amendments, addenda or supplements to any of the Security Documents
(whether or not completed);
|
17.2.3
|
any
other documents which may at any time be required by any Bank or
by the
Agent to give effect to any of the Security Documents or which any
Bank or
the Agent is entitled to call for or obtain pursuant to any of the
Security Documents (including, without limitation, all premiums and
other
sums from time to time payable by the Agent in relation to the Mortgagees'
Insurances); and
|
17.2.4
|
the
exercise of the rights, powers, discretions and remedies of the Banks
and/or the Agent under or pursuant to the Security
Documents.
|
17.3
|
Events
of Default The
Borrowers shall indemnify the Banks and the Agent from time to time
on
demand against all losses and costs incurred or sustained by any
Bank or
by the Agent as a consequence of any Event of Default, including
(without
limitation) any Break Costs.
|
17.4
|
Funding
costs
The Borrowers shall indemnify the Banks and the Agent from time to
time on
demand against all losses and costs incurred or sustained by any
Bank or
by the Agent if, for any reason, any Drawing is not advanced to the
Borrowers after the relevant Drawdown Notice has been given to the
Agent,
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 Agent
or by any
of the Banks) including (without limitation) any Break
Costs.
|
58
17.5
|
Protection
and enforcement The
Borrowers shall indemnify the Banks and the Agent from time to time
on
demand against all losses, costs and liabilities which any Bank or
the
Agent may from time to time sustain, incur or become liable for in
or
about the protection, maintenance or enforcement of the rights conferred
on the Banks and/or the Agent by the Security Documents or in or
about the
exercise or purported exercise by the Banks and/or the Agent of any
of the
rights, powers, discretions or remedies vested in them under or arising
out of the Security Documents, including (without limitation) any
losses,
costs and liabilities which any Bank or the Agent may from time to
time
sustain, incur or become liable for by reason of the Banks or the
Agent
being mortgagees of any Vessel and/or a lender to the Borrowers,
or by
reason of any Bank or the Agent being deemed by any court or authority
to
be an operator or controller, or in any way concerned in the operation
or
control, of any Vessel.
|
17.6
|
Liabilities
of Banks and Agent The
Borrowers will from time to time reimburse the Banks and the Agent
on
demand for all sums which any Bank or the Agent may pay or become
actually
or contingently liable for on account of any Borrower or in connection
with any Vessel (whether alone or jointly or jointly and severally
with
any other person) including (without limitation) all sums which any
Bank
or the Agent may pay or guarantees which any Bank or the Agent may
give in
respect of the Insurances, any expenses incurred by any Bank or by
the
Agent in connection with the maintenance or repair of any Vessel
or in
discharging any lien, bond or other claim relating in any way to
any
Vessel, and any sums which any Bank or the Agent may pay or guarantees
which they may give to procure the release of any Vessel from arrest
or
detention.
|
17.7
|
Taxes
The
Borrowers shall pay all Taxes to which all or any part of the Indebtedness
or any of the Security Documents may be at any time subject and shall
indemnify the Agent and the Banks on demand against all liabilities,
costs, claims and expenses resulting from any omission to pay or
delay in
paying any such Taxes.
|
18.1
|
Waivers
No
failure or delay on the part of the Agent or of a Bank in exercising
any
right, power, discretion or remedy under or pursuant to any of the
Security Documents, nor any actual or alleged course of dealing between
the Agent or any Bank and any of the Borrowers, shall operate as
a waiver
of, or acquiescence in, any default on the part of any Security Party,
unless expressly agreed to do so in writing by the Agent, nor shall
any
single or partial exercise by the Agent or a Bank of any right, power,
discretion or remedy preclude any other or further exercise of that
right,
power, discretion or remedy, or the exercise by the Agent or a Bank
of any
other right, power, discretion or remedy.
|
59
18.2
|
No
oral variations No
variation or amendment of any of the Security Documents shall be
valid
unless in writing and signed on behalf of the Banks and the
Agent.
|
18.3
|
Severability
If
at any time any provision of any of the Security Documents is invalid,
illegal or unenforceable in any respect that provision shall be severed
from the remainder and the validity, legality and enforceability
of the
remaining provisions shall not be affected or impaired in any
way.
|
18.4
|
Successors
etc. The
Security Documents shall be binding on the Security Parties and on
their
successors and permitted transferees and assignees, and shall inure
to the
benefit of the Bank and the Agent and their respective successors,
transferees and assignees. None of the Borrowers may assign nor transfer
any of its rights under or pursuant to any of the Security Documents
without the prior written consent of the
Agent.
|
18.5
|
Further
assurance If
any provision of the Security Documents 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 the Banks or
by the
Agent on their behalf are considered by the Banks for any reason
insufficient to carry out the terms of this Agreement, then from
time to
time the Borrowers will promptly, on demand by the Agent, execute
or
procure the execution of such further documents as in the opinion
of the
Banks are necessary to provide adequate security for the repayment
of the
Indebtedness.
|
18.6
|
Other
arrangements The
Banks and the Agent may, without prejudice to their rights under
or
pursuant to the Security Documents, at any time and from time to
time, on
such terms and conditions as they may in their discretion determine,
and
without notice to any Borrower, grant time or other indulgence to,
or
compound with, any other person liable (actually or contingently)
to the
Banks and/or the Agent in respect of all or any part of the Indebtedness,
and may release or renew negotiable instruments and take and release
securities and hold funds on realisation or suspense account without
affecting the liabilities of the Borrowers or the rights of the Banks
and
the Agent under or pursuant to the Security
Documents.
|
60
18.7
|
Advisers
The
Borrowers irrevocably authorise the Agent, at any time and from time
to
time during the Facility Period, to consult insurance advisers on
any
matters relating to the Insurances, including, without limitation,
the
collection of insurance claims, and from time to time to consult
or retain
advisers or consultants to monitor or advise on any other claims
relating
to the Vessels. The Borrowers will provide such advisers and consultants
with all information and documents which they may from time to time
require and will reimburse the Agent on demand for all costs and
expenses
incurred by the Agent in connection with the consultation or retention
of
such advisers or consultants.
|
18.8
|
Delegation
The
Banks and the Agent may at any time and from time to time delegate
to any
person any of their rights, powers, discretions and remedies pursuant
to
the Security Documents on such terms as they may consider appropriate
(including the power to
sub-delegate).
|
18.9
|
Rights
etc. cumulative Every
right, power, discretion and remedy conferred on the Banks and/or
the
Agent under or pursuant to the Security Documents shall be cumulative
and
in addition to every other right, power, discretion or remedy to
which
they may at any time be entitled by law or in equity. The Banks and
the
Agent may exercise each of their rights, powers, discretions and
remedies
as often and in such order as they deem appropriate. The exercise
or the
beginning of the exercise of any right, power, discretion or remedy
shall
not be interpreted as a waiver of the right to exercise that or any
other
right, power, discretion or remedy either simultaneously or
subsequently.
|
18.10
|
No
enquiry The
Banks and the Agent shall not be concerned to enquire into the powers
of
the Security Parties or of any person purporting to act on behalf
of any
of the Security Parties, even if any of the Security Parties or any
such
person shall have acted in excess of their powers or if their actions
shall have been irregular, defective or informal, whether or not
any Bank
or the Agent had notice thereof.
|
18.11
|
Continuing
security The
security constituted by the Security Documents shall be continuing
and
shall not be satisfied by any intermediate payment or satisfaction
until
the Indebtedness shall have been repaid in full and neither the Banks
nor
the Agent shall be under any further actual or contingent liability
to any
third party in relation to the Vessels, the Insurances, Earnings
or
Requisition Compensation or any other matter referred to in the Security
Documents.
|
61
18.12
|
Security
cumulative The
security constituted by the Security Documents shall be in addition
to any
other security now or in the future held by the Banks or by the Agent for
or in respect of all or any part of the Indebtedness, and shall not
merge
with or prejudice or be prejudiced by any such security or any other
contractual or legal rights of the Banks or the Agent, nor affected
by any
irregularity, defect or informality, or by any release, exchange
or
variation of any such security. Section 93 of the Law of Property
Xxx 0000
and all provisions which the Agent considers analogous thereto under
the
law of any other relevant jurisdiction shall not apply to the security
constituted by the Security Documents.
|
18.13
|
Re-instatement
If
the Banks or the Agent take any steps to exercise any of their rights,
powers, remedies or discretions pursuant to the Security Documents
and the
result shall be adverse to the Banks and/or the Agent, the Borrowers,
the
Banks and the Agent shall be restored to their former positions as
if no
such steps had been taken.
|
18.14
|
No
liability Neither
the Banks nor the Agent nor any agent or employee of any Bank and/or
the
Agent, nor any receiver and/or manager appointed by the Agent, shall
be
liable for any losses which may be incurred in or about the exercise
of
any of the rights, powers, discretions or remedies of the Banks and/or
the
Agent under or pursuant to the Security Documents nor liable as mortgagee
in possession for any loss on realisation or for any neglect or default
of
any nature for which a mortgagee in possession might otherwise be
liable.
|
18.15
|
Rescission
of payments etc. Any
discharge, release or reassignment by the Banks and/or the Agent
of any of
the security constituted by, or any of the obligations of any Security
Party contained in, any of the Security Documents 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.
|
62
18.16
|
Subsequent
Encumbrances If
the Agent receives notice of any subsequent Encumbrance affecting
any
Vessel or all or any part of the Insurances, Earnings or Requisition
Compensation or the Earnings Account, the Agent may open a new account
in
its books for the Borrowers. If the Agent does not open a new account,
then (unless the Agent gives written notice to the contrary to the
Borrowers) as from the time of receipt by the Agent of notice of
such
subsequent Encumbrance, all payments made to the Agent shall be treated
as
having been credited to a new account of the Borrowers and not as
having
been applied in reduction of the
Indebtedness.
|
18.17
|
Releases
If
any Bank or the Agent shall at any time release any party from all
or any
part of any of the Security Documents, the liability of any other
party to
the Security Documents shall not be varied or
diminished.
|
18.18
|
Discretions
Unless
otherwise expressly indicated, where any Bank or the Agent is stated
in
the Security Documents to have a discretion and/or where the opinion
of
any Bank or the Agent is referred to and/or where the consent, agreement
or approval of any Bank or the Agent is required for any course of
action,
or where anything is required to be acceptable to any Bank or to
the
Agent, the Banks and the Agent shall have a sole, absolute and unfettered
discretion and/or may give or withhold their consent, agreement or
approval at their sole, absolute and unfettered
discretion.
|
18.19
|
Certificates
Any
certificate or statement signed by an authorised signatory of the
Agent
purporting to show the amount of the Indebtedness (or any part of
the
Indebtedness) or any other amount referred to in any of the Security
Documents shall, save for manifest error or on any question of law,
be
conclusive evidence as against the Borrowers of that amount.
|
18.20
|
Survival
of representations and warranties The
representations and warranties on the part of the Borrowers contained
in
this Agreement shall survive the execution of this Agreement and
the
advance of the Loan.
|
18.21
|
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.
|
63
18.22
|
Contracts
(Rights of Third Parties) Xxx 0000 No
term of this Agreement is enforceable by a person who is not a party
to
it.
|
19.1
|
Governing
law This
Agreement shall in all respects be governed by and interpreted in
accordance with English law.
|
19.2
|
Jurisdiction
For
the exclusive benefit of the Banks and the Agent, 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.
|
19.3
|
Alternative
jurisdictions Nothing
contained in this Clause shall limit the right of the Banks or the
Agent
to commence any Proceedings against any of the Borrowers in any other
court of competent jurisdiction nor shall the commencement of any
Proceedings against any of the Borrowers in one or more jurisdictions
preclude the commencement of any Proceedings in any other jurisdiction,
whether concurrently or not.
|
19.4
|
Waiver
of objections Each
of the Borrowers 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, 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.
|
19.5
|
Service
of process Without
prejudice to the right of the Agent and the Banks to use any other
method
of service permitted by law, each of the Borrowers irrevocably agrees
that
any writ, notice, judgment or other legal process shall be sufficiently
served on it if addressed to it and left at or sent by post to the
Address
for Service, and in that event shall be conclusively deemed to have
been
served at the time of leaving or, if posted, at 9.00 a.m. on the
Business
Day after posting by prepaid first class
post.
|
IN
WITNESS
of which
the parties to this Agreement have executed this Agreement the day and year
first before written.
64
SCHEDULE
1
The
Borrowers and the Vessels
Name
of Borrower
|
Country
of Incorporation
|
Registered
Office
|
Name
of Vessel
|
Flag
of Vessel
|
Type
of Vessel
|
Charterer
|
Period
+ (Option)
|
Rate
|
Class
|
Index
Amount
|
MC
Pelerin Shipping Limited
|
Bahamas
|
Xxxxxx
Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
|
"Coniston"
|
Bahamas
|
Liquidated
Petroleum Gas Carrier
|
Statoil
|
Till
04/07/06
|
200,000
|
NS
(Tanker, Liquefied Gases - Maximum Pressure 18.0kg/cm2 and
Minimum Temperature 0OC Type 2PG)
MNS
|
14%
|
MC
Heron Shipping Limited
|
Bahamas
|
Xxxxxx
Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
|
"Auteuil"
|
Bahamas
|
Liquidated
Petroleum Gas Carrier
|
Statoil
|
Till
01/07/06
|
170,000
|
NS
(Tanker, Liquefied Gases - Maximum Pressure 18.0kg/cm2 and
Minimum Temperature 0OC Type 2PG)
MNS
|
18%
|
MC
Cormorant Shipping Limited
|
Bahamas
|
Xxxxxx
Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
|
"Deauville"
|
Bahamas
|
Liquidated
Petroleum Gas Carrier
|
Petredec
|
Till
05/06
|
190,000
|
NS
(Tanker, Liquefied Gases - Maximum Pressure 18.0kg/cm2 and
Minimum Temperature 0OC Type 2PG)
MNS
|
18%
|
MC
Tercel Shipping Limited
|
Bahamas
|
Xxxxxx
Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
|
"Longchamp"
|
Bahamas
|
Liquidated
Petroleum Gas Carrier
|
Statoil
|
Till
14/06/06
|
160,000
|
NS
(Tanker, Liquefied Gases - Maximum Pressure 18.0kg/cm2 and
Minimum Temperature 0OC Type 2PG)
MNS
|
12%
|
Sphinx
Limited
|
St.
Xxxxxxx and the Grenadines
|
000
Xxxxxxx Xxxxxx, Xxxxxxxxx, St Xxxxxxx and the Grenadines
|
"Malvern"
|
Bahamas
|
Liquidated
Petroleum Gas Carrier
|
Statoil
|
Till
12/12/07
|
188,750
|
NS
(Tanker, Liquefied Gases - Maximum Pressure 18.0kg/cm2 and
Minimum Temperature 0OC Type 2PG)
MNS
|
12%
|
65
MC
Egret Shipping Limited
|
Bahamas
|
Xxxxxx
Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
|
"Cheltenham"
|
Bahamas
|
Liquidated
Petroleum Gas Carrier
|
Statoil
|
Till
04/12/06
|
250,000
|
NS
(Tanker, Liquefied Gases - Maximum Pressure 18.0kg/cm2 and
Minimum Temperature 0OC Type 2PG)
MNS
|
12%
|
London
Bridge Shipping Limited
|
Cayman
Islands
|
Xxxxxxx
Xxxxx, 00 Xxxx Xxxxxx, P.O. Box 190 GT, Xxxxxx Town, Grand Cayman,
Cayman
Islands
|
"London
Bridge"
|
Isle
of Man
|
Liquidated
Petroleum Gas Xxxxxxx
|
Xxxx
Limited
|
Till
30/03/07
|
300,000
|
000
X0 X XXX XXX X0X00 Liquefied Gas Tanker Type-2G
MC
E AUT INERT RI
|
7%
|
Blackfriars
Bridge Shipping Limited
|
Cayman
Islands
|
Xxxxxxx
Xxxxx, 00 Xxxx Xxxxxx, P.O. Box 190 GT, Xxxxxx Town, Grand Cayman,
Cayman
Islands
|
"Blackfriars
Bridge"
|
Isle
of Man
|
Liquidated
Petroleum Gas Carrier
|
Monet
Trading Limited
|
Till
31/03/07
|
300,000
|
000
X0 X XXX XXX X0X00 Liquefied Gas Tanker Type-2G
MC
E AUT INERT RI
|
7%
|
66
SCHEDULE
2
The
Banks and the Commitments
The
Banks
|
The
Commitments
|
(in
Dollars)
|
|
Fortis
Bank (Nederland) N.V.
|
15,875,000
|
Xxxxxxxxxx
00
|
|
0000
XX Xxxxxxxxx
|
|
Xxx
Xxxxxxxxxxx
|
|
Fax:
x00 00 000 0000
|
|
Attn:
Global Shipping Group
|
|
KfW
|
15,875,000
|
Xxxxxxxxxxxxxxxxxxx
0-0
|
|
00000
Xxxxxxxxx xx Xxxx
|
|
Xxxxxxx
Xxxxxxxx of Germany
|
|
Fax:
x00 00 0000 0000
|
|
Attn:
Ship Financing Department
|
67
SCHEDULE
3
General
Terms and Conditions
68
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
MC
PELERIN SHIPPING LIMITED
|
)
|
__________________________________________ |
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
MC
HERON SHIPPING LIMITED
|
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
MC
CORMORANT SHIPPING
|
)
|
LIMITED
|
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
MC
TERCEL SHIPPING LIMITED
|
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
SPHINX
LIMITED
|
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
MC
EGRET SHIPPING LIMITED
|
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
LONDON
BRIDGE SHIPPING
|
)
|
LIMITED
|
)
|
69
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
BLACKFRIARS
BRIDGE SHIPPING
|
)
|
LIMITED
|
)
|
__________________________________________ | |
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
FORTIS
BANK (NEDERLAND) N.V.
|
)
|
(as
a Bank)
|
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
KfW
|
)
|
(as
a Bank)
|
)
|
SIGNED
by
|
)
|
duly
authorised for and on behalf
|
)
|
of
FORTIS
BANK (NEDERLAND) N.V.
|
)
|
(as
Agent)
|
)
|
70
APPENDIX A
To:
|
Fortis
Bank (Nederland) N.V.
|
From:
|
MC
Pelerin Shipping Limited
|
MC
Heron Shipping Limited
MC
Cormorant Shipping Ltd.
MC
Tercel Shipping Limited
Sphinx
Limited
MC
Egret Shipping Limited
London
Bridge Shipping Limited
Blackfriars
Bridge Shipping Limited
[Date]
Dear
Sirs,
Drawdown
Notice
We
refer
to the Loan Agreement dated ___________________ 2006 made between,
amongst others, 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 2.3 of the Agreement, we irrevocably request that you advance the
Loan to us on _________ 2006, which is a Business Day, by paying the amount
of
the Drawing to [specify account details].
We
warrant that the representations and warranties contained in Clause 4 of the
Agreement are true and correct at the date of this Drawdown Notice and will
be
true and correct on ____________ 2006; that no Event of Default
nor Potential Event of Default has occurred and is continuing, and that no
Event
of Default or Potential Event of Default will result from the advance of the
Drawing requested in this Drawdown Notice.
Yours
faithfully
.......................
For
and
on behalf of
MC
Pelerin Shipping Limited
MC
Heron Shipping Limited
MC
Cormorant Shipping Ltd.
MC
Tercel Shipping Limited
Sphinx
Limited
MC
Egret Shipping Limited
London
Bridge Shipping Limited
Blackfriars
Bridge Shipping Limited
00
XXXXXXXX
X
Form
of Transfer Certificate
To:
|
Fortis
Bank (Nederland)
N.V.
|
This
transfer certificate relates to a secured loan facility agreement (as from
time
to time amended, varied, supplemented or novated βthe
Loan Agreement")
dated
_______ 2006, on the terms and subject to the conditions of which a
secured loan facility of up to $31,750,000 was made available to MC Heron
Shipping Limited and others, as joint and several borrowers, by a syndicate
of
banks on whose behalf you act as agent and security trustee.
1
|
Terms
defined in the Loan Agreement shall, unless otherwise expressly
indicated,
have the same meaning when used in this certificate. The terms
"Transferor"
and "Transferee"
are defined in the schedule to this
certificate.
|
2
|
The
Transferor:-
|
2.1
|
confirms
that the details in the Schedule under the heading "Transferor's
Commitment"
accurately summarise its Commitment; and
|
2.2
|
requests
the Transferee to accept by way of novation the transfer to the Transferee
of the amount of the Transferorβs Commitment specified in the Schedule by
counter-signing and delivering this certificate to the Agent at its
address for Communications specified in the Loan
Agreement.
|
3
|
The
Transferee requests the Agent to accept this certificate as being
delivered to the Agent pursuant to and for the purposes of clause
14.4 of
the Loan Agreement so as to take effect in accordance with the
terms of
that clause on the Transfer Date specified in the
Schedule.
|
4
|
The
Agent (on its own behalf and on behalf of each of the Borrowers
and each
of the Banks other than the Transferor) confirms its acceptance
of this
certificate for the purposes of clause 14.4 of the Loan
Agreement.
|
5
|
The
Transferee confirms that:-
|
5.1
|
it
has received a copy of the Loan Agreement together with all other
information which it has required in connection with this transaction;
|
5.2
|
it
has not relied and will not in the future rely on the Transferor
or any
other party to the Loan Agreement to check or enquire on its behalf
into
the legality, validity, effectiveness, adequacy, accuracy or completeness
of any such information; and
|
5.3
|
it
has not relied and will not in the future rely on the Transferor
or any
other party to the Loan Agreement to keep under review on its behalf
the
financial condition, creditworthiness, condition, affairs, status
or
nature of any of the Security
Parties.
|
72
6
|
Execution
of this certificate by the Transferee constitutes its representation
to
the Transferor and to all other parties to the Loan Agreement that
it has
the power to become a party to the Loan Agreement as a Bank on
the terms
of the Loan Agreement and has taken all steps to authorise execution
and
delivery of this certificate.
|
7
|
The
Transferee undertakes with the Transferor and each of the other
parties to
the Loan Agreement that it will perform in accordance with their
terms all
those obligations which by the terms of the Loan Agreement will
be assumed
by it after delivery of this certificate to the Agent and the satisfaction
of any conditions subject to which this certificate is expressed
to take
effect.
|
8
|
The
Transferor makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of any of the Security Documents or
any
document relating to any of the Security Documents, and assumes
no
responsibility for the financial condition of any of the Security
Parties
or for the performance and observance by the Security Parties of
any of
their obligations under any of the Security Documents or any document
relating to any of the Security Documents and any conditions and
warranties implied by law are expressly
excluded.
|
9
|
The
Transferee acknowledges that nothing in this certificate or in
the Loan
Agreement shall oblige the Transferor to:-
|
9.1
|
accept
a re-transfer from the Transferee of the whole or any part of the
rights,
benefits and/or obligations transferred pursuant to this certificate;
or
|
9.2
|
support
any losses directly or indirectly sustained or incurred by the Transferee
for any reason including, without limitation, the non-performance
by any
party to any of the Security Documents of any obligations under any
of the
Security Documents.
|
10
|
The
address and fax number of the Transferee for the purposes of clause
9.20
of the Loan Agreement are set out in the
Schedule.
|
11
|
This
certificate may be executed in any number of counterparts each
of which
shall be original but which shall together constitute the same
instrument.
|
12
|
This
certificate shall be governed by and interpreted in accordance
with
English law.
|
73
THE SCHEDULE
1
|
2
|
Transferee:
|
3
|
Transfer
Date
(not earlier that the fifth Business Day after the date of delivery
of the
Transfer Certificate to the Agent):
|
4
|
Transferorβs Commitment: |
5
|
Amount
transferred:
|
6
|
Transfereeβs
address and fax number for the purposes of clause 9.20 of the Loan
Agreement:
|
[name
of Transferor]
|
[name
of Transferee]
|
||||
By:
|
By:
|
||||
Date:
|
Date:
|
||||
Fortis
Bank (Nederland) N.V.
as
Agent
for
and
on behalf of itself, each of the Borrowers and each of the Banks (other than
the
Transferor)
By:
|
||
Date:
|
74
DATED
APRIL 19, 2006
-
to -
FORTIS
BANK (NEDERLAND) N.V.
GUARANTEE
AND INDEMNITY
XXXXXXXXXX
XXXXXXX
Xxx,
Xx Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
Tel:
x00 000 0000 0000
Fax:
x00 000 0000 0000
(Ref:
814)
CONTENTS
Page
|
||
1
|
Definitions
and Interpretation
|
78
|
2
|
Representations
and Warranties
|
80
|
3
|
Guarantee
and Indemnity
|
80
|
4
|
Preservation
of Guarantor's Liability
|
81
|
5
|
Preservation
of Credit Parties' Rights
|
83
|
6
|
Undertakings
|
84
|
7
|
Payments
|
86
|
8
|
Currency
|
87
|
9
|
Set-Off
and Lien
|
88
|
10
|
Application
of Moneys
|
89
|
11
|
Partial
invalidity
|
90
|
12
|
Further
Assurance
|
90
|
13
|
Miscellaneous
|
90
|
14
|
Notices
|
91
|
15
|
Counterparts
|
91
|
16
|
Law
and Jurisdiction
|
91
|
GUARANTEE
AND INDEMNITY
Dated:
April 19, 2006
BY:
(1)
|
MC
SHIPPING INC,
a
corporation incorporated according to the law of the Republic of
Liberia
whose registered office is at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx
(the
"Guarantor");
|
IN
FAVOUR OF:
(2)
|
FORTIS
BANK (NEDERLAND) N.V.
acting as agent and security trustee for the Lenders (as hereinafter
defined) through its office at Xxxxxxxxxx 00, 0000 XX Xxxxxxxxx The
Netherlands (the "Security
Agent").
|
(A)
|
Each
of the banks listed in Schedule 2 to the Loan Agreement (as defined
below)
(collectively the "Lenders")
has agreed to lend to MC Pelerin Shipping Limited ("MC
Pelerin"),
MC Heron Shipping Limited ("MC
Heron"),
MC Cormorant Shipping Limited ("MC
Cormorant"),
MC Tercel Shipping Limited ("MC
Tercel")
and MC Egret Shipping Limited ("MC
Egret")
each a Bahamian company and a wholly-owned subsidiary of the Guarantor,
Sphinx Limited ("Sphinx"),
a St. Xxxxxxx and Grenadines corporation and a wholly-owned subsidiary
of
the Guarantor and London Bridge Shipping Limited and Blackfriars
Bridge
Shipping Limited, each a Cayman Islands company and a wholly owned
subsidiary of the Guarantor (MC Pelerin, MC Heron, MC Cormorant,
MC
Tercel, MC Egret, Sphinx, London Bridge Shipping Limited and Blackfriars
Bridge Shipping Limited being herein collectively called the "Borrowers")
on a joint and several basis its
participation in a loan not exceeding thirty one million seven hundred
and
fifty thousand Dollars (US$31,750,000) (the "Loan")
on the terms and subject to the conditions set out in a loan agreement
dated
April 2006 (the "Loan
Agreement")
made between the Borrowers (as borrowers), the Lenders (as lenders)
and
Fortis Bank (Nederland) N.V. as agent (the "Agent")
and security trustee for the
Lenders.
|
(B)
|
Pursuant
to the Loan Agreement, and as a condition precedent to the several
obligations of the Lenders to make the Loan available to the Borrowers,
the Borrowers have, amongst other things, agreed to procure that
the
Guarantor execute and deliver this Guarantee and Indemnity in favour
of
the Security Agent as security agent for the
Lenders.
|
THIS DEED WITNESSES
as
follows:-
1.1
|
In
this Guarantee and Indemnity:-
|
"Consolidated
Net Worth"
means,
at any relevant time, Consolidated Shareholder's Equity of the Guarantor and
its
subsidiaries, plus shareholder loans (if any) less goodwill and any other
intangible assets.
"Consolidated
Shareholder's Equity"
and
"Consolidated
Net Income"
have
the meanings attributed to them in the Guarantor's audited accounts for the
year
ended 31 December 2005.
"Credit
Parties"
means
the Security Agent, the Agent and the Lenders.
"EBITDA"
means,
at any relevant time, the Consolidated Net Income of the Guarantor and its
subsidiaries plus interest expenses, taxes, depreciation, amortisation and
provision for impairment loss (if any) for the previous period of twelve (12)
months.
"Guarantor's
Liabilities"
means
all of the liabilities and obligations of the Guarantor to any of the Credit
Parties under or pursuant to this Guarantee and Indemnity, from time to time,
whether in respect of principal, interest, costs or otherwise and whether
present, future, actual or contingent.
"Guarantor's
Security Documents"
means
this Guarantee and Indemnity and any and all documents which may at any time
be
executed by the Guarantor as security for the payment of all or any part of
the
Guarantor's Liabilities.
"Liquid
Assets"
means
the aggregate of cash and cash equivalents, marketable securities and available
but undrawn credit lines not subject to any third party
Encumbrances.
"Net
Interest Coverage Ratio"
means,
at any relevant time, the amount of EBITDA for the immediately preceding period
of twelve (12) months divided by the amount of interest expense in the
immediately preceding period of twelve (12) months under financing arrangements.
1.2
|
Unless
otherwise specified in this Guarantee and Indemnity, or unless the
context
otherwise requires, all words and expressions defined in the Loan
Agreement shall have the same meaning when used in this Guarantee
and
Indemnity.
|
1.3
|
In
this Guarantee and Indemnity:-
|
1.3.1 |
words
denoting the plural number include the singular and vice
versa;
|
1.3.2
|
words
denoting persons include corporations, partnerships, associations
of
persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice
versa;
|
1.3.3
|
references
to Clauses are references to clauses of this Guarantee and
Indemnity;
|
1.3.4
|
references
to this Guarantee and Indemnity include the recitals to this Guarantee
and
Indemnity;
|
1.3.5
|
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 Guarantee and Indemnity;
|
1.3.6
|
reference
to any document (including, without limitation, to any of the Security
Documents) are, unless the context otherwise requires, references
to that
document as amended, supplemented, novated or replaced from time
to
time;
|
1.3.7
|
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;
and
|
1.3.8
|
references
to any Credit Party include its successors, transferees and
assignees.
|
2
|
Representations and Warranties
|
The
Guarantor represents and warrants to the Security Agent at the date of this
Guarantee and Indemnity and (by reference to the facts and circumstances then
pertaining) on each day throughout the Facility Period that:-
2.1
|
all
representations and warranties given by the Borrowers in the Loan
Agreement in respect of the Guarantor and/or the Guarantor's Security
Documents are and will remain correct and none of them is or will
become
misleading;
|
2.2
|
it
is not necessary to ensure the legality, validity, enforceability
or
admissibility in evidence of any of the Guarantor's Security Documents
that it be filed, recorded or enrolled with any court or other authority
in any country or that any stamp, registration or similar tax be
paid on
or in relation to any of the Guarantor's Security Documents;
|
2.3
|
the
Guarantor is not in breach of, or default under, any agreement of
any sort
binding on it or on all or any part of its assets;
and
|
2.4
|
the
Guarantor is not aware of any material facts or circumstances which
have
not been disclosed to the Security Agent 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 the Loan
Agreement available to the
Borrowers.
|
3
|
Guarantee and Indemnity
|
The
Guarantor:-
3.1
|
irrevocably
and unconditionally guarantees the due and punctual payment of each
and
every part of the Indebtedness in accordance with the terms of the
Security Documents so that, if any of the Indebtedness is not paid
when it
is due and payable, whether on maturity or otherwise, the Guarantor
will,
immediately on demand, make such payment to the Security Agent in
the
manner specified by the Security Agent, together with interest at
the
Default Rate on the amount demanded from the date of demand until
the date
of payment, both before and after judgment;
and
|
3.2
|
agrees,
as a separate and independent obligation, that, if any of the Indebtedness
is not recoverable from the Guarantor under Clause 3.1 for any reason,
the
Guarantor will be liable as a principal debtor by way of indemnity
for the
same amount as that for which the Guarantor would have been liable
had
that Indebtedness been recoverable, and agrees to discharge its liability
under this Clause 3.2 by making payment to the Security Agent
immediately on demand together with interest at the Default Rate
on the
amount demanded from the date of demand until the date of payment,
both
before and after judgment.
|
4
|
Preservation of Guarantor's Liability
|
4.1
|
This
Guarantee and Indemnity is a continuing security for the full amount
of
the Indebtedness from time to time until the expiry of the Facility
Period.
|
4.2
|
Any
Credit Party may without the Guarantor's consent and without notice
to the
Guarantor and without in any way releasing or reducing the Guarantor's
Liabilities:-
|
4.2.1
|
amend,
vary, novate, or replace any of the Security Documents (other than
the
Guarantor's Security Documents);
and/or
|
4.2.2
|
agree
with the Borrowers to increase or reduce the amount of the Loan,
or vary
the terms and conditions for its repayment or prepayment (including,
without limitation, the rate and/or method of calculation of interest
payable on the Loan); and/or
|
4.2.3
|
allow
any time or other indulgence to any of the other Security Parties
under or
in connection with any of the Security Documents;
and/or
|
4.2.4
|
renew,
vary, release or refrain from enforcing any of the Security Documents
(other than the Guarantor's Security Documents);
and/or
|
4.2.5
|
compound
with any of the other Security Parties;
and/or
|
4.2.6
|
enter
into, renew, vary or terminate any other agreement or arrangement
with any
of the other Security Parties; and/or
|
4.2.7
|
do
or omit or neglect to do anything which might, but for this provision,
operate to release or reduce the liability of the Guarantor under
this
Guarantee and Indemnity.
|
4.3
|
The
Guarantor's Liabilities shall not be affected
by:-
|
4.3.1
|
the
absence of, or any defective, excessive or irregular exercise of,
any of
the powers of any of the other Security Parties; nor
|
4.3.2
|
any
security given or payment made to any Credit Party by any of the
other
Security Parties being avoided or reduced under any law (whether
English
or foreign) relating to bankruptcy or insolvency or analogous circumstance
in force from time to time; nor
|
4.3.3
|
any
change in the constitution of the Guarantor or of any of the other
Security Parties or of any Security Party or the absorption of or
amalgamation by any Credit Party in or with any other entity or the
acquisition of all or any part of the assets or undertaking of any
Credit
Party by any other entity; nor
|
4.3.4
|
the
liquidation, administration, receivership, bankruptcy or insolvency
of the
Guarantor or any of the other Security Parties;
nor
|
4.3.5
|
any
of the Credit Documents (other than this Guarantee and Indemnity)
being
defective, void or unenforceable, or the failure of any other person
to
provide any Credit Party with any security, guarantee or indemnity
envisaged by the Loan Agreement; nor
|
4.3.6
|
any
composition, assignment or arrangement being made by any of the other
Security Parties with any of its creditors;
nor
|
4.3.7
|
anything
which would, but for this provision, have released or reduced the
liability of the Guarantor to any Credit Party.
|
4.4
|
Any
Credit Party may continue the accounts of the Borrowers or open one
or
more new accounts for the Borrowers notwithstanding any demand under
this
Guarantee and Indemnity, and the Guarantor's liability at the date
of
demand shall not be released or affected by any subsequent payment
into or
out of any of the Borrowers' accounts with any Credit
Party.
|
5
|
Preservation of Credit
Parties' Rights
|
5.1
|
This
Guarantee and Indemnity is in addition to any other security, guarantee
or
indemnity now or in the future held by any of the Credit Parties
in
respect of the Indebtedness, whether from the Borrowers or any of
them,
the Guarantor or any other person, and shall not merge with, prejudice
or
be prejudiced by, any such security, guarantee or indemnity or any
contractual or legal right of any of the Credit
Parties.
|
5.2
|
Any
release, settlement, discharge or arrangement relating to the Guarantor's
Liabilities shall be conditional on no payment, assurance or security
received by any Credit Party in respect of the Indebtedness being
avoided
or reduced under any law (whether English or foreign) in force from
time
to time relating to bankruptcy, insolvency or any (in the opinion
of the
Security Agent) analogous circumstance, and, after any such avoidance
or
reduction, each Credit Party shall be entitled to exercise all of
its
rights, powers, discretions and remedies under or pursuant to the
Guarantor's Security Documents and/or any other rights, powers,
discretions or remedies which it would otherwise have been entitled
to
exercise, as if no release, settlement, discharge or arrangement
had taken
place.
|
5.3
|
Following
the full payment of the Indebtedness, the Security Agent shall be
entitled
to retain the Guarantor's Security Documents until the Security Agent
is
satisfied in its discretion that no Credit Party will have to make
any
payment under any law referred to in
Clause 5.2.
|
5.4
|
Until
the expiry of the Facility Period the Guarantor shall not:-
|
5.4.1
|
be
entitled to participate in any sums received by any Credit Party
in
respect of any of the Indebtedness;
nor
|
5.4.2
|
be
entitled to participate in any security held by any Credit Party
in
respect of any of the Indebtedness nor stand in the place of, or
be
subrogated for, any Credit Party in respect of any such security;
nor
|
5.4.3
|
take
any step to enforce any claim against any of the other Security Parties
(or their respective estates or effects), nor claim or exercise any
right
of set off or counterclaim against any of the other Security Parties,
nor
make any claim in the bankruptcy or liquidation of any of the other
Security Parties, in respect of any sums paid by the Guarantor to
any
Credit Party or in respect of any sum which includes the proceeds
of
realisation of any security held by any Credit Party under or pursuant
to
any of the Guarantor's Security Documents;
nor
|
5.4.4
|
take
any steps to enforce any other claim which it may have against any
of the
other Security Parties without the prior written consent of the Security
Agent, and then only on such terms and subject to such conditions
as the
Security Agent may impose.
|
5.5
|
Any
Credit Party may, but shall not be obliged to, resort for its own
benefit
to any other means of payment at any time and in any order it thinks
fit
without releasing or reducing the Guarantor's Liabilities.
|
5.6
|
Any
Credit Party may enforce any of the Guarantor's Security Documents
either
before or after resorting to any other means of payment without entitling
the Guarantor to any benefit from or share in any such other means
of
payment until the expiry of the Facility Period.
|
5.7
|
The
Guarantor agrees that it is, and will throughout the Facility Period
remain, a principal debtor in respect of the Guarantor's
Liabilities.
|
5.8
|
No
failure to exercise, nor any delay in exercising, on the part of
any
Credit Party, any right or remedy under the Guarantor's Security
Documents
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 the
Guarantor's Security Documents are cumulative and not exclusive of
any
rights or remedies provided by law.
|
6
|
Undertakings
|
6.1
|
The
Guarantor shall pay to the Security Agent on demand on a full indemnity
basis all costs and expenses incurred by any Credit Party in or about
or
incidental to the exercise by it of its rights under any of the
Guarantor's Security Documents, together with interest at the Default
Rate
on the amount demanded from the date of demand until the date of
payment,
both before and after judgment.
|
6.2
|
The
Guarantor has not taken, and will not take without the prior written
consent of the Security Agent (and then only on such terms and subject
to
such conditions as the Security Agent may impose), any security from
any
of the other Security Parties in connection with this Guarantee and
Indemnity, and any security taken by the Guarantor notwithstanding
this
Clause shall be held by the Guarantor in trust for the Credit Parties
absolutely as a continuing security for the Guarantor's
Liabilities.
|
6.3
|
The
Guarantor agrees to execute, at any time during the Facility Period,
in
favour of the Agent (as agent and security trustee of the Banks)
pledges
over and/or charges of all the Guarantor's right, title and interest
in
and to the shares of each of the Borrowers, and to execute and deliver
to
the Agent all documents which the Agent may require to obtain the
full
benefit of such pledges and/or
charges.
|
6.4
|
The
Guarantor shall supply to the Security Agent as soon as the same
become
available, but in any event within 180 days after the end of each
of its
financial years, its audited consolidated financial statements for
that
financial year, and with its unaudited semi-annual management accounts
within 90 days of the end of the half year. Each set of financial
statements shall be certified by a director of the Guarantor as fairly
representing its financial condition as at the date at which those
financial statements were drawn up and shall be prepared in accordance
with generally accepted accounting principles in the Guarantor's
jurisdiction of incorporation.
|
6.5
|
The
Guarantor shall supply to the Security
Agent:
|
6.5.1
|
all
documents dispatched by the Guarantor to its shareholders (or any
class of
them) or its creditors generally at the same time as they are dispatched;
and
|
6.5.2
|
promptly
upon becoming aware of them, details of any litigation, arbitration
or
administrative proceedings which are current, threatened or pending
against any of the Security Parties and which might, if adversely
determined, have a material adverse effect on the business or financial
condition of any of the Security Parties; and
|
6.5.3
|
promptly,
such further information regarding the financial condition, business
and
operations of any of the Security Parties as the Security Agent may
reasonably request.
|
6.6
|
Financial
covenants
the Guarantor covenants with the Agent that it will, throughout the
Facility Period,:-
|
6.6.1
|
maintain
Liquid Assets of a minimum of US$5.0
million;
|
6.6.2
|
maintain
a Consolidated Net Worth of at least thirty million Dollars ($30,000,000)
(to be tested quarterly by reference to the Guarantor's 10Q filings);
and
|
6.6.3
|
maintain
a Net Interest Coverage Ratio of at least 2.0 (to be tested quarterly,
by
reference to the Guarantor's 10Q
filings).
|
7
|
Payments
|
7.1
|
All
amounts payable by the Guarantor under or pursuant to any of the
Guarantor's Security Documents shall be paid to such accounts at
such
banks as the Security Agent may from time to time direct to the Guarantor
in the relevant currency in same day funds for immediate value. Payment
shall be deemed to have been received on the date on which the Security
Agent receives authenticated advice of receipt, unless that advice
is
received by the Security Agent on a day other than a Business Day
or at a
time of day (whether on a Business Day or not) when the Security
Agent in
its discretion considers that it is impossible or impracticable to
utilise
the amount received for value that same day, in which event the payment
in
question shall be deemed to have been received on the Business Day
next
following the date of receipt of advice by the Security
Agent.
|
7.2
|
All
payments to be made by the Guarantor pursuant to any of the Guarantor's
Security Documents shall, subject only to Clause 7.3, 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, and the Guarantor will not claim any equity in respect of
any
payment due from it to any Credit Party under or in relation to any
of the
Guarantor's Security Documents.
|
7.3
|
If
at any time any law requires (or is interpreted to require) the Guarantor
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
Guarantor will promptly notify the Security Agent and, simultaneously
with
making that payment, will pay 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, each relevant
Credit Party receives a net sum equal to the sum which it would have
received had no deduction or withholding been made.
|
7.4
|
If
at any time the Guarantor is required by law to make any deduction
or
withholding from any payment to be made by it pursuant to any of
the
Guarantor's Security Documents, the Guarantor will pay the amount
required
to be deducted or withheld to the relevant authority within the time
allowed under the applicable law and will, no later than thirty days
after
making that payment, deliver to the Security Agent an original receipt
issued by the relevant authority, or other evidence acceptable to
the
Security Agent, evidencing the payment to that authority of all amounts
required to be deducted or
withheld.
|
7.5
|
Interest
will be payable both before and after judgment on a daily basis and
on the
basis of a 360 day year and compounded at such intervals as the Security
Agent shall in its discretion determine.
|
7.6
|
Any
certificate or statement signed by an authorised signatory of the
Security
Agent purporting to show the amount of the Indebtedness or of the
Guarantor's Liabilities (or any part of any of them) or any other
amount
referred to in any of the Credit Documents shall, save for manifest
error
or on any question of law, be conclusive evidence as against the
Guarantor
of that amount.
|
8
|
Currency
|
8.1
|
The
Guarantor's liability under this Guarantee and Indemnity is to discharge
the Indebtedness in the currency in which it is expressed to be payable
(the "Agreed
Currency").
|
8.2
|
If
at any time any Credit Party receives (including by way of set off)
any
payment by or on behalf of the Guarantor in a currency other than
the
Agreed Currency, that payment shall take effect as a payment to that
Credit Party of the amount in the Agreed Currency which that Credit
Party
is able to purchase (after deduction of any relevant costs) with
the
amount of the payment so received in accordance with its usual practice.
|
8.3
|
To
the extent that any payment to any Credit Party (whether by the Guarantor
or any other person and whether under any judgment or court order
or
otherwise) in a currency other than the Agreed Currency shall on
actual
conversion into the Agreed Currency fall short of the relevant liability
of the Borrowers expressed in the Agreed Currency, then the Guarantor
as a
separate and independent obligation will indemnify that Credit Party
against the shortfall.
|
9
|
Set-Off
and Lien
|
9.1
|
The
Guarantor irrevocably authorises each Credit Party at any time to
set off
without notice any sums then due and payable by the Guarantor to
that
Credit Party under this Guarantee and Indemnity (irrespective of
the
branch or office, currency or place of payment) against any credit
balance
from time to time standing on any account of the Guarantor (whether
current or otherwise, whether or not subject to notice and whether
or not
that credit balance is then due to the Guarantor) with any branch
of to
that Credit Party in or towards satisfaction of the Guarantor's
Liabilities and, in the name of that Credit Party or the Guarantor,
to do
all acts (including, without limitation, converting or exchanging
any
currency) which may be required to effect such set-off.
|
9.2
|
Each
Credit Party shall have a lien on and be entitled to retain and realise
as
additional security for any sums then due and payable by the Guarantor
to
that Credit Party under this Guarantee and Indemnity any cheques,
drafts,
bills, notes or negotiable or non-negotiable instruments and any
stocks,
shares or marketable or other securities and property of any kind
of the
Guarantor (or of the relevant Credit Party as agent or nominee of
the
Guarantor) from time to time held by that Credit Party, whether for
safe
custody or otherwise.
|
9.3
|
The
Guarantor irrevocably authorises each Credit Party at any time to
use the
whole or any part of any credit balance from time to time standing
on any
of the Guarantor's accounts with any branch of that Credit Party
to
purchase the Agreed Currency as if it were a receipt in accordance
with
Clause 8.
|
9.4
|
Despite
any term to the contrary in relation to any deposit or credit balance
at
any time on any account of the Guarantor with any Credit Party, no
such
deposit or credit balance shall be repayable or capable of being
assigned,
mortgaged, charged or otherwise disposed of or dealt with by the
Guarantor
until the Guarantor's Liabilities have been discharged in full, but
each
Credit Party may from time to time permit the withdrawal of all or
any
part of any such deposit or balance without affecting the continued
application of this Clause.
|
10
|
Application
of Moneys
|
10.1
|
All
sums which any Credit Party (other than the Security Agent) receives
(including by way of set off) under or in connection with any of
the
Guarantor's Security Documents, otherwise than by payment from the
Security Agent, shall be paid to the Security Agent immediately on
receipt, and that payment to the Security Agent shall be deemed to
have
been made by the Guarantor rather than by the receiving Credit
Party.
|
10.2
|
All
sums which the Security Agent receives under or in connection with
any of
the Guarantor's Security Documents shall, unless otherwise agreed
by the
Security Agent or otherwise provided in the Loan Agreement, be applied
by
the Security Agent in or towards satisfaction, or by way of retention
on
account, of the Guarantor's Liabilities, in such manner as the Security
Agent may in its discretion
determine.
|
10.3
|
The
Security Agent may place any money received by it under or in connection
with any of the Guarantor's Security Documents to the credit of a
suspense
account on such terms and subject to such conditions as the Security
Agent
may in its discretion determine for so long as the Security Agent
thinks
fit without any obligation in the meantime to apply that money in
or
towards discharge of the Indebtedness, and, despite such payment,
the
Security Agent may claim against any of the other Security Parties
or
prove in the bankruptcy, liquidation or insolvency of any of the
other
Security Parties for the whole of the Indebtedness at the date of
the
Security Agent's demand for payment pursuant to this Guarantee and
Indemnity, together with all interest, commission, charges and expenses
accruing subsequently.
|
11
|
Partial
invalidity
|
If,
at
any time, any provision of any of the Guarantor's Security Documents 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.
The
Guarantor agrees that from time to time on the written request of the Security
Agent it will immediately execute and deliver to the Security Agent all further
documents which the Security Agent may require for the purpose of perfecting
or
protecting the security intended to be created by the Guarantor's Security
Documents.
13.1
|
All
the covenants and agreements of the Guarantor in this Guarantee and
Indemnity shall bind the Guarantor and its successors and permitted
assignees and shall inure to the benefit of the Credit Parties and
their
respective successors, transferees and
assignees.
|
13.2
|
The
representations and warranties on the part of the Guarantor contained
in
this Guarantee and Indemnity shall survive the execution of this
Guarantee
and Indemnity.
|
13.3
|
No
variation or amendment of this Guarantee and Indemnity shall be valid
unless in writing and signed on behalf of the Guarantor and the Security
Agent.
|
13.4
|
A
person who is not a party to this Guarantee and Indemnity has no
right
under the Contracts (Rights of Third Parties) Xxx 0000 to enforce
or to
enjoy the benefit of any term of this Guarantee and
Indemnity.
|
The
provisions of clause 16 of the Loan Agreement shall apply (mutatis mutandis)
to
this Guarantee and Indemnity as if it were set out in full with references
to
this Guarantee and Indemnity substituted for references to the Loan Agreement
and with references to the Guarantor substituted for references to the
Borrowers.
This
Guarantee and Indemnity may be executed in any number of counterparts, and
this
has the same effect as if the signatures on the counterparts were on a single
copy of this Guarantee and Indemnity.
16.1
|
This
Guarantee and Indemnity shall in all respects be governed by and
interpreted in accordance with English
law.
|
16.2
|
For
the exclusive benefit of the Security Agent, the Guarantor irrevocably
agrees that the courts of England are to have jurisdiction to settle
any
disputes which may arise out of or in connection with this Guarantee
and
Indemnity and that any proceedings may be brought in those courts.
|
16.3
|
Nothing
contained in this Clause shall limit the right of the Security Agent
to
commence any proceedings against the Guarantor in any other court
of
competent jurisdiction nor shall the commencement of any proceedings
against the Guarantor in one or more jurisdictions preclude the
commencement of any proceedings in any other jurisdiction, whether
concurrently or not.
|
16.4
|
The
Guarantor 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 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.
|
16.5
|
Without
prejudice to any other mode of service allowed under any relevant
law, the
Guarantor:
|
16.5.1
|
irrevocably
appoints Marine Legal Services Limited as its agent for service of
process
in relation to any proceedings before the English courts;
and
|
16.5.2
|
agrees
that failure by a process agent to notify the Guarantor of the process
will not invalidate the proceedings
concerned.
|
IN WITNESS
of
which
this Guarantee and Indemnity has been duly executed and delivered as a deed
the
day and year first before written.
SIGNED SEALED
and
DELIVERED
|
)
|
as
a
DEED
|
)
|
by
MC
SHIPPING INC.
|
)
|
acting
by
|
)
|
___________________________________ |
)
|
its
duly authorised
|
)
|
)
|
|
in
the presence of:-
|
)
|