EXECUTION COPY
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ESCROW AND PLEDGE AGREEMENT
between
MILLENIUM SEACARRIERS, INC
and
THE FIRST NATIONAL BANK OF MARYLAND
Dated as of July 15 , 1998
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TABLE OF CONTENTS
PAGE
Section 1: Definitions.......................................................2
Section 2: Delivery and Acceptance of Escrowed
Property.........................................................3
Section 3: Disbursement of Escrowed Property.................................4
Section 4: Disbursement of Escrowed Poperty in Connection
with Special Mandatory Redemption................................8
Section 5: Disbursement of Escrowed Property Upon the
Occurrence of Remedies Trigger Event.............................8
Section 6: Security of Interest in Favor of Escrow
Agent...........................................................10
Section 7: Compensation and Indemnity.......................................13
Section 8: Modifications, Waivers and Amendments............................13
Section 9: Concerning the Escrow Agent......................................13
Section 10: Notices..........................................................15
Section 11: Miscellaneous....................................................15
Exhibit A: Form of Release Certificate
Exhibit B: Form of Officers' Certificate for
Release Date
Exhibit C: Form of Letter of Release of Mortgage
and Reassignment
Exhibit D: Forms of Panamanian, Liberian,
Cypriot, Cayman and Bahamian
Mortgages/Deeds of Covenant
Exhibit E: Form of Opinion of Counsel
Exhibit F: Form of Supplemental Indenture
Exhibit G: Form of Insurance Assignment
-i-
[Draft--7/23/98]
ESCROW AND PLEDGE AGREEMENT, dated as of
July 15, 1998 (the "Agreement"), between MILLENIUM
SEACARRIERS, INC., a Cayman Islands company (the
"Company"), and THE FIRST NATIONAL BANK OF MARYLAND,
a national banking association, as Escrow Agent (the
"Escrow Agent").
This Agreement is being entered into in connection with (i)
the Purchase Agreement (the "Purchase Agreement"), dated July 20, 1998, among
the Company, the Subsidiary Guarantors (as named therein), Credit Suisse First
Boston Corporation and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation (the
"Initial Purchasers"), and (ii) the Indenture (the "Indenture"), dated as of
July 15, 1998, among the Company, the Subsidiary Guarantors and The First
National Bank of Maryland ("FNB"), as trustee (FNB or any successor trustee, the
"Trustee").
Pursuant to the Purchase Agreement, the Company is selling
(the "Offering") $100,000,000 representing 100,000 units (the "Units"), each
Unit consisting of $1,000 principal amount at maturity of it 12% First Priority
Ship Mortgage Notes Due 2005 (the "Securities") and one warrant to purchase five
shares of common stock, par value $.01 per share of the Company (the
"Securities"). Concurrently with the closing of such sale, the Company will
deposit with the Escrow Agent as hereinafter provided, approximately $85.2
million of which no more than $53.8 million will be used to purchase the
Committed Vessels (as defined below). The balance of the funds on deposit will
be used (i) to purchase the Additional Vessels (as defined below), (ii) to pay
related fees and expenses, (iii) to make vessel upgrades and repairs to the
Committed and Additional Vessels, (iv) to make deposits upon the request of
Millenium Management, Inc. ("MMI") pursuant to Section 3.07(b) of the Management
Agreement (the "Management Agreement") dated as of July 1, 1998 among MMI, the
Company and the subsidiaries of the Company signatory thereto to fund the
Contingency Fund (as defined therein) (such deposits hereinafter referred to as
the "Contingency Fund Deposits") or (v) to fund the Special Mandatory Redemption
(as defined below) and for no other purposes other than as set forth herein.
Accordingly, the Company and the Escrow Agent agree as
follows:
1. DEFINITIONS. Capitalized terms used but not
defined herein have the respective meanings specified in
the
Indenture. In addition, the following terms shall have the
following meanings when used herein:
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"Additional Vessels" means additional vessels that the Company
in its own name or through one of the Subsidiary Guarantors (or a
subsidiary which will become a Subsidiary Guarantor) may acquire from
time to time with Escrowed Property (as defined in Section 2(b))
pursuant to sale and purchase contracts ("Acquisition Contracts").
"Committed Vessels" means the Xxxxxxxxx Xxxxx (official number
873704, to be renamed the Millenium Xxxxxxxxxx), the Xxxxx Xxxxxxxx
(official number 864423, to be renamed the Millenium Elmar), the LT
Xxxxxxx (call sign VVDX, to be renamed the Millenium Leader), the LT
Argosy (call sign VTKG, to be renamed the Millenium Hawk), the Xxxxxx
Xxxxx (call sign VTJS, to be renamed the Millenium Eagle), the LT
Odyssey (call sign VTKB, to be renamed the Millenium Osprey), the Soren
Toubro (call sign VTFM, to be renamed the Millenium Falcon), the Xxxx
Xxxxxx (call sign VTFJ, to be renamed the Millenium Condor) (the
preceding eight vessels currently bearing the Flag of India and to be
reflagged to the Cayman Islands), the Clipper Amethyst (official number
720437, to be renamed the Millenium Amethyst), the Clipper Yama
(official number 729494, to be renamed the Millenium Yama) and the
Clipper Majestic (official number 7718175, to be renamed the Millenium
Majestic) (the latter three vessels bearing the Flag of the Bahamas).
"Escrow Account" means an account established by the Escrow
Agent in the name of "The First National Bank of Maryland, as Escrow
Agent for Millenium Seacarriers, Inc."
"Initial Deposit" means an amount of cash or Treasury
Securities having an aggregate value on the date hereof of $85.2
million.
"Treasury Securities" means debt obligations issued or
guaranteed by the government of the United States of America or any
agency thereof for which the full faith and credit of the United States
of America is pledged to secure payment in full at maturity and which
are not redeemable at the option of the issuer prior to maturity.
2. DELIVERY AND ACCEPTANCE OF ESCROWED Property. (a) (i) On
the date hereof, the Escrow Agent shall establish the Escrow Account into which
the Escrow Agent will, concurrently with the execution and delivery hereof,
deposit the Initial Deposit received from the Company.
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(ii) In the event and to the extent the Initial Deposit
consists of cash, the Company may, concurrently or at any time
thereafter and prior to the termination of this Escrow Agreement, with
such cash deposit, deliver to the Escrow Agent (A) a written
confirmation or sales order for delivery to the Escrow Account which
sets forth the cost of Temporary Cash Investments to be acquired by the
Company and their principal amount at maturity, if applicable, and (B)
irrevocable instructions directing the Escrow Agent to release some or
all of the cash constituting the Initial Deposit to the seller of such
Temporary Cash Investments in an amount equal to the purchase price
thereof against delivery of such Treasury Securities.
(b) The Initial Deposit, together with the interest, dividends
and distributions thereon, less any amounts released pursuant to the terms of
this Agreement, shall from time to time constitute the "Escrowed Property". The
Escrow Agent further agrees to invest any portion of the Escrowed Property
represented by cash in Temporary Cash Investments as directed in writing from
time to time by the Company. Any funds received by the Escrow Agent for which
the Company has not given written investment instructions shall be invested in
an interest bearing Temporary Cash Investment at a non-United States (i.e.,
offshore) financial institution selected by the Escrow Agent in its sole
discretion.
(c) The obligation and liability of the Escrow Agent to make
the payments and transfers required by this Agreement shall be limited to the
Escrowed Property and any other moneys on deposit with it pursuant to this
Agreement. The Escrow Agent shall not be liable for any loss resulting from any
investment made pursuant to this Agreement in compliance with the provisions
hereof.
3. DISBURSEMENT OF ESCROWED PROPERTY. (a) On any date (a
"Release Date"), the Escrow Agent will release Escrowed Property to or at the
order of the Company, provided that the Escrow Agent shall have received a
written request in the form of Exhibit A hereto (the "Release Certificate") from
the Company, signed by two Officers of the Company, at least 3 Business Days
prior to such Release Date, and provided that the following conditions have been
satisfied, in the reasonable judgment of the Escrow Agent, prior to or
simultaneous with the release of Escrowed Property:
(i) If the Company proposes to consummate on the date of the
release of the Requested Amount, one or more Acquisition Contracts in
connection with the acquisition of one or more Committed Vessels
(provided,
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HOWEVER, that no more than $53.8 million in the aggregate may be
released in connection with the payment of the purchase price for the
Committed Vessels) or Additional Vessels, the Escrow Agent shall have
received:
(A)(1) fully executed mortgage releases and
satisfaction documents substantially in the form of Exhibit C
hereto (the "Release Documents") from the holders of any
existing indebtedness with respect to such Committed Vessels
or Additional Vessels, which Release Documents shall be in
appropriate form for recording or registration in the
appropriate governmental offices, as to which the Escrow Agent
shall be entitled to rely on the Opinion of Counsel (as
defined below) to the Company described in clause (iv) below;
and
(2) evidence satisfactory to the Escrow Agent to the effect
that any existing indebtedness to which such Committed Vessel
or Additional Vessel is subject has been, or will be, repaid
as of such Release Date, and that immediately prior to or
contemporaneously with the transfer of title to such Committed
Vessel or Additional Vessel by the Seller to the related
Subsidiary Guarantor, such Seller had title to such vessel
free and clear of all mortgages, liens and encumbrances of
record;
(B) fully executed mortgages and related deeds of
covenant, if required (the "Mortgages"), substantially in the
form of Exhibit D hereto and fully executed related
assignments of insurance (the "Insurance Assignments")
substantially in the form of Exhibit G hereto with respect to
each such Committed Vessel or Additional Vessel, which
Mortgages and Insurance Assignments shall be in appropriate
form for recording a registration in the appropriate
governmental offices if required by applicable law in order to
perfect the security interest therein created, as to which the
Escrow Agent shall be entitled to rely on the Opinion of
Counsel to the Company described in clause (iv) below;
(C) originals, certified to be true and complete by
an Officer of the Company, of the certificates representing
all the shares of capital stock (the "Pledged Shares") of the
Subsidiary Guarantor acquiring such Committed Vessel or
Additional Vessel (unless such Subsidiary Guarantor is already
a Subsidiary
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Guarantor), together with an Officers' Certificate in the form
of Exhibit B hereto;
(D) copies, certified to be true and complete by an
Officer of the Company, of the fully executed Acquisition
Contracts covered by such
Release Certificate;
(E) copies, certified to be true and complete by an
Officer of the Company, of any Charters related to such
Committed Vessels or Additional
Vessels;
(F) the report of an insurance broker required by the
form mortgage or deed of covenant attached hereto as part of
Exhibit D, with respect to insurance policies maintained in
respect of each such Committed Vessel or Additional Vessel,
which report shall include loss payable clauses substantially
in the form set forth in Appendix B to the form of Letter of
Undertaking set forth in Annex B to Exhibit G hereto;
(G) a classification certificate, dated as of a date
not more than 30 days prior to the Release Date, from a
classification society with respect to each such Committed
Vessel or Additional Vessel showing such Vessel to be free of
all conditions, recommendations and qualifications affecting
classification;
(H) a Supplemental Indenture executed by the owner of
such Committed Vessel or Additional Vessel as a new Subsidiary
Guarantor (if not already a Subsidiary Guarantor),
substantially in the form of Exhibit F hereto;
(I) copies, certified to be true and complete by an
Officer of the Company, of two appraisals, dated not more than
90 days prior to such Release Date, setting forth the
Appraised Values of each Committed Vessel or Additional
Vessel, except with respect to the Millenium Elmar, the
Millenium Xxxxxxxxxx, the Millenium Amethyst and the Millenium
Yama, with respect to which such appraisals may be dated not
more than 180 days prior to such Release Date; and
(J) copies, certified to be true and complete by an
Officer of the Company of the Document of Compliance and
Safety Management Certificates as required by the
International Safety Management Code, to the extent required.
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(ii) If such Release Request is made in connection with the
execution (but not the consummation) of one or more Acquisition
Contracts in respect of one or more Additional Vessels, the Escrow
Agent shall have received:
(A) copies, certified to be true and complete by an
Officer of the Company, of one or more fully executed
Acquisition Contracts covered by such
Release Requests;
(B) a fully executed Officers' Certificate of the
Company substantially in the form of Exhibit B hereto; and
(C) to the extent available, copies, certified to be
true and complete by an Officer of the Company, of any
Charters related to the Additional Vessels, to the extent such
Charters will continue after consummation of the Acquisition
Contracts.
(iii) If such Release Request is made in connection with, or
within six months after the acquisition of a Committed Vessel or an
Additional Vessel with Escrowed Property, for the purpose of upgrades
or necessary maintenance, repair or drydocking expenses or to make the
Contingency Fund Deposit in relation to such vessel, the Escrow Agent
shall have received
(A) a fully executed Officers' Certificate of the
Company substantially in the form of Exhibit B hereto;
(B) with respect to any upgrades, maintenance, repair
or drydocking expenses, all invoices or written estimates of
the cost of such upgrades, maintenance, repair or drydocking
expenses in relation to the Committed Vessel or the Additional
Vessel; and
(C) with respect to the Contingency Fund Deposit, a
receipt from MMI to the effect that a deposit has been made
pursuant to Section 3.07(b) of the Management Agreement and
specifying the amount of such deposit.
(iv) The Escrow Agent shall have received one or more signed
opinions of counsel substantially in the form of Exhibit E hereto with
such changes as may be necessary, to the reasonable satisfaction of the
Escrow
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Agent, to conform to the legal requirements of the relevant
jurisdiction (the "Opinion of Counsel"); and
(v) The Escrow Agent shall have received any other documents
or certificates reasonably requested by the Escrow Agent to establish
that the conditions described in Section 3(a) have been complied with
in all material respects.
(b) Notwithstanding paragraph 3(a) above, if the Escrow Agent
receives a notice from the Trustee or otherwise becomes aware that a Default or
Event of Default has occurred and is continuing, the Escrow Agent will not
release any Escrowed Property to the Company unless and until the Escrow Agent
receives a notice from the Trustee that such Default or Event of Default, as the
case may be, is not continuing or has been waived in accordance with the terms
of the Indenture.
4. DISBURSEMENT OF ESCROWED PROPERTY IN CONNECTION WITH
SPECIAL MANDATORY REDEMPTION. If the Escrow Agent receives notice or otherwise
becomes aware that the Securities have become subject to the Special Mandatory
Redemption pursuant to paragraph 6 of the Securities and Article 3 of the
Indenture, the Escrow Agent shall (i) liquidate all Escrowed Property then held
by it not later than the third Business Day prior to the Special Mandatory
Redemption Date and (ii) release all the Escrowed Property to the Paying Agent
on the Special Mandatory Redemption Date.
To the extent that, after the close of business on July 31,
1999, the amount of cash and the fair market value (as determined by the Board
of Directors in good faith) of securities (including the Temporary Cash
Investments) on deposit in Escrow with the Escrow Agent is equal to or less than
$5.0 million, such cash and Temporary Cash Investment shall be promptly released
to the Company by the Escrow Agent upon written request of the Company, free of
any lien of the Indenture, the Security Agreements or the Escrow Agreement, and
this Escrow Agreement will be terminated.
5. DISBURSEMENT OF ESCROWED PROPERTY UPON THE OCCURRENCE OF
REMEDIES TRIGGER EVENT. (a) If the Escrow Agent receives a notice from the
Trustee that the principal of and interest on the Securities then outstanding
have become immediately due and payable pursuant to Section 6.02 of the
Indenture (an "Acceleration Event") and such acceleration is not rescinded on or
prior to the earlier of five Business Days after receipt of such notice and the
Special Mandatory Redemption Date (a "Remedies Trigger Event"), the Escrow Agent
will liquidate all Escrowed
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Property then held by it in accordance with paragraph (b) below.
(b) Upon the occurrence and during the continuance of a
Remedies Trigger Event (so long as the acceleration related thereto has not been
rescinded), but not otherwise, the Escrow Agent may without notice except as
specified below, sell the Escrowed Property or any part thereof in one or more
parcels at a public or private sale, at any exchange, broker's board or at any
of the Escrow Agent's offices or elsewhere, for cash, on credit or for future
delivery, upon such terms as the Escrow Agent may determine to be commercially
reasonable, and the Escrow Agent, the Trustee or any holder of the Securities
may be the purchaser of any or all of the Escrowed Property so sold and
thereafter hold the same, absolutely, free from any right or claim of whatsoever
kind. The Company agrees that, to the extent notice of sale shall be required by
law, at least 2 Business Days' notice to the Company of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Escrow Agent shall not be obligated to
make any sale of Escrowed Property regardless of notice of sale having been
given. The Escrow Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Escrow Agent shall incur no liability as a result of the sale of the Escrowed
Property, or any part thereof, at any private sale conducted in a commercially
reasonable manner. The Company hereby waives any claims against the Escrow Agent
arising by reason of the fact that the price at which any Escrowed Property may
have been sold at such a private sale was less than the price which might have
been obtained at a public sale, even if the Escrow Agent accepts the first offer
received and does not offer such Escrowed Property to more than one offeree.
(c) Upon the occurrence and during the continuance of a
Remedies Trigger Event (so long as the acceleration related thereto has not been
rescinded), any cash held by the Escrow Agent as Escrowed Property and all cash
proceeds received by the Escrow Agent in respect of any sale of, collection
from, or other realization upon, all or any part of the Escrowed Property
pursuant to Section 5(b), shall be released by the Escrow Agent to the Paying
Agent for payment to the holders of the Securities.
(d) This Agreement shall create a continuing Lien on the
Escrowed Property that shall (i) remain in full force and effect until the
earlier of (A) the payment in full of the Securities and (B) the release of all
Escrowed Property in accordance with the provisions of this Agreement, (ii) be
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binding upon the Company and its successors and assigns and (iii) enure to the
benefit of the Escrow Agent, the holders of the Securities and their respective
successors, transferees and assigns.
6. SECURITY INTEREST IN FAVOR OF ESCROW AGENT; ESCROWED
PROPERTY. (a) To secure the full and punctual payment when due and the full and
punctual performance of all amounts that may be payable from time to time under
the Indenture, the Security Agreements and the Securities, the Company hereby
grants to the Escrow Agent, for the benefit of the Escrow Agent, the Trustee and
the holders of the Securities, a security interest in all its right, title and
interest in and to the following, other than such of the following which are
released from the Lien of this Agreement pursuant to Section 3 or Section 4
hereof:
(i) the Initial Deposit of $85.2 million and all certificates
or instruments representing any of the Temporary Cash Investments; and
(ii) all interest, dividends, cash, instruments and other
property and proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any of the
foregoing.
(b) Any and all cash, certificates or instruments representing
or evidencing the Escrowed Property shall be delivered to and held by or on
behalf of the Escrow Agent and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Escrow Agent.
The Escrow Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default, in its discretion and without
notice to the Company, to transfer to or to register in the name of the Escrow
Agent or any of its nominees any or all the Escrowed Property. In addition, the
Escrow Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Escrowed Property for certificates or
instruments of different denominations.
(c) The Company hereby represents and warrants with respect to
any Escrowed Property:
(i) It is the legal and beneficial owner of the Escrowed
Property and has full corporate power, authority and legal right to
pledge all the Escrowed Property.
(ii) The pledge pursuant to Section 6(a) creates a valid and
perfected first priority Lien on the Escrowed
10
Property securing the payment and performance of all amounts that may
be payable from time to time under the Indenture, the Security
Agreements and the Securities.
(d) The Company agrees that at any time and from time to time,
at the expense of the Company, the Company will promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary or that the Escrow Agent may reasonably request in order to perfect
and protect any Lien granted or purported to be granted hereby or to enable the
Escrow Agent to exercise and enforce its rights and remedies hereunder with
respect to any Escrowed Property.
(e) (i) The Escrow Agent shall be entitled to receive, deposit
into the Escrow Account and hold as collateral in the Escrow Account
all interest and dividends paid and distributions made in respect of
the Temporary Cash Investments. Any such interest or dividends shall,
if received by the Company, be received in trust for the benefit of the
Escrow Agent, be segregated from the other property or funds of the
Company and be forthwith delivered to the Escrow Agent as collateral in
the same form as so received (with any necessary endorsement).
(ii) As long as no Event of Default shall have occurred and be
continuing and until written notice thereof from the Escrow Agent to
the Company, the Company shall be entitled to exercise any and all
voting and other consensual rights relating to Temporary Cash
Investments or any part thereof for any purpose; PROVIDED, HOWEVER,
that no vote shall be cast, and no consent, waiver or ratification
given or action taken, which would be inconsistent with or violate any
provision of this Agreement, the Indenture, the Security Agreements or
the Securities.
(iii) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Company to exercise the voting and
other consensual rights that it would otherwise be entitled to exercise
pursuant to Section 6(e)(ii) shall cease upon notice from the Escrow
Agent to the Company and upon the giving of such notice all such rights
shall thereupon be vested in the Escrow Agent who shall thereupon have
the sole right to exercise such voting and other consensual rights.
(iv) In order to permit the Escrow Agent to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant to Section 6(e)(iii), and to receive all interest,
11
dividends and distributions which it may be entitled to receive under
Section 6(e)(i), the Company shall, if necessary, upon written request
form the Escrow Agent, from time to time execute and deliver to the
Escrow Agent such instruments as the Escrow Agent may reasonably
request.
(f) The Company hereby appoints the Escrow Agent as the
Company's attorney-in-fact, with full authority in the place and stead of the
Company and in the name of the Company or otherwise, from time to time in the
Escrow Agent's discretion but only after the occurrence and during the
continuance of an Event of Default, to take any action and to execute any
instrument which the Escrow Agent may deem necessary or advisable in order to
accomplish the purposes of this Section 6, including to receive, endorse and
collect all instruments made payable to the Company representing any dividend,
interest payment or other distribution in respect of the Escrowed Property or
any part thereof and to give full discharge for the same. This power, being
coupled with an interest, is irrevocable.
(g) If the Company fails to perform any agreement contained in
this Section 6, the Escrow Agent may itself (but shall not be obligated to)
perform, or cause performance of, such agreement, and the expenses of the Escrow
Agent incurred in connection therewith shall be payable by the Company under
Section 7.
(h) Upon the release of any Escrowed Property to or upon the
order of the Company pursuant to Section 3 or Section 4, such Escrowed Property
shall be delivered to or upon the order of the Company, free and clear of any
and all interests of the Escrow Agent, the Trustee and the holders of the
Securities.
(i) The Company shall comply with (i) TIA ss. 314(b), relating
to Opinions of Counsel regarding the Lien of this Agreement and (ii) TIA ss.
314(d), relating to the release of Escrowed Property from the Lien of this
Agreement and Officers' Certificates or other documents regarding fair value of
the Escrowed Property, to the extent such provisions are applicable. Any
certificate or opinion required by TIA ss. 314(d) may be executed and delivered
by an Officer of the Company to the extent permitted by TIA ss. 314(d).
7. COMPENSATION AND INDEMNITY. The Company shall pay to the
Escrow Agent from time to time upon demand reasonable compensation for its
services. The Company shall reimburse the Escrow Agent upon demand for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its
12
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Escrow Agent's agents, counsel, accountants
and experts. The Company shall indemnify the Escrow Agent and hold it harmless
from and against any and all damages, suits, actions, loss, liability or expense
(including reasonable attorneys' fees) incurred by it in connection with the
administration of this Agreement and the performance of its duties hereunder.
The Escrow Agent shall notify the Company promptly of any claim for which it may
seek indemnity. Failure by the Escrow Agent to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Escrow Agent may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Escrow Agent through the Escrow Agent's own wilful misconduct, negligence or bad
faith. The indemnification provisions of this Section 7 shall survive the
termination of this Agreement.
To secure the Company's payment obligations in this Section,
the Escrow Agent shall have a security interest in the Escrowed Property
pursuant to Section 6.
8. MODIFICATIONS, WAIVERS AND AMENDMENTS. The Escrow Agent
shall not be bound by any modification, amendment, termination (except as
provided in Section 11 hereof), cancelation, rescission or supersession of this
Agreement unless the same shall be in writing and signed by the parties hereto,
and, if its rights, duties, immunities or indemnities as Escrow Agent are
affected thereby, unless it shall have given its prior written consent thereto.
This Agreement may not be modified or amended or terminated (except as provided
in Section 11 hereof) without the prior written consent of holders of all the
Securities (except as permitted without such consent pursuant to the Indenture).
9. CONCERNING THE ESCROW AGENT. (a) The Escrow Agent shall
exercise the same degree of care toward the Escrowed Property as it exercises
toward its own similar property and shall not be held to any higher standard of
care under this Agreement, nor be deemed to owe any fiduciary duty to the
Company or anyone else.
(b) The Escrow Agent may act upon any instrument or other
writing believed by it in good faith to be genuine and to have been signed or
presented by the proper person, and shall not be liable to any party hereto in
connection with the performance of its duties hereunder, except for its own
gross negligence, wilful misconduct or bad faith. The duties of the Escrow Agent
shall be determined only with reference to this Agreement and applicable laws,
and the
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Escrow Agent is not charged with any knowledge of or any duties or
responsibilities in connection with any other document or agreement. If in doubt
as to its duties and responsibilities hereunder, the Escrow Agent may consult
with counsel of its choice and shall be protected in any action taken or omitted
in good faith in connection with the advice or opinion of such counsel.
(c) The Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either directly or
by or through its agents or attorneys.
(d) Nothing in this Agreement shall be deemed to impose upon
the Escrow Agent any duty to qualify to do business or to act as agent or
otherwise in any jurisdiction other than the State of Maryland.
(e) The Escrow Agent shall not be responsible for and shall
not be under a duty to examine into or pass upon the validity, binding effect,
execution or sufficiency of this Agreement, any agreement amendatory or
supplemental hereto or of any certificates or opinions delivered to it hereunder
or pursuant hereto.
(f) The Escrow Agent makes no representation as to the
validity, value, genuineness or collectability of any security or other document
or instrument held by or delivered to it.
(g) The Escrow Agent shall not be called upon to advise any
party as to selling or retaining, or taking or refraining from taking any action
with respect to, any securities or other property deposited hereunder.
(h) The Escrow Agent shall have the right at any time to
resign hereunder by giving written notice of its resignation to the Company at
the address set forth herein or at such other address as the Company shall
provide, at least 60 days prior to the date specified for such resignation to
take effect. Upon the effective date of such resignation, all cash and other
payments and all other property then held by the Escrow Agent hereunder shall be
delivered by it to a successor escrow agent. If no successor escrow agent is
appointed, the Escrow Agent may apply to a court of competent jurisdiction for
such appointment.
(i) In the event that the Escrow Agent should at any time be
confronted with inconsistent claims or demands to the Escrowed Property the
Escrow Agent shall have the right, but not the duty, to interplead the parties
in any court of competent jurisdiction and request that such court
14
determine the respective rights of the parties with respect to the Escrowed
Property. In the event the Escrow Agent no longer holds any Escrowed Property,
it shall be released from any obligation or liability as a consequence of any
such claims or demands.
10. NOTICES. All notices required to be given hereunder shall
be in writing and shall be deemed given when received at the following addresses
until such time as the parties hereto designate a different or additional
address or addresses:
To the Company:
Millenium Seacarriers, Inc.
x/x Xxxxxx xxx Xxxxxx
X.X. Xxx 000
Xxxxx Xxxxxx Street
Xxxxxx Town, Grand Cayman
Cayman Islands, British West Indies
To the Escrow Agent:
The First National Bank of Maryland
Corporate Trust Department
Mail Code 101-591
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention of: Xxxxxx Xxxxxxxx
11. MISCELLANEOUS. (a) This Agreement sets forth exclusively
the duties of the Escrow Agent with respect to any and all matters pertinent
hereto and no implied duties or obligations shall be read into this Agreement
against the Escrow Agent.
(b) This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which when taken
together shall constitute one agreement.
(c) This Agreement shall terminate when all Escrowed Property
has been disbursed pursuant to Section 3, 4 or 5, or if the Securities shall be
repaid in full or the Company has exercised either its covenant defeasance or
legal defeasance option in accordance with the terms of the Indenture and
thereafter the Escrow Agent shall have no further obligation or liability
hereunder.
(d) This Agreement shall be governed by the laws of the State
of New York but without giving effect to applicable principles of conflicts of
law to the extent that
15
the application of the laws of another jurisdiction would be required thereby.
(e) By the execution and delivery of this Agreement, the
Company (i) acknowledges that it has, by separate written instrument,
irrevocably designated and appointed Kylco Maritime (USA), Inc. ("Kylco USA")
(and any successor entity), as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to this Agreement
that may be instituted in any federal or state court in the State of New York,
Borough of Manhattan or brought by the Escrow Agent (whether in its individual
capacity or in its capacity as Escrow Agent under this Agreement), and
acknowledges that Kylco USA has accepted such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding, and (iii) agrees
that service of process upon Kylco USA and written notice of said service to the
Company shall be deemed in every respect effective service of process upon the
Company in any such suit or proceeding. The Company further agrees to take any
and all action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and
appointment of Kylco USA in full force and effect so long as this Agreement
shall be in full force and effect.
16
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
MILLENIUM SEACARRIERS, INC.
by /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
THE FIRST NATIONAL BANK OF
MARYLAND, as Escrow Agent,
by /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Assistant Vice President
EXHIBIT A to
Escrow Agreement
[Form of Release Certificate]
The First National Bank of Maryland
Corporate Trust Department
Mail Code 101-991
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention of Xx. Xxxxxx Xxxxxxxx
[Date]
MILLENIUM SEACARRIERS, INC.
ESCROW AND PLEDGE AGREEMENT
RELEASE CERTIFICATE
Dear Sirs:
Reference is made to that Escrow and Pledge Agreement, dated
as of July 15, 1998 between you, as Escrow Agent, and the undersigned (the
"Escrow Agreement"). Capitalized terms used but not defined herein shall have
the meanings assigned thereto in the Escrow Agreement.
As of the date hereof, to the knowledge of the undersigned, no
Default or Event of Default under the Indenture dated as of July 15, 1998 has
occurred and is continuing. The undersigned hereby requests that Escrowed
Property in an amount equal to $__________ (the "Requested Amount") be released
to the undersigned (or pursuant to the undersigned's further written
instructions) on , which date is not less than 3 Business Days after the date
hereof.
[This Release Request is being made in connection with the
execution by the Company or a Wholly Owned Subsidiary of a sale and purchase
contract (an "Acquisition Contract") to acquire an Additional Vessel or
Additional Vessels, (i) such Acquisition Contract has been signed by the
applicable seller, is in full force and effect as of the date of the Release
Certificate and the undersigned are not aware of any default that could
reasonably lead to the termination of such Acquisition Contract thereunder by
the Company, such Wholly Owned Subsidiary or the applicable seller, (ii) the
vessel(s) to be acquired pursuant to such Acquisition Contract conform(s) in all
material respects with the description in the Offering Circular of the types of
Vessels which are to be acquired with Escrowed Property, (iii) the Requested
Amount does not exceed the amount required to pay a deposit to the applicable
seller, or to pay other pre-delivery expenses, or the cost of appraisals for
such Additional Vessel or Additional Vessels, in each case called for by the
Acquisition Contract, and (iv) after
2
giving effect to the release of the Requested Amount and the application thereof
in accordance with such Release Certificate, the Loan to Value Ratio would not
exceed 0.85 to 1.00 as of the date of the execution of the Acquisition
Contract.]
[This release request is being made in connection with the
consummation by the Company or a Wholly Owned Subsidiary, simultaneously with
the release of the Requested Amount, of the acquisition of one or more Committed
Vessels or Additional Vessels, pursuant to an Acquisition Contract, (i) the
vessel(s) to be acquired pursuant to such Acquisition Contract is either a
Committed Vessel or conform(s) in all material respects with the description in
the Offering Circular of the types of Vessels which are to be acquired with
Escrowed Property and in the case of a Committed Vessel, the conditions in the
related Acquisition Contract have been satisfied in all material respects; (ii)
the Requested Amount does not exceed the sum of the balance of the consideration
payable to the applicable seller pursuant to the Acquisition Contract plus the
related transaction costs (including the cost of appraisals for such Committed
Vessel(s) or Additional Vessel(s)) incurred by the Company or the Wholly Owned
Subsidiary, including the reasonable fees and expenses of counsel and the costs
of the registration of title and the recording of the mortgage with respect
thereto, (iii) after giving effect to the release of the Requested Amount and
the application thereof in accordance with such Release Certificate, the Loan to
Value Ratio would not exceed 0.85 to 1.00 as of the date of the execution of the
Acquisition Contract, and (iv) the aggregate amount of funds released to pay the
purchase price of the Committed Vessels, after giving effect to this Release
Certificate, does not exceed $53.8 million.]
[This release request is being made in connection with, or
within six months after, the acquisition of a Committed Vessel or an Additional
Vessel by the Company or a Wholly Owned Subsidiary with proceeds of the sale of
the Securities, including Escrowed Property, the Company or the Wholly Owned
Subsidiary has undertaken or is undertaking upgrades or necessary maintenance,
repair (including structural modifications) or drydocking expenses, including
survey expenses, or is making the Contingency Fund Deposit (as defined in the
Escrow Agreement) relating to such Committed Vessel or such Additional Vessel,
and (ii) the
3
Requested Amount does not exceed the amount of such expenses.]
Very truly yours,
MILLENIUM SEACARRIERS, INC.
by
-----------------------------------
Name:
Title:
by
-----------------------------------
Name:
Title:
EXHIBIT B to
Escrow Agreement
FORM OF OFFICERS' CERTIFICATE
FOR RELEASE DATE
This certificate is being delivered pursuant to Section 3(a)
of the Escrow and Pledge Agreement dated as of July 15, 1998 (the "Escrow
Agreement"), between Millenium Seacarriers, Inc. (the "Company") and The First
National Bank of Maryland, as Escrow Agent (the "Escrow Agent"). Capitalized
terms used but not defined herein have the meanings given such terms in the
Escrow Agreement. The Company hereby certifies through the undersigned officers
that:
1. [The Company and the applicable seller have executed the
following Acquisition Contracts or other sale and purchase
contracts to acquire an Additional Vessel(s):
Ship Name:
Seller:
Deposit Amount:
Purchase Price:
Appraised Value:]
[The Company has undertaken or is undertaking necessary
upgrades, maintenance, repair or drydocking expenses relating
to an Additional Vessel:
Ship Name:
Cost of Maintenance:]
2. All conditions precedent in the Escrow Agreement for the
release of Escrowed Property on the Release Date have been
satisfied or will be satisfied concurrently with the release
of the Escrowed Property described below in paragraph 4.
3. The Company or a Wholly Owned Subsidiary thereof is the record
and beneficial owner of the Pledged Shares, free and clear of
any Lien, except for the Lien created by the Indenture.
4. The Company directs that the following amounts be released
from the Escrow Account to the following parties by wire
transfer as provided below or, if no wire transfer
instructions are provided, by check to the parties indicated
(any amounts described below to be paid to the undersigned
represent reimbursements of amounts previously paid by the
undersigned in satisfaction of deposit amounts payable to the
applicable seller(s) in
2
respect of one or more Acquisition Contracts listed in
paragraph 1 above):
NAME AMOUNT WIRE INSTRUCTIONS
IN WITNESS WHEREOF, Millenium Seacarriers, Inc. through the
undersigned officers, has signed this Certificate this day of , 199 .
MILLENIUM SEACARRIERS, INC.
by
-----------------------------------
Name:
Title:
by
-----------------------------------
Name:
Title:
EXHIBIT C
to Escrow Agreement
[Form of Letter of Release of Mortgage and Reassignment]
To: [The Company or applicable Subsidiary Guarantor]
From: [Lender name and address]
Dear Sirs
M.V.S [ ]
We refer to an agreement (the "Loan Agreement") dated
_____________ and made between (1) yourselves as Borrowers and (2) ourselves as
Lender pursuant to which we agreed to make available to you a secured loan
facility of up to US$________ (the "Loan").
In consideration of the receipt by us of full repayment of the
Loan and all other amounts outstanding to us under the Loan Agreement, we, as
Lender, hereby irrevocably declare and confirm that the Borrower(s) [and the
Guarantor, [insert name of Guarantor],] are released from all their respective
obligations of whatsoever nature under all of the security documents, including:
[the Mortgage dated ___________ [as amended by Amendment(s) No. __ thereto dated
as of ____________ (collectively,] [(] the "Mortgage"), made and executed by
[Name of Shipowner], a ____________ corporation, on the whole of the vessel
[Name of Vessel], Official No. __ (the "Vessel"), said Mortgage having been
recorded in ____________ at ____________ in Book __ at page __.] [add any other
obligations]
Furthermore, we hereby release and reassign to the Borrowers
all our rights, title and interest in and to all assets, income and property
assigned by the Borrowers to ourselves pursuant to the said security documents
or any other documents executed pursuant to the Loan Agreement and agree to
execute at the expense of the Borrowers, such
2
further documents as the Borrowers may reasonably require in order to effect
such releases and reassignments.
Dated: ____________
Name of Mortgagee/Lender]
By
-------------------------------------
Name:
Title:
0
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On this _____ day of ____________, ____, before me personally
appeared ________________________, to me known who, being by me duly sworn, did
depose and say that s/he resides at ____________, ____________, ___________,
that s/he is the [office held] of ____________, a ____________, corporation, the
corporation described in and which executed the foregoing instrument; that s/he
signed her/his name thereto pursuant to a power of attorney of said corporation
and that the foregoing instrument is the act and deed of said corporation.
----------------------------
Notary Public
EXHIBIT D to
Escrow Agreement
[Forms of Panamanian, Liberian, Cypriot, Cayman and Bahamian
Mortgages/Deeds of Covenant]
EXHIBIT E to
Escrow Agreement
FORM OF OPINION OF COUNSEL
This opinion is being delivered pursuant to Section 3(a) of
the Escrow and Pledge Agreement dated as of July 15, 1998(the "Escrow
Agreement"), between Millenium Seacarriers, Inc. (the "Company") and The First
National Bank of Maryland, as Escrow Agent (the "Escrow Agent"). Capitalized
terms used but not defined herein have the meanings given such terms in the
Escrow Agreement or the Indenture. We are of opinion that:
1. All conditions precedent in the Escrow Agreement to the
release of Escrowed Property on the date hereof have been satisfied in
all material respects or will be satisfied in all material respects
immediately after the release of the Escrowed Property as described in
the Officers' Certificate delivered pursuant to Section 3(a) of the
Escrow Agreement.
2. [If this opinion is being delivered in respect of an
Additional Vessel, add--The acquisition of the Additional Vessel
conforms in all material respects to the description contained in the
Offering Circular dated July 20, 1998.]
3. [If this opinion is being delivered in respect of a new
Subsidiary Guarantor, add--The Supplemental Indenture constitutes a
valid and legally binding obligation of the Guarantor party thereto,
enforceable against such Guarantor in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.]
4. The applicable Subsidiary Guarantor is a corporation
validly existing and in good standing under the laws of [ ], and has
all requisite corporate and legal right, power and authority to own its
vessel and to transact the business it purports to transact. The
applicable Subsidiary Guarantor has all requisite corporate and legal
right, power and authority to execute and deliver the Security
Agreements, Charters and the Supplemental Indenture, if applicable, to
which it is a party and to consummate the transactions contemplated
thereby and to perform its obligations thereunder.
5. The execution and delivery and performance of the Security
Agreements relating to each [Committed Vessel] [Additional Vessel]
(which Security Agreements, if required by applicable law in order to
perfect the security interests therein created, are in appropriate form
for recording or registration in the appropriate
2
governmental offices) will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
statute, rule, regulation or order of any New York, Federal or [home
jurisdiction] governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company or any
of their respective properties, or any agreement or instrument to which
the Company or any such subsidiary is a party or by which the Company
or any such subsidiary is bound or to which any of the properties of
the Company or any such subsidiary is subject.
6. Neither the execution and delivery of the Security
Agreements or the Supplemental Indenture nor the performance thereof
nor the consummation of the transactions contemplated thereby will
result in any violation of or be in conflict with or constitute a
default under any term or provision of (i) the Articles of
Incorporation or By-laws of the applicable Subsidiary Guarantor or the
Company or (ii)(a) any term or provision of any agreement, indenture,
mortgage instrument or license that is material to the applicable
Subsidiary Guarantor or (b) any statute, law, governmental rule,
regulation or ordinance or order of any court, arbitrator or
governmental authority and, in the case of each (a) and (b), applicable
to it or its properties or assets, or result in the creation of (or
impose any obligation on the applicable Subsidiary Guarantor to create)
any Lien (other than the Lien of the Indenture and the Lien of the
applicable mortgage upon any of the properties or assets of the
applicable Subsidiary Guarantor pursuant to any such term or provision.
7. The applicable Subsidiary Guarantor has, by all necessary
corporate and shareholder action, duly authorized the execution and
delivery of, and the performance of its obligations under each of the
Security Agreements relating to each [Committed] [Additional] Vessel to
which the Company or a Subsidiary Guarantor is a party, each
Supplemental Indenture, if applicable, and each Charter to which a
Subsidiary Guarantor is a party.
8. Subject to the consummation of the transactions herein
described the applicable Subsidiary Guarantor has title of record to
the [Committed] [Additional] Vessel free and clear of any Liens (as
defined in the Indenture) of record, except for the lien of the related
Mortgage and Permitted Liens.
3
9. The Supplemental Indenture has been duly authorized,
executed and delivered by the applicable Subsidiary Guarantor.
10. All filing, registration and recording fees required in
connection with any Security Agreement relating to each [Committed]
[Additional] Vessel or other fees necessary to ensure the validity,
effectiveness and priority of any liens, charges and encumbrances
created thereby have been paid.
11. No authorization, consent, license, permission, permit or
approval (including exchange control approval) of or action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the execution, delivery and performance of any of the
Security Agreements or the Supplemental Indenture by the respective
parties thereto and no such authorization, consent, license,
permission, permit, approval, action, notice or filing is required for
the exercise by the Trustee of the rights and remedies granted to it
under any of the Security Agreements, except for the filing and
registration of the Mortgages in the office of the applicable flag
jurisdiction.
12. Upon the recording of the Mortgages in the office of the
applicable flag jurisdiction, each Mortgage will create of record the
first priority mortgage lien covering the related Mortgaged Vessel
which it purports to create [subject to standard or customary
qualifications].
13. The security interests created by each Security Agreement
(other than the Mortgages) do not require any action to be taken under
or pursuant to the laws of the appropriate flag jurisdiction in order
to create or perfect such security interests or to permit the Trustee
to enforce its rights under the Security Agreements creating the same.
14. The choice of New York law to govern the Security
Agreements (other than the Mortgages) and the Supplemental Indenture
constitutes a valid choice of law. The submission by the applicable
Subsidiary Guarantor to the non-exclusive jurisdiction of any Federal
or state court in the Borough of Manhattan, The City of New York (a
"New York Court") is a valid submission insofar as the appropriate law
is concerned, provided that Kylco USA has accepted its appointment by
the applicable Subsidiary Guarantor as its agent to accept service of
process in the United States of America.
4
15. Neither the applicable Subsidiary Guarantor nor any of its
property have any immunity from the jurisdiction of any court or from
any legal process (whether through service or notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise).
16. To the best of our knowledge there are no legal or
governmental actions, suits or proceedings now pending or threatened
against the applicable Subsidiary Guarantor, or to which any of the
properties of the applicable Subsidiary Guarantor all subject, except
actions, suits and proceedings of the character normally incident to
the business conducted by the applicable Subsidiary Guarantor (none of
which calls into question the validity or legality of the Security
Agreements or Guarantee Agreement or any action taken or to be taken
pursuant thereto).
17. In a suit on the events before a court of the jurisdiction
of the applicable subsidiary guarantor, such court will respect and
enforce the agreement of the parties as to judgment currency.
18. No stamp or registration or similar taxes, duties, imposts
or other charge are payable in respect of enforcement of the Security
Agreements or Supplemental Indenture.
EXHIBIT F to
Escrow Agreement
FORM OF SUPPLEMENTAL INDENTURE
[ ] [ ] SUPPLEMENTAL INDENTURE (this
"Supplemental Indenture") dated as of
, , among MILLENIUM
SEACARRIERS, INC., a Cayman Islands corporation (the
"Company"), the guarantors listed on the signature
pages hereto (the "Guarantors"), and THE FIRST
NATIONAL BANK OF MARYLAND, a national banking
association (the "Trustee"), to the INDENTURE (the
"Indenture") dated as of July 15, 1998 among the
Company, the guarantors named therein (the
"Subsidiary Guarantors"), and the Trustee.
WHEREAS, Sections 9.01(5) and (8) of the Indenture provide
that without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee may amend the Indenture to add additional Guarantees
with respect to the Securities, including Subsidiary Guarantees, or to make any
change that does not adversely affect the rights of any Securityholder;
WHEREAS, Section 4.14 of the Indenture requires the Company to
cause [ ] to become a Subsidiary Guarantor, and [ ] is hereby agreeing to become
such, and Section 11.01(b) of the Indenture requires [ ] to make an assignment
to the Trustee of all the freights and hires and Charters in respect of the
Mortgaged Vessel;
WHEREAS, the entry into this Supplemental Indenture by the
parties hereto is in all respects authorized by the provisions of the Indenture;
and
WHEREAS, all things necessary to make this Supplemental
Indenture a valid agreement of the Company and the Subsidiary Guarantors in
accordance with its terms have been done.
NOW, THEREFORE, and in consideration of the premises, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Securityholders, as follows:
SECTION 1. [NEW GUARANTOR] hereby agrees to become a
Subsidiary Guarantor under the Indenture and, together with each other
Subsidiary Guarantor, hereby unconditionally and irrevocably guarantees, jointly
and severally, to each Holder and to the Trustee and its successors and assigns
(a) the full and punctual payment of principal of and interest on the Securities
when due, whether at maturity, by acceleration, by redemption, by
-2-
required repurchase or otherwise, and all other monetary obligations of the
Company and the Subsidiary Guarantors under the Indenture and the Securities and
of the Subsidiary Guarantors under the Security Agreements and (b) the full and
punctual performance within applicable grace periods of all other obligations of
the Company and the Subsidiary Guarantors under the Indenture, the Security
Agreements and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). Each Guarantor further agrees that the Obligations
may be extended or renewed, in whole or in part, without notice or further
assent from such Guarantor and that such Guarantor will remain bound under the
Indenture notwithstanding any extension or renewal of any Obligation. The
Subsidiary Guarantor is subject to all the provisions of the Indenture
applicable to a Subsidiary Guarantor. Without limiting the effect of the
foregoing, the Subsidiary Guarantor hereby agrees that it is hereby bound by the
provisions of Article 11 of the Indenture relating to the assignment to the
Trustee as security, and hereby grants to the Trustee a security in (subject to
the provisions of the Indenture), all the freights and hires and Charters to
which such Subsidiary Guarantor is entitled in respect of its Mortgaged Vessel.
SECTION 2. The Indenture, as supplemented and amended by this
Supplemental Indenture and all other indentures supplemental thereto, is in all
respects ratified and confirmed, and the Indenture, this Supplemental Indenture
and all indentures supplemental thereto shall be read, taken and construed as
one and the same instrument.
SECTION 3. If any provision hereof limits, qualifies or
conflicts with another provision hereof which is required to be included in this
Supplemental Indenture by any of the provisions of the Trust Indenture Act, such
required provision shall control.
SECTION 4. All covenants and agreements in this Supplemental
Indenture by the Subsidiary Guarantor shall bind its successors and assigns,
whether so expressed or
not.
SECTION 5. In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 6. Nothing in this Supplemental Indenture, expressed
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Securityholders any benefit or any legal
-3-
or equitable right, remedy or claim under this Supplemental Indenture.
SECTION 7. THIS SUPPLEMENTAL INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 8. All terms used in this Supplemental Indenture not
otherwise defined herein that are defined in the Indenture shall have the
meanings set forth therein.
SECTION 9. This Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 10. The recitals contained herein shall be taken as
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of the Indenture, this Supplemental Indenture or of the Securities
and shall not be accountable for the use or application by the Company of the
Securities or the proceeds thereof.
-4-
IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be
duly executed as of the date first written above.
MILLENIUM SEACARRIERS,
INC., as principal obligor
and Pledgor,
by
------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS:
RAPID OCEAN CARRIERS
LIMITED,
by
------------------------------------
Name:
Title:
IVY NAVIGATION LIMITED,
by
------------------------------------
Name:
Title:
OAKMONT SHIPPING AND
TRADING LIMITED,
by
------------------------------------
Name:
Title:
TOPSCALE SHIPPING COMPANY
LIMITED,
by
------------------------------------
Name:
Title:
-5-
CONIFER SHIPPING COMPANY
LIMITED,
by
------------------------------------
Name:
Title:
[NEW SUBSIDIARY GUARANTOR],
by
------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF
MARYLAND, as Trustee,
by
------------------------------------
Name:
Title:
EXHIBIT G to
The Escrow Agreement
INSURANCE ASSIGNMENT
[NAME OF VESSEL]
[NAME OF SHIPOWNER], a corporation organized and existing
under the laws of (the "Shipowner"), in consideration of One Dollar ($1) lawful
money of the United States of America, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, as
sole owner of the [jurisdiction] flag vessel [NAME OF VESSEL], Official
No.______ (the "Vessel"), has sold, assigned, transferred, set over and granted
a security interest and by this instrument does sell, assign, transfer, set over
and grant a security interest, unto The First National Bank of Maryland, a
national banking association organized and existing under the laws of the United
States of America, as Trustee and Collateral Agent (the "Assignee") under that
certain Collateral Agency and Intercreditor Agreement dated as of July 15, 1998
(as the same may be from time to time amended, supplemented or otherwise
modified, the "Collateral Agency Agreement") among (i) the Shipowner, (ii) the
certain other Subsidiary Guarantors named therein, (iii) the Assignee, and (iv)
Millenium Seacarriers, Inc. (the "Issuer") and unto the Assignee's successors
and assigns, and its successors' and assigns' own proper use and benefit, as
collateral security for the Shipowner's Obligations (as defined in the
Collateral Agency Agreement), all right, title and interest of the Shipowner
under, in and to (i) all insurances (including all entries in a protection and
indemnity or war risks association) in respect of the Vessel whether now or
hereafter to be effected, and all renewals of or replacements for the same, (ii)
all claims, returns of premium and other moneys and claims for moneys due and to
become due under said insurance or in respect of said insurance, (iii) all other
rights of the Shipowner under or in respect of said insurance and (iv) any
proceeds of any of the foregoing.
Except where otherwise expressly provided, words and
expressions defined in the Indenture shall bear the same meanings when used in
this Assignment.
It is expressly agreed that anything herein contained to the
contrary notwithstanding, the Shipowner shall remain liable under said
insurances to perform all of the obligations assumed by it thereunder, and the
Assignee shall have no obligation or liability under said insurances by reason
of or arising out of this instrument of assignment nor shall the Assignee be
required or obligated in any manner to perform or fulfill any obligations of the
Shipowner under or pursuant to said insurances or to make any payment or to make
any inquiry as to the nature or sufficiency of any payment received by it or to
present or
-2-
file any claim, or to take any other action to collect or enforce the payment of
any amounts which may have been assigned to it or to which it may be entitled
hereunder at any time or times.
The Shipowner hereby constitutes the Assignee, its successors
and assigns, the Shipowner's true and lawful attorney-in-fact, irrevocably, with
full power (in the name of the Shipowner or otherwise), to ask, require, demand,
receive, compound and give acquittance for any and all moneys and claims for
moneys due and to become due under or arising out of said insurances, to settle
or comprise any claims, to endorse any checks or other instruments or orders in
connection therewith and to file any claims or to take any action or institute
any proceeding which the Assignee may deem to be necessary or advisable in the
premises. The powers and authorities granted to the Assignee and its successors
or assigns herein have been given for valuable consideration and are hereby
declared to be irrevocable.
The Shipowner covenants and agrees that:
(a) the insurances assigned hereby are now valid and in
full force and effect and that the Shipowner will not
do or omit or knowingly suffer to be done or omitted
anything whereby any of the insurances assigned
hereby may become void or voidable in whole or in
part or the Assignee or any other person claiming
title through it may be prevented from receiving the
proceeds thereof;
(b) if by reason of anything done or omitted or knowingly
suffered to be done or omitted the insurances
assigned hereby shall at any time become voidable in
whole or in part the Shipowner will forthwith at its
own cost take all such insurances in force and in
particular will pay all premiums as they become due;
(c) if by reason of anything done or omitted or knowingly
suffered to be done or omitted the insurances
assigned hereby or any of them shall at any time
become void in whole or in part the Shipowner at its
own cost will forthwith effect new insurances with
insurers approved by the Assignee on terms approved
by the Assignee and will forthwith (if so required by
the Assignee) execute an assignment of such new
insurances to the Assignee and will pay any sums
payable by way of premium under the new insurances.
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The Shipowner hereby further covenants and agrees to procure
that notice of this Assignment in substantially the form of Annex A shall be
duly given to all underwriters and that where the consent of any underwriter is
required pursuant to any of the insurances assigned hereby that it shall be
obtained and evidence thereof shall be given to the Assignee, or, in the
alternative, that in the case of protection and indemnity coverage the Assignee
shall obtain a letter of undertaking by the underwriters, and that there shall
be duly endorsed upon all slips, cover notes, policies, certificates of entry or
other instruments issued or to be issued in connection with the insurances
assigned hereby such clauses as to loss payees as the Assignee may require or
approve. In all cases, unless otherwise agreed in writing by the Assignee, such
slips, cover notes, notices, certificates of entry or other instruments shall
show the Assignee as named assured and loss payee and shall provide that there
will be no recourse against the Assignee for payment of premiums, calls or
assessments.
The Shipowner agrees that at any time and from time to time,
upon the written request of the Assignee, the Shipowner will promptly and duly
execute and deliver or cause to be executed and delivered any and all such
further instruments and documents as the Assignee may deem desirable in
obtaining the full benefits of this Assignment and of the rights and powers
herein granted.
The Shipowner does hereby warrant and represent that it has
not assigned or pledged, and hereby covenants that, without the prior written
consent thereto of the Assignee, so long as this instrument of assignment shall
remain in effect, it will not assign or pledge the whole or any part of the
right, title and interest hereby assigned to anyone other than the Assignee, its
successors or assigns, and it will not take or omit to take any action, the
taking or omission of which might result in an alteration or impairment of said
insurances, of this Assignment or of any of the rights created by said
insurances or this Assignment.
All notices or other communications which are required to be
made to the Assignee hereunder shall be made pursuant to Section 7.2 of the
Collateral Agency Agreement.
The Shipowner hereby appoints the Assignee its
attorney-in-fact for the sole purpose of executing and filing any financing
statements or papers of similar purpose or effect in connection with any filing
or recording of this Assignment.
THIS ASSIGNMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
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OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
This Assignment shall not be amended and/or varied except by agreement in
writing signed by the parties hereto.
Section 7.12 of the Collateral Agency Agreement is
incorporated herein in its entirety and made a part hereof as if it were set
forth herein.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Shipowner has duly executed this
Insurance Assignment in respect of the [jurisdiction] flag vessel [NAME OF
VESSEL] this ____ day of -----, -----.
[NAME OF SHIPOWNER]
as Shipowner
By______________________________
Name:
Title:
ANNEX A
to the Insurance Assignment
NOTICE OF ASSIGNMENT
To: [NAME OF BROKER]
PLEASE TAKE NOTICE that, pursuant to the annexed Insurance
Assignment of [NAME OF SHIPOWNER] (the "Shipowner"), the Shipowner has assigned
to The First National Bank of Maryland, as Trustee and Collateral Agent (the
"Assignee"), all of the Shipowner's right, title and interest in, to and under
(i) all insurances in respect of [NAME OF VESSEL] (the "Vessel") whether now or
hereafter to be effected, and all renewals of or replacements for the same, (ii)
all claims, returns of premium and other moneys and claims for moneys due and to
become due under said insurance or in respect of said insurance, (iii) all other
rights of the Shipowner under or in respect of said insurance and (iv) any
proceeds of any of the foregoing as security for the Obligations as defined in
the Collateral Agency Agreement dated July 15, 1998, among (i) the Shipowner,
(ii) certain other Subsidiary Guarantors named therein, (iii) the Assignee and
(iv) Millenium Seacarriers, Inc. (the "Issuer"). The undersigned hereby directs
that, on and after the date on which the Assignee shall have notified you that
an Event of Default (as defined in such Collateral Agency Agreement) has
occurred and is continuing, all moneys otherwise payable to the Shipowner under
the insurances referred to in the above-mentioned Assignment of Insurances shall
be paid to the Assignee at _________, at its office at _____________________;
ABA No. _______; CHIPs ID# _____; Account No. __________; Ref.:
_________________________ Attn: _________________ Re: _________; until further
notice from the Assignee.
Dated: ______ ____, ______.
[NAME OF SHIPOWNER]
By:__________________________
Name:
Title:
Acknowledged and Agreed
on this __ day of ____, ___:
[NAME OF BROKER]
By:_______________________
Name:
Title:
ANNEX B
to the Insurance Assignment
FORM OF LETTER OF UNDERTAKING
Dear Sirs,
We confirm that we have effected insurances for the account of the above Owners
as set out in Appendix A attached.
Pursuant to instructions received from the above Owners and/or their authorized
Managers or Agents and in consideration of your approving us as the appointed
Brokers in connection with the insurances covered by this letter, we
hereby undertake:
1. To hold the Insurance Slips or Contracts, the Policies when issued, and
any renewals of such Policies or new Policies or any Policies
substituted therefor with your consent as may be arranged through
ourselves and the benefit of the insurance hereunder to your order in
accordance with the terms of the Loss Payable Clause(s) set out in
Appendix B attached; and
2. To arrange for the said Loss Payable Clause(s) to be included on the
policies when issued; and
3. To have endorsed on each and every Policy as and when the same is
issued a Notice of Assignment in the form of Annex A to the Insurance
Assignment hereto dated and signed by the Owners and acknowledged by
Underwriters in accordance with Market practice; and
4. To advise you promptly if we cease to be the Broker for the Assured or
in the event of any material changes of which we are aware affecting
the said insurances, and
5. Following a written application received from you not later than one
month before expiry of these insurances to notify you within fourteen
days of the receipt of such application in the event of our not having
received notice of renewal instructions from the Owners and/or their
authorized Managers or Agents, and in the event of our receiving
instructions to renew to advise you promptly of the details thereof.
Our above undertakings are given subject to our lien on the Policies for
premiums and subject to our right of cancellation of default in payment of such
premiums but we undertake not to exercise such rights of cancellation without
giving you ten days notice in writing, either by letter, telex or cable and a
reasonable opportunity for you to pay any premium outstanding. We further
undertake on
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application from you to advise you promptly of the premium payment situation.
It is understood and agreed that the operation of any Automatic Termination of
Cover, Cancellation or Amendment Provisions contained in the Policy conditions
shall override any Undertakings given by us as Brokers.
Notwithstanding the terms of the said Loss Payable Clause and the said Notice of
Assignment, unless and until we receive written notice from you to the contrary,
we shall be empowered to arrange for the collision and/or salvage guarantee to
be given in the event of bail being required in order to prevent the arrest of
the vessel or to secure the release of the vessel from arrest following a
casualty. Where a guarantee has been given as aforesaid and the guarantor has
paid any sum under the guarantee in respect of such claim, there shall be
payable directly to the guarantor out of the proceeds of the said Policies a sum
equal to the sum so paid.
This undertaking is subject to all claims and returns of premiums being
collected through us as Brokers.
Yours faithfully,
Authorized Signatory
Appendix A
to Letter of Undertaking
DETAILS OF INSURANCES
Appendix B
to the Letter of Undertaking
Forms of Loss Payable Clauses
(A) HULL AND MACHINERY
By an Insurance Assignment dated _______, 1998 the Owner has assigned
to The First National Bank of Maryland, not in its individual capacity but
solely as Collateral Agent and Trustee (the "Collateral Agent and Trustee"),
under the Collateral Agency and Intercreditor Agreement (the "Agreement"), dated
as of July 15, 1998, among the Collateral Agent and Trustee, The Bank of New
York, a New York trust company (the "Lender") and Millenium Seacarriers, Inc., a
Cayman Islands company (the "Company"), the Owner and each subsidiary of the
Company listed on the signature pages thereto, all the Owner's right, title and
interest in and to all policies and contracts of insurance from time to time
taken out or entered into by or for the benefit of the Owner in respect of the
vessel hereto (the "Vessels") and accordingly:
Unless the Collateral Agent and Trustee shall otherwise agree, all
insurance must name the Collateral Agent and Trustee as an assured, but without
liability for premiums, calls or assessments, and all amounts of whatsoever
nature payable under any insurance must be payable to the Collateral Agent and
Trustee for distribution first to itself and thereafter to the Owner or others
as their interests may appear. All amounts payable under any insurance with
respect to the Vessel involving any damage to the Vessel not constituting an
actual or constructive or an agreed or compromised total loss, the underwriters
may pay direct for the repair, salvage or other charges involved or, if the
Owner shall have first fully repaired the damage or paid all of the salvage or
other charges, may pay the Owner as reimbursement therefor; PROVIDED, HOWEVER,
that if such amounts (including any franchise or deductible) are in excess of
One Million United States Dollars ($1,000,000), the underwriters shall make such
payment to the Collateral Agent and Trustee. All payments of insurance shall be
made to the Collateral Agent and Trustee if an Event of Default (as defined in
the Agreement) shall have occurred or any event which with the giving of notice
or the lapse of time, or both, would constitute an Event of Default.
(B) PROTECTION AND INDEMNITY RISKS
Amounts payable under any insurance on the Vessel with respect to
protection and indemnity risks may be paid directly to the Owner to reimburse it
for any loss, damage or expense incurred by it and covered by such insurance or
to the person to whom any liability covered by such insurance has been incurred;
PROVIDED, HOWEVER, that if the
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Collateral Agent and Trustee shall give notice that an Event of Default (as
defined in the Agreement) shall have occurred or any event which with the giving
of notice or the lapse of time, or both, would constitute an Event of Default,
all such payments shall be made to the Collateral Agent and Trustee until the
indebtedness by secured pursuant to the Agreement has been fully discharged.
