DATED 2007 IOLI OWNING COMPANY LIMITED (as Borrower) - and - DEUTSCHE SCHIFFSBANK AKTIENGESELLSCHAFT (as Lender) US$35,000,000 SECURED LOAN AGREEMENT
Exhibit
4.10
DATED 2007
IOLI
OWNING COMPANY LIMITED
(as
Borrower)
-
and -
DEUTSCHE
SCHIFFSBANK AKTIENGESELLSCHAFT
(as
Lender)
___________________________________
US$35,000,000
SECURED
___________________________________
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XXXXXXXXXX
XXXXXXX
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Xxx
Xx. Xxxx’x Xxxxxxxxxx
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Xxxxxx
XX0X 0XX
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Tel:
000 0000 0000
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Fax:
000 0000 0000
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Ref:
09.195
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CONTENTS
Page
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1
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Definitions
and Interpretation
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1
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2
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The
Loan and its Purpose
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11
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3
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Conditions
of Utilisation
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11
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4
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Advance
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12
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5
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Repayment
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12
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6
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Prepayment
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13
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7
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Interest
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14
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8
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Indemnities
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16
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9
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Fees .
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20
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10
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Security
and Application of Moneys
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20
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11
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Representations
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22
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12
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Undertakings
and Covenants
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25
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13
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Events
of Default
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33
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14
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Assignment
and Sub-Participation
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37
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15
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The
Master Agreement
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38
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16
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Set-Off
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39
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17
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Payments
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40
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18
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Notices
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41
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19
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Partial
Invalidity
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43
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20
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Remedies
and Waivers
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43
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21
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Miscellaneous
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43
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22
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Law
and Jurisdiction
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44
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SCHEDULE
1: Conditions Precedent and Subsequent
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46
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Part
I: Conditions precedent
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46
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Part
II: Conditions subsequent
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51
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SCHEDULE
2: Form of Drawdown Notice
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53
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Dated:
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2007
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BETWEEN:
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(1)
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IOLI OWNING COMPANY
LIMITED, a company incorporated under the laws of the Xxxxxxxx
Islands whose registered office is at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Xxxxxxxx Islands MH 96960 (the ”Borrower”);
and
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(2)
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DEUTSCHE SCHIFFSBANK
AKTIENGESELLSCHAFT acting through its office at 17, Xxxxxxx, 00000,
Xxxxxx, Xxxxxxx Xxxxxxxx of Germany (the “Lender”).
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WHEREAS:
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(A)
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The
Borrower has agreed to purchase the Vessel from the Seller on the terms of
the MOA and intends to register the Vessel under the flag of
Malta.
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(B)
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The
Lender has agreed to advance to the Borrower an amount not exceeding the
lesser of (i) seventy per cent (70%) of the Purchase Price and (ii) thirty
five million Dollars ($35,000,000) in order to assist the Borrower to
finance part of the Purchase Price of the
Vessel.
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(C)
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Upon
acquisition of the Vessel, the Borrower would bareboat charter the Vessel
to the Bareboat Charterer, who would bareboat register the Vessel under
the flag of Antigua, following the expiry of which the Borrower would
redeliver the Vessel to the
Borrower.
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IT IS AGREED as
follows:
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1
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Definitions
and Interpretation
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1.1 In
this Agreement:
“Administration” has the
meaning given to it in paragraph 1.1.3 of the ISM Code.
“Annex VI” means Annex VI
(Regulations for the Prevention of Air Pollution from Ships) to the
International Convention for the Prevention of Pollution from Ships 1973 (as
modified in 1978 and 1997).
“Assignments” means the deed or
deeds of assignment from the Borrower, the Bareboat Charterer and any Charterer
referred to in Clause 10.1.2 (Security
Documents).
“Availability Termination Date”
means 31 October 2007 or such later date as the Lender may in its discretion
agree.
“Bareboat Charter” means the
bareboat charter dated 8 June 2007 on the terms and subject to the conditions of
which the Borrower will bareboat charter the Vessel to the Bareboat Charterer
for a period scheduled to expire in January 2009 at a daily net rate of hire of
not less than twenty six thousand Dollars ($26,000), as amended and/or
supplemented from time to time.
“Bareboat Charterer” means MIT
Maritime or its nominee, Harpa, or Harpa’s sub-charterer, Xxxxxx, in its
capacity as bareboat charterer or any other bareboat charterer
proposed by the Borrower and accepted by the Lender in its absolute
discretion.
“Break Costs” means all sums
payable by the Borrower from time to time under Clause 8.3 (Break Costs).
“Business Day” means a day
(other than a Saturday or Sunday) on which banks are open for general business
in New York, London, Bremen, Hamburg and Piraeus.
“Cardiff” means Cardiff Marine
Inc. of 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia.
“Charter” means any
charterparty or any contract of employment other than the Bareboat Charter in
respect of the Vessel.
“Charterer” means any charterer
other than the Bareboat Charterer who shall at any time during the Facility
Period enter into a Charter.
“Confirmation” means a
confirmation exchanged, or deemed exchanged, between the Lender and the Borrower
as contemplated by the Master Agreement.
“Credit Support Document” means
any document providing security for the obligations of the Borrower under the
Master Agreement and, where the context permits, any other document referred to
in any Credit Support Document which has the effect of creating an Encumbrance
in favour of the Lender.
“Credit Support Provider” means
any person (other than the Borrower) providing security for the obligations of
the Borrower under the Master Agreement.
“Currency of Account” means, in
relation to any payment to be made to the Lender under a Finance Document, the
currency in which that payment is required to be made by the terms of that
Finance Document.
“Deed of Covenants” means the
deed of covenants referred to in Clause 10.1.1
(Security
Documents).
“Default” means an Event of
Default or any event or circumstance specified in Clause 13.1 (Events of Default) which would (with the
expiry of a grace period, the giving of notice, the making of any determination
under the Finance Documents or any combination of any of the foregoing) be an
Event of Default.
“DOC” means, in relation to the
ISM Company, a valid Document of Compliance issued for the ISM Company by the
Administration under paragraph 13.2 of the ISM Code.
“Dollars” and “$” each means available and
freely transferable and convertible funds in lawful currency of the United
States of America.
“Drawdown Date” means the date
on which the Loan is advanced under Clause 4 (Advance).
“Drawdown Notice” means a
notice substantially in the form set out in Schedule 2 (Form of Drawdown
Notice).
2
“Earnings” means all hires,
freights, pool income and other sums payable to or for the account of the
Borrower, the Bareboat Charterer and/or any Charterer in respect of the 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 and the benefit of the Performance Guarantees.
“Encumbrance” means a mortgage,
charge, assignment, pledge, lien, or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar
effect.
“Event of Default” means any of
the events or circumstances set out in Clause 13.1 (Events of
Default).
“Facility Period” means the
period beginning on the date of this Agreement and ending on the date when the
whole of the Indebtedness has been paid in full and the Security Parties and the
Bareboat Charterer have ceased to be under any further actual or contingent
liability to the Lender under or in connection with the Finance
Documents.
“Finance Documents” means this
Agreement, the Master Agreement, the
Security Documents and any other document designated as such by the Lender and
the Borrower and “Finance
Document” means any one of them.
“Financial Indebtedness” means
any obligation for the payment or repayment of money, whether present or future,
actual or contingent, in respect of:
(a) moneys
borrowed;
(b) any
acceptance credit;
(c) any
bond, note, debenture, loan stock or similar instrument;
(d) any
finance or capital lease;
(e) receivables
sold or discounted (other than on a non-recourse basis);
(f) deferred
payments for assets or services;
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(g)
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any
derivative transaction protecting against or benefiting from fluctuations
in any rate or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken into
account);
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(h)
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any
amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a
borrowing;
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(i)
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any
counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by
a bank or financial institution;
and
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3
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(j)
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the
amount of any liability in respect of any guarantee or indemnity for any
of the items referred to in paragraphs (a) to (i)
above.
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“GAAP” means generally accepted
accounting principles in the United States of America.
“Guarantee” means the guarantee
and indemnity referred to in Clause 10.1.3 (Security
Documents).
“Guarantor” means DryShips Inc.
of the Xxxxxxxx Islands and/or (where the context permits) any other person who
shall at any time during the Facility Period give to the Lender a guarantee
and/or indemnity for the repayment of all or part of the
Indebtedness.
“Harpa” means Harpa Shipping
& Chartering GmbH & CO. Kommanditgesellschaft of the Federal Republic of
Germany.
“Hedging Transaction” means a
Transaction entered into between the Lender and the Borrower pursuant to the
Master Agreement for the express purpose of hedging all or part of the
Borrower’s interest rate risk under this Agreement.
“IAPPC” means a valid
international air pollution prevention certificate for the Vessel issued under
Annex VI.
“Indebtedness” means the
aggregate from time to time of: the amount of the Loan outstanding; all accrued
and unpaid interest on the Loan; and all other sums of any nature (together with
all accrued and unpaid interest on any of those sums) payable to the Lender
under all or any of the Finance Documents.
“Insurances” means all policies
and contracts of insurance (including all entries in protection and indemnity or
war risks associations) which are from time to time taken out or entered into in
respect of or in connection with the Vessel or her increased value or the
Earnings and (where the context permits) all benefits under such contracts and
policies, including all claims of any nature and returns of
premium.
“Interest Period” means each
period for the determination and payment of interest selected by the Borrower or
agreed or selected by the Lender pursuant to Clause 7 (Interest).
4
“ISM Code” means the
International Management Code for the Safe Operation of Ships and for Pollution
Prevention.
“ISM Company” means, at any
given time, the company responsible for the Vessel’s compliance with the ISM
Code under paragraph 1.1.2 of the ISM Code.
“ISPS Code” means the International
Ship and Port Facility Security Code.
“ISPS Company” means, at any
given time, the company responsible for the Vessel’s compliance with the ISPS
Code.
“ISSC” means a valid
international ship security certificate for the Vessel issued under the ISPS
Code.
“LIBOR” means:
(a) the
applicable Screen Rate; or
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(b)
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(if
no Screen Rate is available for any Interest Period) the arithmetic mean
of the rates (rounded upwards to four decimal places) quoted to the Lender
in the London interbank market,
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at
11.00 a.m. two (2) Business Days before the first day of the relevant Interest
Period for the offering of deposits in Dollars in an amount comparable to the
Loan (or any relevant part of the Loan) and for a period comparable to the
relevant Interest Period.
“Loan” means the aggregate
amount advanced or to be advanced by the Lender to the Borrower under Clause 4 (Advance) or, where the
context permits, the amount advanced and for the time being
outstanding.
“Management Agreement” means
the agreement(s) for the commercial and/or technical management of the Vessel
(during the period in which the Bareboat Charter is in force) between the
Bareboat Charterer and the relevant Managers and the agreement(s) for the
commercial and/or technical management of the Vessel (during the remainder of
the Facility Period when the Bareboat Charter is not in force) dated 24
September 2007 between the Borrower and the relevant Managers.
5
“Managers” means Xxxxxx &
Partner Ship Management GmbH & Co. KG, Haren (Ems), Federal Republic of
Germany during the period that the Bareboat Charter is in force and Cardiff
during the remainder of the Facility Period or such other commercial and/or
technical managers of the Vessel nominated by the Borrower as the Lender may
approve.
“Margin” means zero point nine
per cent (0.9%) per annum.
“Master Agreement” means any
master agreement in Deutscher Rahmenvertrag (Rahmenvertrag Für
Finanztermingeschäfte) form (or any other form of master agreement relating to
interest or currency exchange transactions agreed between the parties hereto)
entered into between the Lender and the Borrower during the Facility Period,
including each Schedule to any Master Agreement and each Confirmation exchanged
pursuant to any Master Agreement.
“Maximum Loan Amount” means
thirty five million Dollars ($35,000,000).
“MIT Maritime” means MIT Maritime Investment
& Trading GmbH & Co. KG, Haren/Ems, a company incorporated under the
laws of Germany with its place of business at Xxxxxx Xxx. 0 00000
Xxxxx/XXX, Xxxxxxx.
“MOA” means the memorandum of
agreement dated 8 June 2007 on the terms and subject to the conditions of which
the Seller will sell the Vessel to the Borrower for the Purchase Price (as
amended and/or novated and/or supplemented from time to time).
“Mortgage” means the statutory
mortgage referred to in Clause 10.1.1 (Security Documents) together
with the Deed of Covenants.
“Mortgagee’s Insurances” means
all policies and contracts of mortgagee’s interest insurance, mortgagee’s
additional perils (oil pollution) insurance and any other
insurance from time to time taken out by the Lender in relation to the
Vessel.
“Notional Amount”, in respect
of any Hedging Transaction, means the Notional Amount as defined in the
Confirmation relating to that Hedging Transaction.
6
“Original Financial Statements”
means the audited consolidated financial statements of the Borrower, Cardiff and
the Guarantor for the financial year ended 2006.
“Xxxxxx” means Xxxxxx Shipping
Limited of Antigua and Barbuda.
“Performance Guarantees” means
the guarantee to be granted in favour of the Borrower by MIT Marine in respect
of Harpa’s performance and obligations under the Bareboat Charter, including but
not limited to payment obligations and redelivery obligations of Harpa, and the
guarantee to be granted in favour of the Borrower by Harpa in respect of
Pamini’s performance and obligations under the Bareboat Charter and any
sub-charter agreements, including but not limiting to payment obligations and
redelivery obligations of Xxxxxx.
“Purchase Price” means the
amount of fifty million one hundred and sixty one thousand eight hundred and
fifty six Dollars ($50,161,856).
“Relevant Documents” means the
Finance Documents, the MOA, the Bareboat Charter, any Charter, the Performance
Guarantees, the Management Agreement, the Managers’ confirmations specified in
Part I of Schedule 1 (Conditions precedent) and
Part II of Schedule 1 (Conditions
subsequent).
“Repayment Date” means the date
for payment of any Repayment Instalment in accordance with Clause 5.1 (Repayment of
Loan).
“Repayment Instalment” means
any instalment of the Loan to be repaid by the Borrower under Clause 5.1 (Repayment of
Loan).
“Requisition Compensation”
means all compensation or other money which may from time to time be payable to
the Borrower, the Bareboat Charterer and/or any Charterer 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).
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“Screen Rate” means in
relation to LIBOR, the British Bankers’ Association Interest Settlement
Rate for the relevant currency and period displayed on the appropriate page of the Reuters
screen. If the agreed page is replaced or the service ceases to
be available, the Lender may specify another page or service displaying
the appropriate rate after consultation with the
Borrower.
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7
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“Security Documents”
means the Mortgage, the Deed of Covenants, the Assignments, the Guarantee,
any other Credit Support Documents or (where the context permits) any
one or more of them and any other agreement or document which may at any
time be executed by any person as security for the payment of all or any
part of the Indebtedness and “Security Document” means
any one of them.
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“Security Parties” means the
Borrower, the Guarantor, any other Credit Support Provider and any other person
who may at any time during the Facility Period be liable
for, or provide security for, all or any part of the Indebtedness, and “Security Party” means any one
of them.
“Seller” means MIT Maritime in
its capacity as seller.
“SMC” means a valid safety
management certificate issued for the Vessel by or on behalf of the
Administration under paragraph 13.7 of the ISM Code.
“SMS” means a safety management
system for the Vessel developed and implemented in accordance with the ISM
Code.
“Tax” means any tax, levy,
impost, duty or other charge or withholding of a similar nature (including any
penalty or interest payable in connection with any failure to pay or any delay
in paying any of the same).
“Total Loss”
means:
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(a)
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an
actual, constructive, arranged, agreed or compromised total loss of the
Vessel; or
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(b)
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the
requisition for title or compulsory acquisition of the Vessel by any
government or other competent authority (other than by way of requisition
for hire); or
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(c)
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the
capture, seizure, arrest, detention or confiscation of the Vessel by any
government or by persons acting or purporting to act on behalf of any
government, unless the Vessel is released and returned to the possession
of the Borrower, the Bareboat Charterer and/or any Charterer within one
month after the capture, seizure, arrest, detention or confiscation in
question.
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8
“Transaction” means a
transaction entered into between the Lender and the Borrower governed by the
Master Agreement.
“Vessel” means the dry cargo
bulk carrier vessel m.v. “CLIPPER GEMINI” of approximately 51,201 dwt, built in
2003, currently registered under the flag of Antigua in the ownership of the
Seller and intended to be sold by the Seller to the Borrower on the terms of the
MOA, and everything now or in the future belonging to her on board and
ashore.
1.2 In
this Agreement:
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1.2.1
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words
denoting the plural number include the singular and vice
versa;
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1.2.2
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words
denoting persons include corporations, partnerships, associations of
persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice
versa;
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1.2.3
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references
to Recitals, Clauses and Schedules are references to recitals, clauses and
schedules to or of this Agreement;
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1.2.4
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references
to this Agreement include the Recitals and the
Schedules;
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1.2.5
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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;
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1.2.6
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references
to any document (including, without limitation, to all or any of the
Relevant Documents) are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or replaced from time
to time;
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1.2.7
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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;
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1.2.8
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references
to the Lender include its successors, transferees and
assignees;
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1.2.9
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a
time of day (unless otherwise specified) is a reference to London time;
and
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9
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1.2.10
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words
and expressions defined in the Master Agreement, unless the context
otherwise requires, have the same
meaning.
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1.3 Offer letter
This
Agreement supersedes the terms and conditions contained in any correspondence
relating to the subject matter of this Agreement exchanged between the Lender
and the Borrower or their representatives prior to the date of this
Agreement.
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2
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The
Loan and its Purpose
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2.1
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Amount Subject
to the terms of this Agreement, the Lender agrees to make available to the
Borrower a term loan not exceeding the Maximum Loan
Amount.
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2.2
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Purpose The
Borrower shall apply the Loan for the purposes referred to in Recital
(B).
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2.3
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Monitoring The
Lender shall not be bound to monitor or verify the application of any
amount borrowed under this
Agreement.
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3
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Conditions
of Utilisation
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3.1
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Conditions
precedent The Borrower is not entitled to have the
Loan advanced unless the Lender has received all of the documents and
other evidence listed in Part I of Schedule 1 (Conditions
precedent).
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3.2
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Further conditions
precedent The Lender will only be obliged to
advance the Loan if on the date of the Drawdown Notice and on the proposed
Drawdown Date:
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3.2.1
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no
Default is continuing or would result from the advance of the Loan;
and
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3.2.2
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the
representations made by the Borrower under Clause 11 (Representations) are
true in all material respects.
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3.3
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Conditions
subsequent The Borrower undertakes to deliver or
to cause to be delivered to the Lender on, or as soon as practicable
after, the Drawdown Date the additional documents and other evidence
listed in Part II of Schedule 1 (Conditions
subsequent).
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10
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3.4
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No
Waiver If the Lender in its sole discretion agrees
to advance all or any part of the Loan to the Borrower before all of the
documents and evidence required by Clause 3.1
(Conditions
precedent) have been
delivered to or to the order of the Lender, the Borrower undertakes to
deliver all outstanding documents and evidence to or to the order of the
Lender no later than the date specified by the
Lender.
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The
advance of all or any part of the Loan under this Clause 3.4 shall not be taken as a waiver of the Lender’s
right to require production of all the documents and evidence required by Clause
3.1 (Conditions
precedent).
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3.5
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Form and
content All documents and evidence delivered to
the Lender under this Clause 3
shall:
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3.5.1 be
in form and substance acceptable to the Lender; and
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3.5.2
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if
required by the Lender, be certified, notarised, legalised or attested in
a manner acceptable to the Lender.
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4
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Advance
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The
Borrower may request the Loan to be advanced in one amount on any Business
Day prior to the Availability Termination Date by delivering to the Lender
a duly completed Drawdown Notice not more than ten (10) and not fewer than
three (3) Business Day (or fewer than three (3) Business Days subject to
the Lender’s prior written consent) before the proposed Drawdown
Date.
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5
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Repayment
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5.1
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Repayment of
Loan The Borrower agrees to repay the Loan to the
Lender by thirty six (36) consecutive quarterly Repayment
Instalments. The first six (6) Repayment Instalments each in
the amount of one million five hundred thousand Dollars ($1,500,000), the
next twenty nine (29) Repayment Instalments each in the amount of five
hundred thousand Dollars ($500,000) and the thirty sixth and final
Repayment Instalment in the amount of eleven million five hundred thousand
Dollars ($11,500,000) (comprising an instalment of five hundred thousand
Dollars ($500,000) and a balloon payment of eleven million Dollars
($11,000,000)), the first Repayment Instalment falling due on the date
which is three (3) calendar months after the Drawdown Date and subsequent
Repayment Instalments falling due at consecutive intervals of three (3)
calendar months thereafter.
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11
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5.2
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Reduction of Repayment
Instalments If the aggregate amount advanced to
the Borrower is less than the Maximum Loan Amount, the amount of each
Repayment Instalment shall be reduced pro rata to the amount actually
advanced.
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5.3
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Reborrowing The
Borrower may not reborrow any part of the Loan which is repaid or
prepaid.
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6
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Prepayment
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6.1
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Illegality If
it becomes unlawful in any jurisdiction for the Lender to perform any of
its obligations as contemplated by this Agreement or to fund or maintain
the Loan:
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6.1.1
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the
Lender shall promptly notify the Borrower of that event;
and
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6.1.2
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the
Borrower shall repay the Loan (to the extent already advanced) on the last
day of the current Interest Period or, if earlier, the date specified by
the Lender in the notice delivered to the Borrower (being no earlier than
the last day of any applicable grace period permitted by
law).
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6.2
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Voluntary prepayment of
Loan The Borrower may prepay the whole or any part
of the Loan (but, if in part, being an amount that reduces the Loan by a
minimum amount of five hundred thousand Dollars ($500,000)) subject as
follows:
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6.2.1
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it
gives the Lender not less than five (5) Business Days’ (or such shorter
period as the Lender may agree) prior
notice;
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6.2.2
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no
prepayment may be made until after the Availability Termination Date;
and
|
|
|
6.2.3
|
12
|
|
6.3
|
Mandatory prepayment on sale or
Total Loss If the Vessel is sold by the Borrower
or becomes a Total Loss, the Borrower shall, simultaneously with any such
sale or within one hundred and twenty (120) days after any such Total
Loss, prepay the whole of the Loan.
|
|
|
6.4
|
Restrictions Any
notice of prepayment given under this Clause 6 shall be irrevocable and, unless a contrary
indication appears in this Agreement, shall specify the date or dates upon
which the relevant prepayment is to be made and the amount of that
prepayment.
|
Any
prepayment under this Agreement shall be made together with accrued interest on
the amount prepaid and, subject to any Break Costs and subject to Clause 6.2
(Voluntary prepayment of
Loan) and Clause 6.3 (Mandatory prepayment on sale or
Total Loss), without premium or penalty.
|
7
|
Interest
|
|
|
7.1
|
Interest
Periods The period during which the Loan shall be
outstanding under this Agreement shall be divided into consecutive
Interest Periods of one (1), three (3), six (6) or twelve (12)
months’ duration, as selected by the Borrower by written notice to the
Lender 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 Lender.
|
|
|
7.2
|
Beginning and end of Interest
Periods Each Interest Period shall start on the
Drawdown Date or (if the Loan is already made) on the last day of the
preceding Interest Period and end on the date which numerically
corresponds to the Drawdown Date or the last day of the preceding Interest
Period in the relevant calendar month except that, if there is no
numerically corresponding date in that calendar month, the Interest Period
shall end on the last Business Day in that
month.
|
|
|
7.3
|
Interest Periods to meet
Repayment Dates If an Interest Period would
otherwise expire after the next Repayment Date, there shall be a separate
Interest Period for a part of the Loan equal to the relevant Repayment
Instalment which shall expire on the next Repayment Date and the Interest
Period determined shall apply only to the balance of the
Loan.
|
13
|
|
7.4
|
Non-Business
Days If an Interest Period would otherwise end on
a day which is not a Business Day, that Interest Period will instead end
on the next Business Day in that calendar month (if there is one) or the
preceding Business Day (if there is
not).
|
|
|
7.5
|
Interest
rate During each Interest Period interest shall
accrue on the Loan at the rate determined by the Lender to be the
aggregate of (a) the Margin and
(b) LIBOR.
|
|
|
7.6
|
Failure to select Interest
Period If the Borrower at any time fails to select
or agree an Interest Period in accordance with Clause 7.1 (Interest Periods), the
interest rate applicable shall be the rate determined by the Lender in
accordance with Clause 7.5 (Interest rate) for an Interest
Period of such duration (not exceeding three (3) months) as the
Lender may select.
|
|
|
7.7
|
Accrual and payment of
interest Interest shall accrue from day to day,
shall be calculated on the basis of a 360 day year and the actual number
of days elapsed (or, in any circumstance where market practice differs, in
accordance with the prevailing market practice) and shall be paid by the
Borrower to the Lender on the last day of each Interest Period and, if the
Interest Period is longer than three (3) months, on the dates falling
at three (3) monthly intervals after the first day of that Interest
Period.
|
|
|
7.8
|
Default
interest If the Borrower fails to pay any amount
payable by it under a Finance Document on its due date, interest shall
accrue on the overdue amount from the due date up to the date of actual
payment (both before and after judgment) at a rate which is two per cent
(2%) higher than the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted the Loan in the
currency of the overdue amount for successive Interest Periods, each
selected by the Lender (acting reasonably). Any interest
accruing under this Clause 7.8 shall be
immediately payable by the Borrower on demand by the Lender. If
unpaid, any such interest will be compounded with the overdue amount at
the end of each Interest Period applicable to that overdue amount but will
remain immediately due and payable.
|
|
|
7.9
|
Changes in market
circumstances If at any time the Lender determines
(which determination shall be final and conclusive and binding on the
Borrower) that, by reason of changes affecting the London interbank
market, adequate and fair means do not exist for determining the rate of
interest on the Loan for any Interest
Period:
|
|
|
7.9.1
|
the
Lender shall give notice to the Borrower of the occurrence of such event;
and
|
14
|
|
7.9.2
|
the
rate of interest on the Loan for that Interest Period shall be the rate
per annum which is the sum of:
|
|
|
(a)
|
the
Margin; and
|
|
|
(b)
|
the
rate which expresses as a percentage rate per annum the cost to the Lender
of funding the Loan from whatever source it may reasonably
select
|
PROVIDED
THAT if the resulting rate of interest is not acceptable to the
Borrower:
|
|
7.9.3
|
the
Lender will negotiate with the Borrower in good faith with a view to
modifying this Agreement to provide a substitute basis for determining the
rate of interest which is financially a substantial equivalent to the
basis provided for in this
Agreement;
|
|
|
7.9.4
|
any
substitute basis agreed pursuant to Clause 7.9.3 shall be binding on the parties to this
Agreement; and
|
|
|
7.9.5
|
if,
within thirty (30) days of the giving of the notice referred to in
Clause 7.9.1, the Borrower and the
Lender fail to agree in writing on a substitute basis for determining the
rate of interest, the Borrower will immediately prepay the Loan, together
with any Break Costs.
|
|
|
7.10
|
Determinations
conclusive The Lender shall promptly notify the
Borrower of the determination of a rate of interest under this Clause 7 and each such determination shall (save in the
case of manifest error) be final and
conclusive.
|
|
8
|
Indemnities
|
|
|
8.1
|
Transaction
expenses The Borrower will, within fourteen (14)
days of the Lender’s written demand, pay the Lender the amount of all
costs and expenses (including legal fees and Value Added Tax or any
similar or replacement tax if applicable) incurred by the Lender in
connection with:
|
|
|
8.1.1
|
the
negotiation, preparation, printing, execution and registration of the
Finance Documents (whether or not any Finance Document is actually
executed or registered and whether or not all or any part of the Loan is
advanced);
|
15
|
|
8.1.2
|
any
amendment, addendum or supplement to any Finance Document (whether or not
completed); and
|
|
|
8.1.3
|
any
other document which may at any time be required by the Lender to give
effect to any Finance Document or which the Lender is entitled to call for
or obtain under any Finance
Document.
|
|
|
8.2
|
Funding
costs The Borrower shall indemnify the Lender on
the Lender’s written demand against all losses and costs incurred or
sustained by the Lender if, for any reason, the Loan is not advanced to
the Borrower after the relevant Drawdown Notice has been given to the
Lender, or is advanced on a date other than that requested in the Drawdown
Notice (unless, in either case, as a result of any default by the
Lender).
|
|
|
8.3
|
Break
Costs The Borrower shall indemnify the Lender on
the Lender’s written demand against all costs, losses, premiums or
penalties incurred by the Lender as a result of its receiving any
prepayment of all or any part of the Loan (whether pursuant to Clause 6 (Prepayment) or otherwise) on
a day other than the last day of an Interest Period for the Loan or
relevant part of the Loan, or any other payment under or in relation to
the Finance Documents on a day other than the due date for payment of the
sum in question, including (without limitation) any losses or costs
incurred in liquidating or re-employing deposits from third parties
acquired to effect or maintain all or any part of the Loan, and any
liabilities, expenses or losses incurred by the Lender in terminating or
reversing, or otherwise in connection with, any Transaction or any other
interest rate and/or currency swap, transaction or arrangement entered
into by the Lender to hedge any exposure arising under this Agreement, or
in terminating or reversing, or otherwise in connection with, any open
position arising under this Agreement or the Master
Agreement.
|
16
|
|
8.4
|
Currency
indemnity In the event of the Lender receiving or
recovering any amount payable under a Finance Document in a currency other
than the Currency of Account, and if the amount received or recovered is
insufficient when converted into the Currency of Account at the date of
receipt to satisfy in full the amount due, the Borrower shall, on the
Lender’s written demand, pay to the Lender such further amount in the
Currency of Account as is sufficient to satisfy in full the amount due and
that further amount shall be due to the Lender as a separate debt under
this Agreement.
|
|
|
8.5
|
Increased costs (subject to
Clause 8.6 (Exceptions
to increased costs)) If,
by reason of the introduction of any law, or any change in any law, or any
change in the interpretation or administration of any law, or compliance
with any request or requirement from any central bank or any fiscal,
monetary or other authority occurring after the date of this
Agreement:
|
|
|
8.5.1
|
the
Lender (or the holding company of the Lender) shall be subject to any Tax
with respect to payment of all or any part of the Indebtedness (other than
Tax on overall net income); or
|
|
|
8.5.2
|
the
basis of Taxation of payments to the Lender in respect of all or any part
of the Indebtedness shall be changed;
or
|
|
|
8.5.3
|
any
reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans by
any branch of the Lender; or
|
|
|
8.5.4
|
the
manner in which the Lender allocates capital resources to its obligations
under this Agreement and/or the Master Agreement or any ratio (whether
cash, capital adequacy, liquidity or otherwise) which the Lender is
required or requested to maintain shall be affected;
or
|
|
|
8.5.5
|
there
is imposed on the Lender (or on the holding company of the Lender) any
other condition in relation to the Indebtedness or the Finance
Documents;
|
17
| and the result of any of the above shall be to increase the cost to the Lender (or to the holding company of the Lender) of the Lender making or maintaining the Loan, or its obligations under the Master Agreement, or to cause the Lender to suffer (in its opinion) a material reduction in the rate of return on its overall capital below the level which it reasonably anticipated at the date of this Agreement and which it would have been able to achieve but for its entering into this Agreement or the Master Agreement, and/or performing its obligations under this Agreement or the Master Agreement, then, subject to Clause 8.6 (Exceptions to increased costs), the Lender shall notify the Borrower and the Borrower shall from time to time pay to the Lender on demand the amount which shall compensate the Lender (or the holding company of the Lender) for such additional cost or reduced return. A certificate signed by an authorised signatory of the Lender setting out the amount of that payment and the basis of its calculation shall be submitted to the Borrower and shall be conclusive evidence of such amount save for manifest error or on any question of law. |
|
|
8.6
|
Exceptions to increased
costs Clause 8.5
(Increased
costs) does not apply to
the extent any additional cost or reduced return referred to in that
Clause is:
|
|
|
8.6.1
|
compensated
for by a payment made under Clause 8.10
(Taxes);
or
|
|
|
8.6.2
|
compensated
for by a payment made under Clause 17.3
(Grossing-up);
or
|
|
|
8.6.3
|
attributable
to the wilful breach by the Lender (or the holding company of the Lender)
of any law or regulation.
|
|
|
8.7
|
Events of
Default The Borrower shall indemnify the Lender
from time to time on the Lender’s written demand against all losses, costs
and liabilities incurred or sustained by the Lender as a consequence of
any Event of Default.
|
|
|
8.8
|
Enforcement
costs The Borrower shall pay to the Lender on the
Lender’s written demand the amount of all costs and expenses (including
legal fees) incurred by the Lender in connection with the enforcement of,
or the preservation of any rights under, any Finance Document including
(without limitation) any losses, costs and expenses which the Lender may
from time to time sustain, incur or become liable for by reason of the
Lender being mortgagee of the Vessel and/or a lender to the Borrower, or
by reason of the Lender being deemed by any court or authority to be an
operator or controller, or in any way concerned in the operation or
control, of the Vessel.
|
18
|
|
8.9
|
Other
costs The Borrower shall pay to the Lender on the
Lender’s written demand the amount of all sums which the Lender may pay or
become actually or contingently liable for on account of the Borrower in
connection with the Vessel (whether alone or jointly or jointly and
severally with any other person) including (without limitation) all sums
which the Lender may pay or guarantees which it may give in respect of the
Insurances, any expenses incurred by the Lender in connection with the
maintenance or repair of the Vessel or in discharging any lien, bond or
other claim relating in any way to the Vessel, and any sums which the
Lender may pay or guarantees which it may give to procure the release of
the Vessel from arrest or
detention.
|
|
|
8.10
|
Taxes The
Borrower shall pay all Taxes to which all or any part of the Indebtedness
or any Finance Document may be at any time subject (other than Tax on the
Lender’s overall net income) and shall indemnify the Lender on the
Lender’s written demand against all liabilities, costs, claims and
expenses resulting from any omission to pay or delay in paying any such
Taxes.
|
|
9
|
Fees The
Borrower shall pay to the Lender an arrangement fee in the amount of zero
point twenty five per cent (0.25%) of the Maximum Loan Amount on the
Drawdown Date.
|
|
10
|
Security
and Application of Moneys
|
|
|
10.1
|
Security
Documents As security for the payment of the
Indebtedness, the Borrower shall execute and deliver to the Lender or
cause to be executed and delivered to the Lender the following documents
in such forms and containing such terms and conditions as the Lender shall
require:
|
|
|
10.1.1
|
a
first statutory mortgage over the Vessel together with a collateral deed
of covenants;
|
|
|
10.1.2
|
first
priority deeds of assignment of the Insurances, Earnings, Bareboat Charter
(or Charter) and Requisition Compensation of the Vessel from the Borrower,
the Bareboat Charterer (or Charterer) including (in the case of the
Bareboat Charterer) an agreement whereby the interests of the Bareboat
Charterer under the Bareboat Charter are subordinated to the interests of
the Lender under the Mortgage; and
|
19
|
|
10.1.3
|
a
guarantee and indemnity from the
Guarantor.
|
|
|
10.2
|
General application of
moneys The Borrower, subject to Clause 10.3 (Application of moneys on sale
or Total Loss), irrevocably authorises the Lender to apply all sums
which the Lender may receive:
|
|
|
10.2.1
|
pursuant
to a sale or other disposition of the Vessel or any right, title or
interest in the Vessel; or
|
|
|
10.2.2
|
by
way of payment of any sum in respect of the Insurances, Earnings or
Requisition Compensation; or
|
|
|
10.2.3
|
otherwise
arising under or in connection with any Security
Document,
|
in
or towards satisfaction, or by way of retention on account, of the Indebtedness,
in such manner as the Lender may in its discretion determine PROVIDED THAT any
part of the Indebtedness arising out of the Master Agreement shall be satisfied,
or retained for, on a pari passu basis with the remainder of the
Indebtedness.
|
10.3
|
Application of moneys on sale
or Total Loss The Borrower
irrevocably authorises the Lender to apply all sums which the Lender may
receive pursuant to a sale by the Borrower of the Vessel or a Total Loss
in or towards satisfaction of the prepayment due and payable by virtue of
that sale or Total Loss under Clause 6.3
(Mandatory prepayment on
sale or Total Loss), but the Borrower’s obligation to make that
prepayment shall not be affected if those sums are insufficient to satisfy
that obligation.
|
|
|
10.4
|
Additional
security If at any time the aggregate of the
market value of the Vessel (such market value to be conclusively
determined by a reputable, independent and first class firm of shipbrokers
appointed by the Lender on the basis of a charter-free sale for prompt
delivery for cash at arm’s length on normal commercial terms as between a
willing seller and a willing buyer) and the value of any additional
security (such value to be the face amount of the deposit (in the case
of cash), determined conclusively by appropriate advisers appointed by the
Lender (in the case of other charged assets), and determined by the Lender
in its discretion (in all other cases) for the time being provided to the
Lender under this Clause 10.4 is less than one hundred and twenty
five per cent (125%) of the Loan the Borrower shall, within thirty (30)
days of the Lender’s request, at the Borrower’s
option:
|
20
|
|
10.4.1
|
pay
to the Lender or to its nominee a cash deposit in the amount of the
shortfall to be secured in favour of the Lender as additional security for
the payment of the Indebtedness; or
|
|
|
10.4.2
|
give
to the Lender other additional security in amount and form acceptable to
the Lender in its discretion; or
|
|
|
10.4.3
|
prepay
the amount of the Indebtedness which will ensure that the aggregate of the
market value of the Vessel (determined as stated above) and the value of
any such additional security is not less than one hundred and twenty five
per cent (125%) of the Loan.
|
| Clauses 5.3 (Reborrowing), 6.2 (Voluntary prepayment of Loan) and 6.4 (Restrictions) shall apply, mutatis mutandis, to any prepayment made under this Clause 10.4 and the value of any additional security provided shall be determined as stated above. |
|
11
|
Representations
|
|
|
11.1
|
Representations The
Borrower makes the representations and warranties set out in this Clause
11.1 to the Lender on the date of this
Agreement.
|
|
|
11.1.1
|
Status Each
Security Party (which is not an individual) is a corporation, duly
incorporated and validly existing under the law of its jurisdiction of
incorporation and has the power to own its assets and carry on its
business as it is being conducted.
|
|
|
11.1.2
|
Binding
obligations The obligations expressed to be
assumed by each Security Party in each Finance Document to which it is a
party are legal, valid, binding and enforceable
obligations.
|
|
|
11.1.3
|
Non-conflict with other
obligations The entry into and performance by each
Security Party of, and the transactions contemplated by, the Finance
Documents do not conflict with:
|
|
|
(a)
|
any
law or regulation applicable to that Security
Party;
|
|
|
(b)
|
the
constitutional documents of that Security Party;
or
|
21
|
|
(c)
|
any
document binding on that Security Party or any of its
assets,
|
|
|
and
in borrowing the Loan, the Borrower is acting for its own
account.
|
|
|
11.1.4
|
Power and
authority Each Security Party has the power to
enter into, perform and deliver, and has taken all necessary action to
authorise its entry into, performance and delivery of, the Finance
Documents to which
it is a party and the transactions contemplated by those Finance
Documents.
|
|
|
11.1.5
|
Validity and admissibility in
evidence All consents, licences, approvals,
authorisations, filings and registrations required or
desirable:
|
|
|
(a)
|
to
enable each Security Party lawfully to enter into, exercise its rights and
comply with its obligations in the Finance Documents to which it is a
party or to enable the Lender to enforce and exercise all its rights under
the Finance Documents; and
|
|
|
(b)
|
to
make the Finance Documents to which any Security Party is a party
admissible in evidence in its jurisdiction of
incorporation,
|
have
been obtained or effected and are in full force and effect.
|
|
11.1.6
|
Governing law and
enforcement The choice of English law as the
governing law of any Finance Document expressed to be governed by English
law will be recognised and enforced in the jurisdiction of incorporation
of each relevant Security Party, and any judgment obtained in England in
relation to any such Finance Document will be recognised and enforced in
the jurisdiction of incorporation of each relevant Security
Party.
|
|
|
11.1.7
|
Deduction of
Tax No Security Party is required under the law of
its jurisdiction of incorporation to make any deduction for or on account
of Tax from any payment it may make under any Finance
Document.
|
|
|
11.1.8
|
No filing or stamp
taxes Under the law of jurisdiction of
incorporation of each relevant Security Party it is not necessary that the
Finance Documents (other than the Security Documents) be filed, recorded
or enrolled with any court or other authority in that jurisdiction or that
any stamp, registration or similar tax be paid on or in relation to the
Finance Documents or the transactions contemplated by the Finance
Documents.
|
22
|
|
11.1.9
|
No
default No Event of Default is continuing or might
reasonably be expected to result from the advance of the
Loan.
|
|
|
11.1.10
|
No misleading
information Any factual information provided by
any Security Party to the Lender was true and accurate in all material
respects as at the date it was
provided.
|
|
|
11.1.11
|
Pari passu
ranking The payment obligations of each Security
Party and the Bareboat Charterer under the Finance Documents to which it
is a party rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors, except for obligations mandatorily
preferred by law applying to companies
generally.
|
|
|
11.1.12
|
No proceedings pending or
threatened No litigation, arbitration or
administrative proceedings of or before any court, arbitral body or agency
have been started or (to the best of the Borrower’s knowledge threatened)
which, if adversely determined, might reasonably be expected to have a
materially adverse effect on the business, assets, financial condition or
credit worthiness of any Security
Party.
|
|
|
11.1.13
|
Disclosure of material
facts The Borrower is not aware of any material
facts or circumstances which have not been disclosed to the Lender and
which might, if disclosed, have adversely affected the decision of a
person considering whether or not to make loan facilities of the nature
contemplated by this Agreement available to the
Borrower.
|
|
|
11.1.14
|
No established place of
business in the UK or US No Security Party (other
than the Guarantor) has an established place of business in the United
Kingdom or the United States of
America.
|
|
|
11.1.15
|
Completeness of Relevant
Documents The copies of any Relevant Documents
provided or to be provided by the Borrower to the Lender in accordance
with Clause 3 (Conditions of
Utilisation) are, or will be,
true and accurate copies of the originals and represent, or will
represent, the full agreement between the parties to those Relevant
Documents in relation to the subject matter of those Relevant Documents
and there are no commissions, rebates, premiums or other payments due or
to become due in connection with the subject matter of those Relevant
Documents other than in the ordinary course of business or as disclosed
to, and approved in writing by, the
Lender.
|
23
|
|
11.1.16
|
Indirect subsidiary of the
Guarantor The Borrower is and shall remain an indirect
subsidiary of the Guarantor.
|
|
|
11.2
|
Repetition Each
representation and warranty in Clause 11.1
(Representations)
is deemed to be repeated by the Borrower by reference to the facts and
circumstances then existing on the date of the Drawdown Notice and the
first day of each Interest Period.
|
|
12
|
Undertakings
and Covenants
|
The
undertakings and covenants in this Clause 12 remain
in force for the duration of the Facility Period.
12.1 Information
Undertakings
|
|
12.1.1
|
Financial
statements The Borrower shall supply to the
Lender, and shall procure that Cardiff and the Guarantor supply to the
Lender, as soon as the same become available, but in any event within one
hundred and eighty (180) days after the end of each of their respective
financial years, the audited consolidated financial statements for that
financial year, containing (amongst other things) the Borrower’s or, as
the case may be, Cardiff’s and the Guarantor’s profit and loss account
for, and balance sheet at the end of, each such financial
year.
|
|
|
12.1.2
|
Requirements as to financial
statements Each set of financial statements
delivered by the Borrower under Clause 12.1.1
(Financial
statements):
|
|
|
(a)
|
shall
be certified by a director or an authorised signatory of the Borrower,
Cardiff and the Guarantor, respectively, as fairly representing their
financial condition as at the date as at which those financial statements
were drawn up; and
|
24
|
|
(b)
|
shall
be prepared using GAAP, accounting practices and financial reference
periods consistent with those applied in the preparation of the Original
Financial Statements unless, in relation to any set of financial
statements, the Borrower, Cardiff or the Guarantor notifies the Lender
that there has been a change in GAAP, the accounting practices or
reference periods and the Borrower’s, Cardiff’s or the Guarantor’s
auditors, respectively, deliver to the
Lender:
|
|
|
(i)
|
a
description of any change necessary for those financial statements to
reflect the GAAP, accounting practices and reference periods upon which
the Original Financial Statements were prepared;
and
|
|
|
(ii)
|
sufficient
information, in form and substance as may be reasonably required by the
Lender, to enable the Lender to make an accurate comparison between the
financial position indicated in those financial statements and that
indicated in the Original Financial
Statements.
|
|
|
12.1.3
|
Interim financial
statements The Borrower shall supply to the
Lender, and shall procure that Cardiff supply to the Lender, as soon as
the same become available, but in any event within ninety (90) days after
the end of each six (6) month period during each of their respective
financial years, the unaudited semi-annual financial statements and
management accounts for that six-month
period.
|
|
|
12.1.4
|
Information:
miscellaneous The Borrower shall supply to the
Lender:
|
|
|
(a)
|
all
documents dispatched by the Borrower to its shareholders (or any class of
them) or its creditors generally at the same time as they are
dispatched;
|
|
|
(b)
|
promptly
upon becoming aware of them, details of any litigation, arbitration or
administrative proceedings which are current, threatened or pending
against any Security Party, and which might, if adversely determined, have
a materially adverse effect on the business, assets, financial condition
or credit worthiness of that Security Party and/or the Bareboat Charterer;
and
|
25
|
|
(c)
|
promptly,
such further information regarding the financial condition, business and
operations of any Security Party as the Lender may reasonably request
including, without limitation, cash flow analyses and details of the
operating costs of the Vessel.
|
|
|
12.1.5
|
Notification of
default
|
|
|
(a)
|
The
Borrower shall notify the Lender of any Default (and the steps, if any,
being taken to remedy it) promptly upon becoming aware of its
occurrence.
|
|
|
(b)
|
Promptly
upon a request by the Lender, the Borrower shall supply to the Lender a
certificate signed by two of its directors or senior officers or an
authorised signatory on its behalf certifying that no Default is
continuing (or if a Default is continuing, specifying the Default and the
steps, if any, being taken to remedy
it).
|
|
|
12.1.6
|
“Know your customer” checks
If:
|
|
|
(a)
|
the
introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this
Agreement;
|
|
|
(b)
|
any
change in the status of the Borrower after the date of this Agreement;
or
|
|
|
(c)
|
a
proposed assignment or transfer by the Lender of any of its rights and
obligations under this Agreement,
|
| obliges the Lender (or, in the case of (c) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender (for itself or, in the case of (c) above, on behalf of any prospective new Lender) in order for the Lender (or, in the case of (c) above, any prospective new Lender) to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. |
26
|
|
12.2
|
General
undertakings
|
| 12.2.1 |
Authorisations The
Borrower shall promptly:
|
|
|
12.2.1.1
|
obtain,
comply with and do all that is necessary to maintain in full force and
effect; and
|
|
|
12.2.1.2
|
supply
certified copies to the Lender of,
|
any
consent, licence, approval or authorisation required under any law or regulation
to enable each Security Party to perform its obligations under the Finance
Documents to which it is a party and to ensure the legality, validity,
enforceability or admissibility in evidence in the jurisdiction of incorporation
of each relevant Security Party of any Finance Document.
|
|
12.2.2
|
Compliance with
laws The Borrower shall comply in all respects
with all laws to which it may be subject, if failure so to comply would
materially impair its ability to perform its obligations under the Finance
Documents.
|
|
|
12.2.3
|
Conduct of
business The Borrower shall carry on and conduct
its business in a proper and
efficient manner, file all requisite tax returns and pay all tax which
becomes due and payable (except where contested in good
faith).
|
|
|
12.2.4
|
Evidence of good
standing The Borrower will from time to time if
requested by the Lender provide the Lender with evidence in form and
substance satisfactory to the Lender that the Security Parties and all
corporate shareholders of any Security Party remain in good
standing.
|
|
|
12.2.5
|
Negative pledge and no
disposals The Borrower shall not without the prior
written consent of the Lender create nor permit to subsist any Encumbrance
or other third party rights over any of its present or future assets or
undertaking nor dispose of any those assets or of all or part of that
undertaking.
|
27
|
|
12.2.6
|
Merger The
Borrower shall not without the prior written consent of the Lender enter
into any amalgamation, demerger, merger or corporate
reconstruction.
|
|
|
12.2.7
|
Change of
business The Borrower shall not without the prior
written consent of the Lender make any substantial change to the general
nature of its business from that carried on at the date of this
Agreement.
|
|
|
12.2.8
|
No other
business The Borrower shall not without the prior
written consent of the Lender engage in any business other than the
ownership, operation, chartering and management of the
Vessel.
|
|
|
12.2.9
|
No place of business in UK or
US The Borrower shall not have an established
place of business in the United Kingdom or the United States of America at
any time during the Facility
Period.
|
|
|
12.2.10
|
No
borrowings The Borrower shall not without the
prior written consent of the Lender borrow any money (except for the Loan
and unsecured Financial Indebtedness subordinated to the Loan) nor incur
any obligations under leases.
|
|
|
12.2.11
|
No substantial
liabilities Except in the ordinary course of
business, the Borrower shall not incur any liability to any third party
which is in the Lender’s opinion of a substantial
nature.
|
|
|
12.2.12
|
No loans or other financial
commitments The Borrower shall not without the
prior written consent of the Lender make any loan nor enter into any
guarantee or indemnity or otherwise voluntarily assume any actual or
contingent liability in respect of any obligation of any other person
except for loans made in the ordinary course of business in connection
with the chartering, operation or repair of the
Vessel.
|
|
|
12.2.13
|
No
dividends Upon the occurrence of an Event of
Default, the
Borrower shall not without the prior written consent of the Lender pay any
dividends or make any other distributions to shareholders or issue any new
shares.
|
28
|
|
12.2.14
|
Inspection of
records The Borrower will permit the inspection of
its financial records and accounts from time to time by the Lender or its
nominee.
|
|
|
12.2.15
|
No change in Relevant
Documents The Borrower shall procure that, without
the prior written consent of the Lender, there shall be no termination of,
alteration to, or waiver of any term of, any of the Relevant Documents
which are not Finance Documents.
|
|
|
12.2.16
|
No dealings with Master
Agreement The Borrower shall not assign, novate or
encumber or in any other way transfer any of its rights or obligations
under the Master Agreement, nor enter into any interest rate exchange or
hedging agreement with anyone other than the
Lender.
|
|
|
12.2.17
|
No change in
shareholding The Borrower shall not, without the
Lender’s prior written consent, permit any change in its beneficial
ownership or control.
|
|
|
12.2.18
|
No delivery into Bareboat
Charter or Charter The Borrower shall not permit the
Vessel to be delivered into service under the Bareboat Charter or any
Charter or other contract of employment until either the Borrower has
received written confirmation from the Lender that the Mortgage has been
registered against the Vessel or the Bareboat Charterer or Charterer (as
applicable) has given to the Lender a subordination letter in a form and
substance acceptable to the Lender, in its discretion, confirming that the
Lender’s rights as mortgagee under the Mortgage rank before any maritime
lien which the Bareboat Charterer or Charterer (as applicable) may have
for its claims under or in connection with the Bareboat Charter or Charter
respectively.
|
|
|
12.3
|
Vessel
undertakings
|
|
|
12.3.1
|
No sale of
Vessel The Borrower shall not sell or otherwise
dispose of the Vessel or any shares in the Vessel nor agree to do so
without the prior written consent of the
Lender.
|
|
|
12.3.2
|
No chartering after Event of
Default Following the occurrence and during the
continuation of an Event of Default the Borrower shall not without the
prior written consent of the Lender let the Vessel on charter or renew or
extend any charter or other contract of employment of the Vessel (nor
agree to do so).
|
29
|
|
12.3.3
|
No change in
management The Borrower shall procure that,
without the prior written consent of the Lender, there shall be no
termination of, alteration to, or waiver of any term of, the Management
Agreement(s) and
the Borrower shall not, and shall procure that the Bareboat Charterer does
not, without the prior written consent of the Lender, permit the Managers
to sub-contract or delegate the commercial or technical management of the
Vessel to any third party.
|
|
|
12.3.4
|
Registration of
Vessel The Borrower undertakes to maintain the
registration of the Vessel under the flag stated in Recital (A) for the
duration of the Facility Period unless the Lender agrees otherwise in
writing.
|
|
|
12.3.5
|
Evidence of current
COFR The Borrower will, if and for so long as the
Vessel trades in the United States of America and Exclusive Economic Zone
(as defined in the United States Oil Pollution Act 1990), obtain, retain
and provide the Lender with a copy of, a valid Certificate of Financial
Responsibility for the Vessel under that Act and will comply strictly with
the requirements of that Act.
|
|
|
12.3.6
|
ISM Code
compliance The Borrower
will:
|
|
|
(a)
|
procure
that the Vessel remains for the duration of the Facility Period subject to
a SMS;
|
|
|
(b)
|
maintain
a valid and current SMC for the Vessel throughout the Facility Period and
provide a copy to the Lender;
|
|
|
(c)
|
procure
that the ISM Company maintains a valid and current DOC throughout the
Facility Period and provide a copy to the Lender;
and
|
|
|
(d)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the SMC of the Vessel or of
the DOC of the ISM Company.
|
30
|
|
12.3.7
|
ISPS Code
compliance The Borrower
will:
|
|
|
(a)
|
for
the duration of the Facility Period comply with the ISPS Code in relation
to the Vessel and procure that the Vessel and the ISPS Company comply with
the ISPS Code;
|
|
|
(b)
|
maintain
a valid and current ISSC for the Vessel throughout the Facility Period and
provide a copy to the Lender; and
|
|
|
(c)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
ISSC.
|
|
|
12.3.8
|
Annex VI
compliance The Borrower
will:
|
|
|
(a)
|
for
the duration of the Facility Period comply with Annex VI in relation to
the Vessel and procure that the Vessel’s master and crew are familiar
with, and that the Vessel complies with, Annex
VI;
|
|
|
(b)
|
maintain
a valid and current IAPPC for the Vessel throughout the Facility Period
and provide a copy to the Lender;
and
|
|
|
(c)
|
immediately
notify the Lender in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the
IAPPC.
|
|
|
12.3.9
|
Physical condition
survey The Borrower will permit the Lender to
conduct, and will procure that the Bareboat Charterer and/or any other
Charterer permits the Lender to conduct, a physical condition survey of
the Vessel and to conduct a comprehensive inspection of the class and
other records of the Vessel by a surveyor appointed by the Lender (in its
discretion) at any reasonable time and from time to time during the
Facility Period, at the Borrower’s expense and without interruption of the
operation of the Vessel.
|
31
|
|
12.3.10
|
Financial
covenants The Borrower undertakes to, and shall procure
that the Guarantor, immediately informs the Lender of any financial
covenants given to any other bank or financial institution by the
Guarantor or any financial covenants which evidence, in the opinion of the
Lender, a stronger financial position in favour of such banks or other
financial institutions and shall procure that the Guarantor undertakes to
comply with any such financial
covenants.
|
|
13
|
Events
of Default
|
|
|
13.1
|
Events of
Default Each of the events or circumstances set
out in this Clause 13.1 is an Event of
Default.
|
|
|
13.1.1
|
Non-payment The
Borrower does not pay on the due date any amount payable by it under a
Finance Document at the place at and in the currency in which it is
expressed to be payable.
|
|
|
13.1.2
|
Other
obligations A Security Party or any other person
(except the Lender) does not comply with any provision of any of the
Relevant Documents to which that Security Party or person is a party
(other than as referred to in Clause 13.1.1
(Non-payment)).
|
|
|
No
Event of Default under this Clause 13.1.2
will occur if the failure to comply is capable of remedy and is remedied
within ten (10) Business Days of the Lender giving notice to the Borrower
or the Borrower becoming aware of the failure to
comply.
|
|
|
13.1.3
|
Misrepresentation Any
representation, warranty or statement made or deemed to be repeated by a
Security Party in any Finance Document or any other document delivered by
or on behalf of a Security Party under or in connection with any Finance
Document is or proves to have been incorrect or misleading in any material
respect when made or deemed to be
repeated.
|
|
|
13.1.4
|
Cross
default Any Financial Indebtedness of a Security
Party:
|
|
|
(a)
|
is
not paid when due or within any originally applicable grace period;
or
|
32
|
|
(b)
|
is
declared to be, or otherwise becomes, due and payable before its specified
maturity as a result of an event of default (however described);
or
|
|
|
(c)
|
is
capable of being declared by a creditor to be due and payable before its
specified maturity as a result of such an
event.
|
|
|
13.1.5
|
Insolvency
|
|
|
(a)
|
A
Security Party is unable or admits inability to pay its debts as they fall
due, suspends making payments on any of its debts or, by reason of actual
or anticipated financial difficulties, commences negotiations with one or
more of its creditors with a view to rescheduling any of its Financial
Indebtedness.
|
|
|
(b)
|
The
value of the assets of a Security Party is less than its liabilities
(taking into account contingent and prospective
liabilities).
|
|
|
(c)
|
A
moratorium is declared in respect of any Financial Indebtedness of a
Security Party.
|
|
|
13.1.6
|
Insolvency
proceedings Any corporate action, legal
proceedings or other procedure or step is taken
for:
|
|
|
(a)
|
the
suspension of payments, a moratorium of any Financial Indebtedness,
winding-up, dissolution, administration, bankruptcy or reorganisation (by
way of voluntary arrangement, scheme of arrangement or otherwise) of a
Security Party (other than a solvent liquidation or reorganisation of a
Security Party which is not the
Borrower);
|
|
|
(b)
|
a
composition, compromise, assignment or arrangement with any creditor of a
Security Party;
|
|
|
(c)
|
the
appointment of a liquidator (other than in respect of a solvent
liquidation of a Security Party which is not the Borrower), receiver,
administrative receiver, administrator, compulsory manager, or trustee or
other similar officer in respect of any Security Party or any of its
assets; or
|
33
|
|
(d)
|
enforcement
of any Encumbrance over any assets of a Security
Party,
|
| or any analogous procedure or step is taken in any jurisdiction. |
|
|
13.1.7
|
Creditors’
process Any expropriation, attachment,
sequestration, distress or execution affects any asset or assets of a
Security Party and is not discharged within fourteen (14)
days.
|
|
|
13.1.8
|
Change in ownership or control
of the Borrower There is any change in the
beneficial ownership or control of the Borrower from that advised to the
Lender by the Borrower at the date of this
Agreement.
|
|
|
13.1.9
|
Repudiation A
Security Party or any other person (except the Lender) repudiates any of
the Relevant Documents to which that Security Party or person is a party
or evidences an intention to do so.
|
|
|
13.1.10
|
Impossibility or
illegality Any event occurs which would, or would with
the passage of time, render performance of any of the Relevant Documents
by a Security Party or any other party to any such document impossible,
unlawful or unenforceable by the Lender or a Security
Party.
|
|
|
13.1.11
|
Conditions
subsequent Any of the conditions referred to in Clause
3.3 (Conditions
subsequent) is not satisfied
within the time reasonably required by the
Lender.
|
|
|
13.1.12
|
Revocation or modification of
authorisation 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
a Security Party or any other person (except the Lender) to comply with
any of its obligations under any of the Relevant Documents is not
obtained, is revoked, suspended, withdrawn or withheld, or is modified in
a manner which the Lender considers is, or may be, prejudicial to the
interests of the Lender, or ceases to remain in full force and
effect.
|
|
|
13.1.13
|
Curtailment of
business A Security Party ceases, or threatens to
cease, to carry on all or a substantial part of its business or, as a
result of intervention by or under the authority of any government, the
business of a Security Party is wholly or partially curtailed or
suspended, or all or a substantial part of the assets or undertaking of a
Security Party is seized, nationalised, expropriated or compulsorily
acquired.
|
34
| 13.1.14 |
Reduction of
capital A Security Party reduces its authorised or
issued or subscribed capital.
|
|
|
13.1.15
|
Loss of
Vessel The Vessel suffers a Total Loss or is otherwise
destroyed, abandoned, confiscated, forfeited or condemned as prize, or a
similar event occurs in relation to any other vessel which may from time
to time be mortgaged to the Lender as security for the payment of all or
any part of the Indebtedness, except that a Total Loss, or event similar
to a Total Loss in relation to any other vessel, shall not be an Event of
Default if:
|
|
|
(a)
|
the
Vessel or other vessel is insured in accordance with the Security
Documents; and
|
|
|
(b)
|
no
insurer has refused to meet or has disputed the claim for Total Loss and
it is not apparent to the Lender in its discretion that any such refusal
or dispute is likely to occur; and
|
|
|
(c)
|
payment
of all insurance proceeds in respect of the Total Loss is made in full to
the Lender within one hundred and twenty (120) days of the occurrence of
the casualty giving rise to the Total Loss
in question or such longer period as the Lender may in its discretion
agree.
|
|
|
13.1.16
|
Challenge to
registration The registration of the Vessel or the
Mortgage is contested or becomes void or voidable or liable to
cancellation or termination, or the validity or priority of the Mortgage
is contested.
|
|
|
13.1.17
|
War The
country of registration of the Vessel becomes involved in war (whether or
not declared) or civil war or is occupied by any other power and the
Borrower does not, within thirty (30) days of such war or civil war,
change the flag of the Vessel to a flag acceptable to the Lender in its
absolute discretion and the Lender in its discretion considers that, as a
result, the security conferred by the Security Documents is materially
prejudiced.
|
35
|
|
13.1.18
|
Master Agreement
termination The Master Agreement is for any reason
terminated, cancelled, suspended, rescinded, revoked or otherwise ceases
to remain in full force and effect, unless any such event occurs subject
to an agreement between the Lender and the
Borrower.
|
|
|
13.1.19
|
Notice of
termination The Guarantor gives notice to the
Lender to determine its obligations under the
Guarantee.
|
|
|
13.1.20
|
Material adverse
change Any event or series of events occurs which,
in the opinion of the Lender, is likely to have a materially adverse
effect on the business, assets, financial condition or credit worthiness
of a Security Party.
|
|
|
13.2
|
Acceleration If
an Event of Default is continuing the Lender may by notice to the
Borrower:
|
|
|
13.2.1
|
declare
that the Loan, together with accrued interest, and all other amounts
accrued or outstanding under the Finance Documents are immediately due and
payable, whereupon they shall become immediately due and payable;
and/or
|
|
|
13.2.2
|
declare
that the Loan is payable on demand, whereupon it shall immediately become
payable on demand by the Lender.
|
|
14
|
Assignment and Sub-Participation
|
|
|
14.1
|
Lender’s
rights With prior written notice to the Borrower,
the Lender may assign any of its rights under this Agreement or transfer
by novation any of its rights and obligations under this Agreement to any
other branch of the Lender or to any other bank or financial institution,
and may grant sub-participations in all or any part of the
Loan.
|
|
|
14.2
|
Borrower’s
co-operation The Borrower will co-operate fully
with the Lender in connection with any assignment, transfer or
sub-participation; will execute and procure the execution of such
documents as the Lender may require in that connection; and irrevocably
authorises the Lender to disclose to any proposed assignee, transferee or
sub-participant (whether before or after any assignment, transfer
or sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the
Security Parties, the Loan, the Relevant Documents and the Vessel which
the Lender may in its discretion consider necessary or
desirable.
|
36
|
|
|
|
|
14.3
|
Rights of assignee or
transferee Any assignee or transferee of the
Lender shall (unless limited by the express terms of the assignment or
novation) take the full benefit of every provision of the Finance
Documents benefiting the Lender.
|
|
|
14.4
|
No assignment or transfer by
the Borrower The Borrower may not assign any of
its rights or transfer any of its rights or obligations under the Finance
Documents.
|
|
15
|
The
Master Agreement
|
|
|
15.1
|
Applicability The
following provisions of this Clause 15 will apply if the Lender and the
Borrower have entered, or enter during the Facility Period, at the
Lender’s discretion, into one or more Transactions to hedge interest rate
risks in respect of the Loan or any part
thereof.
|
|
|
15.2
|
Additional
Termination If the Loan is for any reason not
advanced to the Borrower on or before the Availability Termination Date,
and the Lender and the Borrower have entered into any Transactions on or
before the Availability Termination Date, these Transactions shall
terminate on the Availability Termination
Date.
|
|
|
15.3
|
Adjustment of Notional
Amounts If:
|
|
|
15.3.1
|
the
amount of the Loan actually advanced by the Lender to the Borrower is less
than the Notional Amount (or the aggregate Notional Amounts) of the
Hedging Transactions entered into on or before the Drawdown Date;
or
|
|
|
15.3.2
|
the
Borrower prepays part of the Loan under any provision of this Agreement,
and the amount of the Loan remaining outstanding after that prepayment is
less than the Notional Amount (or the aggregate Notional Amounts) of the
Hedging Transactions then in
effect,
|
| the Borrower’s obligations under those Hedging Transactions shall (unless otherwise agreed by the Lender) be calculated (so far as the Lender considers it practicable to do so) by reference to a Notional Amount (or aggregate Notional Amounts) equal to the amount of the Loan actually advanced or remaining outstanding after that prepayment, as reduced on each Repayment Date by the amount of the Repayment Instalment then due, and adjusted if necessary in accordance with Clause 5.2 (Reduction of Repayment Instalments). |
37
|
|
15.4
|
Authority In
order to give effect to Clause 15.3 (Adjustments of Notional
Amounts), or in the event of voluntary or mandatory prepayment by
the Borrower of the whole of the Loan, the Borrower irrevocably authorises
the Lender to amend, restructure, unwind, cancel, net out, terminate,
liquidate, transfer or assign any of the rights or obligations under any
Hedging Transaction, and/or to enter into any other interest rate exchange
and/or hedging transaction or commitment with any other
counterparty.
|
|
|
15.5
|
Termination of
Transactions If the exercise of the Lender’s
rights under Clause 15.2 (Additional
Termination) and/or Clause 15.4 (Authority) results in
the termination of any Transaction, that Transaction shall, for the
purposes of the Master Agreement (including, without limitation, section
7.1 of the Master Agreement) be treated as a terminated transaction
resulting from an Event of Default by the
Borrower.
|
|
|
15.6
|
Indemnity The
Borrower will indemnify the Lender from time to time on demand in respect
of all liabilities, losses, costs or expenses suffered, incurred or
sustained by the Lender arising in any way in relation to the exercise by
the Lender of its rights under this Clause 15, or arising in any way from
any other termination, cancellation, unwinding or restructuring of any
Transaction.
|
|
16
|
Set-Off
|
|
|
16.1
|
Set-off The
Lender may set off any matured obligation due from the Borrower under any
Finance Document against any matured obligation owed by the Lender to the
Borrower, regardless of the place of payment, booking branch or currency
of either obligation. If the obligations are in different
currencies, the Lender may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the
set-off.
|
38
|
|
16.2
|
Master Agreement rights
The rights conferred on the Lender by this Clause 16
shall be in addition to, and without prejudice to or limitation of, the
rights of netting and set off conferred on the Lender by the Master
Agreement.
|
|
17
|
Payments
|
|
|
17.1
|
Payments Each
amount payable by the Borrower under a Finance Document shall be paid to
such account at such bank as the Lender may from time to time direct to
the Borrower in the Currency of Account and in such funds as are customary
at the time for settlement of transactions in the relevant currency in the
place of payment. Payment shall be deemed to have been received
by the Lender on the date on which the Lender receives authenticated
advice of receipt, unless that advice is received by the Lender on a day
other than a Business Day or at a time of day (whether on a Business Day
or not) when the Lender in its discretion considers that it is impossible
or impracticable for the Lender to utilise the amount received for value
that same day, in which event the payment in question shall be deemed to
have been received by the Lender on the Business Day next following the
date of receipt of advice by the
Lender.
|
|
|
17.2
|
No deductions or
withholdings Each payment (whether of principal or
interest or otherwise) to be made by the Borrower under a Finance Document
shall, subject only to Clause 17.3 (Grossing-up), be made
free and clear of and without deduction for or on account of any Taxes or
other deductions, withholdings, restrictions, conditions or counterclaims
of any nature.
|
|
|
17.3
|
Grossing-up If
at any time any law requires (or is interpreted to require) the Borrower
to make any deduction or withholding from any payment, or to change the
rate or manner in which any required deduction or withholding is made, the
Borrower will promptly notify the Lender and, simultaneously with making
that payment, will pay to the Lender whatever additional amount (after
taking into account any additional Taxes on, or deductions or withholdings
from, or restrictions or conditions on, that additional amount) is
necessary to ensure that, after
making the deduction or withholding, the Lender receives a net sum equal
to the sum which the Lender would have received had no deduction or
withholding been made.
|
39
|
|
17.4
|
Evidence of
deductions If at any time the Borrower is required
by law to make any deduction or withholding from any payment to be made by
it under a Finance Document, the Borrower will pay the amount required to
be deducted or withheld to the relevant authority within the time allowed
under the applicable law and will, no later than thirty (30) days after
making that payment, deliver to the Lender an original receipt issued by
the relevant authority, or other evidence acceptable to the Lender,
evidencing the payment to that authority of all amounts required to be
deducted or withheld.
|
|
|
17.5
|
Adjustment of due
dates If any payment or transfer of funds to be
made under a Finance Document, other than a payment of interest on the
Loan or a payment under the Master Agreement, shall be due on a day which
is not a Business Day, that payment shall be made on the next succeeding
Business Day (unless the next succeeding Business Day falls in the next
calendar month in which event the payment shall be made on the next
preceding Business Day). Any such variation of time shall be
taken into account in computing any interest in respect of that
payment.
|
|
|
17.6
|
Control
Account The Lender shall open and maintain on its
books a control account in the name of the Borrower showing the advance of
the Loan and the computation and payment of interest and all other sums
due under this Agreement and the Master Agreement. The
Borrower’s obligations to repay the Loan and to pay interest and all other
sums due under this Agreement and the Master Agreement shall
be evidenced by the entries from time to time made in the control account
opened and maintained under this Clause 17.6
and those entries will, in the absence of manifest error, be conclusive
and binding.
|
|
18
|
Notices
|
|
|
18.1
|
Communications in
writing Any communication to be made under or in
connection with this Agreement shall be made in writing and, unless
otherwise stated, may be made by fax or
letter.
|
|
|
18.2
|
Addresses The
address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of each party to this Agreement
for any communication or document to be made or delivered under or in
connection with this Agreement are:
|
|
|
18.2.1
|
in
the case of the Borrower, c/o Cardiff Marine Inc. of 00 Xxxxxxxxx Xxxxxx,
000 00 Xxxxxxxxxxx, Xxxxxx (fax no: x00 000 000 0000) marked for the
attention of Xx. X. Xxxxxxxxx; and
|
|
|
18.2.2
|
in
the case of the Lender, at the address at the head of this Agreement (fax
no: x00 00 0000 00000) marked for the attention of Xxxx
Xxxx;
|
| or any substitute address, fax number, department or officer as either party may notify to the other by not less than five (5) Business Days’ notice. |
| 18.3 |
Delivery Any
communication or document made or delivered by one party to this Agreement
to the other under or in connection this Agreement will only be
effective:
|
|
|
18.3.1
|
if
by way of fax, when received in legible form;
or
|
|
|
18.3.2
|
if
by way of letter, when it has been left at the relevant address or five
(5) Business Days after being deposited in the post postage prepaid in an
envelope addressed to it at that
address;
|
| and, if a particular department or officer is specified as part of its address details provided under Clause 18.2 (Addresses), if addressed to that department or officer. |
| Any communication or document to be made or delivered to the Lender will be effective only when actually received by the Lender. |
|
|
18.4
|
English
language Any notice given under or in connection
with this Agreement must be in English. All other documents
provided under or in connection with this Agreement must
be:
|
|
|
18.4.1
|
in
English; or
|
|
|
18.4.2
|
if
not in English, and if so required by the Lender, accompanied by a
certified English translation and, in this case, the English translation
will prevail unless the document is a constitutional, statutory or other
official document.
|
|
19
|
Partial
Invalidity
|
If,
at any time, any provision of a Finance Document is or becomes illegal, invalid
or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.
|
20
|
Remedies
and Waivers
|
No
failure to exercise, nor any delay in exercising, on the part of the Lender, any
right or remedy under a Finance Document shall operate as a waiver, nor shall
any single or partial exercise of any right or remedy prevent any further or
other exercise or the exercise of any other right or remedy. The
rights and remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law.
|
21
|
Miscellaneous
|
|
|
21.1
|
No oral
variations No variation or amendment of a Finance
Document shall be valid unless in writing and signed on behalf of the
Lender.
|
|
|
21.2
|
Further
Assurance If any provision of a Finance Document
shall be invalid or unenforceable in whole or in part by reason of any
present or future law or any decision of any court, or if the documents at
any time held by or on behalf of the Lender are considered by the Lender
for any reason insufficient to carry out the terms of this Agreement, then
from time to time the Borrower will promptly, on demand by the Lender,
execute or procure the execution of such further documents
as in the opinion of the Lender are necessary to provide adequate security
for the repayment of the
Indebtedness.
|
|
|
21.3
|
Rescission of payments
etc. Any discharge, release or reassignment by the
Lender of any of the security constituted by, or any of the obligations of
a Security Party and/or the Bareboat Charterer contained in, a Finance
Document shall be (and be deemed always to have been) void if any act
(including, without limitation, any payment) as a result of which such
discharge, release or reassignment was given or made is subsequently
wholly or partially rescinded or avoided by operation of any
law.
|
|
|
21.4
|
Certificates Any
certificate or statement signed by an authorised signatory of the Lender
purporting to show the amount of the Indebtedness (or any part of the
Indebtedness) or any other amount referred to in any Finance Document
shall, save for manifest error or on any question of law, be conclusive
evidence as against the Borrower of that
amount.
|
|
|
21.5
|
Counterparts This
Agreement may be executed in any number of counterparts each of which
shall be original but which shall together constitute the same
instrument.
|
|
|
21.6
|
Contracts (Rights of Third
Parties) Xxx 0000 A person who is not a party to
this Agreement has no right under the Contracts (Rights of Third Parties)
Xxx 0000 to enforce or to enjoy the benefit of any term of this
Agreement.
|
|
22
|
Law and Jurisdiction
|
|
|
22.1
|
Governing
law This Agreement shall in all respects be
governed by and interpreted in accordance with English
law.
|
|
|
22.2
|
Jurisdiction For
the exclusive benefit of the Lender, the parties to this Agreement
irrevocably agree that the courts of England are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Agreement and that any proceedings may be brought in those
courts.
|
|
|
22.3
|
Alternative
jurisdictions Nothing contained in this Clause 22
shall limit the right of the Lender to commence any proceedings against
the Borrower in any other court of competent jurisdiction nor shall the
commencement of any proceedings against the Borrower in one or more
jurisdictions preclude the commencement of any proceedings in any other
jurisdiction, whether concurrently or
not.
|
|
|
22.4
|
Waiver of
objections The Borrower irrevocably waives any
objection which it may now or in the future have to the laying of the
venue of any proceedings in any court referred to in this Clause 22, and any claim that those proceedings have
been brought in an inconvenient or inappropriate forum, and irrevocably
agrees that a judgment in any proceedings commenced in any such court
shall be conclusive and binding on it and may be enforced in the courts of
any other jurisdiction.
|
40
|
|
22.5
|
Service of
process Without prejudice to any other mode of
service allowed under any relevant law, the
Borrower:
|
|
22.5.1
|
irrevocably
appoints Ince & Co. of Xxxxxxxxxxxxx Xxxxx, 0 Xx. Xxxxxxxxx’s Way,
Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx, c/o Xx. X. Xxxxxxx as its agent for
service of process in relation to any proceedings before the English
courts in connection with this Agreement;
and
|
|
|
22.5.2
|
agrees
that failure by a process agent to notify the Borrower of the process will
not invalidate the proceedings
concerned.
|
41
SCHEDULE
1: Conditions Precedent and Subsequent
Part
I: Conditions precedent
|
1
|
Security
Parties
|
|
|
(a)
|
Constitutional
Documents Copies of the constitutional documents
of each Security Party and/or the relevant Bareboat Charterer and its
general partner (as applicable) together with such other evidence as the
Lender may reasonably require that each Security Party and/or the relevant
Bareboat Charterer (as applicable) is duly incorporated in its country of
incorporation and remains in existence with power to enter into, and
perform its obligations under, the Relevant Documents to which it is or is
to become a party.
|
|
|
(b)
|
Certificates of good
standing A certificate of good standing in respect
of each Security Party.
|
|
|
(c)
|
Board
resolutions A copy of a resolution of the board of
directors of each Security Party and the relevant Bareboat Charterer (if
applicable):
|
|
|
(i)
|
approving
the terms of, and the transactions contemplated by, the Relevant Documents
to which it is a party and resolving that it execute those Relevant
Documents; and
|
|
|
(ii)
|
authorising
a specified person or persons to execute those Relevant Documents (and all
documents and notices to be signed and/or despatched under those
documents) on its behalf.
|
|
|
(d)
|
Shareholder
resolutions A copy of a resolution signed by all
the holders of the issued shares in each Security Party and the relevant
Bareboat Charterer (if applicable), approving the terms of, and the
transactions contemplated by, the Relevant Documents to which that
Security Party and the relevant Bareboat Charterer (if applicable) is a
party.
|
|
|
(e)
|
Officer’s
certificates A certificate of a duly authorised
officer of each Security Party and the relevant Bareboat Charterer (if
applicable) certifying that each copy document relating to it specified in
this Part I of Schedule 1 is correct, complete and in full force and
effect as at a date no earlier than the date of this Agreement and setting
out the names of the directors, officers and shareholders of that Security
Party and the relevant Bareboat Charterer and the proportion of shares
held by each shareholder.
|
42
|
|
(f)
|
Evidence of
registration Where such registration is required
or permitted under the laws of the relevant jurisdiction, evidence that
the names of the directors, officers and shareholders of each Security
Party are duly registered in the companies registry or other registry in
the country of incorporation of that Security Party and certified register
excerpts of the relevant Bareboat Charterer and its general partner of
recent date.
|
|
|
(g)
|
Powers of
attorney The notarially attested and legalised
power of attorney of each Security Party and the relevant Bareboat
Charterer (if applicable) under which any documents are to be executed or
transactions undertaken by that Security Party and the relevant Bareboat
Charterer and its general partner (if
applicable).
|
|
2
|
|
Security and related
documents
|
|
|
(a)
|
Vessel
documents Photocopies, certified as true, accurate
and complete by a director or the secretary or the legal advisers of the
Borrower, of:
|
|
|
(i)
|
the
MOA;
|
|
|
(ii)
|
the
xxxx of sale transferring title in the Vessel to the Borrower free of all
encumbrances, maritime liens or other
debts;
|
|
|
(iii)
|
the
protocol of delivery and acceptance evidencing the unconditional physical
delivery of the Vessel by the Seller to the Borrower pursuant to the
MOA;
|
|
|
(iv)
|
any
charterparty or other contract of employment of the Vessel which will be
in force on the Drawdown Date including, without limitation, the Bareboat
Charter or any Charter (as applicable) together with any addenda
thereto;
|
|
|
(v)
|
the
Management Agreements;
|
|
|
(vi)
|
the
Vessel’s current Safety Construction, Safety Equipment, Safety Radio and
Load Line Certificates;
|
43
|
|
(vii)
|
the
Vessel’s current SMC;
|
|
|
(viii)
|
the
ISM Company’s current DOC;
|
|
|
(ix)
|
the
Vessel’s current ISSC;
|
|
|
(x)
|
the
Vessel’s current IAPPC;
|
|
|
(xi)
|
the
Vessel’s current Tonnage
Certificate;
|
|
|
in
each case together with all addenda, amendments or
supplements.
|
|
|
(b)
|
Evidence of Seller’s
title Certificate of ownership and encumbrance (or
equivalent) issued by the Registrar of Ships (or equivalent official) of
the Vessel’s current flag confirming that the Vessel is owned by the
Seller and free of registered Encumbrances and an undertaking by the
Seller to delete the Vessel from its current
flag.
|
|
|
(c)
|
Evidence of Borrower’s
title Evidence that on the Drawdown Date (i) the
Vessel will be at least provisionally registered under the flag stated in
Recital (A) in the ownership of the Borrower and (ii) the Mortgage will be
capable of being registered against the Vessel with first
priority.
|
|
|
(d)
|
Evidence of
insurance Evidence that the Vessel is insured in
the manner required by the Security Documents and that letters of
undertaking will be issued in the manner required by the Security
Documents, together with (if required by the
Lender) the written approval of the Insurances by an insurance adviser
appointed by the Lender.
|
|
|
(e)
|
Confirmation of
class A Certificate of Confirmation of Class for
hull and machinery confirming that the Vessel is classed with the highest
class applicable to vessels of her type with Lloyd’s Register or such
other classification society as may be acceptable to the Lender free of
overdue recommendations affecting
class.
|
|
|
(f)
|
Survey
report A report by a
surveyor (at the expense of the Borrower) instructed by the Lender to
inspect the Vessel confirming that the condition of the Vessel is in all
respects acceptable to the Lender.
|
44
|
|
(g)
|
Valuation A
valuation of the Vessel addressed to the Lender from a broker acceptable
to the Lender certifying a value for the Vessel, assessed in such manner
as the Lender may require, acceptable to the
Lender.
|
|
|
(h)
|
Security
Documents The Security Documents, together with
all other documents required by any of them, including, without
limitation, all notices of assignment and/or charge and evidence that
those notices will be duly acknowledged by the recipients together with an
acknowledgement in respect of the Vessel containing, inter alia, a
confirmation that there does not exist any prior notice of assignment in
respect of the Vessel and stating that the relevant Bareboat Charterer or
the Charterer (as applicable) fully subordinates its rights in respect of
the Vessel and the Borrower to the rights of the Lender under the Security
Documents.
|
|
|
(i)
|
Managers’
confirmation The written confirmation of the
relevant Managers that, throughout the Facility Period during which the
Bareboat Charter is in effect, unless otherwise agreed by the Lender, they
will remain the commercial and technical managers of the Vessel and that
they will not, without the prior written consent of the Lender,
sub-contract or delegate the commercial or technical management of the
Vessel to any third party and confirming in terms acceptable to the Lender
that, following the occurrence of an Event of Default, all claims of the
Managers against the relevant Bareboat Charterer shall be subordinated to
the claims of the Lender under the Finance
Documents.
|
|
|
(j)
|
No
disputes The written confirmation of the Borrower
that there is no dispute under any of the Relevant Documents as between
the parties to any such document.
|
|
|
(k)
|
Other Relevant
Documents Copies of each of the Relevant Documents
not otherwise comprised in the documents listed in this Part I of Schedule
1.
|
|
3
|
Legal
opinions
|
|
|
If
a Security Party and the Bareboat Charterer is incorporated in a
jurisdiction other than England and Wales or if any Finance Document is
governed by the laws of a jurisdiction other than England and Wales, a
legal opinion of the legal advisers to the Lender in each relevant
jurisdiction, substantially in the form or forms provided to the Lender
prior to signing this Agreement or confirmation satisfactory to the Lender
that such an opinion will be given.
|
45
|
4
|
Other documents and
evidence
|
|
|
(a)
|
Drawdown
Notice A duly completed Drawdown
Notice.
|
|
|
(b)
|
Process
agent Evidence that any process agent referred to
in Clause 22.5 (Service of process) and
any process agent appointed under any other Finance Document has accepted
its appointment.
|
|
|
(c)
|
Other
authorisations A copy of any other consent,
licence, approval, authorisation or other document, opinion or assurance
which the Lender considers to be necessary or desirable (if it has
notified the Borrower accordingly) in connection with the entry into and
performance of the transactions contemplated by any of the Relevant
Documents or for the validity and enforceability of any of the Relevant
Documents.
|
|
|
(d)
|
Financial
statements Copies of the Original Financial
Statements.
|
|
|
(e)
|
|
|
(f)
|
“Know your customer”
documents Such documentation and other evidence as
is reasonably requested by the Lender in order for the Lender to comply
with all necessary “know your customer” or similar identification
procedures in relation to the transactions contemplated in the Finance
Documents.
|
|
|
(g)
|
Mortgagee’s Insurances
Fees Payment to
the Lender of all fees in relation to inspections, valuations, legal fees
and premiums for Mortgagee’s Insurances (MII and
MAP).
|
46
Part
II: Conditions subsequent
|
1
|
Evidence of Borrower’s
title Certificate of ownership and encumbrance (or
equivalent) issued by the Registrar of Ships (or equivalent official) of
the flag stated in Recital (A) confirming that (a) the Vessel is
permanently registered under that flag in the ownership of the Borrower,
(b) the Mortgage has been registered with first priority against the
Vessel and (c) there are no further Encumbrances registered against the
Vessel.
|
|
2
|
Deletion by
Seller Evidence that the Vessel has been deleted
from its current flag.
|
|
3
|
Letters of
undertaking Letters of undertaking in respect of
the Insurances as required by the Security Documents together with copies
of the relevant policies or cover notes or entry certificates duly
endorsed with the interest of the
Lender.
|
|
4
|
Acknowledgements of
notices Acknowledgements of all notices of
assignment and/or charge given pursuant to the Security
Documents.
|
|
5
|
Legal
opinions Such of the legal opinions specified in
Part I of this Schedule 1 as have not already been provided to the
Lender.
|
|
6
|
Companies Act
registrations Evidence that the prescribed
particulars of the Security Documents have been delivered to the Registrar
of Companies of England and Wales within the statutory time
limit.
|
|
7
|
Managers’
confirmation The written confirmation of the
relevant Managers that, throughout the Facility Period during which any
other Charter other than the Bareboat Charter is in effect, unless
otherwise agreed by the Lender, they will remain the commercial and
technical managers of the Vessel and that they will not, without the prior
written consent of the Lender, sub-contract or delegate the commercial or
technical management of the Vessel to any third party and confirming in
terms acceptable to the Lender that, following the occurrence of an Event
of Default, all claims of the Managers against the Owner shall
be subordinated to the claims of the Lender under the Finance
Documents.
|
|
8
|
Certificate of Financial
Responsibility A photocopy, certified as true, accurate
and complete by a director or the secretary or the legal advisers of the
Borrower of the Vessel’s current Certificate of Financial Responsibility
issued pursuant to the United States Oil Pollution Act 1990 to be provided
by the Borrower by 31 October 2007.
|
|
9
|
Carrier Initiative
Agreement A photocopy, certified as true, accurate and
complete by a director or the secretary or the legal advisers of the
Borrower of the Borrower’s current Carrier Initiative Agreement with the
United States’ Customs Service to be provided by the Borrower by 31
October 2007.
|
47
|
|
SCHEDULE
2: Form of Drawdown Notice
|
|
To:
|
DEUTSCHE SCHIFFSBANK
AKTIENGESELLSCHAFT
|
| From: | IOLI OWNING COMPANY LIMITED |
[Date]
Dear
Sirs
Drawdown
Notice
We
refer to the Loan Agreement
dated 200
made between ourselves and yourselves (the “Agreement”).
Words
and phrases defined in the Agreement have the same meaning when used in this
Drawdown Notice.
Pursuant
to Clause 4 of the Agreement, we irrevocably
request that you advance the sum of
[ ]
to us on
200 , which is a Business Day, by paying the amount of the advance in
accordance with the MOA.
We
warrant that the representations and warranties contained in Clause 11.1 of the Agreement are true and correct at the date
of this Drawdown Notice and will be true and correct on
200 , that no Default has occurred and is continuing, and that no Default will
result from the advance of the sum requested in this Drawdown
Notice.
We
select the period of [ ] months as the
first Interest Period.
Yours
faithfully
...................................
For
and on behalf of
IOLI OWNING COMPANY
LIMITED
48
IN WITNESS of which the
parties to this Agreement have executed this Agreement the day and year first
before written.
|
SIGNED
by
|
)
|
|
duly
authorised for and on behalf
|
)
|
|
of
IOLI OWNING COMPANY
LIMITED
|
)
|
|
SIGNED
by
|
)
|
|
duly
authorised for and on behalf
|
)
|
|
of
DEUTSCHE
SCHIFFSBANK
|
)
|
|
AKTIENGESELLSCHAFT
|
)
|
49
SK 23113 0002 867882
