Contract
EXHIBIT 4.6
Date 14
April 2008
as
Borrower
—and
—
THE
BANKS AND FINANCIAL INSTITUTIONS
listed
in Schedule 1
as
Lenders
—and
—
PIRAEUS
BANK A.E.
as Agent
and as Security Trustee
— and
—
PIRAEUS
BANK A.E.
as Swap
Bank
relating
to a term loan facility of up
to US$170,000,000
XXXXXX
XXXXXX & XXXXXXXX
Piraeus
INDEX
Clause
Page
|
1
|
INTERPRETATION
|
1
|
|
2
|
FACILITY
|
17
|
|
3
|
POSITION
OF THE LENDERS, THE SWAP BANK AND THE MAJORITY LENDERS
|
18
|
|
4
|
DRAWDOWN
|
19
|
|
5
|
INTEREST
|
20
|
|
6
|
INTEREST
PERIODS
|
22
|
|
7
|
DEFAULT
INTEREST
|
23
|
|
8
|
REPAYMENT
AND PREPAYMENT
|
24
|
|
9
|
CONDITIONS
PRECEDENT
|
26
|
|
10
|
REPRESENTATIONS
AND WARRANTIES
|
27
|
|
11
|
GENERAL
UNDERTAKINGS
|
29
|
|
12
|
CORPORATE
UNDERTAKINGS
|
33
|
|
13
|
INSURANCE
|
34
|
|
14
|
SHIP
COVENANTS
|
39
|
|
15
|
SECURITY
COVER
|
43
|
|
16
|
PAYMENTS
AND CALCULATIONS
|
44
|
|
17
|
APPLICATION
OF RECEIPTS
|
46
|
|
18
|
APPLICATION
OF EARNINGS
|
47
|
|
19
|
EVENTS
OF DEFAULT
|
48
|
|
20
|
FEES
AND EXPENSES
|
52
|
|
21
|
INDEMNITIES
|
53
|
|
22
|
NO
SET-OFF OR TAX DEDUCTION
|
56
|
|
23
|
ILLEGALITY,
ETC
|
56
|
|
24
|
INCREASED
COSTS
|
57
|
|
25
|
SET-OFF
|
58
|
|
26
|
TRANSFERS
AND CHANGES IN LENDING OFFICES
|
59
|
|
27
|
VARIATIONS
AND WAIVERS
|
62
|
|
28
|
NOTICES
|
63
|
|
29
|
SUPPLEMENTAL
|
64
|
|
30
|
LAW
AND JURISDICTION
|
65
|
|
SCHEDULE
1 LENDERS AND COMMITMENTS
|
66
|
|
|
SCHEDULE
2 DETAILS OF INITIAL CHARTERPARTIES
|
67
|
|
|
SCHEDULE
3 DRAWDOWN NOTICE
|
68
|
|
|
SCHEDULE
4 CONDITION PRECEDENT DOCUMENTS
|
69
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|
|
SCHEDULE
5 TRANSFER CERTIFICATE
|
72
|
|
|
SCHEDULE
6 FORM OF COMPLIANCE CERTIFICATE
|
76
|
|
THIS LOAN AGREEMENT is made on
14 April 2008 BETWEEN:
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|
(1)
|
STAR BULK CARRIERS CORP.
a corporation incorporated in the Xxxxxxxx Islands whose registered
office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Xxxxxxxx Xxxxxxx XX 00000 as Borrower;
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(2)
|
THE BANKS AND FINANCIAL
INSTITUTIONS listed in Schedule 1, as Lenders;
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|
|
(3)
|
PIRAEUS BANK A.E. acting
through its office at 00-00 Xxxx Xxxxxxx, Xxxxxxx, Xxxxxx, as Agent;
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(4)
|
PIRAEUS BANK A.E. acting
through its office at 00-00 Xxxx Xxxxxxx, Xxxxxxx, Xxxxxx, as Security Trustee;
and
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|
|
(5)
|
PIRAEUS BANK A.E. acting
through its office at 00-00 Xxxx Xxxxxxx, Xxxxxxx, Xxxxxx, as Swap
Bank.
|
WHEREAS:
The
Lenders have agreed to make available to the Borrower a term loan facility in an
amount of up to $170,000,000 which shall be made available to Borrower for the
purpose of:
|
(a)
|
financing
part of the acquisition cost of m.v.
“SINFONIA”;
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|
(b)
|
providing
the Borrower with liquidity for the acquisition of the 2005-built 53,489
metric tons
deadweight geared bulk carrier m.v. “NORD WAVE” (tbr “STAR OMICRON”));
and
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(c)
|
providing
the Borrower with liquidity for its general corporate purposes. IT IS AGREED as
follows:
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1
|
INTERPRETATION
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|
1.2
|
Definitions. Subject to
Clause 1.6 in this Agreement:
|
“Accounting Information” means
the annual audited consolidated accounts to be provided by the Borrower to the
Agent in accordance with Clause 11.6(a) of this Agreement or the semi-annual
unaudited accounts to be provided by the Borrower to the Agent in accordance
with Clause 11.6(b) of this Agreement;
“Affected Lender” has the
meaning given in Clause 5.5;
“Agency and Trust Deed” means
the agency and trust deed executed or to be executed between the Borrower, the
Lenders, the Agent, the Swap Bank and the Security Trustee in such form as the
Lenders may approve or require;
“Agent” means Piraeus Bank
A.E. and any of its successors including, without limitation, any successor
appointed under clause 5 of the Agency and Trust Deed;
1
“ALPHA” means the 1992-built
Capesize bulk carrier of 175,075 metric deadweight tons currently registered in
the ownership of Star A under the Xxxxxxxx Islands flag with the name “STAR
ALPHA”;
“Approved Flag” means the
Xxxxxxxx Islands flag or such other flag as the Agent may, acting upon the
instructions of the Majority Lenders, approve as the flag on which a Ship shall
be registered;
“Approved Flag State” means
the Republic of Xxxxxxxx Islands, or any other country in which the Agent, may,
acting upon the instructions of the Majority Lenders, approve that a Ship be
registered;
“Approved Manager” means, in
relation to the commercial management of each Ship, Star Bulk Management Inc., a
corporation incorporated in the Republic of Xxxxxxxx Islands having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Xxxxxxxx Xxxxxxx XX 00000 or any other company which the Agent may,
with the authorisation of the Majority Lenders, approve from time to time as the
commercial manager of a Ship;
“Availability Period” means,
the period commencing on the date of this Agreement and ending on:
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(a)
|
in
the case of Tranche A and Tranche B, 30 May
2008;
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|
|
(b)
|
in
the case of Tranche C, 30 August
2008;
|
|
|
(c)
|
(or,
in each case, such later date as the Agent may, with the authorisation of
all the Lenders, agree with the Borrower);
or
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|
|
(d)
|
if
earlier, the date on which the Total Commitments are fully borrowed,
cancelled or
terminated;
|
“BETA” means the 1993-built
Capesize bulk carrier of 174,691 metric deadweight tons registered in the
ownership of Star B under the Xxxxxxxx Islands flag with the name “STAR
BETA”;
“Borrower” means Star Bulk
Carriers Corp., a corporation incorporated in the Xxxxxxxx Islands and having
its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Xxxxxxxx Xxxxxxx XX 00000;
“Business Day” means a day on
which banks are open in London, Hamburg, Athens and Piraeus and, in respect of a
day on which a payment is required to be made under a Finance Document, also in
New York City;
“Charterparty” means, in
relation to each Ship, the Initial Charterparty or the Future Charterparty in
respect of that Ship;
“Charterparty Assignment”
means, in relation to each Ship, an assignment of the rights of the Owner
of that Ship under each Initial Charterparty or, as the case may be, any Future
Charterparty executed or, as the context may require, to be executed by the
relevant Owner in favour of the Security Trustee, in each case, in such form as
the Lenders may approve or require and, in the plural, means all of them;
2
“Collateral Ships” means,
together, “ALPHA”, and “BETA” and, in the singular, means either of
them;
“Confirmation” and “Early Termination Date” in
relation to any continuing Transaction have the meaning given in the Master
Agreement;
“Commitment” means, in
relation to a Lender, the amount set opposite its name in the third
column of Schedule 1, or, as the case may require, the amount specified in the
relevant
Transfer Certificate, as that amount may be reduced, cancelled or terminated in
accordance with this Agreement (and “Total Commitments” means,
subject to clause 2.4, the aggregate of the Commitments of all the
Lenders);
“Compliance Certificate” means
a certificate in the form set out in Schedule 6 (or in any other form which the
Agent, acting with the authorisation of all the Lenders, approves or
requires);
“Compliance Date” means 31
March, 30 June, 30 September and 31 December in each calendar year (or such
other dates as of which the Borrower prepares its consolidated financial
statements which it is required to deliver to the Lender pursuant to Clause
11.6);
“Contract Price” means
$83,740,000 being the purchase price for “SINFONIA” payable by Star L to the
Seller pursuant to the MOA;
“Contractual Currency” has the meaning given in Clause
21.5;
“Contribution” means, in
relation to a Lender, the part of the Loan which is owing to that
Lender;
“Creditor Party” means the
Agent, the Security Trustee, the Swap Bank or any Lender, whether as at the date
of this Agreement or at any later time;
“Dollars” and “$” means the
lawful currency for the time being of the United States of America;
“Drawdown Date” means, in
relation to a Tranche, the date requested by the Borrower for that Tranche to be
advanced, or (as the context requires) the date on which that Tranche is
actually advanced;
“Drawdown Notice” means a
notice in the form set out in Schedule 3 (or in any other form which the Agent
approves or reasonably requires);
“Earnings” means, in relation
to each Ship, all moneys whatsoever which are now, or later become, payable
(actually or contingently) to the Owner thereof or the Security Trustee and
which arise out of the use or operation of that Ship, including (but not limited
to):
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(a)
|
all
freight, hire and passage moneys, compensation payable to the relevant
Owner or the Security Trustee in the event of requisition of that Ship for
hire, remuneration for salvage and towage services, demurrage and
detention moneys and damages for breach (or payments for variation or
termination) of any charterparty (including, but not limited to, the
Charterparties) or other contract for the employment of the
Ship;
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(b)
|
all
moneys which are at any time payable under Insurances in respect of loss
of earnings; and
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3
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(c)
|
if
and whenever that Ship is employed on terms whereby any moneys falling
within paragraphs (a) or (b) above are pooled or shared with any other
person, that proportion of the net receipts of the relevant pooling or
sharing arrangement which is attributable to that
Ship;
|
“Earnings Account” means, in
relation to each Ship, an account in the name of the Owner of that Ship, with
the Agent designated “[name of Ship] - Earnings Account”, or any other account
(with that or another office of the Agent) which is designated by the Agent as
the Earnings Account for that Ship for the purposes of this Agreement and, in
the plural means all of
them;
“Earnings Account Pledge” means, in relation to
each Earnings Account, a deed of pledge creating security in respect of that
Earnings Account in such form as the Lenders may approve or require and in the
plural means all of them;
“EBITDA” means, in relation to
a Compliance Date or for any accounting period, the consolidated net income of
the Group for that accounting period:
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(a)
|
plus,
to the extent deducted in computing consolidated net income of the Group
for that accounting period, the sum, without duplication,
of:
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(i)
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all
federal, state, local and foreign taxes and tax
distributions;
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(ii)
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Net
Interest Expenses; and
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(iii)
|
depreciation,
depletion, amortisation of intangibles and other non-cash charges or
non-cash losses (including non-cash transaction expenses and the
amortisation of debt discounts) and any extraordinary losses not incurred
in the ordinary course of business;
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(b)
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minus,
to the extent added in computing consolidated net income of the Group for
that accounting period, any non-cash income or non-cash gains and any
extraordinary gains not incurred in the ordinary course of
business;
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all
determined on a consolidated basis in accordance with generally accepted
accounting principles and as shown in the Accounting Information;
“Environmental Claim”
means:
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(a)
|
any
claim by any governmental, judicial or regulatory authority which arises
out of an Environmental Incident or an alleged Environmental Incident or
which relates to any Environmental Law;
or
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(b)
|
any
claim by any other person which relates to an Environmental Incident or to
an alleged Environmental Incident,
|
and “claim” means a claim for
damages, compensation, fines, penalties or any other payment of any kind whether
or not similar to the foregoing; an order or direction to take, or not to take,
certain action or to desist from or suspend certain action; and any form of
enforcement or regulatory action, including the arrest or attachment of any
asset;
“Environmental Incident”
means, in relation to each Ship:
4
(a) any
release of Environmentally Sensitive Material from that Ship; or
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(b)
|
any
incident in which Environmentally Sensitive Material is released from a
vessel other than that Ship and which involves a collision between that
Ship and such other vessel or some other incident of navigation or
operation, in either case, in connection with which that Ship is actually
or potentially liable to be arrested, attached, detained or injuncted
and/or that Ship or the Owner thereof and/or any operator or manager is at
fault or allegedly at fault or otherwise liable to any legal or
administrative action; or
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(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from that Ship and in connection with which that Ship is
actually or potentially liable to be arrested and/or where the Owner
thereof and/or any operator or manager of that Ship is at fault or
allegedly at fault or otherwise liable to any legal or administrative
action;
|
“Environmental Law” means any
law relating to pollution or protection of the environment, to the carriage of
Environmentally Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;
“Environmentally Sensitive Material”
means oil, oil products and any other substance (including any chemical,
gas or other hazardous or noxious substance) which is (or is capable of being or
becoming) polluting, toxic or hazardous;
“Event of Default” means any
of the events or circumstances described in Clause 18.1;
“Fee Letter” means a letter or
letters issued or to be issued by the Borrower to the Agent in which the
Borrower agrees to pay certain fees to the Agent in connection with this
Agreement;
“Finance Documents”
means:
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(a)
|
this
Agreement;
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(b)
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the
Master Agreement;
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(c)
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the
Master Agreement Assignment;
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(d)
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the
Agency and Trust Deed;
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(e)
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the
Guarantees;
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(f)
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the
Mortgages;
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(g)
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the
General Assignments;
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(h)
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the
Earnings Account Pledges;
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(i)
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the
Charterparty Assignments;
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(j)
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the
Manager’s Undertakings; and
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(k)
|
any
other document (whether creating a Security Interest or not) which is
executed at any time by the Borrower, any Owner or any other person as
security for, or to establish any form
of subordination or priorities arrangement in relation to, any amount
payable to the Lenders and/or the Swap Bank under this Agreement or any of
the documents referred to in this
definition;
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5
“Financial Indebtedness”
means, in relation to a person (the “debtor”), a liability of the
debtor:
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(a)
|
for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
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(b)
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under
any loan stock, bond, note or other security issued by the
debtor;
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(c)
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under
any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
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(d)
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under
a financial lease, a deferred purchase consideration arrangement or any
other agreement having the commercial effect of a borrowing or raising of
money by the debtor;
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(e)
|
under
any interest or currency swap or any other kind of derivative transaction
entered into by the debtor or, if the agreement under which any such
transaction is entered into requires netting of mutual liabilities, the
liability of the debtor for the net amount;
or
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(f)
|
under
a guarantee, indemnity or similar obligation entered into by the debtor in
respect of a liability of another person which would fall within (a) to
(e) if the references to the debtor referred to the other
person;
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“Fleet Vessels” means,
together, all of the vessels (including, but not limited to, the Ships) from
time to time owned by members of the Group and, in the singular, means any of
them;
“Future Charterparty” means,
in relation to each Ship, any time charterparty, consecutive voyage charter or
contract of affreightment in respect of such Ship (other than any Initial
Charterparty) of a duration (or capable of being or exceeding a duration) of 11
months or more and any guarantee of such charter or other contract of employment
in respect of such Ship to be entered into by the Owner of such Ship and a
charterer approved by the Agent in form and substance satisfactory to the Agent
(in each case, acting upon the instructions of the Majority
Lenders);
“GAAP” means generally
accepted accounting principles as from time to time in effect in the United
States of America;
“General Assignment” means, in
relation to each Ship, a general assignment of the Earnings, the Insurances and
any Requisition Compensation of that Ship in such form as the Lenders may
approve or require and, in plural means all of them;
“Group” means the Borrower and
its subsidiaries (whether direct or indirect and including, but not limited to,
the Owners) from time to time during the Security Period and “member of the Group” shall be
construed accordingly;
“Guarantee” means, in relation
to each Owner, the guarantee executed or to be executed by each Owner in favour
of the Security Trustee guaranteeing the obligations of the Borrower under this
Agreement
and the other Finance Documents in such form as the Lenders shall approve or
require and, in the plural, means all of them;
6
“IACS” means the International
Association of Classification Societies;
“Initial Charterparty” means,
in relation to each Ship, the time charterparty in relation to that Ship as more
particularly described in Schedule 2 to be in form and substance satisfactory to
the Agent (acting upon the instructions of the Majority Lenders) and, in the
plural, means all of them;
“Insurances” means, in
relation to each Ship:
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(a)
|
all
policies and contracts of insurance, including entries of that Ship in any
protection
and indemnity or war risks association, which are effected in respect of
the Ship, her Earnings or otherwise in relation to her;
and
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(b)
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all
rights and other assets relating to, or derived from, any of the
foregoing, including
any rights to a return of a
premium;
|
“Interest Coverage Ratio”
means, in relation to a Compliance Date or an accounting period, the
ratio of (a) EBITDA for the most recent financial period of the Group ending on
the Compliance Date to (b) the Net Interest Expenses for that financial period
(calculated on a trailing 12-months basis);
“Interest Period” means a
period determined in accordance with Clause 5;
“ISM Code” means, in relation
to its application to each Owner, its Ship and its operation:
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(a)
|
‘The
International Management Code for the Safe Operation of Ships and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’,
adopted by the Assembly of the International Maritime Organisation by
Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994
into chapter IX of the International Convention for the Safety of Life at
Sea 1974 (SOLAS 1974); and
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(b)
|
all
further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of
the International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including without
limitation, the ‘Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations’ produced by
the International Maritime Organisations pursuant to Resolution A.788(19)
adopted on 25 November 1995,
|
as the
same may be amended, supplemented or replaced from time to time;
“ISM Code Documentation”
includes, in relation to each Ship:
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(a)
|
the
document of compliance (DOC) and safety management certificate (SMC)
issued pursuant to the ISM Code in relation to that Ship within the
periods specified by the ISM Code;
and
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(b)
|
all
other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Agent may require;
and
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7
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(c)
|
any
other documents which are prepared or which are otherwise relevant to
establish and maintain the Ship’s or the compliance of its Owner with the
ISM Code which the Agent may
require;
|
“ISM SMS” means, in relation to
each Ship, the safety management system for that Ship which is required to be
developed, implemented and maintained under the ISM Code;
“ISPS Code” means the
International Ship and Port Facility Security Code constituted pursuant to
resolution A.924(22) of the International Maritime Organisation (“IMO”) now set
out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as
amended) and the mandatory ISPS Code as adopted by a Diplomatic Conference of
the IMO on Maritime Security in December 2002 and includes any amendments or
extensions to it and any
regulation issued pursuant to it but shall only apply insofar as it is
applicable law in the relevant Ship’s flag state and any jurisdiction on which
such Ship is operated;
“ISPS Code Documentation”
includes:
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(a)
|
the
International Ship
Security Certificate issued pursuant to the ISPS Code in relation
to each Ship within the
period specified in the ISPS Code;
and
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(b)
|
all
other documents and data which are relevant to the ISPS Code and its implementation
and verification which the Agent may
require;
|
“ISSC” means a valid and
current International Ship Security Certificate issued under the ISPS
Code;
“Lender” means, subject to
Clause 26.6:
|
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(a)
|
a
bank or financial institution listed in Schedule 1 and acting through its
branch indicated in Schedule 1 (or through another branch notified to
the Borrower under Clause 26.14) unless it has delivered a Transfer
Certificate or Certificates covering the entire amounts of its Commitment
and its Contribution; and
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(b)
|
the
holder for the time being of a Transfer
Certificate;
|
“Leverage Ratio” means, at any
relevant time, the ratio of:
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(a)
|
the
Total Liabilities (less all Liquid Funds;
and
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(b)
|
the
Market Value Adjusted Total Assets (including, without limitation, the
Ships)
|
“LIBOR” means, for an Interest
Period:
|
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(a)
|
the
rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as possible equal to, the relevant Interest
Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m.
(London time) on the second Business Day prior to the commencement of that
Interest Period (and, for the purposes of this Agreement, “REUTERS BBA
Page LIBOR 01” means the display designated as “REUTERS BBA Page LIBOR 01”
on the Reuters Money News Services or such other page as may replace
REUTERS BBA Page LIBOR 01 on that service for the purpose of displaying
rates comparable to that rate or on such other service as may be nominated
by the
British Bankers’ Association for the purpose of displaying British
Bankers’ Association Interest Settlement Rates for Dollars); or
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8
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(b)
|
if
no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
determined by the Agent to be the arithmetic mean of the rates per annum
notified to the Agent by each Lender to be the rate per annum at which
deposits in Dollars are offered to that Lender by leading banks in the
London Interbank Market at that Lender’s request of or about 11.00 a.m.
(London time) on the Quotation Date for that Interest Period for a period
equal to that Interest Period and for delivery on the first Business Day
of it;
|
“Liquid Funds” means, in
respect of the relevant period, the aggregate of cash in hand held by members of
the Group with banks or other financial institutions of at least investment
grade rating which is free of any Security Interest;
“Loan” means the principal
amount for the time being outstanding under this Agreement;
“Major Casualty” means, in
relation to each Ship, any casualty to that Ship in respect of which the claim
or the aggregate of the claims against all insurers, before adjustment for any
relevant franchise or deductible, exceeds $250,000 or the equivalent in any
other currency;
“Majority Lenders”
means:
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(a)
|
before
a Tranche has been advanced, Lenders whose Commitments total at least 66
2/3 per cent. of the Total Commitments;
and
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|
(b)
|
after
a Tranche has been advanced, Lenders whose Contributions total 66 2/3 per
cent. of the Loan;
|
“Manager’s Undertaking” means,
in relation to each Ship, a letter of undertaking executed or to be executed by
the Approved Manager in favour of the Security Trustee in such form as the
Lenders may approve or require agreeing certain matters in relation to the
management of that Ship and subordinating the rights of the Approved Manager
against the Ship and the Owner thereof to the rights of the Creditor Parties
under the Finance Documents and, in the plural, means all of them;
“Management Agreement” means,
in relation to each Ship, an agreement made or to be made between the Owner of
that Ship and the Approved Manager in respect of the commercial and/or technical
management of the Ship to be in form and substance in every respect satisfactory
to the Agent (acting upon the instructions of the Majority Lenders) and, in the
plural, means all of them;
“Margin” means 1.25 per cent
per annum;
“Market Value” means, in
relation to each Ship and each Fleet Vessel, the market value thereof calculated
in accordance with Clause 15.4;
“Market Value Adjusted Total Assets”
means, at any time, Total Assets adjusted to reflect the difference
between the book values of all Fleet Vessels and the aggregate Market Value of
all Fleet Vessels and lease transactions relating to any Fleet
Vessels
“Master Agreement” means the
master agreement (on the 1992 ISDA (MulticurrencyCrossborder) form) to be made
between the Borrower and the Swap Bank(at any time
pursuant to Clause 11.21) and includes all Transactions from time to time
entered into and Confirmations from time to time exchanged under the master
agreement;
9
“Master Agreement Assignment”
means the assignment of the Master Agreement executed or to be executed
by the Borrower in favour of the Security Trustee in such form as the Lenders
may approve or require;
“MOA” means the memorandum of
agreement dated 22 January 2008 as amended and supplemented by addendum No. 1
dated 15 February 2008, each entered into between the Seller and Star L in
respect of the sale of “SINFONIA”;
“Mortgage” means in relation
to each Ship, a first priority or, as the case may be, preferred mortgage on
such Ship under the relevant Approved Flag, each in such form as the Lenders may
approve or require and, in plural, means all of them;
“Mortgaged Ship” means a Ship
which is subject to a Mortgage at any relevant time and, in the plural, means
all of them;
“Negotiation Period” has the
meaning given in Clause 5.8;
“Net Interest Expenses” means,
as of any Compliance Date, the aggregate of all interest, commitment and other
fees, commissions, discounts and other costs, charges or expenses accruing due
from all the members of the Group during that accounting period less interest
income received, determined on a consolidated basis in accordance with generally
accepted accounting principles and as shown in the Accounting
Information;
“Notifying Lender” has the
meaning given in Clause 23.1 or 24.1 as the context requires;
“OMICRON” means the 2005-built
Supramax geared bulk carrier of 53,489 metric deadweight tons currently
registered in the ownership of Dampskibsselskaet Norden AS under the Danish
International flag with the name “NORD WAVE” and which is to be purchased by
Star Omicron LLC under the memorandum of agreement relative thereto and
registered in the ownership of Star Omicron LLC under the Xxxxxxxx Islands flag
with the name “STAR OMICRON”;
“Owner” means in relation
to:
|
|
(a)
|
“ALPHA”,
Star A;
|
|
|
(b)
|
“BETA”,
Star B; and
|
|
|
(c)
|
“SINFONIA”,
Star L;
|
and in
the plural, means all of them;
“Payment Currency” has the
meaning given in Clause 21.5;
“Permitted Security Interests”
means:
|
|
(a)
|
Security
Interests created by the Finance
Documents;
|
|
|
(b)
|
liens
for unpaid crew’s wages in accordance with usual maritime
practice;
|
10
|
|
(c)
|
liens
for salvage;
|
|
|
(d)
|
liens
arising by operation of law for not more than 2 months’ prepaid hire under
any charter in relation to a Ship not prohibited by this
Agreement;
|
|
|
(e)
|
liens
for master’s disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary
course of the operation, repair or maintenance of a Ship, provided such
liens do not secure amounts more than 30 days overdue (unless the overdue
amount is being contested by the relevant Owner in good faith by
appropriate steps) and subject, in the case of liens for repair or
maintenance, to Clause 14.12(h);
|
|
|
(f)
|
any
Security Interest created in favour of a plaintiff or defendant in any
action of the court or tribunal before whom such action is brought as
security for costs and expenses where the relevant Owner is prosecuting or
defending such action in good faith by appropriate steps;
and
|
|
|
(g)
|
Security
Interests arising by operation of law in respect of taxes which are not
overdue for payment other than taxes being contested in good faith by
appropriate steps and in respect of which appropriate reserves have been
made;
|
“Pertinent Jurisdiction”, in
relation to a company, means:
|
|
(a)
|
England
and Wales;
|
|
|
(b)
|
the
country under the laws of which the company is incorporated or
formed;
|
|
|
(c)
|
a
country in which the company’s central management and control is or has
recently been exercised;
|
|
|
(d)
|
a
country in which the overall net income of the company is subject to
corporation tax, income tax or any similar
tax;
|
|
|
(e)
|
a
country in which assets of the company (other than securities issued by,
or loans to, related companies) having a substantial value are situated,
in which the company maintains a permanent place of business, or in which
a Security Interest created by the company must or should be registered in
order to ensure its validity or priority;
and
|
|
|
(f)
|
a
country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would
have such jurisdiction if their assistance were requested by the courts of
a country referred to in paragraphs (b) or (c)
above;
|
“Potential Event of Default”
means an event or circumstance which, with the giving of any notice, the
lapse of time, a determination of the Majority Lenders and/or the satisfaction
of any other condition, would constitute an Event of Default;
“Quotation Date” means, in
relation to any Interest Period (or any other period) for which an interest rate
is to be determined under any provision of a Finance Document) the day on which
quotations would ordinarily be given by leading banks in the London Interbank
Market for deposits
in currency in relation to which such rate is to be determined for delivery on
the first day of that Interest Period or other period;
11
“Relevant Person” has the
meaning given in Clause 19.9;
“Repayment Date” means a date
on which a repayment is required to be made under Clause 8;
“Requisition Compensation”
includes all compensation or other moneys payable by reason of any act or
event such as is referred to in paragraph (b) of the definition of “Total
Loss”;
“Secured Liabilities” means
all liabilities which the Borrower, the Security Parties or any of them have, at
the date of this Agreement or at any later time or times, under or by virtue of
the Finance Documents or any judgment relating to the Finance Documents; and for
this purpose, there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected by, or in connection
with, any bankruptcy, liquidation, arrangement or other procedure under the
insolvency laws of any country;
“Security Cover Percentage”
means, at any relevant time, the aggregate of the amounts referred in
paragraphs (a) and (b) of Clause 15.1 expressed as a percentage of the aggregate
of the Loan and the Swap Exposure (if any exists at the relevant
time);
“Security Interest”
means:
|
|
(a)
|
a
mortgage, charge (whether fixed or floating) or pledge, any maritime or
other lien or any other security interest of any
kind;
|
|
|
(b)
|
the
rights of the plaintiff under an action in rem in which the
vessel concerned has been arrested or a writ has been issued or similar
step taken; and
|
|
|
(c)
|
any
arrangement entered into by a person (A) the effect of which is to place
another person (B) in a position which is similar, in economic terms, to
the position in which B would have been had he held a security interest
over an asset of A; but (c) does not apply to a right of set off or
combination of accounts conferred by the standard terms of business of a
bank or financial institution;
|
“Security Party” means each
Owner, the Approved Manager and any other person (except a Creditor Party or a
party which is not a member of the Group or is not controlled
(either directly or indirectly) by the Borrower) who, as a surety or mortgagor,
as a party to any subordination or priorities arrangement, or in any similar
capacity, executes a document falling within the final paragraph of the
definition of “Finance Documents”;
“Security Period” means the
period commencing on the date of this Agreement and ending on the date on which
the Agent notifies the Borrower, the Security Parties and the Lenders
that:
|
|
(a)
|
all
amounts which have become due for payment by the Borrower or any Security
Party under the Finance Documents have been
paid;
|
|
|
(b)
|
no
amount is owing or has accrued (without yet having become due for payment)
under any Finance Document;
|
12
|
|
(c)
|
neither
the Borrower nor any Security Party has any future or contingent liability
under Clause 20, 21 or 22 below or any other provision of this Agreement
or another Finance Document; and
|
|
|
(d)
|
the
Agent, the Security Trustee and the Majority Lenders do not consider that
there is a significant risk that any payment or transaction under a
Finance Document would be set aside, or would have to be reversed or
adjusted, in any present or possible future bankruptcy of the Borrower or
a Security Party or in any present or possible future proceeding relating
to a Finance Document or any asset covered (or previously covered) by a
Security Interest created by a Finance
Document;
|
“Security Trustee” means
Piraeus Bank A.E. and any of its successors including, without limitation, any
successor appointed under clause 5 of the Agency and Trust Deed;
“Seller” means Sun God
Navigation S.A., a company incorporated in Panama;
“Ships” means, together, the
Collateral Ships and “SINFONIA” and, in the singular, means any of
them;
“SINFONIA” means the
1991-built Capesize bulk carrier of 184,400 deadweight tons currently registered
in the ownership of the Seller under the Panamanian flag with the name
“SINFONIA” and which is to be acquired by Star L pursuant to the MOA and
registered in the name of Star L under an Approved Flag with the same
name;
“Star A” means Star Alpha LLC,
a corporation incorporated in the Republic of the Xxxxxxxx Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Xxxxxxxx Xxxxxxx XX 00000;
“Star B” means Star Beta LLC,
a limited liability company formed in the Republic of the Xxxxxxxx Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Xxxxxxxx Xxxxxxx XX 00000;
“Star L” means Lamda LLC,
a limited liability company formed in the Republic of the Xxxxxxxx Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, The Xxxxxxxx Xxxxxxx XX 00000;
“Swap Bank” means Piraeus Bank
A.E. acting through its office at 00-00 Xxxx Xxxxxxx, 000 00 Xxxxxxx,
Xxxxxx;
“Swap Exposure” means, as at
any relevant date, the amount certified by the Swap Bank to be the aggregate net
amount in Dollars which would be payable by the Borrower to the Agent under (and
calculated in accordance with) section 6(e) (Payments on Early Termination) of
the Master Agreement if an Early Termination Date had occurred on the relevant
date in relation to all continuing Transactions entered into between the
Borrower and the Swap Bank;
“Total Assets” means, as of
any Compliance Date, the aggregate value of all assets of the Group included in
the most recent Accounting Information as “current assets” and the value of all
investments (valued in accordance with GAAP) and all other tangible and
intangible assets of the Group properly included in the most recent Accounting
Information as “fixed assets” in accordance with GAAP;
13
“Total Liabilities” means, as
of any Compliance Date, the total liabilities of the Group as at that Compliance
Date as shown in the most recent Accounting Information delivered by the
Borrower pursuant to Clause 11.6;
“Total Loss” means in relation
to each Ship:
|
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of that
Ship;
|
|
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of that Ship,
whether for full consideration, a consideration less than her proper
value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or
persons claiming to be or to represent a government or official authority,
excluding a requisition for hire for a fixed period not exceeding one year
without any right to an extension;
|
|
|
(c)
|
any
condemnation of that Ship by any tribunal or by any person or person
claiming to be a tribunal;
|
|
|
(d)
|
any
arrest, capture, seizure or detention of that Ship (including any
hijacking or theft) unless she is within 30 days redelivered to the full
control the relevant Owner;
|
“Total Loss Date”
means:
|
|
(a)
|
in
the case of an actual loss of a Ship, the date on which it occurred or, if
that is unknown, the date when that Ship was last heard
of;
|
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total loss of
a Ship, the earliest of
|
|
|
(i)
|
the
date on which a notice of abandonment is given to the insurers;
and
|
|
|
(ii)
|
the
date of any compromise, arrangement or agreement made by or on behalf of
the relevant Owner, with that Ship’s insurers in which the insurers agree
to treat that Ship as a total loss;
and
|
|
|
(c)
|
in
the case of any other type of total loss, on the date (or the most likely
date) on which it appears to the Agent that the event constituting the
total loss occurred;
|
“Tranche” means each of
Tranche A, Tranche B and Tranche C and, in the plural, means all of
them;
“Tranche A” means an amount of
up to $65,000,000 to be made available in accordance with the applicable
provisions of this Agreement and which is to be applied in part- financing the
Contract Price of “SINFONIA”;
“Tranche B” means an amount of
up to $55,000,000 to be made available in accordance with the applicable
provisions of this Agreement and which is to be applied in providing the
Borrower with liquidity for the acquisition of “OMICRON”;
14
“Tranche C” means an amount of
up to $50,000,000 to be made available in accordance with the applicable
provisions of this Agreement and which is to be applied in providing the
Borrower with liquidity for its general corporate purposes;
“Transaction” has the meaning
given in the Master Agreement;
“Transfer Certificate” has the
meaning given in Clause 26.2; and
“Trust Property” has the
meaning given in clause 3.1 of the Agency and Trust Deed.
|
1.3
|
Construction of certain
terms. In this Agreement:
|
“approved” means, for the
purposes of Clause 13, approved in writing by the Agent;
“asset” includes every kind of
property, asset, interest or right, including any present, future or contingent
right to any revenues or other payment;
“company” includes any
partnership, joint venture and unincorporated association;
“consent” includes an
authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;
“contingent liability” means a
liability which is not certain to arise and/or the amount of which remains
unascertained;
“document” includes a deed;
also a letter, fax or telex;
“excess risks” means the
proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of any Ship in
consequence of her insured value being less than the value at which that Ship is
assessed for the purpose of such claims;
“expense” means any kind of
cost, charge or expense (including all legal costs, charges and expenses) and
any applicable value added or other tax;
“law” includes any form of
delegated legislation, any order or decree, any treaty or international
convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its Security
Council;
“legal or administrative action”
means any legal proceeding or arbitration and any administrative or
regulatory action or investigation;
“liability” includes every
kind of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“months” shall be construed in accordance with
Clause 1.4;
“obligatory insurances” means
all insurances effected, or
which the Borrower is obliged to effect, under Clause 13 below or any other
provision of this Agreement or another Finance Document;
“parent company” has the
meaning given in Clause 1.5;
15
“person” includes any company;
any state, political sub-division of a state and local or municipal authority;
and any international organisation;
“policy”, in relation to any
insurance, includes a slip, cover note, certificate of entry or other document
evidencing the contract of insurance or its terms;
“protection and indemnity risks”
means the usual risks covered by a protection and indemnity association
managed in London, including pollution risks and the proportion (if any) of any
sums payable to any other person or persons in case of collision which are not
recoverable under the hull and machinery policies by reason of the incorporation
therein of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or
clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute
Amended Running Down Clause (1/10/71) or any equivalent provision;
“regulation” includes any
regulation, rule, official directive, request or guideline (either having the
force of law or compliance with which is reasonable in the ordinary course of
business of the party concerned) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;
“subsidiary” has the meaning
given in Clause 1.5;
“successor” includes any
person who is entitled (by assignment, novation, merger or otherwise) to any
other person’s rights under this Agreement or any other Finance Document (or any
interest in those rights) or who, as administrator, liquidator or otherwise, is
entitled to exercise those rights; and in particular references to a successor
include a person to whom those rights (or any interest in those rights) are
transferred or pass as a result of a merger, division, reconstruction or other
reorganisation of it or any other person;
“tax” includes any present or
future tax, duty, impost, levy or charge of any kind which is imposed by any
state, any political sub-division of a state or any local or municipal authority
(including any such imposed in connection with exchange controls), and any
connected penalty, interest or fine; and
“war risks” means the risks according to Institute
War and Strike Clauses
(Hull Time) (1/10/83) or (1/11/95), or equivalent conditions, including, but not
limited to risk of mines, blocking and trapping, missing vessel, confiscation,
vandalism, sabotage and malicious mischief and all risks excluded from the
standard form of English or other marine policy.
|
1.4
|
Meaning of “month”. A period of one or more “months”
ends on the day in the relevant calendar month numerically corresponding
to the day of the calendar month on which the period started (“the numerically corresponding
day”), but:
|
|
(a)
|
on
the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there is no
later Business Day in the same calendar month, on the Business Day
preceding the
numerically corresponding day;
or
|
|
(b)
|
on
the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding
day;
|
and “month” and “monthly” shall be construed
accordingly.
16
1.5 Meaning of “subsidiary”. A
company (S) is a subsidiary of another company (P) if:
|
(a)
|
a
majority of the issued shares in S (or a majority of the issued shares in
S which carry unlimited rights to capital and income distributions) are
directly owned by P or are indirectly attributable to P;
or
|
|
(b)
|
P
has direct or indirect control over a majority of the voting rights
attached to the issued shares of S;
or
|
|
(c)
|
P
has the direct or indirect power to appoint or remove a majority of the
directors of S; or
|
|
(d)
|
P
otherwise has the direct or indirect power to ensure that the affairs of S
are conducted in accordance with the wishes of
P;
|
and any
company of which S is a subsidiary is a parent company of S.
|
1.6
|
General
Interpretation.
|
|
(a)
|
In
this Agreement:
|
|
|
(i)
|
references
to, or to a provision of, a Finance Document or any other document are
references to it as amended or supplemented, whether before the date of
this Agreement or otherwise;
|
|
|
(ii)
|
references
to, or to a provision of, any law include any amendment, extension,
reenactment or replacement, whether made before the date of this Agreement
or otherwise; and
|
|
|
(iii)
|
words
denoting the singular number shall include the plural and vice
versa.
|
|
(b)
|
Clauses
1.2 to 1.5 and paragraph (a) of this Clause 1.6 apply unless the contrary
intention appears.
|
|
(c)
|
References
in Clause 1.2 to a document being in a particular form include references
to that form with any modifications to that form which the Agent (with the
authorisation of the Majority Lenders in the case of substantial
modifications) approves or reasonably
requires.
|
|
(d)
|
The
clause headings shall not affect the interpretation of this
Agreement.
|
|
2
|
FACILITY
|
|
2.1
|
Amount of facility.
Subject to the other provisions of this Agreement, the Lenders
shall make available to the Borrower a term loan facility not exceeding
$170,000,000 in three Tranches, Tranche A, Tranche B and Tranche
C.
|
|
2.2
|
Lenders’ participations in
Loan. Subject to the other provisions of this Agreement, each
Lender shall participate in each Tranche in the proportion which, as at
the relevant Drawdown Date, its Commitment bears to the Total
Commitments.
|
|
2.3
|
Purpose of Loan. The
Borrower undertakes with each Creditor Party to use each Tranche only for
the purpose stated in the preamble to this Agreement and Clause
2.1.
|
17
|
2.4
|
Limit of initial Total
Commitments.
|
|
(a)
|
The
Borrower hereby acknowledges that until Piraeus Bank A.E. transfers
$85,000,000 of its Commitments (“Excess Commitment”) to
one or more Transferee Lenders it may only draw down Tranche A in the
maximum principal amount of $65,000,000. Until such time as Piraeus Bank
A.E. transfers the Excess Commitment the reference to Total Commitments in
this Agreement shall be construed to mean
$65,000,000.
|
|
(b)
|
As
from the date of this Agreement the Borrower shall assist the Agent to
find banks or financial institutions to whom Piraeus Bank A.E. will
transfer the Excess Commitment in order to permit the Borrower to draw
down Tranche B and Tranche C and to increase the maximum amount of the
Loan to be made available hereunder to
$170,000,000.
|
|
(c)
|
The
transfer of the Excess Commitment will (inter alia) operate to reduce
Piraeus Bank
|
| A.E.’s Contribution in Tranche A to 50 per cent of such Tranche. |
|
3
|
POSITION
OF THE LENDERS, THE SWAP BANK AND THE MAJORITY
LENDERS
|
|
3.1
|
Interests of Lenders and Swap
Bank several. The rights of the Lenders and the Swap Bank under
this Agreement and the Master Agreement are several; accordingly (a) each
Lender shall be entitled to xxx for any amount which has become due and
payable by the Borrower to it under this Agreement; and (b) the Swap Bank
shall be entitled to xxx for any amount which has become due and payable
by the Borrower to it under the Master Agreement without joining the
Agent, the Security Trustee or any other Lender or the Swap Bank as
additional parties in the
proceedings.
|
|
3.2
|
Proceedings by individual
Lender or Swap Bank. However, without the prior consent of the
Majority Lenders, neither a Lender nor a Swap Bank may bring proceedings
in respect of:
|
|
(a)
|
any
other liability or obligation of the Borrower or a Security Party under or
connected with a Finance Document or the Master Agreement;
or
|
|
(b)
|
any
misrepresentation or breach of warranty by the Borrower or a Security
Party in or connected with a Finance Document or the Master
Agreement.
|
|
3.3
|
Obligations several. The
obligations of the Lenders under this Agreement and of the Swap Bank under
the Master Agreement are several; and a failure of a Lender to perform its
obligations under this Agreement or of the Swap Bank to perform its
obligations under the Master Agreement shall not result
in:
|
|
(a)
|
the
obligations of the other Lenders being increased;
nor
|
|
(b)
|
the
Borrower, any Security Party or any other Creditor Party being discharged
(in whole or
in part) from its obligations under any Finance
Document;
|
and in no
circumstances shall a Lender have any responsibility for a failure of another
Lender or the Swap Bank to perform its obligations under this Agreement and the
Master Agreement.
|
3.4
|
Parties bound by certain
actions of Majority Lenders. Every Lender, the Swap Bank, the
Borrower and each Security Party shall be bound
by:
|
18
|
(a)
|
any
determination made, or action taken, by the Majority Lenders under any
provision of a
Finance Document;
|
|
(b)
|
any
instruction or authorisation given by the Majority Lenders to the Agent or
the Security
Trustee under or in connection with any Finance
Document;
|
|
(c)
|
any
action taken (or in good faith purportedly taken) by the Agent or the
Security Trustee in
accordance with such an instruction or
authorisation.
|
|
3.5
|
Reliance on action of Agent.
However, the Borrower and each Security
Party:
|
|
(a)
|
shall
be entitled to assume that the Majority Lenders have duly given any
instruction or
|
|
|
authorisation
which, under any provision of a Finance Document, is required in relation
to any action which the Agent has taken or is about to take;
and
|
|
(b)
|
shall
not be entitled to require any evidence that such an instruction or
authorisation has been
given.
|
|
3.6
|
Construction. In Clauses
3.4 and 3.5 references to action taken include (without limitation) the
granting of any waiver or consent, an approval of any document and an
agreement to any matter.
|
|
4
|
DRAWDOWN
|
|
4.1
|
Request for Tranche. Subject
to the following conditions, the Borrower may request a Tranche to
be made by ensuring that the Agent receives a completed Drawdown Notice
not later than 11.00 a.m. (Piraeus time) 3 Business Days prior to the
intended Drawdown Date.
|
|
4.2
|
Availability. The
conditions referred to in Clause 4.1 are
that:
|
|
(a)
|
a
Drawdown Date has to be a Business Day during the Availability
Period;
|
|
(b)
|
the
amount of each Tranche shall not
exceed:
|
|
|
(i)
|
in
the case of Tranche A, an amount equal to the lesser of (i) $65,000,000
and (ii) 77.63 per cent. of the Contract Price of “SINFONIA” which shall
be made available in a single advance to the Borrower for the purpose of
financing part of the Contract Price of that Ship payable by Star L to the
Seller pursuant to the MOA;
|
|
|
(ii)
|
in
the case of Tranche B, an amount of $55,000,000 which shall be made
available in a single advance to the Borrower for the purpose of providing
the Borrower with liquidity for the acquisition of “OMICRON”;
and
|
|
|
(iii)
|
in
the case of Tranche C, an amount of $50,000,000 which shall be made
available to the Borrower for the purpose of providing the Borrower with
liquidity for its general corporate
purposes;
|
|
(c)
|
Tranche
B shall be made available to the
Borrower:
|
|
|
(i)
|
after
the Drawdown Date of Tranche A; and
|
|
|
(ii)
|
if
Piraeus Bank A.E. has transferred to one or more Transferee Lenders the
Excess Commitment;
|
19
|
(d)
|
Tranche
C shall be made available to the Borrower after the Drawdown Date of
Tranche B; and
|
|
(e)
|
the
aggregate of the Tranches shall not exceed the Total
Commitments.
|
|
4.3
|
Notification to Lenders of
receipt of a Drawdown Notice. The Agent shall promptly notify the
Lenders that it has received a Drawdown Notice in respect of a Tranche and
shall inform each Lender of:
|
|
(a)
|
the
amount of the Tranche and the Drawdown
Date;
|
|
(b)
|
the
amount of that Lender’s participation in the Tranche;
and
|
|
(c)
|
the
duration of the first Interest Period applicable to that
Tranche.
|
|
4.4
|
Drawdown Notice irrevocable.
A Drawdown Notice must be signed by an authorized signatory or a
director of the Borrower; and once served, a
Drawdown Notice cannot be revoked without the prior consent of the Agent,
acting on the authority of the Majority
Lenders.
|
|
4.5
|
Lenders to make available
Contributions. Subject to the provisions of this Agreement, each
Lender shall, on and with value on each Drawdown Date, make available to
the Agent for the account of the Borrower the amount due from that Lender
on that Drawdown Date under Clause
2.1.
|
|
4.6
|
Disbursement of Tranche.
Subject to the provisions of this Agreement, the Agent shall on
each Drawdown Date pay to the Borrower the amounts which the Agent
receives from the Lenders under Clause 4.5; and that payment to the
Borrower shall be made:
|
|
(a)
|
to
the account which the Borrower specifies in the relevant Drawdown Notice;
and
|
|
(b)
|
in the like funds as
the Agent received the payments from the
Lenders.
|
|
4.7
|
Disbursement of Tranche to
third party. The payment by the Agent under Clause 4.6 to a third
party specified in the relevant Drawdown Notice shall constitute the
making of the Tranche, or any part thereof, and the Borrower shall
thereupon become indebted, as principal and direct obligor, to each Lender
in an amount equal to that Lender’s
Contribution.
|
|
5
|
INTEREST
|
|
5.1
|
Payment of normal interest.
Subject to the provisions of this Agreement, interest on the Loan
and each part thereof in respect of each Interest Period shall be paid by
the Borrower on the last day of that Interest
Period.
|
|
5.2
|
Normal rate of interest.
Subject to the provisions of this Agreement, the rate of interest
on the Loan and each part thereof in respect of an Interest Period shall
be the aggregate of (i) the applicable Margin and (ii)
LIBOR.
|
|
5.3
|
Payment of accrued interest.
In the case of an Interest Period longer than 3 months, accrued
interest shall be paid every 3 months during that Interest Period and on
the last day of that Interest
Period.
|
20
|
5.4
|
Notification of Interest
Periods and rates of normal interest. The Agent shall notify the
Borrower and each Lender of
|
|
(a)
|
each
rate of interest; and
|
|
(b)
|
the
duration of each Interest Period;
|
in each
case as soon as reasonably practicable after each is determined.
|
5.5
|
Market disruption. The
following provisions of this Clause 5 apply
if:
|
|
(a)
|
at
least one Business Day before the start of an Interest Period, Lenders
having Contributions
together in an amount equal to or more than 50 per cent. of the Loan (or,
if a Tranche has not been advanced, Commitments amounting to more than 50
per cent. of the Total Commitments) notify the Agent that LIBOR fixed by the Agent
would not accurately reflect the cost to those Lenders of funding their
respective Contributions (or any part of them) during the Interest Period
in the London Interbank Dollar Market at or about 11.00 a.m. (London time)
on the second Business Day before the commencement of the Interest Period;
or
|
|
(b)
|
at
least one Business Day before the start of an Interest Period, the Agent
is notified by a Lender (the “Affected Lender”) that
for any reason it is unable to obtain Dollars in
the London Interbank Market in order to fund its Contribution (or
any part of it) during the Interest
Period.
|
|
5.6
|
Notification of market
disruption. The Agent shall promptly notify the Borrower and each
of the Lenders stating the circumstances falling within Clause 5.5 which
have caused its notice to be given.
|
|
5.7
|
Suspension of drawdown.
If the Agent’s notice under Clause 5.6 is served before a Tranche
is advanced:
|
|
(a)
|
in
a case falling within paragraph (a) of Clause 5.5, the Lenders’
obligations to advance the relevant
Tranche;
|
|
(b)
|
in
a case falling within paragraph (b) of Clause 5.5, the Affected Lender’s
obligation to participate in the relevant
Tranche;
|
shall be
suspended while the circumstances referred to in the Agent’s notice
continue.
|
5.8
|
Negotiation of alternative rate
of interest. If the Agent’s notice under Clause 5.6 is
served after a Tranche has been advanced, the Borrower, the Agent and the
Lenders or (as the case may be) the Affected Lender shall use reasonable
endeavours to agree, within the 30 days after the date on which the Agent
serves its notice under Clause 5.6 (the “Negotiation Period”),
an alternative interest rate or (as the case may be) an alternative
basis for the Lenders or (as the case may be) the Affected Lender to fund
or continue to fund their or its Contribution to the relevant Tranche or
Tranches during the Interest Period
concerned.
|
|
5.9
|
Application of agreed
alternative rate of interest. Any alternative interest
rate or an alternative basis which is agreed during the Negotiation Period
shall take effect in accordance with the terms
agreed.
|
21
|
5.10
|
Alternative rate of interest in
absence of agreement. If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the
relevant circumstances are continuing at the end of the Negotiation
Period, then the Agent shall, with the agreement of each Lender or (as the
case may be) the Affected Lender, set an interest period and interest rate
representing the cost of funding of the Lenders or (as the case may be)
the Affected Lender in Dollars or in any available currency of their or
its Contribution to the relevant Tranche or Tranches plus the applicable
Margin; and the procedure provided for by this Clause 5.10 shall be
repeated if the relevant circumstances are continuing at the end of the
interest period so set by the
Agent.
|
|
5.11
|
Notice of
prepayment. If the Borrower does not agree with an
interest rate set by the Agent under Clause 5.10, the Borrower may give
the Agent not less than 15 Business Days’ notice of its intention to
prepay the relevant Tranche or Tranches at the end of the interest period
set by the Agent.
|
|
5.12
|
Prepayment; termination of
Commitments. A notice under Clause 5.11 shall be
irrevocable; the Agent shall promptly notify the Lenders or (as the case
may require) the Affected Lender of the Borrower’s notice of intended
prepayment; and:
|
|
(a)
|
on
the date on which the Agent serves that notice, the Total Commitments or
(as the case
|
|
|
may
require) the Commitment of the Affected Lender shall be cancelled;
and
|
|
(b)
|
on
the last Business Day of the interest period set by the Agent, the
Borrower shall prepay
(without premium or penalty) the Loan or, as the case may be, the Affected
Lender’s Contribution, together with accrued interest thereon at the
applicable rate plus the applicable
Margin.
|
|
5.13
|
Application of
prepayment. The provisions of Clause 8 shall apply in
relation to the prepayment.
|
|
6
|
INTEREST
PERIODS
|
|
6.1
|
Commencement of Interest
Periods. The first Interest Period applicable to the
Loan shall commence on the Drawdown Date relative to Tranche A and each
subsequent Interest Period shall commence on the expiry of the preceding
Interest Period.
|
|
6.2
|
Duration of normal Interest
Periods. Subject to Clause 6.3, each Interest Period in
respect of the Loan shall be:
|
|
(a)
|
1,
3, 6 or 9 months as notified by the Borrower to the Agent not later than
11.00 a.m. (Piraeus
time) 3 Business Days before the commencement of the Interest
Period;
|
|
(b)
|
in
the case of the first Interest Period applicable to the second and any
subsequent Tranche, a period ending on the last day of the then current
Interest Period for the previous Tranche or Tranches, whereupon all of the
Tranches shall be consolidated and treated as a single
Tranche;
|
|
(c)
|
3
months, if the Borrower fails to notify the Agent by the time specified in
paragraph (a) above;
or
|
|
(d)
|
such
other period as the Agent may, with the Majority Lenders’ authority, agree
with the Borrower.
|
22
|
6.3
|
Duration of Interest Periods
for repayment instalments. In respect of an amount due
to be repaid under Clause 8 on a particular Repayment Date, an Interest
Period shall end on that Repayment
Date.
|
|
6.4
|
Non-availability of matching
deposits for Interest Period selected. If, after the
Borrower has selected an Interest Period longer than 6 months, any Lender
notifies the Agent by 11.00 a.m. (Piraeus time) on the third Business Day
before the commencement of the Interest Period that it is not satisfied
that deposits in Dollars for a period equal to the Interest Period will be
available to it in the London Interbank Market when the Interest Period
commences, the Interest Period shall be of 3
months.
|
|
7
|
DEFAULT
INTEREST
|
|
7.1
|
Payment of default interest on
overdue amounts. The Borrower shall pay interest in accordance
with the following provisions of this Clause 7 on any amount payable by
the Borrower under any Finance Document which the Agent, the Security
Trustee or the other designated payee does not receive on or before the
relevant date, that is:
|
|
(a)
|
the
date on which the Finance Documents provide that such amount is due for
payment; or
|
|
(b)
|
if
a Finance Document provides that such amount is payable on demand, the
date on which
the demand is served; or
|
|
(c)
|
if
such amount has become immediately due and payable under Clause 19.4, the
date on which
it became immediately due and
payable.
|
|
7.2
|
Default rate of interest.
Interest shall accrue on an overdue amount from (and including) the
relevant date until the date of actual payment (as well after as before
judgment) at the rate per annum determined by the Agent to be 2 per cent.
above:
|
|
(a)
|
in
the case of an overdue amount of principal, the higher of the rates set
out at paragraphs (a) and (b) of Clause 7.3;
or
|
|
(b)
|
in
the case of any other overdue amount, the rate set out at paragraph (b) of
Clause 7.3.
|
|
7.3
|
Calculation of default rate of
interest. The rates referred to in Clause 7.2
are:
|
|
(a)
|
the
rate applicable to the overdue principal amount immediately prior to the
relevant date (but only for any unexpired part of any then current
Interest Period);
|
|
(b)
|
the
applicable Margin plus, in respect of successive periods of any duration
(including at call) up to 3 months which the Agent may select from time to
time:
|
|
|
(i)
|
LIBOR;
or
|
|
|
(ii)
|
if
the Agent determines that Dollar deposits for any such period are not
being made available to a Lender or (as the case may be) Lenders by
leading banks in the London Interbank Market in the ordinary course of
business, a rate from time to time determined by the Agent by reference to
the cost of funds to the Agent from such other sources as the Agent may
from time to time determine.
|
23
|
7.4
|
Notification of interest
periods and default rates. The Agent shall promptly notify the
Lenders and the Borrower of each interest rate determined by the Agent
under Clause 7.3 and of each period selected by the Agent for the purposes
of paragraph (b) of that Clause; but this shall not be taken to imply that
the Borrower is liable to pay such interest only with effect from the date
of the Agent’s notification.
|
|
7.5
|
Payment of accrued default
interest. Subject to the other provisions of this Agreement, any
interest due under this Clause shall be paid on the last day of the period
by reference to which it was determined; and the payment shall be made to
the Agent for the account of the Creditor Party to which the overdue
amount is due.
|
|
7.6
|
Compounding of default
interest. Any such interest which is not paid at the end of the
period by reference to which it was determined shall thereupon be
compounded.
|
|
7.7
|
Application to Master
Agreement. For the avoidance of doubt, this Clause 7 does not apply
to any amount payable under the Master Agreement in respect of any
continuing Transaction as to which section 2(e) (Default Interest; Other
Amounts) of the Master Agreement shall
apply.
|
|
8
|
REPAYMENT
AND PREPAYMENT
|
|
8.1
|
Repayment instalments.
The Borrower shall repay the Loan by (a) 24 consecutive
three-monthly instalments of (i) in the case of the first instalment in
the amount of $8,000,000, (ii) in the case of the second to fourth
instalments (inclusive), in the amount of $12,000,000 each, (iii) in the
case of the fifth to eighth instalments (inclusive), in the amount of
$10,000,000 each, (iv) in the case of the ninth to sixteenth instalments
(inclusive), in the amount of $5,000,000 each, (v) in the case of the
seventeenth to twentieth instalments (inclusive), in the amount of
$3,000,000, (vi) in the case of the twenty-first to twenty-fourth
instalments (inclusive), in the amount of $2,500,000 each and (b) a
balloon payment in the amount of $24,000,000 (the “Balloon Instalment”) Provided
that if the Loan is drawdown in less than the maximum available
amount thereof, each repayment instalment (including the Balloon
Instalment) shall be reduced pro rata by an amount in aggregate equal to
such undrawn amount.
|
|
8.2
|
Repayment Dates. The
first repayment instalment for the Loan shall be repaid on the date
falling 3 months after the Drawdown Date of Tranche A, each subsequent
repayment instalment shall be repaid at 3-monthly intervals thereafter and
the last instalment shall be repaid, together with the Balloon Instalment,
on the date falling on the sixth anniversary of such Drawdown
Date.
|
|
8.3
|
Final Repayment Date. On
the final Repayment Date, the Borrower shall additionally pay to the Agent
all other sums then accrued or owing under any Finance
Document.
|
|
8.4
|
Voluntary prepayment.
Subject to the following conditions, the Borrower may prepay the
whole or any part of the Loan on the last day of an Interest Period in
respect thereof.
|
|
8.5
|
Conditions for voluntary
prepayment. The conditions referred to in Clause 8.4 are
that:
|
|
(a)
|
a
partial prepayment shall be $1,000,000 or a multiple of
$1,000,000;
|
|
(b)
|
the
Agent has received from the Borrower at least 30 days’ prior written
notice specifying the amount to be prepaid and the date on which the
prepayment is to be made (such date shall be the last day of an Interest
Period); and
|
24
|
(c)
|
the
Borrower has provided evidence satisfactory to the Agent that any consent
required by the Borrower or any Security Party in connection with the
prepayment has been obtained and remains in force, and that any
requirement relevant to this Agreement which affects the Borrower or any
Security Party has been complied
with.
|
|
8.6
|
Effect of notice of prepayment.
A prepayment notice may not be withdrawn or amended without the
consent of the Agent, given with the authority of the Majority Lenders,
and the amount specified in the prepayment notice shall become due and
payable by the Borrower on the date for prepayment specified in the
prepayment notice.
|
|
8.7
|
Notification of notice of
prepayment. The Agent shall notify the Lenders promptly upon
receiving a prepayment notice, and shall provide any Lender which so
requests with a copy of any document delivered by the Borrower under
Clause 8.5(c).
|
|
8.8
|
Mandatory prepayment. If
a Ship is sold or becomes a Total Loss the Borrower shall be obliged to
prepay the Relevant Amount of the
Loan:
|
|
(a)
|
if
that Ship is sold, on or before the date on which the sale is completed by
delivery of such
Ship to the buyer; or
|
|
(b)
|
if
that Ship becomes a, Total Loss, on the earlier of the date falling 180
days after the
|
|
|
relevant
Total Loss Date and the date of receipt by the Lender of the proceeds of
insurance relating to such Total Loss, and in this Clause
8.8:
|
|
|
(i)
|
“Relevant Amount” means
the higher of (aa) the Relevant Percentage of the Loan and (bb) an amount
which after giving credit for the amount of the prepayment made pursuant
to this Clause 8.8, results in the Security Cover Percentage being equal
to the applicable Security Cover Percentage referred to in Clause 15.1;
and
|
|
|
(ii)
|
“Relevant Percentage”
means:
|
|
|
(aa)
|
in
the case of a Collateral Ship, the Market Value of the Collateral Ship
which has been sold or become a Total Loss (on the date on which the sale
of such Ship is completed by delivery to its buyer or, as the case may be,
on the Total Loss Date in respect of the Ship) expressed as a percentage
of the aggregate Market Value (on the same date) of all the Ships then
subject to a Mortgage; and
|
|
|
(bb)
|
in
the case of “SINFONIA”;
|
|
|
(1)
|
if
that Ship is sold or becomes a Total Loss in the period commencing on the
Drawdown Date of Tranche A and ending on its fourth anniversary, a
percentage which may be mutually agreed between the Borrower and the Agent
(acting on the instructions of all the Lenders), or failing such agreement
50 per cent. Provided
that if an Event of Default or Potential Event of Default has
occurred and is continuing at the relevant time the Relevant Percentage
shall be a percentage of up to 100 per cent. specified by the Agent in a
notice to the Borrower; and
|
|
|
(2)
|
if
that Ship is sold or becomes a Total Loss at any time thereafter the
Market Value of “SINFONIA” on the date on which such sale is completed or
(as the case may be) the Total Loss Date in respect thereof expressed as a
percentage of the aggregate Market Value (on the same date) of all the
Ships then subject to a Mortgage.
|
25
|
8.9
|
Amounts payable on prepayment.
A prepayment shall be made together with accrued interest (and any
other amount payable under Clause 21 below or otherwise) in respect of the
amount prepaid and, if the prepayment is not made on the last day of an
Interest Period together with any sums payable under Clause 21.1(b) but
without premium or penalty.
|
|
8.10
|
Application of partial
prepayment. Any sum received by the Agent pursuant
to:
|
|
(a)
|
Clause
8.8 shall be applied pro rata against the repayment instalments which are
at the time being outstanding (including the Balloon Instalment);
and
|
|
(b)
|
Clause
8.4 shall be applied in inverse order of maturity against the repayment
instalments (including the Balloon Instalment) which are outstanding at
the relevant time.
|
|
8.11
|
Reborrowing. No amount
prepaid in respect of the Loan may be
reborrowed.
|
|
9
|
CONDITIONS
PRECEDENT
|
|
9.1
|
Documents, fees and no default.
Each Lender’s obligation to contribute to a Tranche is subject to
the following conditions precedent:
|
|
(a)
|
that,
on or before service of the first Drawdown Notice, the Agent receives the
documents described in Part A of Schedule 4 in form and substance
satisfactory to the Agent (acting on the authority of the Majority
Lenders) and its lawyers;
|
|
(b)
|
that,
on or before the Drawdown Date relative to Tranche A, the Agent receives
the documents
described in Part B of Schedule 4 in form and substance satisfactory to
the Agent (acting on the authority of the Majority Lenders) and its
lawyers;
|
|
(c)
|
that,
on or before the Drawdown Date relative to Tranche B, the Agent has
transferred the Excess
Commitment in accordance with Clauses 2.4 and
26.3;
|
|
(d)
|
that,
on or before the Drawdown Date relative to Tranche C, the Agent receives
all accrued
commitment fee referred to in Clause
20.1;
|
|
(e)
|
that,
on or before the service of the first Drawdown Notice, the Agent receives
any accrued
fees referred to in Clause 20.1 which are payable at that time and has
received payment of the expenses referred to in Clause
20.2;
|
|
(f)
|
that
both at the date of each Drawdown Notice and at each Drawdown
Date:
|
|
|
(i)
|
no
Event of Default or Potential Event of Default has occurred and is
continuing or would result from the borrowing of the
Loan;
|
|
|
(ii)
|
the
representations and warranties in Clause 10 and those of the Borrower or
any Security Party which are set out in the other Finance Documents would
be true and not misleading if repeated on each of those dates with
reference to the circumstances then
existing;
|
26
|
|
(iii)
|
none
of the circumstances contemplated by Clause 5.5 has occurred and is
continuing; and
|
|
|
(iv)
|
there
has been no material adverse change in the financial position, state of
affairs or prospects of the Borrower, any Security Party or any member of
the Group since the date of the Agent’s commitment letter (dated 8 April
2008) to the Borrower for the Loan, in the light of which the Agent
considers that there is a significant risk that the Borrower or any other
Security Party will later become unable to discharge its liabilities under
the Finance Documents to which it is a party as they fall
due;
|
|
(g)
|
that,
if the ratio set out in Clause 15.1 were applied immediately following the
advance of a Tranche, the Borrower would not be obliged to provide
additional security or prepay part of the Loan under that Clause;
and
|
|
(h)
|
that
at each Drawdown Date the Agent has received, and found to be acceptable
to it, any further opinions, consents, agreements and documents in
connection with the Finance Documents which the Agent may, with the
authorisation of the Majority Lenders, request by notice to the Borrower
prior to the relevant Drawdown
Date.
|
|
9.2
|
Waiver of conditions precedent.
If the Majority Lenders, at their discretion, permit a Tranche to
be borrowed before certain of the conditions referred to in Clause 9.1 are
satisfied, the Borrower shall ensure that those conditions are satisfied
within 5 Business Days after the Drawdown Date relative to that Tranche
(or such longer period as the Agent may, with the authority of the
Majority Lenders, specify).
|
|
10
|
REPRESENTATIONS
AND WARRANTIES
|
|
10.1
|
General. The Borrower
represents and warrants to each Creditor Party as
follows.
|
|
10.2
|
Status. The Borrower is
duly incorporated and validly existing and in good standing under the laws
of the Xxxxxxxx Islands.
|
|
10.3
|
Share capital and ownership.
The Borrower has an authorised share capital divided into
45,988,670 common shares and 19,080,036 warrants each of $0.01 par value
and issued in registered form.
|
|
10.4
|
Corporate power. The
Borrower has the corporate capacity, and has taken all corporate action
and obtained all
consents necessary for it:
|
|
(a)
|
to
execute the Finance Documents to which it is a party;
and
|
|
(b)
|
to
borrow under this Agreement, to enter into Transactions under the Master
Agreement and
to make all the payments contemplated by, and to comply with, those
Finance Documents to which the Borrower is a
party.
|
|
10.5
|
Consents in force.
All the consents
referred to in Clause 10.4 remain in force and nothing has occurred which
makes any of them liable to
revocation.
|
|
10.6
|
Legal validity; effective
Security Interests. The Finance Documents to which the Borrower is
a party, do now or, as the case may be, will, upon execution and delivery
(and, where applicable, registration as provided for in the Finance
Documents):
|
27
|
(a)
|
constitute
the Borrower’s legal, valid and binding obligations enforceable against
the Borrower in accordance with their respective terms;
and
|
|
(b)
|
create
legal, valid and binding Security Interests enforceable in accordance with
their respective terms over all the assets to which they, by their terms,
relate, subject to any relevant insolvency laws affecting creditors’
rights generally.
|
|
10.7
|
No third party Security
Interests. Without limiting the generality of Clause 9.6, at the
time of the execution and delivery of each Finance
Document:
|
|
(a)
|
the
Borrower will have the right to create all the Security Interests which
that Finance Document purports to create;
and
|
|
(b)
|
no
third party will have any Security Interest (except for Permitted Security
Interests) or any other interest, right or claim over, in or in relation
to any asset to which any such Security Interest, by its terms,
relates.
|
|
10.8
|
No conflicts. The
execution by the Borrower of each Finance Document to which it is a party,
and the borrowing by the Borrower of the Loan, and its compliance with
each Finance Document to which it is a party will not involve or lead to a
contravention of
|
|
(a)
|
any
law or regulation; or
|
|
(b)
|
the
constitutional documents of the Borrower;
or
|
|
(c)
|
any
contractual or other obligation or restriction which is binding on the
Borrower or any of its assets including, without limitation, its
shareholding in the Owners.
|
|
10.9
|
No withholding taxes.
All payments which the Borrower is liable to make under the Finance
Documents may be made without deduction or withholding for or on account
of any tax payable under any law of any Pertinent
Jurisdiction.
|
|
10.10
|
No default. No Event
of Default or Potential Event of Default has occurred and is
continuing.
|
|
10.11
|
Information. All
information which has been provided in writing by or on behalf of the
Borrower or any Security Party to any Creditor Party in connection with
any Finance Document satisfied the requirements of Clause 11.5; all
audited and unaudited accounts which have been so provided satisfied the
requirements of Clause 11.7; and there has been no material adverse change
in the financial position or state of affairs of the Borrower, the Owners
or any other member of the Group from that disclosed in the latest of
those accounts.
|
|
10.12
|
Validity and completeness of
the MOA and Initial
Charterparties.
|
|
(a)
|
the
copies of the MOA and the Initial Charterparties delivered to the Agent
before the date
of this Agreement are true and complete
copies;
|
|
(b)
|
the
MOA and each Initial Charterparty constitutes valid, binding and
enforceable obligations
of the parties thereto respectively in accordance with its terms;
and
|
28
|
(c)
|
no
amendments or additions to the MOA or any Initial Charterparty have been
agreed nor has
any party thereto waived any of their respective rights under the MOA or
any Initial Charterparty.
|
|
10.13
|
No litigation. No legal
or administrative action involving the Borrower, the Owners or any other
member of the Group (including, without limitation, any action relating to
any alleged or actual breach of the ISM Code and the ISPS code and/or any
action relating to the MOA) has been commenced or taken or, to the
Borrower’s knowledge, is likely to be commenced or
taken.
|
|
10.14
|
No rebates etc. There is
no agreement or understanding to allow or pay any rebate, premium,
commission, discount or other benefit or payment (howsoever described) to
the Owners, the Seller or any third party in connection with the purchase
by Star L of “SINFONIA”, other than as disclosed to the Lenders in writing
on or prior to the date of this Agreement (including, without limitation,
any information disclosed in the Form F-1 registration statement and
prospectus filed with the US Securities and Exchange Commission, a copy of
which has been delivered to the
Lenders).
|
|
10.15
|
Compliance with certain
undertakings. At the date of this Agreement, the Borrower is in
compliance with Clauses 11.2, 11.4, 11,9 and
11.13.
|
|
10.16
|
Taxes paid. The Borrower
has paid all taxes applicable to, or imposed on or in relation to the
Borrower or its business.
|
|
10.17
|
ISM Code and ISPS Code
compliance. The Borrower will procure that the Owners and each
Approved Manager obtain all necessary ISM Code Documentation and ISPS Code
Documentation in connection with the Ships and comply with the ISM Code
and the ISPS Code.
|
|
10.18
|
No money laundering.
Without prejudice to the generality of Clause 2.3, the Borrower
confirms that, by entering into this Agreement and the other Finance
Documents, it is acting on its own behalf and for its own account and it
is obtaining the Loan for its own account. In relation to the borrowing by
the Borrower of the Loan, the performance and discharge of its obligations
and liabilities under this Agreement or any of the Finance Documents and
the transactions and other arrangements effected or contemplated by this
Agreement or any of the Documents to which the Borrower is a party, the
Borrower is acting for its own account and that the foregoing will not
involve or lead to a contravention of any law, official requirement or
other regulatory measure or procedure which has been implemented to combat
“money laundering” (as defined in Article 1 of the Directive (91/308/EEC)
of the Council of the European
Community).
|
|
11
|
GENERAL
UNDERTAKINGS
|
|
11.1
|
General. The Borrower
undertakes with each Creditor Party to comply with the following
provisions of this Clause 11 at all times during the Security Period
except as the Agent may, with the authority of the Majority Lenders,
otherwise permit.
|
|
11.2
|
Title; negative pledge and pari
passu ranking. The Borrower
will:
|
|
(a)
|
own
(directly or indirectly) the entire beneficial interest in each Owner free
from all Security Interests and other interests and rights of every kind,
except for those created by the Finance
Documents;
|
29
|
(b)
|
not
create or permit to arise any Security Interest (except for Permitted
Security Interests) over any other asset, present or future;
and
|
|
(c)
|
procure
that its liabilities under the Finance Documents to which it is a party do
and will rank at least pari passu with all its other present and future
unsecured liabilities, except for liabilities which are mandatorily
preferred by law.
|
|
11.3
|
No disposal of assets.
The Borrower will not transfer, lease or otherwise dispose
of:
|
|
(a)
|
all
or a substantial part of its assets, whether by one transaction or a
number of transactions, whether related or not;
or
|
|
(b)
|
any
debt payable to it or any other right (present, future or contingent
right) to receive a payment,
including any right to damages or
compensation.
|
|
11.4
|
Restriction on other
liabilities or obligations to be incurred. The Borrower will not
incur, and will procure that none of the Owners will, incur, any liability
or obligation except liabilities and
obligations:
|
|
(a)
|
under
the Finance Documents to which each is a
party;
|
|
(b)
|
under
the MOA (in the case of Star L) and the Initial
Charterparty to which each Owner is a party and incurred in the normal
course of its business of owning, operating and chartering its Ship;
and
|
|
(c)
|
(in
the case of the Borrower) incurred in the normal course of its business
(which shall include, without limitation, incurring Financial Indebtedness
for the financing of the vessels owned by its subsidiaries guaranteeing
the obligations of its subsidiaries and all other matters reasonably
incidental thereto).
|
|
11.5
|
Information provided to be
accurate. All financial and other information which is provided in
writing by or on behalf of the Borrower under or in connection with any
Finance Document will be true and not misleading and will not omit any
material fact or consideration.
|
|
11.6
|
Provision of financial
statements. The Borrower will send to the
Agent:
|
|
(a)
|
as
soon as possible, but in no event later than 180 days after the end of
each Financial Year of the Borrower (commencing with the Financial Year
ended 31 December 2007), the audited consolidated accounts of the Group
for that Financial Year;
|
|
(b)
|
as
soon as possible, but in no event later than 60 days after the end of each
quarterly period in each Financial Year of the Borrower (commencing with
the financial quarter ended on 31 March 2008), the combined unaudited
accounts of the Group for that 3-month period certified in each case as to
their correctness by the chief financial officer of the Borrower;
and
|
|
(c)
|
promptly
after each request by the Agent, such further financial information about
the Borrower, each Owner, the Group and/or the Ships including, but not
limited to, charter arrangements, Financial Indebtedness, operating
expenses and loan repayment profiles, as the Agent may
require.
|
|
11.7
|
Form of financial statements.
All accounts (audited and unaudited) delivered under Clause
11.6 will:
|
30
|
(a)
|
be
prepared in accordance with all applicable laws and
GAAP;
|
|
(b)
|
give
a true and fair view of the state of affairs of the Group at the date of
those accounts and of its profit for the period to which those accounts
relate; and
|
|
(c)
|
fully
disclose or provide for all significant
liabilities of the Group; and
|
|
(d)
|
be
accompanied by a certificate signed by a certificate signed by the chief
financial
|
|
|
officer
of the Borrower confirming that, as at the date of the certificate, no
Event of Default has occurred and is
continuing.
|
|
11.8
|
Shareholder and creditor
notices. The Borrower will send the Agent, at the same time as they
are despatched, copies of all communications which are despatched to all
of the Borrower’s shareholders or creditors or any class of
them.
|
|
11.9
|
Consents. The Borrower
will maintain in force and promptly obtain or renew, and will promptly
send certified copies to the Agent of, all consents
required:
|
|
(a)
|
for
the Borrower and each Owner to perform its obligations under any Finance
Document;
|
|
(b)
|
for
the validity or enforceability of any Finance
Document;
|
|
(c)
|
for
each Owner to continue to own and operate the Ship owned by
it,
|
and the
Borrower will comply (or procure compliance) with the terms of all such
consents.
|
11.10
|
Maintenance of Security
Interests. The Borrower
will:
|
|
(a)
|
at
its own cost, do all that it reasonably can to ensure that any Finance
Document validly creates the obligations and the Security Interests which
it purports to create; and
|
|
(b)
|
without
limiting the generality of paragraph (a) above, at its own cost, promptly
register, file, record or enrol any Finance Document with any court or
authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance
Document, give any notice or take any other step which, in the opinion of
the Majority Lenders, is or has become necessary or desirable for any
Finance Document to be valid, enforceable or admissible in evidence or to
ensure or protect the priority of any Security Interest which it
creates.
|
|
11.11
|
Notification of litigation.
The Borrower will provide the Agent with details of any legal or
administrative action involving the Borrower, the Owners, any Security
Party, each Approved Manager, any Ship or the Earnings or the Insurances
of any Ship as soon as such action is instituted or it becomes apparent to
the Borrower that it is likely to be instituted, unless it is clear that
the legal or administrative action cannot be considered material in the
context of the Finance Documents.
|
|
11.12
|
Principal place of business.
The Borrower will maintain its place of business, and keep its
corporate documents and records, at the address stated at Clause 28.2(a)
and the Borrower shall not establish, or do anything as a result of which
it would be deemed to have a place of business in the United Kingdom or
the United States of America.
|
31
|
11.13
|
Confirmation of no default.
The Borrower will, within 2 Business Days after service by the
Agent of a written request, serve on the Agent a notice which is signed by
an officer or director of the Borrower and which (based on its most recent
annual or interim financial
statements):
|
|
(a)
|
states
that no Event of Default or Potential Event of Default has occurred;
or
|
|
(b)
|
states
that no Event of Default or Potential Event of Default has occurred,
except for a specified
event or matter, of which all material details are
given.
|
The Agent
may serve requests under this Clause 11.14 from time to time but only if asked
to do so by a Lender or Lenders having Contributions exceeding 10 per cent. of
the Loan or (if no Tranche has been advanced) Commitments exceeding 10 per cent.
of the Total Commitments; and this Clause 11.14 does not affect the Borrower’s
obligations under Clause 11.15.
|
11.14
|
Notification of default.
The Borrower will notify the Agent as soon as the Borrower becomes
aware of:
|
|
(a)
|
the
occurrence of an Event of Default or a Potential Event of Default;
or
|
|
(b)
|
any
matter which indicates that an Event of Default or a Potential Event of
Default may have occurred;
|
and will
thereafter keep the Agent fully up-to-date with all developments.
|
11.15
|
Provision of further
information. The Borrower will, as soon as practicable after
receiving the request, provide the Agent with any additional financial or
other information relating:
|
|
(a)
|
to
the Borrower, any Owner, any other member of the Group, any Ship, each
Approved Manager or any other Security Party, the Insurances or the
Earnings; or
|
|
(b)
|
to
any other matter relevant to, or to any provision of, a Finance Document,
which may be requested by the Agent, the Security Trustee or any Lender at
any time.
|
|
11.16
|
Provision of copies and
translation of documents. The Borrower will supply the Agent with a
sufficient number of copies of the documents referred to above to provide
l copy for each Creditor Party; and if the Agent so requires in respect of
any of those documents, the Borrower will provide a certified English
translation prepared by a translator approved by the
Agent.
|
|
11.17
|
No amendment to the MOA or
Initial Charterparties. The Borrower shall procure that no Owner
shall agree to an amendment or change or supplement to (in the case of
Star L) the MOA or the Initial Charterparty to which it is a
party.
|
|
11.18
|
Ownership. The Borrower
shall ensure that (a) it shall remain the direct or indirect owner of all
of the limited liability company interests in each Owner and (b) there
shall be no change in the legal and beneficial ownership of the shares in
each Owner.
|
|
11.19
|
General and administrative
costs. The Borrower shall ensure that the payment of all the
general and administrative costs of the Borrower and the Owners in
connection with the ownership and operation of the Ships (including,
without limitation, the payment of the management fees pursuant to the
Management Agreements) shall be fully subordinated to the payment
obligations of the Borrower and the Owners under this Agreement and the
other Finance Documents throughout the Security
Period.
|
32
|
11.20
|
Money laundering.
Promptly upon the Agent’s request the Borrower will supply, or
procure the supply of, such documentation and other evidence as is
reasonably requested by the Agent in order for each Creditor Party to
carry out and be satisfied with the results of all necessary “know your
client” or other checks which it is required to carry out in relation to
the transactions contemplated by the Finance Documents and to the identity
of any parties to the Finance Documents (other than Creditor Parties) and
their directors and officers.
|
|
11.21
|
Master Agreement and Master
Agreement Assignment. Subject to the prior consent of all the
Lenders being obtained, the Borrower and the Swap Bank may enter into the
Master Agreement. If the Master Agreement is entered into, the Borrower
shall execute in favour of the Security Trustee the Master Agreement
Assignment and shall deliver to the Agent such other documents equivalent
to those referred to at paragraphs 3, 4 and 5 of Part A of Schedule 4
thereof.
|
|
12
|
CORPORATE
UNDERTAKINGS
|
|
12.1
|
General. The Borrower also
undertakes with each Creditor Party to comply with the following
provisions of this Clause 12 at all times during the Security Period
except as the Agent may, with the authority of the Majority Lenders,
otherwise permit.
|
|
12.2
|
Maintenance of status.
The Borrower will maintain its
separate corporate existence and remain in good standing under the laws of the
Xxxxxxxx Islands.
|
|
12.3
|
Negative undertakings.
The Borrower will not:
|
|
(a)
|
change
the nature of its business; or
|
|
(b)
|
provide
any form of credit or financial assistance
to:
|
|
|
(i)
|
a
person who is directly or indirectly interested in the Borrower’s share or
loan capital;
or
|
|
|
(ii)
|
any
company in or with which such a person is directly or indirectly
interested or connected;
|
or enter
into any transaction with or involving such a person or company on terms which
are, in any respect, less favourable to the Borrower than those which it could
obtain in a bargain made at arms’ length Provided that this shall not prevent or
restrict the Borrower from on-lending the Loan to the Owners; or
|
(c)
|
allow
any Owner to open or maintain any account with any bank or financial
institution except accounts with the Agent and the Security Trustee for
the purpose of the Finance Documents;
or
|
|
(d)
|
cause
the shares of the Borrower to cease to be listed on the Nasdaq National
Market in New York; or
|
|
(e)
|
issue,
allot or grant any person a right to any shares in its capital or
repurchase (other than through the share repurchase schemes disclosed by
the Borrower to the Lender on or prior to the date of this Agreement) or
release its issued share capital;
or
|
|
(f)
|
enter
into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
|
33
|
12.4
|
Subordination of rights of
Borrower. All rights which the Borrower at any time has (whether in
respect of the Loan or any other transaction) against any Owner or its
assets shall be fully subordinated to the rights of the Creditor Parties
under the Finance Documents; and in particular, the Borrower shall not
during the Security Period:
|
|
(a)
|
claim,
or in a bankruptcy of any Owner or prove for any amount payable to the
Borrower by an Owner, whether in respect of the Loan or any other
transaction;
|
|
(b)
|
take
or enforce any Security Interest for any such amount;
or
|
|
(c)
|
claim
to set-off any such amount against any amount payable by the Borrower to
any Owner.
|
|
12.5
|
Financial Covenants. The
Borrower undertakes that at all
times:
|
|
(a)
|
the
Interest Coverage Ratio shall not be less than
2:1;
|
|
(b)
|
the
Leverage Ratio shall not be greater than 0.6:1;
and
|
|
(c)
|
the
Borrower will maintain Liquid Funds in an aggregate amount of at least
$500,000 per Fleet Vessel.
|
|
12.6
|
Compliance Check.
Compliance with the undertakings contained in Clause 12.5 shall be
determined as at each Compliance Date by reference to, in the case of the
compliance check as at each of 31 March, 30 June and 30 September in each
financial year, the unaudited consolidated accounts of the Group for the
financial quarters ending on such date in each financial year delivered by
the Agent pursuant to this Agreement and for the compliance check as at 31
December in each financial year, the audited consolidated accounts for
that financial year of the Group delivered to the Agent pursuant to this
Agreement. At the same time as it delivers those consolidated accounts,
the Borrower shall deliver to the Agent a Compliance Certificate signed by
the chief financial officer of the
Borrower.
|
|
12.7
|
Dividends. The Borrower
may pay dividends or make any other form of distribution subject to the
satisfaction of the following
conditions:
|
|
(a)
|
the
Agent has received a certificate issued by the chief financial officer of
the Borrower on the date on which the payment of the dividend is declared
which confirms that no Event of Default has occurred which is continuing
and that no Event of Default or Potential Event of Default will result
from the payment of the dividend or the making of the distribution;
and
|
|
(b)
|
the
Agent is satisfied that on the date on which the certificate referred to
in paragraph (a) is issued, the Security Cover Percentage is equal to at
least 125 per cent.
|
|
13
|
INSURANCE
|
|
13.1
|
General. The Borrower
also undertakes with each Creditor Party to procure that each Owner will
comply with the following provisions of this Clause 13 at all times during
the Security Period (in the case of “SINFONIA” after that Ship has been
delivered to Star L pursuant to the MOA) except as the Agent may, with the
authority of the Majority Lenders, otherwise
permit.
|
|
13.2
|
Maintenance of obligatory
insurances. The Borrower shall procure that each Owner keep the
Ship owned by it insured at the expense of that Owner
against:
|
34
|
(a)
|
fire
and usual marine risks (including hull and machinery and excess
risks);
|
|
(b)
|
war
risks (including protection and indemnity war
risks);
|
|
(c)
|
in
the case of protection and indemnity war risks, in an amount equal to the
amount for which the war risks under the hull policies are effected
(including, without limitation, protection and indemnity war risks in
excess of the amount of war risks
(hull));
|
|
(d)
|
protection
and indemnity risks in excess of the limit of cover for oil pollution
liability risks included within the protection and indemnity risks;
and
|
|
(e)
|
any
other risks against which the Security Trustee considers, having regard to
practices and other circumstances prevailing at the relevant time, it
would in the opinion of the Security Trustee be reasonable for the
relevant Owner to insure and which are specified by the Security Trustee by
notice to the relevant Owner.
|
|
13.3
|
Terms of obligatory insurances.
The Borrower shall procure that each Owner shall effect such
insurances:
|
|
(a)
|
in
Dollars;
|
|
(b)
|
in
the case of fire and usual marine risks and war risks, in an amount on an
agreed value basis at least the greater of (i) an amount, which when
aggregated with the insured value of the other Ships at the relevant time
subject to a Mortgage, is equal to 125 per cent. of the Loan and (ii) the
Market Value of the Ship owned by
it;
|
|
(c)
|
in
the case of oil pollution liability risks, for an aggregate amount equal
to the highest level of cover from time to time available under basic
protection and indemnity club entry (with the international group of
protection and indemnity clubs) and the international marine insurance
market (currently $1,000,000,000);
|
|
(d)
|
in
relation to protection and indemnity risks, in respect of the full value
and tonnage of the Ship owned by
it;
|
|
(e)
|
on
approved terms; and
|
|
(f)
|
through
approved brokers and with approved insurance companies and/or underwriters
or, in the case of war risks and protection and indemnity risks, in
approved war risks and protection and indemnity risks
associations.
|
|
13.4
|
Further protections for the
Creditor Parties. In addition to the terms set out in Clause 13.3,
the Borrower shall procure that the obligatory insurances
shall:
|
|
(a)
|
name
the Security Trustee as sole loss payee with such directions for payment
as the Security
Trustee may specify;
|
|
(b)
|
provide
that all payments by or on behalf of the insurers under the obligatory
insurances to
the Security Trustee shall be made without set-off, counterclaim or
deductions or condition
whatsoever;
|
35
|
(c)
|
provide
that the insurers shall waive, to the fullest extent permitted by English
law, their
|
|
|
entitlement
(if any) (whether by statute, common law, equity, or otherwise) to be
subrogated to the rights and remedies of the Security Trustee in respect
of any rights or interests (secured or not) held by or available to the
Security Trustee in respect of the Secured Liabilities, until the Secured
Liabilities shall have been fully repaid and discharged, except that the
insurers shall not be restricted by the terms of this paragraph from
making personal claims against persons (other than the relevant Owner or
any Creditor Party) in circumstances where the insurers have fully
discharged their liabilities and obligations under the relevant obligatory
insurances;
|
|
(d)
|
provide
that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the Security
Trustee;
|
|
(e)
|
provide
that the Security Trustee may make proof of loss if the relevant Owner
fails to do so; and
|
|
(f)
|
provide
that if any obligatory insurance is cancelled, or if any substantial
change is made in the coverage which adversely affects the interest of the
Security Trustee, or if any obligatory insurance is allowed to lapse for
non-payment of premium, such cancellation, charge or lapse shall not be
effective with respect to the Security Trustee for 30 days (or 7 days in
the case of war risks) after receipt by the Security Trustee of prior
written notice from the insurers of such cancellation, change or
lapse.
|
|
13.5
|
Renewal of obligatory
insurances. The Borrower shall procure that each Owner
shall:
|
|
(a)
|
at
least 21 days before the expiry of any obligatory
insurance:
|
|
|
(i)
|
notify
the Security Trustee of the brokers (or other insurers) and any protection
and indemnity or war risks association through or with whom that Owner
proposes to renew that insurance and of the proposed terms of renewal;
and
|
|
|
(ii)
|
in
case of any substantial change in insurance cover, obtain the Security
Trustee’s approval to the matters referred to in paragraph (1)
above;
|
|
(b)
|
at
least 14 days before the expiry of any obligatory insurance, renew the
insurance in accordance with the Security Trustee’s approval pursuant to
paragraph (a); and
|
|
(c)
|
procure
that the approved brokers and/or the war risks and protection and
indemnity associations with which such a renewal is effected shall
promptly after the renewal notify the Security Trustee in writing of the
terms and conditions of the
renewal.
|
|
13.6
|
Copies of policies; letters of
undertaking. The Borrower shall procure that each Owner shall
ensure that all approved brokers provide the Security Trustee with copies
of all policies relating to the obligatory insurances which they effect or
renew and of a letter or letters of undertaking in a form required by the
Majority Lenders and including undertakings by the approved brokers
that:
|
|
(a)
|
they
will have endorsed on each policy, immediately upon issue, a loss payable
clause and a notice of assignment complying with the provisions of Clause
13.4;
|
|
(b)
|
they
will hold such policies, and the benefit of such insurances, to the order
of the Security Trustee in accordance with the said loss payable
clause;
|
|
(c)
|
they
will advise the Security Trustee immediately of any material change to the
terms of the obligatory insurances;
|
36
|
(d)
|
they
will notify the Security Trustee, not less than 14 days before the expiry
of the obligatory insurances, in the event of their not having received
notice of renewal instructions from that Owner or its agents and, in the
event of their receiving instructions to renew, they will promptly notify
the Security Trustee of the terms of the
instructions;
|
|
(e)
|
they
will notify the Security Trustee if any person other than the Owner is
named as assured or co-assured in any of the obligatory insurances and
shall procure that, upon the written request of the Security Trustee, such
additional assured or co-assured executes in favour of the Security an
assignment (in such form as the Lenders may approve or require) of its
interest in the obligatory insurances;
and
|
|
(f)
|
they
will not set off against any sum recoverable in respect of a claim
relating to the Ship owned by the relevant Owner under such obligatory
insurances any premiums or other amounts due to them or any other person
whether in respect of that Ship or otherwise, they waive any lien on the
policies or, any sums received under them, which they might have in
respect of such premiums or other amounts, and they will not cancel such
obligatory insurances by reason of non-payment of such premiums or other
amounts, and will arrange for a separate policy to be issued in respect of
the Ship forthwith upon being so requested by the Security
Trustee.
|
|
13.7
|
Copies of certificates of
entry. The Borrower shall procure that each Owner shall ensure that
any protection and indemnity and/or war risks associations in which the
Ship owned by that Owner is entered provides the Security Trustee
with:
|
|
(a)
|
a
certified copy of the certificate of entry for that
Ship;
|
|
(b)
|
a
letter or letters of undertaking in such form as may be required by the
Security Trustee; and
|
|
(c)
|
where
required to be issued under the terms of insurance/indemnity provided by
the relevant Owner’s protection and indemnity association, a certified
copy of each United States of America voyage quarterly declaration (or
other similar document or documents) made by that Owner in accordance with
the requirements of such protection and indemnity association;
and
|
|
(d)
|
a
certified copy of each certificate of financial responsibility for
pollution by oil or other Environmentally Sensitive Material issued by the
relevant certifying authority in relation to that Ship if
applicable.
|
|
13.8
|
Deposit of original policies.
The Borrower shall procure that each Owner shall ensure that all
policies relating to obligatory insurances are deposited with the approved
brokers through which the insurances are effected or
renewed.
|
|
13.9
|
Payment of premiums. The
Borrower shall procure that each Owner shall punctually pay all premiums
or other sums payable in respect of the obligatory insurances and produce
all relevant receipts when so required by the Security
Trustee.
|
|
13.10
|
Guarantees. The Borrower
shall procure that each Owner shall ensure that any guarantees required by
a protection and indemnity or war risks association are promptly issued
and remain in full force and
effect.
|
|
13.11
|
Restrictions on employment.
The Borrower shall procure that no Owner employ the Ship owned by
it, nor permit her to be employed, outside the cover provided by any
obligatory insurances.
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37
|
13.12
|
Compliance with terms of
insurances. The Borrower shall procure that no Owner shall do or
omit to do (or permit to be done or not to be done) any act or thing which
would or might render any obligatory insurance invalid, void, voidable or
unenforceable or render any sum payable thereunder repayable in whole or
in part; and, in particular:
|
|
(a)
|
each
Owner shall take all necessary action and comply with all requirements
which may from time to time be applicable to the obligatory insurances,
and (without limiting the obligation contained in Clause 13.7(c) above)
ensure that the obligatory insurances are not made subject to any
exclusions or qualifications to which the Security Trustee has not given
its prior approval;
|
|
(b)
|
no
Owner shall make any changes relating to the classification or
classification society or manager or operator of the Ship owned by it
unless approved by the underwriters of the obligatory
insurances;
|
|
(c)
|
each
Owner shall make all quarterly or other voyage declarations which may be
required by the protection and indemnity risks association in which the
Ship owned by it is entered to maintain cover for trading to the United
States of America and Exclusive Economic Zone (as defined in the United
States Oil Pollution Act 1990 or any other applicable legislation);
and
|
|
(d)
|
no
Owner shall employ the Ship owned by it, nor allow it to be employed,
otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the insurers
and complying with any requirements (as to extra premium or otherwise)
which the insurers specify.
|
|
13.13
|
Alteration to terms of
insurances. The Borrower shall procure that no Owner shall either
make or agree to any alteration to the terms of any obligatory insurance
or waive any right relating to any obligatory insurance without the prior
written consent of the Security
Trustee.
|
|
13.14
|
Settlement of claims.
The Borrower shall procure that no Owner shall settle, compromise
or abandon any claim under any obligatory insurance for Total Loss or for
a Major Casualty, and shall do all things necessary and provide all
documents, evidence and information to enable the Security Trustee to
collect or recover any moneys which at any time become payable in respect
of the obligatory insurances.
|
|
13.15
|
Provision of copies of
communications. The Borrower shall procure that each Owner shall
provide the Security Trustee, at the time of each such
communication, copies of all written communications between that Owner
and:
|
|
(a)
|
the
approved brokers; and
|
|
(b)
|
the
approved protection and indemnity and/or war risks associations;
and
|
|
(c)
|
the
approved insurance companies and/or underwriters, which relate directly or
indirectly to:
|
|
|
(i)
|
that
Owner’s obligations relating to the obligatory insurances including,
without limitation, all requisite declarations and payments of additional
premiums or calls; and
|
|
|
(ii)
|
any
credit arrangements made between that Owner and any of the persons
referred to in paragraphs (a) or (b) above relating wholly or partly to
the effecting or maintenance of the obligatory
insurances.
|
38
|
13.16
|
Provision of information.
In addition, the Borrower shall procure that each Owner shall
promptly provide the Security Trustee (or any persons which it may
designate) with any information which the Security Trustee (or any such
designated person) reasonably requests for the purpose
of:
|
|
(a)
|
obtaining
or preparing any report from an independent marine insurance broker as to
the adequacy of the obligatory insurances effected or proposed to be
effected; and/or
|
|
(b)
|
effecting,
maintaining or renewing any such insurances as are referred to in Clause
13.17 below or dealing with or considering any matters relating to any
such insurances
|
and the
Borrower shall, within a reasonable time following the Security Trustee’s
written demand, indemnify the Security Trustee in respect of all fees and other
expenses incurred by or for the account of the Security Trustee in connection
with any such report as is referred to in paragraph (a) above.
|
13.17
|
Mortgagee’s interest
insurances. The Security Trustee shall be entitled from time to
time to effect, maintain and renew a mortgage’s interest insurance in an
amount equal to 110 per cent. of the Loan, on such terms, through such
insurers and generally in such manner as the Security Trustee may from
time to time consider appropriate and the Borrower shall upon demand fully indemnify the Security
Trustee in respect of all premiums and other expenses which are incurred
in connection with or with a view to effecting, maintaining or renewing
such insurance or dealing with, or considering, any matter arising out of
such insurance.
|
|
13.18
|
Review of insurance
requirements. The Security Trustee shall be entitled to review the
requirements of this Clause 13 from time to time in order to take account
of any changes in circumstances after the date of this Agreement which
are, in the opinion of the Majority Lenders, significant and capable of
affecting the Owners or the Ships and their insurance (including, without
limitation, changes in the availability or the cost of insurance coverage
or the risks to which the Owners may be subject), and may appoint
insurance consultants in relation to this review at the cost of the
Borrower.
|
|
13.19
|
Modification of insurance
requirements. The Security Trustee shall notify the Borrower of any
proposed modification under Clause 13.18 to the requirements of this
Clause 13 which the Majority Lenders, acting upon the advice of their
insurance consultants, consider appropriate in the circumstances, and such
modification shall take effect on and from
the date it is notified in writing to the Borrower as an amendment to this
Clause 13 and shall
bind the Borrower
accordingly.
|
|
13.20
|
Compliance with mortgagee’s
instructions. The Security Trustee shall be entitled (without
prejudice to or limitation of any other rights which it may have or
acquire under any Finance Document) to require any Ship to remain at any
safe port or to proceed to and remain at any safe port designated by the
Security Trustee until the Owner of that Ship implements any amendments to
the terms of the obligatory insurances and any operational changes
required as a result of a notice served under Clause
13.19.
|
|
14
|
SHIP
COVENANTS
|
|
14.1
|
General. The Borrower
also undertakes with each Creditor Party to procure that each Owner shall
comply with the following provisions of this Clause 14 at all times during
the Security Period (in the case of “SINFONIA” after that Ship has been
delivered to Star L pursuant to the MOA) except as the Agent, with the
authority of the Majority Lenders, may otherwise
permit.
|
39
|
14.2
|
Ship’s name and registration.
The Borrower shall procure that each Owner
shall:
|
|
(a)
|
keep
the Ship owned by it registered in its ownership under an Approved
Flag;
|
|
(b)
|
not
change the name or port of registry of any Ship;
and
|
|
(c)
|
not
do or allow to be done anything as a result of which such registration
might be cancelled or imperilled.
|
|
14.3
|
Repair and classification. The
Borrower shall procure that each Owner shall keep the Ship owned by
it in a good and safe condition and state of
repair:
|
|
(a)
|
consistent
with first-class ship ownership and management
practice;
|
|
(b)
|
so
as to maintain the highest class with a first-class classification society
which is a member of IACS acceptable to the Agent free of overdue
recommendations and conditions of such classification society;
and
|
|
(c)
|
so
as to comply with all laws and regulations applicable to vessels
registered at ports in the relevant Approved Flag State or to vessels
trading to any jurisdiction to which the Ship may trade from time to time,
including but not limited to the ISM Code, the ISPS Code, the ISM Code
Documentation and the ISPS Code
Documentation.
|
|
14.4
|
Modification. The
Borrower shall procure that no Owner shall make any modification or
repairs to, or replacement of, the Ship owned by it or equipment installed
on her which would or might materially alter the structure, type or
performance characteristics of the Ship or materially reduce her
value.
|
|
14.5
|
Removal of parts. The
Borrower shall procure that no Owner shall remove any material part of the
Ship owned by it, or any item of equipment installed on, the Ship unless
the part or item so removed is forthwith replaced by a suitable part or
item which is in the same condition as or better condition than the part
or item removed, is free from any Security Interest or any right in favour
of any person other than the Security Trustee and becomes on installation
on the Ship the property of the Owner and subject to the security
constituted by the Mortgage and if applicable, the Deed of Covenant,
relative to the Ship Provided that the Owner
may install equipment owned by a third party if the equipment can be
removed without any risk of damage to the
Ship.
|
|
14.6
|
Surveys. The Borrower shall
procure that each Owner shall submit the Ship owned by it regularly to all
periodical or other surveys which may be required for classification
purposes and, if so required by the Majority Lenders, provide the Security
Trustee (at the expense of the Borrower) with copies of all survey
reports.
|
|
14.7
|
Inspection. The Borrower
shall procure that each Owner shall permit the Security Trustee (by
surveyors or other persons appointed by it for that purpose) to board the
Ship owned by it at all reasonable times to inspect her condition or to
satisfy themselves about proposed or executed repairs and shall afford all
proper facilities for such
inspections.
|
All fees
and expenses incurred in relation to the appointment of surveyors shall be for
the account of the Borrower.
40
|
14.8
|
Prevention of and release from
arrest. The Borrower shall procure that each Owner shall promptly
discharge:
|
|
(a)
|
all
liabilities which give or may give
rise to maritime or possessory liens on or claims enforceable against the
Ship owned by it, her Earnings or her
Insurances;
|
|
(b)
|
all
taxes, dues and other amounts charged in respect of the Ship, her Earnings
or her Insurances; and
|
|
(c)
|
all
other outgoings whatsoever in respect of the Ship, her Earnings or her
Insurances
|
and,
forthwith upon receiving notice of the arrest of the Ship, or of her detention
in exercise or purported exercise of any lien or claim, the relevant Owner shall
procure her release by providing bail or otherwise as the circumstances may
require.
|
14.9
|
Compliance with laws etc.
The Borrower shall procure that each Owner and each Approved
Manager shall:
|
|
(a)
|
comply,
or procure compliance with the ISM Code, the ISPS Code, all Environmental
Laws and all other laws or regulations relating to the Ship owned by the
relevant Owner, its ownership, operation and management or to the business
of that Owner;
|
|
(b)
|
not
employ the Ship nor allow her employment in any manner contrary to any law
or regulation in any relevant jurisdiction including but not limited to
the ISM Code and the ISPS Code; and
|
|
(c)
|
in
the event of hostilities in any part of the world (whether war is declared
or not), not cause
or permit the Ship to enter or trade to any zone which is declared a war
zone by any government or by the Ship’s war risks insurers unless the
Owner has (at its expense) effected any special, additional or modified
insurance cover required for it to enter or trade to any war
zone.
|
|
14.10
|
Provision of information.
The Borrower shall procure that each Owner shall promptly provide
the Security Trustee with any information which the Security Trustee
request regarding:
|
|
(a)
|
the
Ship owned by it, her employment, position and
engagements;
|
|
(b)
|
the
Earnings and payments and amounts due to the master and crew of the Ship
owned by it;
|
|
(c)
|
any
expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship and any payments made in
respect of the Ship;
|
|
(d)
|
any
towages and salvages;
|
|
(e)
|
its
compliance or the compliance of the Ship with the ISM Code and the ISPS
Code,
|
and, upon
the Security Trustee’s request, provide copies of any current charter relating
to the Ship and of any current charter guarantee, and copies of the ISM Code
Documentation and the ISPS Code Documentation.
|
14.11
|
Notification of certain
events. The Borrower shall procure that each Owner shall
immediately notify the Security Trustee by letter
of:
|
|
(a)
|
any
casualty which is or is likely to be or to become a Major
Casualty;
|
41
|
(b)
|
any
occurrence as a result of which the Ship owned by it has become or is, by
the passing of time or otherwise, likely to become a Total
Loss;
|
|
(c)
|
any
requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
|
|
(d)
|
any
arrest or detention of the Ship, any exercise or purported exercise of any
lien on the Ship or her Earnings or any requisition of the Ship for
hire;
|
|
(e)
|
any
intended dry docking of the Ship;
|
|
(f)
|
any
Environmental Claim made against that Owner or in connection with the
Ship, or any Environmental
Incident;
|
|
(g)
|
any
claim for breach of the ISM Code or the ISPS Code being made against the
Owner,
|
|
|
each
Approved Manager or otherwise in connection with the Ship;
or
|
|
(h)
|
any
other matter, event or incident, actual or threatened, the effect of which
will or could
|
|
|
lead
to the ISM Code or the ISPS Code not being complied
with
|
and the
Borrower shall keep the Security Trustee advised in writing on a regular basis
and in such detail as the Security Trustee shall require of the Owners’, the
Approved Manager’s or any other person’s response to any of those events or
matters.
|
14.12
|
Restrictions on chartering,
appointment of managers etc. The Borrower shall procure that no
Owner shall:
|
|
(a)
|
let
the Ship owned by it on demise charter for any
period;
|
|
(b)
|
other
than the relevant Initial Charterparty or Future Charterparty, enter into
any time or consecutive
voyage charter in respect of the Ship owned by it for a term which
exceeds, or which by virtue of any optional extensions may exceed, 11
months;
|
|
(c)
|
change
the terms on which the Ship owned by it is employed or the identity of the
person by
whom that Ship is employed;
|
|
(d)
|
enter
into any charter in relation to the Ship owned by it under which more than
2 months’
hire (or the equivalent) is payable in
advance;
|
|
(e)
|
charter
the Ship owned by it otherwise than on bona fide arm’s length terms at the
time when
the Ship is fixed;
|
|
(f)
|
appoint
a manager of the Ship owned by it other than an Approved Manager or agree
to any alteration to the terms of an Approved Manager’s
appointment;
|
|
(g)
|
de-activate
or lay up the Ship owned by it; or
|
|
(h)
|
put
the Ship owned by it into the possession of any person for the purpose of
work being done
upon her in an amount exceeding or likely to exceed $250,000 (or the
equivalent in any other currency) unless that person has first given to
the Security Trustee and in terms satisfactory to it a written undertaking
not to exercise any lien
on the Ship or her Earnings for the cost of such work or
otherwise.
|
42
|
14.13
|
Notice of Mortgage. The
Borrower shall procure that each Owner shall keep the Mortgage applicable
to the Ship owned by it
registered against that Ship as a valid first priority or preferred
mortgage, carry on board the Ship a certified copy of the Mortgage and
place and maintain in a conspicuous place in the navigation room and the
Master’s cabin of the Ship a framed printed notice stating that the Ship
is mortgaged by the Owner to the Security
Trustee.
|
|
14.14
|
Sharing of Earnings. The
Borrower shall procure that no Owner
shall:
|
|
(a)
|
enter
into any agreement or arrangement for the sharing of any
Earnings;
|
|
(b)
|
enter
into any agreement or arrangement for the postponement of any date on
which any Earnings are due; the reduction of the amount of any Earnings or
otherwise for the release or adverse alteration of any right of that Owner
to any Earnings; or
|
|
(c)
|
enter
into any agreement or arrangement for the release of, or adverse
alteration to, any guarantee or Security Interest relating to any
Earnings.
|
|
14.15
|
Charterparty Assignment.
If any Owner enters into any Future Charterparty in respect of its
Ship, the Borrower shall, at the request of the Agent, procure that the
Owner executes in favour of the Security Trustee a Charterparty Assignment
in respect of that Charterparty, and shall deliver to the Agent such other
documents equivalent to those referred to at paragraphs 3,4 and 5 of
Schedule 4, Part A as the Agent may
require.
|
|
15
|
SECURITY
COVER
|
|
15.1
|
Provision of additional
security cover; prepayment of Loan. The Borrower undertakes with
each Creditor Party that if the Agent notifies the Borrower
that:
|
|
(a)
|
the
aggregate Market Values of the Ships;
plus
|
|
(b)
|
the
net realisable value of any additional security previously provided under
this Clause 15;
|
is below
125 per cent. of the aggregate of the Loan and the Swap Exposure (if any exists
at the relevant time), the Borrower will, within 14 days after the date on which
the Agent’s notice is served, either:
|
|
(i)
|
provide,
or ensure that a third party provides, additional security which, in the
opinion of the Majority Lenders, has a net realisable value at least equal
to the shortfall and which, if it consists of or includes a Security
Interest, covers such asset or assets and is documented in such terms as
the Agent may, with authorisation from the Majority Lenders, approve or
require; or
|
|
|
(ii)
|
prepay
in accordance with Clause 8 such part (at least) of the Loan as will
eliminate the shortfall.
|
|
15.2
|
Meaning of additional security.
In Clause 15.1 “security” means a
Security Interest over an asset or assets (including, without limitation a
vessel (other than a Ship)) (whether securing the Borrower’s liabilities
under the Finance Documents or a guarantee in respect of those
liabilities), or a guarantee, letter of credit, cash deposit or other
security in respect of the Borrower’s liabilities under the Finance
Documents.
|
43
|
15.3
|
Requirement for additional
documents. The Borrower shall not be deemed to have complied with
Clause 15.1 (1) above until the Agent has received in connection with the
additional security certified copies of documents of the kinds referred to
in paragraphs 3, 4 and 5 of Schedule 4, Part A and such legal opinions in
terms acceptable to the Majority Lenders from such lawyers as they may
select.
|
|
15.4
|
Valuation of Ship. The
market value of a Ship at any date is that shown by valuation of that Ship
prepared:
|
|
(a)
|
as
at a date not more than 15 days
previously;
|
|
(b)
|
addressed
to the Agent;
|
|
(c)
|
by
an independent ship sale and purchase broker appointed or approved by the
Agent;
|
|
(d)
|
with
or without physical inspection of the Ship (as the Agent may
require);
|
|
(e)
|
on
the basis of a sale for prompt delivery for cash on normal arm’s length
commercial terms as between a willing seller and a willing buyer, free of
any existing charter or other contract of employment;
and
|
|
(f)
|
after
deducting the estimated amount of the usual and reasonable expenses which
would be incurred in connection with the
sale.
|
|
15.5
|
Value of additional security.
The net realisable value of any additional security which is
provided under Clause 15.1 and which consists of a Security Interest over
a vessel shall be that shown by a valuation complying with the
requirements of Clause 15.4.
|
|
15.6
|
Valuations binding. Any
valuation under Clause 15.1(i), 15.4 or 15.5 shall be binding and
conclusive as regards the Borrower (save in the case of manifest error) as
shall be any valuation which the Majority Lenders make of a security which
does not consist of or include a Security
Interest.
|
|
15.7
|
Provision of information.
The Borrower shall promptly provide the Agent and any Independent
Ship sale and purchase broker or expert acting under Clause 15.4 or 15.5
with any information which the Agent or broker or expert may request for
the purposes of the valuation; and, if the Borrower fails to provide the
information within 3 Business Days following such request, the valuation
may be made on any basis and assumptions which the independent ship sale
and purchase broker or the Majority Lenders (or the expert appointed by
them) consider prudent.
|
|
15.8
|
Payment of valuation expenses.
Without prejudice to the generality of the Borrower’s obligations
under Clauses 20.2, 20.3 and 21.3, the Borrower shall, on demand, pay the
Agent the amount of the fees and expenses of the broker instructed by the
Agent under this Clause .
|
|
15.9
|
Frequency of valuations.
The Borrower acknowledges and agrees that the Agent may commission
valuations of each Ship, or, as the case may be, the Fleet Vessels at such
times as the Lender shall reasonably deem necessary and, in any event, not
less than once during each 12-month of the Security
Period.
|
|
16
|
PAYMENTS
AND CALCULATIONS
|
44
|
16.1
|
Currency
and method of payments. All payments to be
made:
|
|
(a)
|
by
the Lenders to the Agent; or
|
|
(b)
|
by
the Borrower to the Agent, the Security Trustee or any
Lender
|
under a
Finance Document shall be made to the Agent or to the Security Trustee, in the
case of an amount payable to it:
|
|
(i)
|
by
not later than 11.00 a.m. (Piraeus time) on the due
date;
|
|
|
(ii)
|
in
same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or settled in
such other manner as the Agent shall specify as being customary at the
time for the settlement of international transactions of the type
contemplated by this Agreement);
|
|
|
(iii)
|
if
in Dollars, to the account of the Agent at Bank of New York, USA or credit
to the account of the Lender (account number 8033138548) or to such other
account with such other bank as the Agent may from time to time notify to
the Borrower and the other Creditor Parties;
and
|
|
|
(iv)
|
in
the case of an amount payable to the Security Trustee, to such account as
it may from time to time notify to the Borrower and the other Creditor
Parties.
|
|
16.2
|
Payment on non-Business Day.
If any payment by the Borrower under a Finance Document would
otherwise fall due on a day which is not a Business
Day:
|
|
(a)
|
the
due date shall be extended to the next succeeding Business Day;
or
|
|
(b)
|
if
the next succeeding Business Day falls in the next calendar month, the due
date shall be brought forward to the immediately preceding Business
Day,
|
and
interest shall be payable during any extension under paragraph (a) at the rate
payable on the original due date.
|
16.3
|
Basis for calculation of
periodic payments. All interest and commitment fee and any other
payments under any Finance Document which are of an annual or periodic
nature shall accrue from day to day and shall be calculated on the basis
of the actual number of days elapsed and a 360 day
year.
|
|
16.4
|
Distribution of payments to
Creditor Parties. Subject to Clauses 16.5, 16.6 and 16.7 any amount
received by the Agent under a Finance Document for distribution or
remittance to a Lender, or the Swap Bank or the Security Trustee shall be
made available by the Agent to that Lender or, as the case may be, the
Security Trustee or the Swap Bank by payment, with funds having the same
value as the funds received, to such account as the Lender, or the
Security Trustee or the Swap Bank may have notified to the Agent not less
than 5 Business Days previously.
|
|
16.5
|
Permitted deductions by Agent.
Notwithstanding any other provision of this Agreement or any other
Finance Document, the Agent may, before making an amount available to a
Lender or the Swap Bank deduct and withhold from that amount any sum which
is then due and payable to the Agent from that Lender or the Swap Bank
under any Finance Document or any sum which the Agent
is then entitled under any Finance Document to require that Lender or the
Swap Bank to pay on demand.
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45
|
16.6
|
Agent only obliged to pay when
monies received. Notwithstanding any other provision of this
Agreement or any other Finance Document, the Agent shall not be obliged to
make available to the Borrower or any Lender or the Swap Bank any sum
which the Agent is expecting to receive for remittance or distribution to
the Borrower or that Lender or the Swap Bank until the Agent has satisfied
itself that it has received that
sum.
|
|
16.7
|
Refund to Agent of monies not
received. If and to the extent that the Agent makes available a sum
to the Borrower or a Lender or the Swap Bank, without first having
received that sum, the Borrower or (as the case may be) the Lender
concerned or the Swap Bank shall, on
demand:
|
|
(a)
|
refund
the sum in full to the Agent; and
|
|
(b)
|
pay
to the Agent the amount (as certified by the Agent) which will indemnify
the Agent against
any funding or other loss, liability or expense incurred by the Agent as a
result of making the sum available before receiving
it.
|
|
16.8
|
Agent may assume receipt.
Clause 16.7 shall not affect any claim which the Agent has under
the law of restitution, and applies irrespective of whether the Agent had
any form of notice that it had not received the sum which it made
available.
|
|
16.9
|
Creditor Party accounts.
Each Creditor Party shall maintain accounts showing the amounts
owing to it by the Borrower and each Security Party under the Finance
Documents and all payments in respect of those amounts made by the
Borrower and any Security Party.
|
|
16.10
|
Agent’s memorandum account.
The Agent shall maintain a memorandum account showing the amounts
advanced by the Lenders and all other sums owing to the Agent, the
Security Trustee and each Lender from the Borrower and each Security Party
under the Finance Documents and all payments in respect of those amounts
made by the Borrower and any Security
Party.
|
|
16.11
|
Accounts prima facie evidence.
If any accounts maintained under Clauses 16.9 and 16.10 show an amount
to be owing by the Borrower or a Security Party to a Creditor Party, those
accounts shall, absent manifest error, be prima facie evidence that that
amount is owing to that Creditor
Party.
|
|
17
|
APPLICATION
OF RECEIPTS
|
|
17.1
|
Normal order of application,
Except as any Finance Document may otherwise provide, any sums
which are received or recovered by any Creditor Party under or by virtue
of any Finance Document shall be
applied:
|
|
(a)
|
FIRST:
in or towards satisfaction of any amounts then due and payable under the
Finance Documents
in the following order and
proportions:
|
|
|
(i)
|
first,
in or towards satisfaction pro rata of all amounts then due and payable to
the Creditor Parties under the Finance Documents and the Master Agreement
other than those amounts referred to at paragraphs (ii) and (iii)
(including, but without limitation, all amounts payable by the Borrower
under Clauses 20, 21 and 22 of this Agreement or by the Borrower or any
Security Party under any corresponding or similar provision in any other
Finance Document or in the Master
Agreement;
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46
|
|
(ii)
|
secondly,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Creditor Parties under the Finance
Documents and the Master Agreement (and, for this purpose, the expression
“interest” shall include any net amount which the Borrower shall have
become liable to pay or deliver under section 2(e) (Obligations) of the
Master Agreement but shall have failed to pay or deliver to the Lender at
the time of application or distribution under this Clause 17);
and
|
|
|
(iii)
|
thirdly,
in or towards satisfaction pro rata of the Loan and the Swap Exposure
calculated as at the actual Early Termination Date applying to each
particular Transaction, or if no such Early Termination Date shall have
occurred, calculated as if an Early Termination Date occurred on the date
of application or distribution
hereunder);
|
|
(b)
|
SECONDLY:
in retention of an amount equal to any amount not then due and payable
under any Finance Document but which the Agent, by notice to the Borrower,
the Security Parties and the other Creditor Parties, states in its opinion
will or may become due and payable in the future and, upon those amounts
becoming due and payable, in or towards satisfaction of them in accordance
with the foregoing provisions of this Clause;
and
|
|
(c)
|
THIRDLY:
any surplus shall be paid to the Borrower or to any other person appearing
to be
entitled to it.
|
|
17.2
|
Variation of order of
application. The Agent may, with the authorisation of all the
Lenders and the Swap Bank by notice to the Borrower, the Security Parties
and the other Creditor Parties provide for a different manner of
application from that set out in Clause 17.1 either as regards a specified
sum or sums or as regards sums in a specified category or
categories.
|
|
17.3
|
Notice of variation of order of
application. The Agent may give notices under Clause 17.2 from time
to time; and such a notice may be stated to apply not only to sums which
may be received or recovered in the future, but also to any sum which has
been received or recovered on or after the third Business Day before the
date on which the notice is served.
|
|
17.4
|
Appropriation rights
overridden. This Clause 17 and any notice which the Agent gives
under Clause 17.3 shall override any right of appropriation possessed, and
any appropriation made, by the Borrower or any Security
Party.
|
|
18
|
APPLICATION
OF EARNINGS
|
|
18.1
|
Payment of Earnings. The
Borrower undertakes with each Creditor Party to ensure that throughout the
Security Period (subject only to provisions of the relevant General
Assignment), all the Earnings of each Ship are paid to the Earnings
Account for that Ship.
|
|
18.2
|
Location of accounts.
The Borrower shall promptly:
|
|
(a)
|
comply,
and ensure that the Owners comply, with any requirement of the Agent as to
the location
or re-location of any Earnings
Account;
|
|
(b)
|
execute,
and ensure that the Owners execute, any documents which the Agent
specifies to create
or maintain in favour of the Security Trustee a Security Interest over
(and/or rights of set-off, consolidation or other rights in relation to)
the Earnings Accounts (or any of
them).
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47
|
18.3
|
Interest accrued on Accounts.
Any credit balance on the Earnings Accounts shall bear interest at
the rate from time to time offered by the Agent to its customers for
Dollar deposits of similar amounts and for periods similar to those for
which such balances appear to the Agent likely to remain on that Earnings
Account.
|
|
18.4
|
Release of accrued interest.
Interest accruing under Clause 18.3 shall be freely available to
the Owners.
|
|
18.5
|
Debits for expenses etc.
The Agent shall be authorised by the Borrower (but not obliged)
from time to time to debit the Earnings Account without prior notice in
order to discharge any amount due and payable under Clause 20 or 21 to a
Creditor Party or payment of which any Creditor Party has become entitled
to demand under Clause 20 or 21.
|
|
18.6
|
Borrower’s obligations
unaffected. The provisions of this Clause 18 do not
affect:
|
|
(a)
|
the
liability of the Borrower to make payments of principal and interest on
the due dates; or
|
|
(b)
|
any
other liability or obligation of the Borrower or any Security Party under
any Finance Document.
|
|
19
|
EVENTS
OF DEFAULT
|
|
19.1
|
Events of Default. An
Event of Default occurs if:
|
|
(a)
|
the
Borrower or any Security Party fails to pay when due or (if so payable) on
demand within 2 Business Days of such demand any sum payable under a
Finance Document or under any document relating to a Finance Document
unless such failure is due to a bank payment transmission error;
or
|
|
(b)
|
any
breach occurs of Clause 9.2, 11.2, 11.3, 11.17, 12.2, 12.3, 12.5, 12.7,
13.2, 15.1 or 18.1; or
|
|
(c)
|
any
breach by the Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraphs (a) or (b)
above) if, in the opinion of the Majority Lenders, such default is capable
of remedy, and such default continues unremedied 10 Business Days after
written notice from the Agent requesting action to remedy the same;
or
|
|
(d)
|
(subject
to any applicable grace period specified in the Finance Document) any
breach by the Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraphs (a), (b) or
(c) above); or
|
|
(e)
|
any
representation, warranty or statement made by, or by an officer of, the
Borrower or a Security Party in a Finance Document or in a Drawdown Notice
or any other notice or document relating to a Finance Document is untrue
or misleading when it is made; or
|
|
(f)
|
any
of the following occurs in relation to any Financial Indebtedness of a
Relevant Person (exceeding, in the case of the Borrower, $1,000,000 in
aggregate (or the equivalent in any other
currency)):
|
|
|
(i)
|
any
Financial Indebtedness of a Relevant Person is not paid when due or, if so
payable, on demand; or
|
48
|
|
(ii)
|
any
Financial Indebtedness of a Relevant Person becomes due and payable or
capable of being declared due and payable prior to its stated maturity
date as a consequence of any event of default;
or
|
|
|
(iii)
|
a
lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or owner or
becomes capable of being terminated as a consequence of any termination
event; or
|
|
|
(iv)
|
any
overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other
derivative contract or transaction, relating to any Financial Indebtedness
of a Relevant Person ceases to be available or becomes capable of being
terminated as a result of any event of default, or cash cover is required,
or becomes capable of being required, in respect of such a facility as a
result of any event of default; or
|
|
|
(v)
|
any
Security Interest securing any Financial Indebtedness of a Relevant Person
becomes enforceable; or
|
|
(g)
|
any
of the following occurs in relation to a Relevant
Person:
|
|
|
(i)
|
a
Relevant Person becomes, in the opinion of the Majority Lenders, unable to
pay its debts as they fall due; or
|
|
|
(ii)
|
any
assets of a Relevant Person are subject to any form of execution,
attachment, arrest,
sequestration or distress in respect of a sum of, or sums aggregating,
$1,000,000 or more or the equivalent in another currency;
or
|
|
|
(iii)
|
any
administrative or other receiver is appointed over any asset of a Relevant
Person;
or
|
|
|
(iv)
|
a
Relevant Person makes any formal declaration of bankruptcy or any formal
statement
to the effect that it is insolvent or likely to become insolvent, or a
winding up or administration order is made in relation to a Relevant
Person, or the members or directors of a Relevant Person pass a resolution
to the effect that it should be wound up, placed in administration or
cease to carry on business, save that this paragraph does not apply to a
fully solvent winding up of a Relevant Person other than the Borrower
which is, or is to be, effected for the purposes of an amalgamation or
reconstruction previously approved by the Majority Lenders and effected
not later than 3 months after the commencement of the winding up;
or
|
|
|
(v)
|
a
petition is presented in any Pertinent Jurisdiction for the winding up or
administration,
or the appointment of a provisional liquidator, of a Relevant Person;
or
|
|
|
(vi)
|
a
Relevant Person petitions a court, or presents any proposal for, any form
of judicial
or non-judicial suspension or deferral of payments, reorganisation of its
debt (or certain of its debt) or arrangement with all or a substantial
proportion (by number or value) of its creditors or of any class of them
or any such suspension or deferral of payments, reorganisation or
arrangement is effected by court order, contract or otherwise;
or
|
49
|
|
(vii)
|
any
meeting of the members or directors of a Relevant Person is summoned for
the purpose of considering a resolution or proposal to authorise or take
any action of a type described in paragraphs (iii), (iv), (v) or (vi)
above; or
|
|
|
(viii)
|
in
a Pertinent Jurisdiction other than England, any event occurs or any
procedure is commenced which, in the opinion of the Majority Lenders, is
similar to any of the foregoing; or
|
|
(h)
|
the
Borrower or any Security Party ceases or suspends carrying on or changes
the nature of its business or a part of its business which, in the opinion
of the Majority Lenders, is material in the context of this Agreement;
or
|
|
(i)
|
it
becomes unlawful in any Pertinent Jurisdiction or
impossible:
|
|
|
(i)
|
for
the Borrower or any Security Party to discharge any liability under a
Finance Document
or to comply with any other obligation which the Majority Lenders consider
material under a Finance Document;
or
|
|
|
(ii)
|
for
the Agent, the Security Trustee or the Lenders or the Swap Bank to
exercise or enforce any right under, or to enforce any Security Interest
created by, a Finance Document; or
|
|
(j)
|
any
consent necessary to enable any Owner to own, operate or charter a Ship or
to enable the Borrower or any Security Party to comply with any provision
which the Majority Lenders consider material of a Finance Document is not
granted, expires without being renewed, is revoked or becomes liable to
revocation or any condition of such a consent is not fulfilled;
or
|
|
(k)
|
without
the prior consent of the Agent (acting upon the instructions of the
Majority Lenders), Mr. Prokopios Tsirigakis ceases to be, at any time
during the Security Period, the Chief Executive Officer of the Borrower;
or
|
|
(l)
|
the
shares of the Borrower cease to be quoted on the Nasdaq National Market in
New York or any other international recognised stock exchange acceptable
to the Lenders; or
|
|
(m)
|
without
the prior written consent of the Majority Lenders, a change has occurred
after the date of this Agreement in the ownership of any of the shares in
any Owner or in the ultimate control of the voting rights attaching to any
of those shares; or
|
|
(n)
|
an
Event of Default (as defined in section 14 of the Master Agreement)
occurs; or
|
|
(o)
|
the
Master Agreement is terminated, cancelled, suspended, rescinded or revoked
or otherwise
ceases to remain in full force and effect for any reason except with the
consent of the Swap Bank; or
|
|
(p)
|
any
Initial Charterparty is terminated, cancelled, suspended, rescinded or
revoked or otherwise
ceases to remain in full force and effect for any reason except with the
consent of the Agent (acting upon the authorisation of the Majority
Lenders) or by effluxion of time unless a replacement charter in all
respects acceptable to the Lender, to be made between the relevant Owner
and a charterer acceptable to the Lender, is effected within 60 days of the cancellation or
termination of the Initial Charterparty or the date on which the Initial
Charterparty ceases to remain in full force and effect or being
negotiated; or
|
50
|
(q)
|
any
provision which the Majority Lenders consider material of a Finance
Document proves to have been or becomes invalid or unenforceable, or a
Security Interest created by a Finance Document proves to have been or
becomes invalid or unenforceable or such a Security Interest proves to
have ranked after, or loses its priority to, another Security Interest or
any other third party claim or interest;
or
|
|
(r)
|
the
security constituted by a Finance Document is in any way imperilled or in
jeopardy; or
|
|
(s)
|
any
other event occurs or any other circumstances arise or develop including,
without limitation:
|
|
|
(i)
|
a
change in the financial position, state of affairs or prospects of the
Borrower or any Security Party; or
|
|
|
(ii)
|
any
accident or other event involving any Ship or another vessel owned,
chartered or operated by a Relevant
Person;
|
in the
light of which the Majority Lenders consider that there is a significant risk
that the Borrower or any Security Party is, or will later become, unable to
discharge its liabilities under the Finance Documents as they fall
due.
|
19.2
|
Actions following an Event of
Default. On, or at any time after, the occurrence of an Event of
Default:
|
|
(a)
|
the
Agent may, and if so instructed by the Majority Lenders, the Agent
shall:
|
|
|
(i)
|
serve
on the Borrower a notice stating that the Commitments and all other obligations
of each Lender to the Borrower under this Agreement are terminated;
and/or
|
|
|
(ii)
|
serve
on the Borrower a notice stating that the Loan, all accrued interest and
all other amounts accrued or owing under this Agreement are immediately
due and payable or are due and payable on demand;
and/or
|
|
|
(iii)
|
take
any other action which, as a result of the Event of Default or any notice
served under paragraph (i) or (ii) above, the Agent and/or the Lenders are
entitled to take under any Finance Document or any applicable law;
and/or
|
|
(b)
|
the
Security Trustee may, and if so instructed by the Agent, acting with the
authorization of the Majority Lenders, the Security Trustee shall take any
action which, as a result of the Event of Default or any notice served
under paragraph (a) (i) or (ii) above, the Security Trustee, the Agent
and/or the Lenders and/or the Swap Bank are entitled to take under any
Finance Document or any applicable
law.
|
|
19.3
|
Termination of Commitments.
On the service of a notice under paragraph (a)(i) of Clause 19.2,
the Commitments and all other obligations of each Lender to the Borrower
under this Agreement shall
terminate.
|
|
19.4
|
Acceleration of Loan. On
the service of a notice under paragraph (a)(ii) of Clause 19.2, the Loan,
all accrued interest and all other amounts accrued or owing from the
Borrower or any Security Party under this Agreement and every other
Finance Document shall become immediately due and payable or, as the case
may be, payable on demand.
|
51
|
19.5
|
Multiple notices; action
without notice. The Agent may serve notices under paragraphs (a)
(i) and (ii) of Clause 19.2 simultaneously or on different dates and it
and/or the Security Trustee may take any action referred to in that Clause
if no such notice is served or simultaneously with or at any time after
the service of both or either of such
notices.
|
|
19.6
|
Notification of Creditor
Parties and Security Parties. The Agent shall send to each Lender,
the Security Trustee and each Security Party a copy of the text of any
notice which the Agent serves on the Borrower under Clause 19.2; but the
notice shall become effective when it is served on the Borrower, and no
failure or delay by the Agent to send a copy of the text of the notice to
any other person shall invalidate the notice or provide the Borrower or
any Security Party with any form of claim or
defence.
|
|
19.7
|
Lender’s rights unimpaired.
Nothing in this Clause shall be taken to impair or restrict the
exercise of any right given to individual Lenders under a Finance Document
or the general law; and, in particular, this Clause is without prejudice
to Clause 3.1.
|
|
19.8
|
Exclusion of Creditor Party
Liability. No Creditor Party, and no receiver or manager appointed
by the Security Trustee, shall have any liability to the Borrower or a
Security Party:
|
|
(a)
|
for
any loss caused by an exercise of rights under, or enforcement of a
Security Interest created
by, a Finance Document or by any failure or delay to exercise such a right
or to enforce such a Security Interest;
or
|
|
(b)
|
as
mortgagee in possession or otherwise, for any income or principal amount
which might
have been produced by or realised from any asset comprised in such a
Security Interest or for any reduction (however caused) in the value of
such an asset;
|
except
that this does not exempt a Creditor Party or a receiver or manager from
liability for losses shown to have been caused by the gross negligence or the
wilful misconduct of such Creditor Party’s own officers and employees or (as the
case may be) such receiver’s or manager’s own partners or
employees.
|
19.9
|
Relevant Persons. In
this Clause 19 “a
Relevant Person” means the Borrower, a Security Party and any other
member of the Group (but excluding any company which is dormant and the
value of whose gross assets is $50,000 or
less).
|
|
19.10
|
Position of Swap Bank.
Neither the Agent nor the Security Trustee shall be obliged, in
connection with any action taken or proposed to be taken under or pursuant
to the foregoing provisions of this Clause 19, to have any regard to the
requirements of the Swap Bank except to the extent that the Swap Bank is
also a Lender.
|
|
19.11
|
Interpretation. In
Clause 19.1(f) references to an event of default or a termination event
include any event, howsoever described, which is similar to an event of
default in a facility agreement or a termination event in a finance lease;
and in Clause 19.1(g) “petition” includes an
application.
|
|
20
|
FEES
AND EXPENSES
|
|
20.1
|
Commitment and participation
fees. The Borrower shall pay to the
Agent:
|
|
(a)
|
a
commitment fee for distribution among the Lenders pro rata to their
Commitments at the rate of 0.25 per cent. per annum on the undrawn amount
of Tranche C from the date of this Agreement up to and including the
earlier of (A) the Drawdown Date in respect of Tranche C and (B) the last
day
of the Availability Period, such fee to be paid quarterly in arrears and
on the last day of such
period;
|
52
|
|
|
|
(b)
|
on
the date of this Agreement, a participation fee
(to be distributed to the Lenders pro rata to their Commitments) equal to
0.35 per cent. of the Total Commitments;
and
|
|
(c)
|
certain
facility fees set out in the Fee
Letter.
|
|
20.2
|
Costs of negotiation,
preparation etc. The Borrower shall pay to the Agent on its demand
the amount of all expenses incurred by the Lenders, the Agent or the
Security Trustee in connection with the negotiation, preparation,
execution or registration of any Finance Document or any related document
or with any transaction contemplated by a Finance Document or a related
document (including, without limitation, any legal fees or
expenses).
|
|
20.3
|
Costs of variations,
amendments, enforcement etc. The Borrower shall pay to the Agent,
on the Agent’s demand, the amount of all expenses (including, without
limitation, any legal fees or expenses) incurred by a Lender or the Swap
Bank in connection with:
|
|
(a)
|
any
amendment or supplement to a Finance Document, or any proposal for such an
amendment to be made;
|
|
(b)
|
any
consent or waiver by the Lenders, the Majority Lenders or the Lender
concerned under or in connection with a
Finance Document, or any request for such a consent or
waiver;
|
|
(c)
|
the
valuation of any security provided or offered under Clause 15.8 or any
other matter relating to such
security;
|
|
(d)
|
such
circumstances where the Agent, in its absolute opinion, considers that
there has been a material change to the insurances in
respect of a Ship, the review of the insurances of that Ship pursuant to
Clause 13.18;
|
|
(e)
|
any
step taken by the Lender or the Swap Bank concerned with a
view to the protection, exercise or enforcement of any right or Security
Interest created by a Finance Document or for any similar
purpose.
|
There
shall be recoverable under paragraph (e) the full amount of all legal expenses,
whether or not such as would be allowed under rules of court or any taxation or
other procedure carried out under such rules.
|
20.4
|
Documentary taxes. The
Borrower shall promptly pay any tax payable on or by reference to any
Finance Document, and shall, on the Agent’s demand, fully indemnify each
Creditor Party against any liabilities and expenses resulting from any
failure or delay by the Borrower to pay such a
tax.
|
|
20.5
|
Certification of amounts.
A notice which is signed by two officers of a Creditor Party, which
states that a specified amount, or aggregate amount, is due to that
Creditor Party under this Clause 20 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is
due.
|
|
21
|
INDEMNITIES
|
53
|
21.1
|
Indemnities regarding borrowing
and repayment of Loan. The Borrower shall fully indemnify the Agent
and each Lender on the Agent’s demand and the Security Trustee on its
demand in respect of all expenses, liabilities and losses which are
incurred by that Creditor Party, or which that Creditor Party reasonably
and with due diligence estimates that it will incur, as a result of or in
connection with:
|
|
(a)
|
a
Tranche not being borrowed on the date specified in the Drawdown Notice
for that Tranche for any reason other than a default by the Lender
claiming the indemnity;
|
|
(b)
|
the
receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant
period;
|
|
(c)
|
any
failure (for whatever reason) by the Borrower to make payment of any
amount due under a Finance Document on the due date or, if so payable, on
demand (after giving credit for any default interest paid by the Borrower
on the amount concerned under Clause
7);
|
|
(d)
|
the
occurrence and/or continuance of an Event of Default or a Potential Event
of Default and/or the acceleration of repayment of the Loan under Clause
19;
|
and in
respect of any tax (other than tax on its overall net income) for which a
Creditor Party is liable in connection with any amount paid or payable to that
Creditor Party (whether for its own account or otherwise) under any Finance
Document.
|
21.2
|
Breakage costs. Without
limiting its generality, Clause 21.1 covers any liability, expense or
loss, including a loss of a prospective profit, incurred by a
Lender:
|
|
(a)
|
in
liquidating or employing deposits from third parties acquired or arranged
to fund or maintain all or any part of its
Contribution and/or any overdue amount (or an aggregate amount which
includes its Contribution or any overdue amount);
and
|
|
(b)
|
in
terminating, or otherwise in connection with, any interest and/or currency
swap or any other transaction entered into (whether with another legal
entity or with another office or department of the Lender concerned) to
hedge any exposure arising under this Agreement or that part which the
Lender concerned determines is fairly attributable to this Agreement of
the amount of the liabilities, expenses or losses (including losses of
prospective profits) incurred by it in terminating, or otherwise in
connection with, a number of transactions of which this Agreement is
one.
|
|
21.3
|
Miscellaneous indemnities.
The Borrower shall fully indemnify each Creditor Party severally on
their respective demands in respect of all claims, demands, proceedings,
liabilities, taxes, losses and expenses of every kind (“liability items”)
which may be made or brought against, or incurred by, the relevant
Creditor Party, in any country, in relation
to:
|
|
(a)
|
any
action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by the Agent, the Security Trustee or any other
Creditor Party or by any receiver appointed under a Finance
Document;
|
|
(b)
|
any
other event, matter or question which occurs or arises at any time during
the Security Period and which has any connection with, or any bearing on,
any Finance Document, any payment or other transaction relating to a
Finance Document or any asset covered (or previously covered) by a
Security Interest created (or intended to be created) by a Finance
Document;
|
54
|
|
other
than claims, expenses, liabilities and losses which are shown to have been
directly and mainly caused by the dishonesty or wilful misconduct of a
Creditor Party’s officers or
employees.
|
Without
prejudice to its generality, this Clause 21.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code, the ISPS Code or any
Environmental Law.
|
21.4
|
Extension of indemnities;
environmental indemnity. Without prejudice to its generality,
Clause 21.3 covers:
|
|
(a)
|
any
matter which would be covered by Clause 21.3 if any of the references in
that Clause
|
|
|
to
a Lender were a reference to the Agent or (as the case may be) to the
Security Trustee; and
|
|
(b)
|
any
liability items which arise, or are asserted, under or in connection with
any law
|
|
|
relating
to safety at sea, pollution or the protection of the
environment.
|
|
21.5
|
Currency indemnity. If
any sum due from the Borrower or any Security Party to a Creditor Party
under a Finance Document or under any order or judgment relating to a
Finance Document has to be converted from the currency in which the
Finance Document provided for the sum to be paid (the “Contractual Currency”)
into another currency (the “Payment Currency”) for
the purpose of:
|
|
(a)
|
making
or lodging any claim or proof against the Borrower or any Security Party,
whether in its liquidation, any arrangement involving it or otherwise;
or
|
|
(b)
|
obtaining
an order or judgment from any court or other tribunal;
or
|
|
(c)
|
enforcing
any such order or judgment;
|
the
Borrower shall indemnify the Creditor Party concerned against the loss arising
when the amount of the payment actually received by that Creditor Party is
converted at the available rate of exchange into the Contractual
Currency.
In this
Clause 21.5, the “available
rate of exchange” means the rate at which the Creditor Party concerned is
able at the opening of business (Hamburg time) on the Business Day after it
receives the sum concerned to purchase the Contractual Currency with the Payment
Currency.
This
Clause 21.5 creates a separate liability of the Borrower which is distinct from
its other liabilities under the Finance Documents and which shall not be merged
in any judgment or order relating to those other liabilities.
|
21.6
|
Certification of amounts.
A notice which is signed by 2 officers of a Creditor Party, which
states that a specified amount, or aggregate amount, is due to that
Creditor Party under this Clause 21 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is
due.
|
|
21.7
|
Application to Master
Agreement. For the avoidance of doubt, Clause 21.5 does not apply
in respect of sums due from the Borrower to the Swap Bank under or in
connection with the Master Agreement as to which sums the provisions of
section 8 (Contractual Currency) of the Master Agreement shall
apply.
|
55
|
21.8
|
Sums deemed due to a Lender.
For the purposes of this Clause 21, a sum payable by the Borrower
to the Agent or the Security Trustee for distribution to a Lender shall be
treated as a sum due to that
Lender.
|
|
22
|
NO
SET-OFF OR TAX DEDUCTION
|
|
22.1
|
No deductions. All
amounts due from the Borrower under a Finance Document shall be
paid:
|
|
(a)
|
without
any form of set-off, cross-claim or condition;
and
|
|
(b)
|
free
and clear of any tax deduction except a tax deduction which the Borrower
is required by law to make.
|
|
22.2
|
Grossing-up for taxes.
If the Borrower is required by law to make a tax deduction from any
payment:
|
|
(a)
|
the
Borrower shall notify the Agent as soon as it becomes aware of the
requirement;
|
|
(b)
|
the
Borrower shall pay the tax deducted to the appropriate taxation authority
promptly, and in any event before any fine or penalty
arises;
|
|
(c)
|
the
amount due in respect of the payment shall be increased by the amount
necessary to ensure that each Creditor Party receives and retains (free
from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would
otherwise have received.
|
|
22.3
|
Evidence of payment of taxes.
Within 1 month after making any tax deduction, the Borrower
concerned shall deliver to the Agent documentary evidence satisfactory to
the Agent that the tax had been paid to the appropriate taxation
authority.
|
|
22.4
|
Exclusion of tax on overall net
income. In this Clause 22 “tax deduction” means
any deduction or withholding for or on account of any present or future
tax except tax on a Creditor Party’s overall net
income.
|
|
22.5
|
Application to Master
Agreement. For the avoidance of doubt, Clause 22 does not apply in
respect of sums due from the Borrower under or in connection with the
Master Agreement as to which sums the provisions of section 2(d)
(Deduction or Withholding for Tax) of the Master Agreement shall
apply.
|
|
23
|
ILLEGALITY,
ETC
|
|
23.1
|
Illegality. This Clause
23 applies if a Lender (the “Notifying Lender”)
notifies the Agent that it has become, or will with effect from a
specified date, become:
|
|
(a)
|
unlawful
or prohibited as a result of the introduction of a new law, an amendment
to an existing law or a change in the manner in which an existing law is
or will be interpreted or applied;
or
|
|
(b)
|
contrary
to, or inconsistent with, any
regulation,
|
for the
Notifying Lender to maintain or give effect to any of its obligations under this
Agreement in the manner contemplated by this Agreement.
56
|
23.2
|
Notification of illegality.
The Agent shall promptly notify the Borrower, the Security Parties,
the Security Trustee and the other Lenders of the notice under Clause 23.1
which the Agent receives from the Notifying
Lender.
|
|
23.3
|
Prepayment; termination of
Commitment. On the Agent notifying the Borrower under Clause 23.2,
the Notifying Lender’s Commitment shall terminate; and thereupon or if
later, on the date specified in the Notifying Lender’s notice under Clause
23.1 as the date on which the notified event would become effective the
Borrower shall prepay the Notifying Lender’s Contribution in accordance
with Clause 8.
|
|
23.4
|
Mitigation. If
circumstances arise which would result in a notification under Clause 23.1
then, without in any way limiting the rights of the Notifying Lender under
Clause 23.3, the Notifying Lender shall use reasonable endeavours to
transfer its obligations, liabilities and rights under this Agreement and
the Finance Documents to another office or financial institution not
affected by the circumstances but the Notifying Lender shall not be under
any obligation to take any such action if, in its opinion, to do would or
might:
|
|
(a)
|
have
an adverse effect on its business, operations or financial condition;
or
|
|
(b)
|
involve
it in any activity which is unlawful or prohibited or any activity that is
contrary to, or inconsistent with, any regulation;
or
|
|
(c)
|
involve
it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.
|
|
24
|
INCREASED
COSTS
|
|
24.1
|
Increased costs. This
Clause 24 applies if a Lender (the “Notifying Lender”)
notifies the Agent that the Notifying Lender considers that as a
result of:
|
|
(a)
|
the
introduction or alteration after the date of this Agreement of a law or
regulation or an alteration after the date of this Agreement in the manner
in which a law or regulation is interpreted or applied (disregarding any
effect which relates to the application to payments under this Agreement
of a tax on the Notifying Lender’s overall net income);
or
|
|
(b)
|
the
effect of complying with any law or regulation (including any which
relates to capital adequacy or liquidity controls or which affects the
manner in which the Notifying Lender allocates capital resources to its
obligations under this Agreement (including, without limitation, any laws
or regulations which shall replace, amend and/or supplement those set out
in the statement of the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled “International
Convergence of Capital Management and Capital Structures”)) which is
introduced, or altered, or the interpretation or application of which is
altered, after the date of this
Agreement,
|
is that
the Notifying Lender (or a parent company of it) has incurred or will incur an
“increased cost”, that is to say:
|
|
(i)
|
an
additional or increased cost incurred as a result of, or in connection
with, the Notifying Lender having entered into, or being a party to, this
Agreement or a Transfer Certificate, of funding or maintaining its
Commitment or Contribution or performing its obligations under this
Agreement, or of having outstanding all or any part of its Contribution or
other unpaid sums; or
|
57
|
|
(ii)
|
a
reduction in the amount of any payment to the Notifying Lender under this
Agreement or in the effective return which such a payment represents to
the Notifying Lender or on its
capital;
|
|
|
(iii)
|
an
additional or increased cost of funding all or maintaining all or any of
the advances comprised in a class of advances formed by or including the
Notifying Lender’s Contribution or (as the case may require) the
proportion of that cost attributable to the Contribution;
or
|
|
|
(iv)
|
a
liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Notifying Lender
under this Agreement;
|
but not
an item attributable to a change in the rate of tax on the overall net income of
the Notifying Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 21.1 or by Clause 22.
For the
purposes of this Clause 24.1 the Notifying Lender may in good faith allocate or
spread costs and/or losses among its assets and liabilities (or any class
thereof) on such basis as it considers appropriate.
|
24.2
|
Notification to Borrower of
claim for increased costs. The Agent shall promptly notify the
Borrower and the Security Parties of the notice which the Agent received
from the Notifying Lender under Clause
24.1.
|
|
24.3
|
Payment of increased costs.
The Borrower shall pay to the Agent, at the end of any Interest
Period during which the Agent makes demand, for the account of the
Notifying Lender, the amounts which the Agent from time to time notifies
the Borrower that the Notifying Lender has specified to be necessary to
compensate the Notifying Lender for the increased
cost.
|
|
24.4
|
Notice of prepayment. If
the Borrower is not willing to continue to compensate the Notifying Lender
for the increased cost under Clause 24.3, the Borrower may give the Agent
not less than 14 days’ notice of its intention to prepay the Notifying
Lender’s Contribution at the end of an Interest
Period.
|
|
24.5
|
Prepayment; termination of
Commitment. A notice under Clause 24.4 shall be irrevocable; the Agent
shall promptly notify the Notifying Lender of the Borrower’s notice of
intended prepayment; and:
|
|
(a)
|
on
the date on which the Agent serves that notice, the Commitment of the
Notifying Lender
shall be cancelled; and
|
|
(b)
|
on
the date specified in its notice of intended prepayment, the Borrower
shall prepay (without
premium or penalty) the Notifying Lender’s Contribution, together with
accrued interest thereon at the applicable rate plus the applicable
Margin.
|
|
24.6
|
Application of prepayment.
Clause 8 shall apply in relation to the
prepayment.
|
|
25
|
SET-OFF
|
|
25.1
|
Application of credit balances.
Each Creditor Party may without prior
notice:
|
58
|
(a)
|
apply
any balance (whether or not then due) which at any time stands to the
credit of any account in the name of the Borrower at any office in any
country of that Creditor Party in or towards satisfaction of any sum then
due from the Borrower to that Creditor Party under any of the Finance
Documents; and
|
|
(b)
|
for
that purpose:
|
|
|
(i)
|
break,
or alter the maturity of, all or any part of a deposit of the
Borrower;
|
|
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance into
Dollars;
|
|
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance which the Creditor Party concerned considers
appropriate.
|
|
25.2
|
Existing rights unaffected.
No Creditor Party shall be obliged to exercise any of its rights
under Clause 25.1; and those rights shall be without prejudice and in
addition to any right of set-off, combination of accounts, charge, lien or
other right or remedy to which a Creditor Party is entitled (whether under
the general law or any document).
|
|
25.3
|
Sums deemed due to a Lender.
For the purposes of this Clause 25, a sum payable by the Borrower
to the Agent or the Security Trustee for distribution to, or for the
account of, a Lender shall be treated as a sum due to that Lender; and
each Lender’s proportion of a sum so payable for distribution to, or for
the account of, the Lenders shall be treated as a sum due to such
Lender.
|
|
26
|
TRANSFERS
AND CHANGES IN LENDING OFFICES
|
|
26.1
|
Transfer by Borrower.
The Borrower may not, without the consent of the Agent, given on
the instructions of all the
Lenders:
|
|
(a)
|
transfer
any of its rights or obligations under any Finance Document;
or
|
|
(b)
|
enter
into any merger, de-merger or other reorganisation, or carry out any other
act, as a result of which any of its rights or liabilities would vest in,
or pass to, another person.
|
|
26.2
|
Transfer by a Lender.
Subject to Clause 26.5, a Lender (the “Transferor Lender”)
may, with the prior consent of the Agent (such consent not to be
unreasonably withheld), at any time
cause:
|
|
(a)
|
its
rights in respect of all or part of its Contribution;
or
|
|
(b)
|
its
obligations in respect of all or part of its Commitment;
or
|
|
(c)
|
a
combination of (a) and (b)
|
to be (in
the case of its rights) transferred to, or (in the case of its obligations)
assumed by, another bank or financial institution (a “Transferee Lender”) by
delivering to the Agent a completed certificate in the form set out in Schedule
4 with any modifications approved or required by the Agent (a “Transfer Certificate”)
executed by the Transferor Lender and the Transferee Lender.
However
any rights and obligations of the Transferor Lender in its capacity as Agent or
Security Trustee will have to be dealt with separately in accordance with the
Agency and Trust Deed.
59
|
26.3
|
Transfer Certificate, delivery
and notification. As soon as reasonably practicable after a
Transfer Certificate is delivered to the Agent, it shall (unless it has
reason to believe that the Transfer Certificate may be
defective):
|
|
(a)
|
sign
the Transfer Certificate on behalf of itself, the Borrower, the Security
Parties, the Security Trustee and each of the
Lenders;
|
|
(b)
|
on
behalf of the Transferee Lender, send to the Borrower and each Security
Party letters or faxes notifying them of the Transfer Certificate and
attaching a copy of it;
|
|
(c)
|
send
to the Transferee Lender copies of the letters or faxes sent under
paragraph (b) above.
|
|
26.4
|
Effective Date of Transfer
Certificate. A Transfer Certificate becomes effective on the date,
if any, specified in the Transfer Certificate as its effective date Provided that it is
signed by the Agent under Clause 26.3 on or before that
date.
|
|
26.5
|
No transfer without Transfer
Certificate. No assignment or transfer of any right or obligation
of a Lender under any Finance Document is binding on, or effective in
relation to, the Borrower, any Security Party, the Agent or the Security
Trustee unless it is effected, evidenced or perfected by a Transfer
Certificate.
|
|
26.6
|
Lender re-organisation; waiver
of Transfer Certificate. However, if a Lender enters into any
merger, de-merger or other reorganisation as a result of which all its
rights or obligations vest in another person (the “successor”), the
successor shall automatically and without any further act being necessary
become a Lender with the same Commitment and Contribution as were held by
the predecessor Lender.
|
|
26.7
|
Effect of Transfer Certificate.
A Transfer Certificate takes effect in accordance with English law
as follows:
|
|
(a)
|
to
the extent specified in the Transfer Certificate, all rights and interests
(present, future or contingent) which the Transferor Lender has under or
by virtue of the Finance Documents are assigned to the Transferee Lender
absolutely, free of any defects in the Transferor Lender’s title and of
any rights or equities which the Borrower or any Security Party had
against the Transferor Lender;
|
|
(b)
|
the
Transferor Lender’s Commitment is discharged to the extent specified in
the Transfer Certificate;
|
|
(c)
|
the
Transferee Lender becomes a Lender with the Contribution previously held
by the Transferor Lender (or the part thereof specified in the Transfer
Certificate) and a Commitment of an amount specified in the Transfer
Certificate;
|
|
(d)
|
the
Transferee Lender becomes bound by all the provisions of the Finance
Documents which are applicable to the Lenders generally, including those
about pro-rata sharing and the exclusion of liability on the part of, and
the indemnification of, the Agent and the Security Trustee and, to the
extent that the Transferee Lender becomes bound by those provisions (other
than those relating to exclusion of liability), the Transferor Lender
ceases to be bound by them;
|
|
(e)
|
any
part of the Loan which the Transferee Lender advances after the Transfer
Certificate’s effective date ranks in point of priority and security in
the same way as it would have ranked had it been advanced by the
transferor, assuming that any defects in the transferor’s title and any
rights or equities of the Borrower or any Security Party against the
Transferor Lender had not existed;
|
60
|
(f)
|
the
Transferee Lender becomes entitled to all the rights under the Finance
Documents which are applicable to the Lenders generally, including but not
limited to those relating to the Majority Lenders and those under Clause
5.5 and Clause 20, and to the extent that the Transferee Lender becomes
entitled to such rights, the Transferor Lender ceases to be entitled to
them; and
|
|
(g)
|
in
respect of any breach of a warranty, undertaking, condition or other
provision of a Finance Document or any misrepresentation made in or in
connection with a Finance Document, the Transferee Lender shall be
entitled to recover damages by reference to the loss incurred by it as a
result of the breach or misrepresentation, irrespective of whether the
original Lender would have incurred a loss of that kind or
amount.
|
The
rights and equities of the Borrower or any Security Party referred to above
include, but are not limited to, any right of set off and any other kind of
cross-claim.
|
26.8
|
Maintenance of register of
Lenders. During the Security Period the Agent shall maintain a
register in which it shall record the name, Commitment, Contribution and
administrative details (including the lending office) from time to time of
each Lender holding a Transfer Certificate and the effective date (in
accordance with Clause 26.4) of the Transfer Certificate; and the Agent
shall make the register available for inspection by any Lender, the
Security Trustee and the Borrower during normal banking hours, subject to
receiving at least 5 Business Days prior
notice.
|
|
26.9
|
Reliance on register of
Lenders. The entries on that register shall, in the absence of
manifest error, be conclusive in determining the identities of the Lenders
and the amounts of their Commitments and Contributions and the effective
dates of Transfer Certificates and may be relied upon by the Agent and the
other parties to the Finance Documents for all purposes relating to the
Finance Documents.
|
|
26.10
|
Authorisation of Agent to sign
Transfer Certificates. The Borrower, the Security Trustee and each
Lender irrevocably authorise the Agent to sign Transfer Certificates on
its behalf.
|
|
26.11
|
Registration fee. In
respect of any Transfer Certificate (save for any Transfer Certificate to
be executed pursuant to Clause 2.4), the Agent shall be entitled to
recover a
registration fee of $2,000 from the Transferor Lender or (at the
Agent’s option) the Transferee
Lender.
|
|
26.12
|
Sub-participation; subrogation
assignment. A Lender may sub-participate all or any part of its
rights and/or obligations under or in connection with the Finance
Documents without the consent of, or any notice to, the Borrower, any
Security Party, the Agent or the Security Trustee; and the Lenders may
assign, in any manner and terms agreed by the Majority Lenders, the Agent
and the Security Trustee, all or any part of those rights to an insurer or
surety who has become subrogated to
them.
|
|
26.13
|
Disclosure of information.
A Lender may disclose to a potential Transferee Lender or
sub-participant any information which the Lender has received in relation
to the Borrower, any Security Party or their affairs under or in
connection with any Finance Document, unless the information is clearly of
a confidential nature.
|
|
26.14
|
Change of lending office.
A Lender may change its lending office by giving notice to the
Agent and the change shall become effective
on the later of:
|
|
(a)
|
the
date on which the Agent receives the notice;
and
|
61
|
(b)
|
the
date, if any, specified in the notice as the date on which the change will
come into effect.
|
|
|
|
|
26.15
|
Notification. On
receiving such a notice, the Agent shall notify the Borrower and the
Security Trustee; and, until the Agent receives such a notice, it shall be
entitled to assume that a Lender is acting through the lending office of
which the Agent last had notice.
|
|
27
|
VARIATIONS
AND WAIVERS
|
|
27.1
|
Variations, waivers etc. by
Majority Lenders. Subject to Clause 27.2, a document shall be
effective to vary, waive, suspend or limit any provision of a Finance
Document, or any Creditor Party’s rights or remedies under such a
provision or the general law, only if the document is signed, or
specifically agreed to by fax, by the Borrower, by the Agent on behalf of
the Majority Lenders, by the Agent and the Security Trustee in their own
rights, and, if the document relates to a Finance Document to which a
Security Party is party, by that Security
Party.
|
|
27.2
|
Variations, waivers etc.
requiring agreement of all Lenders. However, as regards the
following, Clause 27.1 applies as if the words “by the Agent on behalf of
the Majority Lenders” were replaced by the words “by or on behalf of every
Lender and the Swap Bank”:
|
|
(a)
|
a
change in the Margin or in the definition of
LIBOR;
|
|
(b)
|
a
change to the date for, or the amount of, any payment of principal,
interest, fees, or other sum payable under this
Agreement;
|
|
(c)
|
a
change to any Lender’s Commitment;
|
|
(d)
|
an
extension of the Availability
Period;
|
|
(e)
|
a
change to the definition of “Majority Lenders” or “Finance
Documents”;
|
|
(f)
|
a
change to the preamble or to Clause 2, 3, 4, 5.1, 8.1, 8.2, 17, 18, 19 or
30;
|
|
(g)
|
a
change to this Clause 27;
|
|
(h)
|
any
release of, or material variation to, a Security Interest, guarantee,
indemnity or subordination arrangement set out in a Finance Document;
and
|
|
(i)
|
any
other change or matter as regards which this Agreement or another Finance
Document expressly provides that each Lender’s consent is
required.
|
|
27.3
|
Exclusion of other or implied
variations. Except for a document which satisfies the requirements
of Clauses 27.1 and 27.2, no document, and no act, course of conduct,
failure or neglect to act, delay or acquiescence on the part of the
Creditor Parties or any of them (or any person acting on behalf of any of
them) shall result in the Creditor Parties or any of them (or any person
acting on behalf of any of them) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from
enforcing, relying on or
exercising:
|
|
(a)
|
a
provision of this Agreement or another Finance Document;
or
|
|
(b)
|
an
Event of Default; or
|
62
|
(c)
|
a
breach by the Borrower or a Security Party of an obligation under a
Finance Document or the general law;
or
|
|
(d)
|
any
right or remedy conferred by any Finance Document or by the general
law;
|
and there
shall not be implied into any Finance Document any term or condition requiring
any such provision to be enforced, or such right or remedy to be exercised,
within a certain or reasonable time.
|
28
|
NOTICES
|
|
28.1
|
General. Unless
otherwise specifically provided, any notice under or in connection with
any Finance Document shall be given by registered letter or fax; and
references in the Finance Documents to written notices, notices in writing
and notices signed by particular persons shall be construed
accordingly.
|
|
28.2
|
Addresses for
communications. A notice shall be
sent:
|
|
(a)
|
to
the Borrower:
|
Aethrion
Centre
40
Xx. Xxxxxxxxxxxx Xxxxxx
000
00 Xxxxxxxx
Xxxxxx
Xxxxxx
Fax
No: x00 000 000 0000
Attn:
the Chief Financial Officer
|
|
(b)
|
to
a Lender:
|
At
the address opposite its name in Schedule 1 or (as the case may require)
in the relevant Transfer Certificate.
|
|
(c)
|
to
the Agent:
|
Piraeus
Bank A.E.
00-00
Xxxx Xxxxxxx
000
00 Xxxxxxx
Xxxxxx
Fax
No: x00 000 000 0000
Attn:
Relationship Manager
|
|
(d)
|
to
the Security Trustee:
|
Piraeus
Bank A.E.
47-49
Xxxx Xxxxxxx
000
00 Xxxxxxx
Xxxxxx
Fax
No: x00 000 000 0000
Attn:
Relationship Manager
|
|
(e)
|
to
the Swap Bank:
|
Piraeus
Bank A.E.
47-49
Xxxx Xxxxxxx
000
00 Xxxxxxx
Xxxxxx
Fax
No: x00 000 000 0000
Attn:
Relationship Manager
|
63
or to
such other address as the relevant party may notify the Agent or, if the
relevant party is the Agent or the Security Trustee, the Swap Bank, the
Borrower, the Lenders, and the Security Parties.
|
28.3
|
Effective date of notices.
Subject to Clauses 28.4 and
28.5:
|
|
(a)
|
a
notice which is delivered personally shall be deemed to be served, and
shall take effect, at
the time when it is
delivered;
|
|
(b)
|
a
notice which is delivered by registered letter shall be deemed to be
served, and shall take
effect, 5 Business Days after being deposited in the post postage prepaid
in an envelope addressed to it at the relevant address;
and
|
|
(c)
|
a
notice which is sent by fax shall be deemed to be served, and shall take
effect, 2 hours after its transmission is
completed.
|
|
28.4
|
Service outside business hours.
However, if under Clause 28.3 a notice would be deemed to be
served:
|
|
(a)
|
on
a day which is not a business day in the place of receipt;
or
|
|
(b)
|
on
such a business day, but after 5 p.m. local
time;
|
the
notice shall (subject to Clause 28.5) be deemed to be served, and shall take
effect, at 9 a.m. on the next day which is such a business day.
|
28.5
|
Illegible notices.
Clauses 28.3 and 28,4 do not apply if the recipient of a notice
notifies the sender within one hour after the time at which the notice
would otherwise be deemed to be served that the notice has been received
in a form which is illegible in a material
respect.
|
|
28.6
|
Valid notices. A notice
under or in connection with a Finance Document shall not be invalid by
reason that its contents or the manner of serving it do not comply with
the requirements of this Agreement or, where appropriate, any other
Finance Document under which it is served
if:
|
|
(a)
|
the
failure to serve it in accordance with the requirements of this Agreement
or other Finance Document, as the case may be, has not caused any party to
suffer any significant loss or prejudice;
or
|
|
(b)
|
in
the case of incorrect and/or incomplete contents, it should have been
reasonably clear to the party on which the notice was served what the
correct or missing particulars should have
been.
|
|
28.7
|
English language. Any
notice under or in connection with a Finance Document shall be in
English.
|
|
28.8
|
Meaning of “notice”. In
this Clause “notice” includes any demand, consent, authorisation,
approval, instruction, waiver or other
communication.
|
|
29
|
SUPPLEMENTAL
|
|
29.1
|
Rights cumulative,
non-exclusive. The rights and remedies which the Finance Documents
give to each Creditor Party are:
|
|
(a)
|
cumulative;
|
64
|
(b)
|
may
be exercised as often as appears expedient;
and
|
|
(c)
|
shall
not, unless a Finance Document explicitly and specifically states so, be
taken to exclude
or limit any right or remedy conferred by any
law.
|
|
29.2
|
Severability of provisions.
If any provision of a Finance Document is or subsequently becomes
void, unenforceable or illegal, that shall not affect the validity,
enforceability or legality of the other provisions of that Finance
Document or of the provisions of any other Finance
Document.
|
|
29.3
|
Third party rights. A
person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce or to enjoy the
benefit of any term of this
Agreement.
|
|
29.4
|
Counterparts. A Finance
Document may be executed in any number of
counterparts.
|
|
30
|
LAW
AND JURISDICTION
|
|
30.1
|
English law. This
Agreement shall be governed by, and construed in accordance with, English
law.
|
|
30.2
|
Exclusive English jurisdiction.
Subject to Clause 30.3, the courts of England shall have exclusive
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement.
|
|
30.3
|
Choice of forum for the
exclusive benefit of the Creditor Parties. Clause 30.2 is for the
exclusive benefit of the Creditor Parties, each of which reserves the
right:
|
|
(a)
|
to
commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter;
and
|
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
|
The
Borrower shall not commence any proceedings in any country other than England in
relation to a matter which arises out of or in connection with this
Agreement.
|
30.4
|
Process agent. The
Borrower irrevocably appoints Eurofin International Ltd, whose present
address is Xxxxxxx Xxxxxxx, Xxxxxx XX00 XXX, Xxxxxxx, to act as its agent
to receive and accept on its behalf any process or other document relating
to any proceedings in the English courts which are connected with this
Agreement.
|
|
30.5
|
Creditor Party rights
unaffected. Nothing in this Clause 30 shall exclude or limit any
right which any Creditor Party may have (whether under the law of any
country, an international convention or otherwise) with regard to the
bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
|
|
30.6
|
Meaning of “proceedings”.
In this Clause 30, “proceedings” means
proceedings of any kind, including an application for a provisional or
protective measure.
|
AS WITNESS the hands of the
duly authorised officers or attorneys of the parties the day and year first
before written.
65
SCHEDULE
1
LENDERS
AND COMMITMENTS
|
Lender
|
Lending
Office
|
Commitment
(US
Dollars)
|
|
Piraeus
Bank A.E.
|
00-00
Xxxx Xxxxxxx
000
00 Xxxxxxx
Xxxxxx
|
170,000,000*
|
|
|
*
|
Please refer to Clause 2.4
pursuant to which the Commitment of Piraeus Bank A.E. is limited initially
to $65,000,000, increasing, following the syndication of the Total
Commitments, up to
$85,000,000
|
66
SCHEDULE
2
DETAILS
OF INITIAL CHARTERPARTIES
|
Ship
|
Hire
Rate ($/day)
|
Actual
or Estimated Delivery Date
|
Charter
Period (months)
|
Charterer
|
|
“ALPHA”
|
47,500
|
Delivered
on [•]
|
35
to 38 months
|
Worldlink
Shipping Limited
|
|
“BETA”
|
106,500
|
Delivered
on [•]
|
24
to 26 months
|
Industrial
Carriers Inc.
|
|
“SINFONIA”
|
100,000
|
Within
3 Business
Days
of the Drawdown
Date
for Tranche A
|
11
months
|
K
Line
|
67
SCHEDULE
3
DRAWDOWN
NOTICE
To:Piraeus
Bank A.E.
00-00
Xxxx Xxxxxxx
000 00
Xxxxxxx
Xxxxxx
Attention:
Loans Administration [ ] 2008
DRAWDOWN
NOTICE
|
1
|
We
refer to the loan agreement (the “Loan Agreement”) dated
[•] 2008 and made between ourselves as Borrower, the Lenders referred to
therein, yourselves as Agent, Security Trustee and Swap Bank and in
connection with a term loan facility of up to US$170,000,000. Terms
defined in the Loan Agreement have their defined meanings when used in
this Drawdown Notice.
|
|
2
|
We
request to borrow Tranche [A] [B] [C] as
follows:
|
|
(a)
|
Amount
of Tranche $[•];
|
|
(b)
|
Drawdown
Date: [•] 2008;
|
|
(c)
|
Duration
of the first Interest Period shall be [•]
months;
|
|
(d)
|
Payment
instructions: account of
[ ]
and numbered
[ ] with
[ ]
of
[ ].
|
|
3
|
We
represent and warrant that:
|
|
(a)
|
the
representations and warranties in Clause 10 of the Loan Agreement would
remain
|
|
|
true
and not misleading if repeated on the date of this notice with reference
to the circumstances now existing;
|
|
(b)
|
no
Event of Default or Potential Event of Default has occurred or will result
from the
|
|
|
borrowing
of the Loan.
|
|
4
|
This
notice cannot be revoked without the prior consent of the Majority
Lenders.
|
|
5
|
We
authorise you to deduct any outstanding fees applicable to the Tranche
referred to in Clause 20.1 from the amount of that
Tranche.
|
|
[Attorney-in-Fact][Director]
for
and on behalf of
|
68
SCHEDULE
4
CONDITION
PRECEDENT DOCUMENTS
PART
A
The
following are the documents referred to in Clause 9.1(a).
|
1
|
A
duly executed original of each of:
|
|
(a)
|
this
Agreement;
|
|
(b)
|
the
Agency and Trust Deed;
|
|
(c)
|
the
Guarantees; and
|
|
(d)
|
the
Earnings Account Pledges.
|
|
2
|
Copies
of the certificate of incorporation and constitutional documents of the
Borrower and each Owner.
|
|
3
|
Copies
of resolutions of the directors of the Borrower and the directors and
shareholders of each Owner authorising the execution of each of the
Finance Documents to which the Borrower or that Owner is a party and, in
the case of the Borrower, authorising named officers to give the Drawdown
Notices and other notices under this
Agreement.
|
|
4
|
The
original of any power of attorney under which any Finance Document is
executed on behalf of the Borrower or each
Owner.
|
|
5
|
Copies
of all consents which the Borrower or any Owner requires to enter into, or
make any payment under, any Finance Document and, in the case of Star L,
the MOA.
|
|
6
|
The
originals of any mandates or other documents required in connection with
the opening or operation of each Earnings
Account.
|
|
7
|
Evidence
satisfactory to the Agent that each Owner is a direct or indirect
wholly-owned subsidiary of the
Borrower.
|
|
8
|
A
copy of the MOA and of all documents signed or issued by the parties
thereto under or in connection with
it.
|
|
9
|
Such
documentary evidence as the Agent and its legal advisers may require in
relation to the due authorisation and execution of the MOA and all
documents to be executed by the parties thereto under the
MOA.
|
|
10
|
A
copy of the Management Agreement in respect of each
Ship.
|
69
|
11
|
All documentation
required by each Creditor Party in relation to the Borrower and any
Security Party pursuant to that Creditor Party’s “know your customer”
requirements.
|
|
12
|
Documentary
evidence that the agent for service of process named in Clause 30 has been
appointed.
|
|
13
|
Favourable
legal opinions from lawyers appointed by the Agent on such matters
concerning the laws of the Xxxxxxxx Islands and such other relevant
jurisdictions as the Agent may
require.
|
|
14
|
If
the Agent so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Agent.
|
PART
B
The
following are the documents referred to in Clause 9.1(b).
|
1
|
A
copy of the Initial Charterparty in relation to each Ship and of all
documents signed or issued by the parties thereto under or in connection
with that Initial Charterparty.
|
|
2
|
A
duly executed original of the Mortgage, the General Assignment and the
Charterparty Assignment relating to each Ship (and of each document to be
delivered under each of them);
|
|
3
|
Documentary
evidence that:
|
|
(a)
|
“SINFONIA”
has been unconditionally delivered by the Seller to, and accepted by, Star
L under
the MOA and the Contract Price (including any balance not being financed
by Tranche A) has been duly paid, together with a copy of the xxxx of sale
and the other documents delivered by the Seller
thereunder;
|
|
(b)
|
each
Ship is definitively and permanently registered in the name of the
relevant Owner under
an Approved Flag;
|
|
(c)
|
each
Ship is in the absolute and unencumbered ownership of the Owner thereof,
save as contemplated
by the Finance Documents applicable to that
Ship;
|
|
(d)
|
each
Ship maintains the highest available class with a first-class
classification society which
is a member of IACS as the Agent may approve free of all overdue
recommendations and conditions of such classification
society;
|
|
(e)
|
the
Mortgage relating to each Ship has been duly registered against that Ship
as a valid first priority
or preferred ship mortgage in accordance with the laws of the relevant
Approved Flag State;
|
|
(f)
|
each
Ship is insured in accordance with the provisions of this Agreement and
all requirements
therein in respect of insurances have been complied with;
and
|
|
4
|
A
duly executed original of each Manager’s Undertaking in relation to each
Ship.
|
|
5
|
Copies
of:
|
|
(a)
|
the
document of compliance (DOC) and safety management certificate (SMC)
referred to in paragraph (a) of the definition of the ISM Code
Documentation and the ISSC in respect of each Ship and the relevant
Approved Manager certified as true and in effect by the relevant Owner;
and
|
|
(b)
|
the
ISPS Code Documentation in respect of each Ship and the relevant Owner
certified as true and in effect by that
Owner.
|
|
6
|
A
valuation (at the cost of the Borrower) of each Ship, addressed to the
Agent, stated to be for the purpose of this Agreement and dated not
earlier than 15 days before the Drawdown Date for Tranche A, each from an
independent sale and purchase ships broker appointed by the Agent to be
prepared in accordance with Clause 15.4 and showing that the aggregate
Market Value of the Ships is in an amount satisfactory to the
Agent.
|
|
7
|
Favourable
legal opinions from lawyers appointed by the Agent on such matters
concerning the laws of Xxxxxxxx Islands and such other relevant
jurisdictions as the Agent may
require.
|
|
8
|
A
favourable opinion from an independent insurance consultant acceptable to
the Agent on such matters relating to the insurances of each Ship as the
Agent may require.
|
|
9
|
If
the Agent so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Agent.
|
Every
other copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of
the Borrower or any other person acceptable to the Agent in its sole
discretion.
71
SCHEDULE
5
TRANSFER
CERTIFICATE
The
Transferor and the Transferee accept exclusive responsibility for ensuring that
this Certificate and the transaction to which it relates comply with all legal
and regulatory requirements applicable to them respectively.
|
To:
|
Piraeus
Bank A.E. for itself and for and on behalf of the Borrower, each Security
Party, the Security Trustee, the Swap Bank and each Lender, as defined in
the Loan Agreement referred to
below.
|
[
]
|
1
|
This
Certificate relates to a Loan Agreement (the “Loan Agreement”) dated
[ ] 2008 and made between (1) Star Bulk Carriers Corp. as
borrower (the “Borrower”), (2) the
banks and financial institutions named therein as Lenders, (3) Piraeus
Bank A.E. as Agent, (4) Piraeus Bank A.E. as Security Trustee and (5)
Piraeus Bank A.E. as Swap Bank in respect of a term loan facility of up to
US$170,000,000.
|
|
2
|
In
this Certificate:
|
“the Relevant Parties” means
the Agent, the Borrower, each Security Party, the Security Trustee, the Swap
Bank and each Lender;
“the Transferor” means [full
name] of [lending office];
“the Transferee” means [full
name] of [lending office].
Terms
defined in the Loan Agreement shall, unless the contrary intention appears, have
the same meanings when used in this Certificate.
|
3
|
The
effective date of this Certificate is ........200
Provided that this
Certificate shall not come into effect unless it is signed by the Agent on
or before that
date.
|
|
4
|
The
Transferor assigns to the Transferee absolutely all rights and interests
(present, future or contingent) which the Transferor has as Lender under
or by virtue of the Loan Agreement and every other Finance Document in
relation to [ ] per cent. of the Contribution outstanding to the
Transferor (or its predecessors in title) which is set out
below:
|
|
Contribution
|
Amount
transferred
|
72
|
5
|
By
virtue of this Transfer Certificate and Clause 26 of
the Loan Agreement, the Transferor is discharged [entirely from its
Commitment which amounts to
$[ ]]
[from [ ] per cent. of its Commitment, which percentage represents
$[ ]] and the Transferee acquires
a Commitment of
$[ ].
|
|
6
|
The
Transferee undertakes with the Transferor and each of the Relevant Parties
that the Transferee will observe and perform all the obligations under the
Finance Documents which Clause 26 of the Loan Agreement provides will
become binding on it upon this Certificate taking
effect.
|
|
7
|
The
Agent, at the request of the Transferee (which request is hereby made)
accepts, for the Agent itself and for and on behalf of every other
Relevant Party, this Certificate as a Transfer Certificate taking effect
in accordance with Clause 26 of the Loan
Agreement.
|
|
8
|
The
Transferor:
|
|
(a)
|
warrants
to the Transferee and each Relevant
Party:
|
|
|
(i)
|
that
the Transferor has full capacity to enter into this transaction and has
taken all corporate action and obtained all consents which are in
connection with this transaction;
and
|
|
|
(ii)
|
that
this Certificate is valid and binding as regards the
Transferor;
|
|
(b)
|
warrants
to the Transferee that the Transferor is absolutely entitled, free of
encumbrances, to all the rights and interests covered by the assignment in
paragraph 4 above;
|
|
(c)
|
undertakes
with the Transferee that the Transferor will, at its own expense, execute
any documents which the Transferee reasonably requests for perfecting in
any relevant jurisdiction the Transferee’s title under this Certificate or
for a similar purpose.
|
|
9
|
The
Transferee:
|
|
(a)
|
confirms
that it has received a copy of the Loan Agreement and each other Finance
Document;
|
|
(b)
|
agrees
that it will have no rights of recourse on any ground against either the
Transferor, the Agent, the Security Trustee, the Swap Bank or any Lender
in the event that:
|
|
|
(i)
|
the
Finance Documents prove to be invalid or
ineffective,
|
|
|
(ii)
|
the
Borrower or any Security Party fails to observe or perform its
obligations, or to discharge its liabilities, under the Finance
Documents;
|
|
|
(iii)
|
it
proves impossible to realise any asset covered by a Security Interest
created by a Finance Document, or the proceeds of such assets are
insufficient to discharge the liabilities of the Borrower or any Security
Party under the Finance Documents;
|
|
(c)
|
agrees
that it will have no rights of recourse on any ground against the Agent,
the Security Trustee, the Swap Bank or any Lender in the event that this
Certificate proves to be invalid or
ineffective;
|
73
|
(d)
|
warrants
to the Transferor and each Relevant Party (i) that it has full capacity to
enter into this transaction and has taken all corporate action and
obtained all official consents which it needs to take or obtain in
connection with this transaction; and (ii) that this Certificate is valid
and binding as regards the Transferee;
and
|
|
(e)
|
confirms
the accuracy of the administrative details set out below regarding the
Transferee.
|
|
10
|
The
Transferor and the Transferee each undertake with the Agent and the
Security Trustee severally, on demand, fully to indemnify the Agent and/or
the Security Trustee in respect of any claim, proceeding, liability or
expense (including all legal expenses) which they or either of them may
incur in connection with this Certificate or any matter arising out of it,
except such as are shown to have been mainly and directly caused by the
gross and culpable negligence or dishonesty of the Agent’s or the Security
Trustee’s own officers or
employees.
|
|
11
|
The
Transferee shall repay to the Transferor on demand so much of any sum paid
by the Transferor under paragraph 10 above as exceeds
one-half of the amount demanded by the Agent or the Security Trustee in
respect of a claim, proceeding, liability or expense which was not
reasonably foreseeable at the date of this Certificate; but nothing in
this paragraph shall affect the liability of each of the Transferor and
the Transferee to the Agent or the Security Trustee for the full amount
demanded by it.
|
|
[Name
of Transferor]
|
[Name
of Transferee]
|
|
By:
|
By:
|
|
Date:
|
Date:
|
|
Agent
|
|
|
Signed
for itself and for and on behalf of itself as Agent and for every other
Relevant Party
|
|
| PIRAEUS BANK A.E. | |
|
By:
|
|
|
Date:
|
74
Administrative
Details of Transferee
Name of
Transferee:
Lending
Office:
Contact
Person
(Loan
Administration Department):
Telephone:
Telex:
Fax:
Contact
Person
(Credit
Administration Department):
Telephone:
Telex:
Fax:
Account
for payments:
|
Note:
|
This
Transfer Certificate alone may not be sufficient to transfer a
proportionate share of the Transferor’s interest in the security
constituted by the Finance Documents in the Transferor’s or Transferee’s
jurisdiction. It is the responsibility of each Lender to ascertain whether
any other documents are required for this
purpose.
|
75
SCHEDULE
6
FORM
OF COMPLIANCE CERTIFICATE
|
|
To:
|
PIRAEUS
BANK X.X.
|
|
|
Xxxx
7-9
|
X-00000 Xxxxxxx
Germany
[ ] 200[
]
Dear
Sirs,
We refer
to a loan agreement dated [•] 2008 (the “Loan Agreement”) made between (amongst
others) yourselves and ourselves in relation to a term loan facility of up to
$170,000,000.
Words and
expressions defined in the Loan Agreement shall have the same meaning when used
in this compliance certificate.
We
enclose with this certificate a copy of the [audited]/[unaudited] consolidated
accounts for the Group for the [financial year] [3-month period] ended [•]. The
accounts (i) have been prepared in accordance with all applicable laws and GAAP
all consistently applied, (ii) give a true and fair view of the state of affairs
of the Group at the date of the accounts and of its profit for the period to
which the accounts relate and (iii) fully disclose or provide for all
significant liabilities of the Group.
We also
enclose copies of the valuations of all the Fleet Vessels which were used for
the purpose of calculating the Leverage Ratio as at [•].
The
Borrower represents that no Event of Default or Potential Event of Default has
occurred as at the date of this certificate [except for the following matter or
event [set out all material
details of matter or event]]. In addition as of [•], the Borrower
confirms compliance with the financial covenants set out in Clause 12.5 of the
Loan Agreement for the 3 months ending as of the date to which the enclosed
accounts are prepared.
We now
certify that, as at [●]:
|
|
(a)
|
the
Interest Coverage Ratio is [●]:[●];
|
|
|
(b)
|
the
Leverage Ratio is [●]:[●];
and
|
|
|
(c)
|
the
Liquid Funds are $[●], representing $[●] per Fleet
Vessel,
|
as shown
in the attached calculation sheets.
This
certificate shall be governed by, and construed in accordance with, English
law.
|
[ ]
Chief
Financial Officer of
|
76
EXECUTION
PAGE
|
BORROWED
|
||
|
SIGNED by Georgia
Mastagas
for
an on behalf of
STAR
BULK CARRIERS CORP
|
)
)
)
|
|
|
LENDERS
|
||
|
SIGNED by Xxxxxxxx Xxxxx
and Xxxxx Dallas
for
an on behalf of
PIRAEUS
BANK A.E.
|
)
)
)
|
|
|
AGENT
|
||
|
SIGNED by Xxxxxxxx Xxxxx
and Xxxxx Dallas
for
an on behalf of
PIRAEUS
BANK A.E.
|
)
)
)
|
|
|
SECURITY
TRUSTEE
|
||
|
SIGNED by Xxxxxxxx Xxxxx
and Xxxxx Dallas
for
an on behalf of
PIRAEUS
BANK A.E.
|
)
)
)
|
|
|
SWAP BANK
|
||
|
SIGNED by Xxxxxxxx Xxxxx
and Xxxxx Dallas
for
and on behalf of
PIRAEUS
BANK A.E.
|
)
)
)
|
|
|
Witness
to all the above signatures
|
)
|
|
|
Name:
Address:
|
77
