Loan Agreement relating to a US$3,975,230 loan facility Dated February 2010
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relating
to a US$3,975,230 loan facility
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Dated
February
2010
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BHOBO
One Ltd.
BHOBO
Two Ltd.
BHOBO
Three Ltd.
RMJ
OBO Shipping Ltd.
Sagamore
Shipping Ltd.
OBO
Holdings Ltd.
Boss
Tankers Ltd.
Agawam
Shipping Corp.
Aquidneck
Shipping Corp.
Anawan
Shipping Corp.
Isabelle
Shipholdings Corp.
(as
joint and several Borrowers)
B+H
Ocean Carriers Ltd
(as
Guarantor)
Bank
of Scotland plc
(as
Lender)
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Contents
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1
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Definitions
and interpretation
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3
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1.1
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Definitions
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3
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1.2
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Interpretation
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16
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2
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Facility
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18
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3
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Drawdown
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18
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3.1
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Request
for Advance
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18
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3.2
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Availability
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18
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3.3
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Drawdown
Notice irrevocable
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19
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3.4
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Disbursement
of Advance by issuance of the Effective Date Notice
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19
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4
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Interest
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19
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4.1
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Payment
of normal interest
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19
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4.2
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Normal
rate of interest
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19
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4.3
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Payment
of accrued interest
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19
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4.4
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Notification
of market disruption
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19
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4.5
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Suspension
of drawdown.
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20
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4.6
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Negotiation
of alternative rate of interest
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20
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4.7
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Application
of agreed alternative rate of interest
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20
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4.8
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Alternative
rate of interest in absence of agreement
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20
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4.9
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Notice
of prepayment
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20
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4.10
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Prepayment
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20
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4.11
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Application
of prepayment
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20
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5
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Interest
Periods
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20
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5.1
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Commencement
of Interest Periods
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20
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5.2
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Duration
of normal Interest Periods
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20
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5.3
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Duration
of Interest Periods for repayment instalments
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21
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5.4
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Non-availability
of matching deposits for Interest Period selected
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21
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6
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Default
interest
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21
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6.1
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Payment
of default interest on overdue amounts
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21
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6.2
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Default
rate of interest
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21
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6.3
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Calculation
of default rate of interest
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21
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6.4
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Notification
of interest periods and default rates
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22
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6.5
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Payment
of accrued default interest
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22
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6.6
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Compounding
of default interest
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22
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6.7
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Application
to Master Agreements
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22
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7
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Repayment
and prepayment
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22
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7.1
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Amount
of repayment instalments
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22
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7.2
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Mandatory
repayment of Excess Cash
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23
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7.3
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Final
Repayment Date
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23
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7.4
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Voluntary
prepayment
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23
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7.5
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Conditions
for voluntary prepayment
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23
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7.6
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Effect
of notice of prepayment
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24
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7.7
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Mandatory
prepayment
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24
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7.8
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Amounts
payable on prepayment
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24
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7.9
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Application
of partial prepayment
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24
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7.10
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No
reborrowing
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24
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8
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Conditions
precedent
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24
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8.1
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Documents,
fees and no default
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24
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8.2
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Waivers
of conditions precedent
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26
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9
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Representations
and warranties
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26
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9.1
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General
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26
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9.2
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Status
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26
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9.3
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Share
capital and ownership
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26
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9.4
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Corporate
power
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27
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9.5
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Consents
in force
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27
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9.6
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Legal
validity; effective Security Interests
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27
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9.7
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No
third party Security Interests
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27
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9.8
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No
conflicts
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27
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9.9
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No
withholding taxes
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28
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9.10
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No
default
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28
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9.11
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Information
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28
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9.12
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No
litigation
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28
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9.13
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Compliance
with certain undertakings
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28
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9.14
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Taxes
paid
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28
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9.15
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ISM
Code and ISPS Code compliance
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28
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9.16
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No
filing or stamp taxes
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28
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9.17
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Own
account
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29
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9.18
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Pari
passu ranking
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29
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9.19
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No
sovereign immunity
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29
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9.20
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Barge
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29
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10
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General
undertakings
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29
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10.1
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General
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29
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10.2
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Title;
negative pledge
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29
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10.3
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No
disposal of assets
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30
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10.4
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No
other liabilities or obligations to be incurred
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30
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10.5
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Information
provided to be accurate
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30
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10.6
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Provision
of financial statements and other information
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30
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10.7
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Form
of financial statements
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30
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10.8
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Shareholder
and creditor notices
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31
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10.9
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Consents
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31
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10.10
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Maintenance
of Security Interests
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31
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10.11
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Notification
of litigation
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31
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10.12
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No
amendment to Master Agreements
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31
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10.13
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Confirmation
of no default
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31
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10.14
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Notification
of default
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32
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10.15
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Provision
of further information
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32
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10.16
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Due
diligence
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32
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10.17
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Further
Information
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32
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10.18
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New
equity undertaking
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32
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10.19
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Information
on Trade Debt
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33
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10.20
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Restriction
on prepayments of the Nordea Facility
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33
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10.21
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Information
relating to chartering and financing of the Barge
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34
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10.22
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Payments
into retention account
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34
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10.23
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Cashflow
Forecasts and Cashflow Reports
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34
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10.24
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Guarantor's
consent and confirmation
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35
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The
Guarantor hereby:
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35
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11
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Corporate
undertakings
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35
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11.1
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General
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35
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11.2
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Maintenance
of status
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35
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11.3
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Negative
undertakings
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35
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12
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Insurance
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36
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12.1
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General
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36
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12.2
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Maintenance
of obligatory insurances
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36
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12.3
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Terms
of obligatory insurances
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37
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12.4
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Further
protections for the Lender
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37
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12.5
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Renewal
of obligatory insurances
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37
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12.6
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Copies
of policies; letters of undertaking
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38
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12.7
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Copies
of certificates of entry
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38
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12.8
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Deposit
of original policies
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39
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12.9
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Payment
of premiums
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39
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12.10
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Guarantees
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39
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12.11
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Compliance
with terms of insurances
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39
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12.12
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Alteration
to terms of insurances
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39
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12.13
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Settlement
of claims
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39
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12.14
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Provision
of copies of communications
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40
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12.15
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Provision
of information
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40
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12.16
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Mortgagee's
interest, additional perils
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40
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13
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Ship
covenants
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40
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13.1
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General
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40
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13.2
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Ship's
name and registration
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40
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13.3
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Repair
and classification
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41
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13.4
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Modification
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41
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13.5
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Removal
of parts
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41
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13.6
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Surveys
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41
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13.7
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Inspection
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41
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13.8
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Prevention
of and release from arrest
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42
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13.9
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Compliance
with laws etc.
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42
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13.10
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Provision
of information
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42
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13.11
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Notification
of certain events
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43
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13.12
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Restrictions
on chartering, appointment of managers etc.; undertaking to replace or
extend charterparties
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43
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13.13
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Notice
of Mortgage
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44
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13.14
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Sharing
of Earnings
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44
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14
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Financial
covenants
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44
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14.1
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Definitions
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44
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14.2
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Financial
covenants
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44
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15
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Security
cover
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45
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15.1
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Minimum
required security cover
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45
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15.2
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Provision
of additional security; prepayment
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45
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15.3
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Value
of additional vessel security
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46
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15.4
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Valuations
binding
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46
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15.5
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Provision
of information
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46
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15.6
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Payment
of valuation expenses
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46
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16
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Payments
and calculations
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46
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16.1
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Currency
and method of payments
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46
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16.2
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Payment
on non-Business Day
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46
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16.3
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Basis
for calculation of periodic payments
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47
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16.4
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Lender
accounts
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47
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16.5
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Accounts
prima facie evidence
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47
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16.6
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Source
of funds
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47
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17
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Application
of receipts
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47
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17.1
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Normal
order of application
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47
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17.2
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Variation
of order of application
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48
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17.3
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Notice
of variation of order of application
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48
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17.4
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Appropriation
rights overridden
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48
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18
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Application
of Earnings
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48
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18.1
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Payment
of Earnings
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48
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18.2
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Location
of accounts
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48
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18.3
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Debits
for expenses etc.
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49
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19
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Events
of Default
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49
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19.1
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Events
of Default
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49
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19.2
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Actions
following an Event of Default
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49
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19.3
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Termination
of Commitment
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49
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19.4
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Acceleration
of the Advances
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49
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19.5
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Multiple
notices; action without notice
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49
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19.6
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Exclusion
of Lender/Swap Bank liability
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49
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19.7
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Interpretation
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49
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20
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Fees
and expenses
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49
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20.1
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Arrangement
fee
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49
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20.2
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Costs
of negotiation, preparation etc.
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49
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20.3
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Costs
of variations, amendments, enforcement etc.
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49
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20.4
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Certification
of amounts
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49
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21
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Indemnities
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49
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21.1
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Indemnities
regarding borrowing and repayment of the Advance
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49
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21.2
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Breakage
costs
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49
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21.3
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Miscellaneous
indemnities
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49
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21.4
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Currency
indemnity
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49
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21.5
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Application
to Master Agreements
|
49
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21.6
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Certification
of amounts
|
49
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|
22
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No
set-off or Tax Deduction; value added tax
|
49
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22.1
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Definitions
|
49
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22.2
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No
set-off and counterclaim
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49
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22.3
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Tax
gross-up
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49
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22.4
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Tax
indemnity
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49
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22.5
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Tax
Credit
|
49
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22.6
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Stamp
taxes
|
49
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22.7
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Value
added tax
|
49
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23
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Illegality,
etc.
|
49
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23.1
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Illegality
|
49
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23.2
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Notification
and effect of illegality
|
49
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23.3
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Mitigation
|
49
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|
24
|
Increased
costs
|
49
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24.1
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Definitions
|
49
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24.2
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Increased
Costs
|
49
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24.3
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Optional
prepayment
|
49
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25
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Set-off
|
49
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25.1
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Set-off
of matured or contingent liabilities
|
49
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25.2
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Existing
rights unaffected
|
49
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25.3
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No
Security Interest
|
49
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|
26
|
Transfers
and changes in lending office
|
49
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26.1
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Transfer
by Borrowers
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49
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26.2
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Assignment
by Lender
|
49
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26.3
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Rights
of assignee
|
49
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26.4
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Sub-participation;
subrogation assignment
|
49
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26.5
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Disclosure
of information
|
49
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26.6
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Change
of lending office
|
49
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27
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Variations
and waivers
|
49
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27.1
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Variations,
waivers etc. by Lender
|
49
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27.2
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Exclusion
of other or implied variations
|
49
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28
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Notices
|
49
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28.1
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Method
and delivery
|
49
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28.2
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Addresses
|
49
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28.3
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Receipt
|
49
|
|
28.4
|
Electronic
communication
|
49
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28.5
|
Service
Documents
|
49
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28.6
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Valid
notices
|
49
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|
29
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Joint
and several liability
|
49
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29.1
|
General
|
49
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29.2
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No
impairment of Borrower's obligations
|
49
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29.3
|
Principal
debtors
|
49
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|
29.4
|
Subordination
|
49
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29.5
|
Borrower's
required action
|
49
|
|
30
|
Relationship
between the Lender and the Swap Bank
|
49
|
|
31
|
Supplemental
|
49
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31.1
|
Rights
cumulative, non-exclusive
|
49
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31.2
|
Invalidity
|
49
|
|
31.3
|
Counterparts
|
49
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31.4
|
Third
party rights
|
49
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|
31.5
|
Entire
Agreement
|
49
|
|
32
|
Governing
law
|
49
|
|
33
|
Jurisdiction
|
49
|
|
33.1
|
Jurisdiction
of the English courts
|
49
|
|
33.2
|
Proceedings
in other jurisdictions
|
49
|
|
33.3
|
Waiver
of objections
|
49
|
|
34
|
Service
of process
|
49
|
|
34.1
|
Address
for service
|
49
|
|
34.2
|
Agreed
method of service
|
49
|
|
Schedule
1 - Drawdown Notice
|
49
|
|
|
Schedule
2 - Condition precedent documents
|
49
|
|
|
Schedule
3 – Mandatory Cost formula
|
49
|
|
|
Schedule
4 – Form of Effective Date Notice
|
49
|
|
|
Schedule
5 – Form of Compliance Certificate
|
49
|
GRK/54321.31100/8688553.08 Contents
()
Dated
February
2010
Between
|
(1)
|
BHOBO One Ltd., a
Xxxxxxxx Islands company of Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960 and whose principal office is at Par La
Ville Place, 00 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX00,
Xxxxxxx;
|
|
(2)
|
BHOBO Two Ltd., a
Xxxxxxxx Islands company of Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960 and whose principal office is at Par La
Ville Place, 00 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX00,
Xxxxxxx;
|
|
(3)
|
BHOBO Three Ltd., a
Xxxxxxxx Islands company of Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960 and whose principal office is at Par La
Ville Place, 00 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX00,
Xxxxxxx;
|
|
(4)
|
RMJ OBO Shipping Ltd., a
Xxxxxxxx Islands company of Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960 and whose principal office is at Par La
Ville Place, 00 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX00,
Xxxxxxx;
|
|
(5)
|
Sagamore Shipping Ltd.,
a Xxxxxxxx Islands company of Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960 and whose principal office is at Par La
Ville Place, 00 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX00,
Xxxxxxx;
|
|
(6)
|
OBO Holdings Ltd., a
Xxxxxxxx Islands company of Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960l and whose principal office is at Par La
Ville Place, 00 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx XX00, Xxxxxxx (OBO Holdings and
together with BHOBO One Ltd., BHOBO Two Ltd., BHOBO Three Ltd., RMJ OBO
Shipping Ltd. and Sagamore Shipping Ltd. are hereinafter referred to as
the OBO
Borrowers);
|
|
(7)
|
Boss Tankers Ltd., a
Xxxxxxxx Islands company whose registered offices are at Trust Company
Complex, Ajeltake Island, Majuro, Xxxxxxxx Islands MH96960 and whose
principal office is at Par La Ville Place, 00 Xxx-Xx-Xxxxx Xxxx, Xxxxxxxx
XX00, Xxxxxxx (Boss
Tankers)
|
|
(8)
|
Agawam Shipping
Corp., being a
corporation incorporated in the Xxxxxxxx Islands whose registered offices
are at Trust Company Complex, Ajeltake Island, Majuro, Xxxxxxxx Islands
MH96960 and whose principal office is at Par la Ville Place, 00 Xxx xx
Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx (Xxxxxx);
|
|
(9)
|
Aquidneck Shipping
Corp., being a corporation incorporated in the Xxxxxxxx Islands
whose registered offices are at Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960 and whose principal office is at Par la
Ville Place, 14 Par la Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx (Aquidneck);
|
|
(10)
|
Anawan Shipping
Corp., being a
corporation incorporated in the Xxxxxxxx Islands whose registered offices
are at Trust Company Complex, Ajeltake Island, Majuro, Xxxxxxxx Islands
MH96960 and whose principal office is at Par la Ville Place, 14 Par la
Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx (Xxxxxx and together with
Boss Tankers, Agawam, Aquidneck are hereinafter referred to as the Original
Borrowers);
|
|
(11)
|
Isabelle Shipholding
Corp., being a
corporation incorporated in Liberia whose registered offices are at 00
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx of Liberia (Isabelle and together
with Boss Tankers, Agawam, Aquidneck and Anawam are hereinafter referred
to as the Existing
Borrowers);
|
the OBO
Borrowers and the Existing Borrower as joint and several Borrowers (as that term
is defined below); and
|
(12)
|
B+H Ocean Carriers Ltd.,
a Liberian company of 3rd Floor, Par La Ville, 00 Xxx Xx Xxxxx Xxxx,
Xxxxxxxx XXXX, Xxxxxxx (xxx
Xxxxxxxxx);
|
|
(13)
|
Bank of Scotland plc as the Lender (as
that term is defined below).
|
Background
|
A
|
By
a Loan Agreement dated 30 August 2007 (the Original Loan
Agreement), the Lender made available to the Original Borrowers a
loan facility of up to $25,500,000 (the Original Loan) to
finance the ships named "Agawam", "Anawan" and "Aquidneck" (the Original
Ships).
|
|
B
|
By
a Loan Agreement dated 7 December 2007 (the December Loan
Agreement), the Lender made available to the Existing Borrowers a
loan facility of up to $34,000,000 in respect of (a) the refinancing of
the Original Loan, (b) the financing of the product tanker type vessel
named "Pequod" (together with the Original Ships, the Existing Ships) and (c)
the provision of finance for each of the Existing Ships to be converted
from a single hull status to a fully IMO compliant double hull status (the
Existing
Loan).
|
|
C
|
By
a consent letter dated 20 August 2009 from the Lender addressed to, and
acknowledged by, the Guarantor and the Existing Borrowers (the First Consent Letter),
the Lender gave certain consents for the benefit of the Existing
Borrowers, and the Guarantor and the Existing Borrowers gave certain
undertakings to the Lender and in particular agreed that any failure by
them to comply with any of their respective obligations under the letter
would (among other things) entitle the Lender to increase the rate of
interest applicable to all Advances (as defined in the Existing Loan
Agreement) to a rate of 10% per
annum.
|
|
D
|
By
a consent letter dated 16 November 2009 from the Lender addressed to, and
acknowledged by, the Guarantor and the Existing Borrowers (the Second Consent Letter),
the Lender gave certain further consents for the benefit of the Existing
Borrowers, and the Guarantor and the Existing Borrowers agreed that with
effect from 19 November 2009 the rate of interest applicable to the
Advances (as defined in the Existing Loan Agreement) would be increased to
a rate of 10% per annum and the Existing Loan would be repayable on
demand. The December Loan Agreement, the First Consent Letter
and the Second Consent Letter are together referred to as the Existing Loan
Agreement.
|
|
E
|
The
Existing Borrowers have requested and the Lender has agreed, subject to
the terms of this Agreement, to make certain amendments to the Existing
Loan Agreement, inter alia, to (i) introduce BHOBO One Ltd., BHOBO
Two Ltd., BHOBO Three Ltd., RMJ OBO Shipping Ltd., Sagamore Shipping Ltd.
and OBO Holdings as joint and several borrowers (ii) reschedule the
repayment of the balance of the Existing Loan, (iii) change the basis
of calculation of interest applicable to the Advances (as defined in the
Existing Loan Agreement) and (iv) provide additional security to secure
the Secured Liabilities.
|
|
F
|
The
Swap Bank has agreed to enter into a Deed of Amendment and Accession of
the Existing Master Agreement pursuant to which the OBO Borrowers will
accede to the Existing Master
Agreement.
|
|
G
|
By
a Guarantee dated 7 December 2007 (the Guarantee), the
Guarantor guaranteed the liabilities of the Existing Borrowers to the
Lender and the Swap Bank under the Finance Documents (as defined in the
Existing Loan Agreement).
|
|
H
|
The
Guarantor enters into this Agreement to confirm that the Existing Loan
Agreement will be replaced and superseded by this Agreement and confirms
that the Guarantee shall extend to guarantee the Secured Liabilities as
defined in this Agreement and shall remain in full force and effect as
amended and extended by the terms of this
Agreement.
|
It
is agreed
|
1
|
Definitions
and interpretation
|
|
1.1
|
Definitions
|
Subject
to Clause 1.2,
in this Agreement the following definitions apply.
Account Charge means in
respect of each Ship a deed creating second priority security in respect of the
relevant Earnings Account executed by the relevant Ship Owning Borrower in
favour of the Lender in form satisfactory to the Lender.
Advance means an amount which
shall not exceed the Commitment and the principal amount outstanding in respect
thereof from time to time.
Agent means Nordea Bank Norge
ASA in its capacity as agent on behalf of the lenders under the Nordea
Facility.
Approved Manager means, in
relation to a Ship, B + H Management Limited whose registered office
is at 0xx Xxxxx, Xxx xx Xxxxx Xxxxx, 14 Par la Xxxxx Xxxx, Xxxxxxxx, XX00,
Xxxxxxx or any other company which the Lender may approve from time to time as
the technical and commercial manager of the Ships.
Approved Panel Broker means
any shipbroking firm nominated by the Borrowers and acceptable to the Lender
from amongst X.X Xxxxxx Shipbrokers A.S., Fearnleys AS, Clarksons, Arrow
Chartering UK Ltd., Bassoe Shipbrokers AS, Braemar Seascope Valuations Ltd.,
London, Xxxxxxxxx & Stemoco AS, Oslo, Compass Maritime Services LLC, NY
(or any other independent sale and purchase shipbroker of repute as may be
nominated by the Borrowers and acceptable to the Lender in its absolute
discretion).
Assignment Agreement means a
second priority assignment agreement executed by the each Ship Owning Borrower
assigning the Earnings, Insurances, certain bank account of the Ship Owning
Borrowers with Nordea and the Charter Guarantees in respect of each Ship in
favour of the Lender in form satisfactory to the Lender.
Authorised Officer has the
meaning given to it in paragraph 3
of Part A of Schedule 2.
Availability Period means the
period commencing on the date of this Agreement and ending on:
|
(i)
|
5
February 2010 (or such later date as the Lender may agree with the
Borrowers); or
|
|
(ii)
|
if
earlier, the date on which the Commitment is fully borrowed, cancelled or
terminated.
|
Barge means MV “Safecom 1”,
being an accommodation barge to be delivered to Straits Offshore Ltd. of Palm
Grove House, Tortola, BVI and to be registered in a ship registry acceptable to
the Lender.
Borrowers means each
of:
|
(a)
|
the
Ship Owning Borrowers;
|
|
(b)
|
OBO
Holdings; and
|
|
(c)
|
the
Existing Borrowers.
|
Boss Tankers Account means an
account in the name of Boss Tankers Ltd. with the Lender with account no.
00000000 or any other account which is designated by the Lender as the Boss
Tankers Account for the purposes of this Agreement.
Boss Tankers Account Charge
means the deed creating first priority security in respect of the Boss Tankers
Account executed by Boss Tankers Ltd. in favour of the Lender in form
satisfactory to the Lender.
Business Day means a day
(other than a Saturday or Sunday) on which banks are open for general business
in Edinburgh, London and, in respect of a day on which a payment is required to
be made under a Finance Document, in New York City.
Cash has the meaning given to
it in Clause 15.
Cash Equivalents has the
meaning given to it in Clause 15.
Charterers means:
|
|
(a)
|
in
respect of each of MV “Rip Hudner”, MV “Xxxxxx Xxxxxxxxx”, MV “Searose G”
and “Xxxxx X. Xxxxx”, TTMI Sarl. of Geneva,
Switzerland;
|
(b) in
respect of MT “Sagamore”, ENOC Supply & Trading LLC of Dubai;
and
(c) any
other charterer of any of the Ships as approved by the Lender from time to
time.
Charter Guarantee means the
guarantees granted by the relevant Charter Guarantor in favour of the relevant
Ship Owning Borrower as security for due performance of all the relevant
Charterers obligations under the relevant Charterparty.
Charter Guarantor
means:
|
|
(a)
|
in
respect of (i) MV “Rip Hudner”, (ii) MV “Xxxxxx Xxxxxxxxx” and (iii) MV
“Searose G”, Sempra Energy of 000 Xxx Xxxxxx, Xxx Xxxxx,
X.X.X.;
|
|
|
(b)
|
in
respect of MV “Xxxxx X. Xxxxx”; The Royal Bank of Scotland
plc;
|
|
|
(c)
|
in
respect of MT “Sagamore”, ENOC Supply & Trading LLC of
Dubai, however only to the extent that the ENOC Supply & Trading LLC
has nominated another company as charterers under the Charterparty for
MT “Sagamore”; and
|
|
(d)
|
any
other charter guarantor for any of the Vessels, as approved by the Agent
(on behalf of the Lenders) from time to
time.
|
Charterparty
means:
|
(a)
|
in
respect of each of MV “Rip Hudner” and MV “Xxxxxx Xxxxxxxxx”, the time
charterparties dated 4 February 2005, respectively, made between BHOBO Two
and BHOBO One (as owners), respectively, and TTMI Sarl. (as charterers),
for a period of six (6) years at a net daily charter rate of not less than
USD 26,600 during year 1, USD 24,600 during year 2, USD 23,600 during year
3, USD 22,600 during year 4, a USD 20,600 during year 5 and USD 24,400
during year 6;
|
|
(b)
|
in
respect of MV “Searose G”, the time charterparty dated 4 February 2005
made between BHOBO Three (as owner) and TTMI Sarl. (as charterers), for a
charter period of six (6) years at a net daily charter rate of not less
than USD 26,000 during year 1, USD 24,000 during year 2, USD 23,000 during
year 3, USD 22,000 during year 4, USD 20,000 during year 5 and USD 24,400
during year 6 and with a 35.00% profit share in years 2 –
5;
|
|
(c)
|
in
respect of MV “Xxxxx X. Xxxxx”, the time charterparty dated 28 May 2008
made between RMJ OBO Shipping Ltd. (as owner) and TTMI Sarl (as
charterers), for a period of three (3) years commencing on 13 October
2009, at a daily charter rate of not less than USD
31,140;
|
|
(d)
|
in
respect of MV “Sagamore”, the time charterparty made or to be made between
Sagamore Shipping Ltd. (as owner) and ENOC Supply & Trading LLC (as
charterers), for a charter period of three (3) years commencing at the
relevant Drawdown Date, at a daily charter rate of not less than USD
21,500 (less 3.75% commission);
|
|
(e)
|
any
other time charterparty between the relevant Borrower and a
Charterer,
|
in any
event, in form and substance as approved by the Lender.
Charterparty Assignment means
a second priority charterparty assignment executed by the each Ship Owning
Borrower assigning the Charterparty in respect of each Ship in favour of the
Lender in form satisfactory to the Lender.
Commitment means $3,975,230 as
that amount may be reduced, cancelled or terminated in accordance with this
Agreement.
Compliance Certificate means a
notice in the form of Schedule 5.
Confirmation and Early Termination Date, in
relation to any continuing Designated Transaction, have the meanings given in
the Master Agreement.
Contractual Currency has the
meaning given in Clause 21.4.
Deeds of Covenant means, in
relation to each Ship, a second priority deed of covenant collateral to the
Mortgage on that Ship executed by the relevant Ship Owning Borrower in favour of
the Lender in form satisfactory to the Lender.
Designated Transaction means a
transaction which fulfils the following requirements1:
|
(a)
|
it
was entered into by (i) the Borrowers pursuant to the Existing Master
Agreement with the Swap Bank or (ii) the OBO Borrowers pursuant to the
Nordea Facility;;
|
|
(b)
|
its
purpose was the hedging of (i) the Existing Borrowers' exposure under the
Existing Loan Agreement or (ii) the OBO Borrowers' exposure under the
Nordea Facility, to fluctuations in LIBOR arising from the funding of the
advances thereunder (or any part thereof) for a period expiring no later
than the final repayment date relating to the last advance thereunder to
be repaid; and
|
|
(c)
|
in
respect of the Designated Transactions under the Existing Loan Agreement
only, it was designated by (i) the Existing Borrowers, by delivery by the
Existing Borrowers to the Swap Bank and the Lender of a notice of
designation, as a Designated Transaction for the purposes of the 'Finance
Documents' (as defined in the Existing Loan Agreement), in the form set
out in Schedule 4 to the Existing Loan
Agreement
|
It is
acknowledged that the Designated Transaction entered into under the Existing
Master Agreement is the transaction effective as of 7 September 2007 with
transaction no. 1235290TS/1235291TS.
Dollars and $ means the lawful currency
for the time being of the United States of America.
Drawdown Date means the date
requested by the Borrowers for the Advance to be made, or (as the context
requires) the date on which the Advance is actually made.
Drawdown Notice means a notice
in the form set out in Schedule 1
(or in any other form which the Lender approves or reasonably
requires).
Earnings means, in relation to
a Ship, all moneys whatsoever which are now, or later become, payable (actually
or contingently) to the Ship Owning Borrower owning the Ship and which arise out
of the use or operation of the Ship, including (but not limited
to):
|
(a)
|
all
freight, hire and passage moneys, compensation payable to the Ship Owning
Borrower owning the Ship in the event of requisition of the 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 or other contract for the employment of the
Ship;
|
|
(b)
|
all
moneys which are at any time payable under Insurances in respect of loss
of earnings; and
|
|
(c)
|
if
and whenever the Ship is employed on terms whereby any moneys falling
within paragraphs (a) or (b) 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 the
Ship.
|
Earnings Accounts means in
relation to each Ship, an account in the name of the Ship Owning Borrower owning
that Ship and held with Nordea Bank Finland plc, London branch and designated as
follows:
|
(i)
|
account no. 00000000 in the name
of BHOBO One Ltd.
|
|
(ii)
|
account
no. 00000000 in the name of BHOBO Two
Ltd.
|
|
(iii)
|
account
no. 00000000 in the name of BHOBO Three
Ltd.
|
|
(iv)
|
account
no. 00000000 in the name of RMJ OBO Shipping
Ltd.
|
|
(v)
|
account
no. 00000000 in the name of Sagamore Shipping
Ltd.
|
or any
other account which is designated by the Lender as the Earnings Account in
relation to the Ship for the purposes of this Agreement.
Effective Date means the date
on which the Lender issues the Effective Date Notice.
Effective Date Notice means a
notice in the form set out in Schedule 4.
Environmental Claim
means:
|
(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
|
|
(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:
|
(a)
|
any
release of Environmentally Sensitive Material from a Ship;
or
|
|
(b)
|
any
incident in which Environmentally Sensitive Material is released from a
vessel other than a Ship and which involves a collision between a Ship and
such other vessel or some other incident of navigation or operation, in
either case, in connection with which a Ship is actually or potentially
liable to be arrested, attached, detained or injuncted and/or a Ship
and/or any Ship Owning Borrower and/or any operator or manager of the Ship
is at fault or allegedly at fault or otherwise liable to any legal or
administrative action; or
|
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from a Ship and in connection with which a Ship is actually
or potentially liable to be arrested and/or where any Ship Owning Borrower
and/or any operator or manager of a 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 19.1.
Excess Cash means (measured
quarterly) any amount of Cash and Cash Equivalents in excess of the aggregate
amount of (i) $10,000,000 and (ii) provisions for dry-docking for the
following twelve (12) months for the Ships (as agreed for the purposes of the
Nordea Facility).
Existing Borrowers means
Agawam Shipping Corp., Aquidneck Shipping Corp., Anawan Shipping Corp., Isabelle
Shipholdings Corp. and Boss Tankers Ltd.
Existing Loan Agreement means
the loan facility agreement dated 7 December 2007 between the Existing
Borrowers and the Lender (as lender and swap bank) providing for a
$34 million loan facility relating to four MR product tankers as
supplemented by a consent letter dated 20 August 2009 from the Lender and agreed
to and acknowledged by the Guarantor and the Existing Borrowers, pursuant to
which the Lender, the Guarantor and the Existing Borrowers agreed that any
failure of the Guarantor or the Existing Borrowers to comply with any of its
obligations under the letter would entitle the Lender to increase the rate of
interest applicable to all Advances (as defined in the Existing Loan Agreement)
to a rate of 10% per annum (the Consent Letter) and as further supplemented by a
letter dated 16 November 2009 from the Lender and acknowledged and agreed to by
the Guarantor and the Existing Borrowers, pursuant to which the Lender exercised
its right to charge interest on the Advances (as defined in the Existing Loan
Agreement) to a rate of 10% per annum and declared the Existing Loan shall be
payable on demand.
Existing Master Agreement
means the master agreement dated 31 August 2007 (as acceded to by
Isabelle Shipholdings Corp. on 7 December 2007) between the Swap Bank and the
Existing Borrowers.
Existing Swap Transactions
means the Existing Master Agreement, each transaction entered into
pursuant thereto and the indemnity between the Borrowers and the Lender dated 31
August 2007 relating thereto.
Finance Documents
means:
|
(a)
|
this
Agreement;
|
|
(b)
|
the
Guarantee;
|
|
(c)
|
the
Second Deed of Accession;
|
|
(d)
|
the
Mortgages;
|
|
(e)
|
the
Deeds of Covenant;
|
|
(f)
|
the
Assignment Agreements and any notices and acknowledgements to be delivered
thereunder;
|
|
(g)
|
the
Charterparty Assignments and any notices and acknowledgements to be
delivered thereunder;
|
|
(h)
|
the
Account Charges;
|
|
(i)
|
the
Share Pledge 1 and any documents to be delivered
thereunder;
|
|
(j)
|
the
Share Pledge 2 and any documents to be delivered
thereunder;
|
|
(k)
|
the
Xxxxxx Share Pledge and any documents to be delivered
thereunder;
|
|
(l)
|
the
Retention Account Charge Agreement and any notices and acknowledgements to
be delivered thereunder;
|
|
(m)
|
the
Boss Tankers Account Charge;
|
|
(n)
|
the
Safecom Assignment Agreement;
|
|
(o)
|
the
Xxxxxx Co-ordination Agreement;
|
|
(p)
|
the
Nordea Co-ordination Agreement;
|
|
(q)
|
the
Safecom Co-ordination Agreement; and
;
|
|
(r)
|
the
Master Agreement and each transaction entered into under or pursuant
thereto;
|
|
(s)
|
any
other document (whether creating a Security Interest or not) which is
executed at any time by any Borrower or any other person as security for,
or to establish any form of subordination or priorities arrangements in
relation to, any amount payable to the Lender under this Agreement or any
of the other documents referred to in this
definition.
|
Finance Parties means the
Lender and the Swap Bank.
Financial Indebtedness means,
in relation to a person (the debtor), a liability of the
debtor:
|
(a)
|
for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
|
|
(b)
|
under
any loan stock, bond, note or other security issued by the
debtor;
|
|
(c)
|
under
any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
|
|
(d)
|
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;
|
|
(e)
|
under
any foreign exchange transaction 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
|
|
(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.
|
Group means the Guarantor and
its subsidiaries.
Guarantee means
the guarantee dated 7 December 2007 executed by the Guarantor in
favour of the Lender.
Guarantor means B+H Ocean
Carriers Ltd., a Liberian company of 3rd Floor, Par La Ville, 00 Xxx Xx Xxxxx
Xxxx, Xxxxxxxx XXXX, Xxxxxxx.
Insurances means, in relation
to a Ship:
|
(a)
|
all
policies and contracts of insurance, including entries of the 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
|
|
(b)
|
all
rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a
premium.
|
Interest Period means a period
determined in accordance with Clause 5.
ISM Code means the
International Safety Management Code (including the guidelines on its
implementation), adopted by the International Maritime Organisation Assembly as
Resolutions A.741 (18) and A.788 (19), as the same may be amended or
supplemented from time to time (and the terms safety management system,
Safety Management
Certificate and Document
of Compliance have the same meanings as are given to them in the ISM
Code).
ISPS Code means the
International Ship and Port Security Code as adopted by the Conference of
Contracting Governments to the Safety of Life at Sea Convention 1974 on 13
December 2002 and incorporated as Chapter XI-2 of the Safety of Life at Sea
Convention 1974 and has taken effect on 1 July 2004.
Lender means Bank of Scotland
plc (company no. SC327000) whose registered office is at Xxx Xxxxx, Xxxxxxxxx
XX0 0XX and acting for the purposes of this Agreement through its offices at New
Uberior House, 11 Xxxx Xxxx Xxxxxx, Xxxxxxxxx XX0 0XX, or its successor or
assign.
LIBOR means, for an Interest
Period:
|
(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 Moneyline Telerate Page 3750 at or about 11.00
a.m. (London time) on the Quotation Date for that Interest Period (and,
for the purposes of this Agreement, "Moneyline Telerate Page
3750" means the display designated as "Page 3750" on the Telerate
Service or such other page as may replace Page 3750 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 as the
information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for Dollars);
or
|
|
(b)
|
if
no rate is quoted on Telerate Page 3750, the rate per annum at which
deposits in Dollars are offered to the Lender by leading banks in the
London interbank market at the Lender's request at 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.
|
Major Casualty means, in
relation to a Ship, any casualty to the 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 $500,000 or the equivalent in any
other currency.
Mandatory Cost means the rate
determined in accordance with Schedule 3.
Margin means six point five
per cent. (6.5%) per annum.
Market Value means the fair
market value of each of the Ships in US Dollars, being the average of valuations
of the respective Ship obtained from two (2) Approved Panel Brokers, with or
without physical inspection of the Ships (as the Lender may require) on the
basis of a sale for prompt delivery for cash at arm’s length on normal
commercial terms as between a willing buyer and seller, on an “as is, where is”
basis, free of any existing charter or other contract of employment and/or pool
arrangement.
Master Agreement means the
Existing Master Agreement as amended and acceded to pursuant to the Second Deed
of Accession and includes all Designated Transactions from time to time entered
into and Confirmations from time to time exchanged under that master
agreement.
Mortgages means, in relation
to each Ship, a second priority Bahamian ship mortgage on that Ship executed by
the relevant Ship Owning Borrower in favour of the Lender in form satisfactory
to the Lender.
Negotiation Period has the
meaning given in Clause 4.6.
Xxxxxx means Xxxxxx OBO 2
Inc., a Liberian corporation.
Xxxxxx Co-ordination Agreement
means the co-ordination agreement to be entered into between the Lender, the
Agent, Nordea Bank Norge ASA (as lender under a certain USD 8,000,000 term loan
facility agreement dated 5 September 2006 (as amended) between Nordea Bank Norge
ASA and Seapowet Trading Ltd.) and Seapowet Trading Ltd., in respect of the
Xxxxxx Share Pledge, in form and substance satisfactory to the
Lender.
Xxxxxx Senior Security Documents
means (i) the first priority share pledge dated 6 September 2006 executed
by STL in favour of the Nordea Bank Norge ASA (as lender under a certain USD
8,000,000 term loan facility agreement dated 5 September 2006 (as amended)
between Nordea Bank Norge ASA and Seapowet Trading Ltd.) and (ii) the
second priority share pledge dated 14 December 2009 executed by STL in favour of
the Agent, each in relation to 50% of the shares in Xxxxxx.
Xxxxxx Share Pledge means a
share pledge agreement for a third priority pledge over 50% of the shares in
Xxxxxx OBO 2 Inc. (Liberia) to be executed by STL in favour of the Lender, in
form and substance satisfactory to the Lender and subject to the approval of
such share pledge by the first priority and second priority pledgees over such
shares.
Nordea Co-ordination Agreement
means the Co-ordination Agreement dated on or about the date hereof
between the Lender, the Borrowers and the Agent.
Nordea Facility means the
USD 202,000,000 Reducing Revolving Credit Facility Agreement dated
29 August 2006 (as amended by addendum no. 1 dated 10 October 2008,
addendum no. 2 and waiver agreement dated 17 July 2009 and addendum
no. 3 dated on or about the date of this Agreement) between OBO Holdings
Ltd and the Ship Owning Borrowers as borrowers, certain banks and financial
institution as lenders, Nordea Bank Finland plc as swap bank, Nordea Bank Norge
ASA as bookrunner, agent, arranger and underwriter and DVB Bank America NV, the
Lender and HSB Nordbank as co-arrangers.
Payment Currency has the
meaning given in Clause 21.4.
Permitted Security Interests
means:
|
(a)
|
Security
Interests created by the Finance
Documents;
|
|
(b)
|
Security
Interests created by the Senior Security
Documents;
|
|
(c)
|
liens
for unpaid master's and crew's wages in accordance with usual maritime
practice;
|
|
(d)
|
liens
for salvage;
|
|
(e)
|
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;
|
|
(f)
|
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 Ship Owning Borrower in
good faith by appropriate steps);
|
|
(g)
|
any
Security Interest created in favour of a plaintiff or defendant in any
proceedings or arbitration as security for costs and expenses where a
Borrower is actively prosecuting or defending such proceedings or
arbitration in good faith;
|
|
(h)
|
Security
Interests arising by operation of law in respect of taxes which are not
overdue for payment or in respect of taxes being contested in good faith
by appropriate steps and in respect of which appropriate reserves have
been made; and
|
|
(i)
|
Security
Interests in connection with financing of the
Barge.
|
Pertinent Document
means:
|
(a)
|
any
Finance Document;
|
|
(b)
|
any
policy or contract of insurance contemplated by or referred to in
Clause 12
or any other provision of this Agreement or another Finance
Document;
|
|
(c)
|
any
other document contemplated by or referred to in any Finance Document;
and
|
|
(d)
|
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.
|
Pertinent Matter
means:
|
(a)
|
any
transaction or matter contemplated by, arising out of, or connection with
a Pertinent Document; or
|
|
(b)
|
any
statement relating to a Pertinent Document or to a transaction or matter
falling within paragraph (a);
|
and
covers any such transaction, matter or statement, whether entered into, arising
or made at any time before the signing of this Agreement or on or at any time
after that signing.
Potential Event of Default
means an event or circumstance which, with the giving of any notice, the lapse
of time, a determination by the Lender 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 the currency in relation to which such rate is to be
determined for delivery on the first day of that Interest Period or other
period.
Refinanced Amount has the
meaning given to it in Clause 3.4.
Repayment Date means each
31 March, 30 June, 30 September and 31 December in each year up
to and including 2011.
Retention Account means
account no. 6015.04.42640 with the Agent in the name of OBO Holdings
Ltd.
Retention Account Charge
Agreement means the account charge collateral to this Agreement for the
second priority charge over the Retention Account to be executed by OBO Holdings
Ltd. in favour of the Lender as security for the Secured Liabilities, in form
and substance satisfactory to the Lender.
Retention Account Senior Security
Document means the account charge dated 14 December 2009 executed by OBO
Holdings Ltd. in favour of the Agent creating a first priority charge over the
Retention Account.
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.
Safecom Assignment Agreement
means the assignment agreement to be executed by Straits Offshore Ltd. in favour
of the Lender collateral to this Agreement for the third priority assignment of
(i) any monies to be paid to Straits Offshore Ltd. for the operation and
chartering of the Barge and (ii) any sales proceeds to be received by Straits
Offshore Ltd. upon the sale or transfer of the Barge, in form and substance
satisfactory to the Lender and always subject to the approval by the first
priority and second priority assignees over such assets.
Safecom Co-ordination
Agreement means the co-ordination agreement to be entered into between
the Agent, the Lender and Straits Offshore Ltd., in respect of i.e. the Safecom
Assignment Agreement, in form and substance satisfactory to the
Lender.
Safecom Senior Security Documents
means a first priority assignment agreement to be entered into between
Straits Offshore Ltd. in favour of a third party lender and the second priority
assignment agreement dated 14 December 2009 executed by Straits Offshore Ltd. in
favour of the Agent for the second priority assignment of (i) any monies to be
paid to Straits Offshore Ltd. for the operation and chartering of the Barge and
(ii) any sales proceeds to be received by Straits Offshore Ltd. upon the sale or
transfer of the Barge.
Second Deed of Accession means
the second deed of accession and amendment to be entered into between the
Borrowers and the Swap Bank pursuant to which (a) the OBO Borrowers shall accede
to the Existing Master Agreement and (b) the Borrowers shall make certain
amendments to the Existing Master Agreement.
Secured Liabilities means
all:
|
(a)
|
liabilities
which the Borrowers, the Security Parties or any of them have, at the date
of this Agreement or at any later time or times, under or in connection
with any Finance Document or any judgment relating to any Finance
Document;
|
|
(b)
|
the
liabilities of the Owner, the Borrower and the other Obligors to the
Mortgagee under or pursuant to the Finance
Documents;
|
|
(c)
|
indebtedness
of the Borrowers and each of them to the Mortgagee on any current or other
account, including interest and bank
charges;
|
|
(d)
|
other
liabilities of the Borrowers and each of them to the Mortgagee;
and
|
|
(e)
|
costs
and expenses (including legal fees) incurred by the Lender in connection
with that indebtedness, those liabilities and any of the Finance
Documents, on a full indemnity
basis,
|
together
with interest at the Default Rate on those amounts from the date on which the
liability was incurred to the date of actual payment (both before and after
judgment); 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 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
security rights of a plaintiff under an action in rem;
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 this paragraph (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 the
Guarantor and any person (except the Lender) who, as a surety or mortgagor, as a
party to any subordination or priorities arrangement, or in any similar
capacity, executes a documents falling with the last 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 Lender notifies the Borrowers and the Security Parties that:
(a)
the Secured Liabilities have been discharged in full;
|
|
(b)
|
there
is no amount is owing or has accrued (without yet having become due for
payment) to the Lender; and
|
|
|
(c)
|
neither
one of the Borrowers or any Security Party has any future or contingent
liability to the Lender.
|
Senior Security Documents
means the Senior Ship Security Documents, the Xxxxxx Senior Security
Documents, the Share Pledge 1 Senior Security Document, the Share Pledge 2
Senior Security Document, the Retention Account Senior Security Document and the
Safecom Senior Security Document.
|
|
Senior Ship Security
Documents has the meaning given to the term 'Senior Mortgage
Documents' in the Nordea Co-ordination
Agreement.
|
Service Documents means all
claim forms, application notices, judgments, orders or other notices of legal
process relating to this Agreement.
Share Pledge 1 means the share
pledge agreement for the second priority pledge of all of the shares (and any
dividends and distributions in respect of such shares) in OBO Holdings Ltd. to
be executed by the Guarantor in favour of the Lender, in form and substance
acceptable to the Lender and always subject to the approval by the first
priority pledgee over such shares.
Share Pledge 1 Senior Security
Document means the share pledge agreement dated 14 December 2009 executed
by the Guarantor in favour of the Agent for the first priority pledge of all of
the shares (and any dividends and distributions in respect of such shares) in
OBO Holdings Ltd.
Share Pledge 2 means the share
pledge agreement for the second priority pledge of all of the shares (and any
dividends and distributions in respect of such shares) in the Ship Owning
Borrowers to be executed by OBO Holdings Ltd. in favour of the Lender, in form
and substance acceptable to the Lender and always subject to the approval by the
first priority pledgee over such shares.
Share Pledge 2 Senior Security
Document means the share pledge agreement dated 14 December 2009 executed
by OBO Holdings in favour of the Agent for the first priority pledge of all of
the shares (and any dividends and distributions in respect of such shares) in
the Ship Owning Borrowers.
Shareholder means, in relation
to the Ship Owning Borrowers, OBO Holdings.
Ship means each
of:
|
(a)
|
m/v
"Xxxxxx Xxxxxxxxx" an 83,000 dwt OBO tanker built in 1993 with IMO number
9050084 registered in the name of BHOBO One Ltd. under the Bahamas
flag;
|
|
(b)
|
m/v
"Rip Hudner" an 83,000 dwt OBO tanker built in 1994 with IMO number
9077111 registered in the name of BHOBO Two Ltd. under the Bahamas
flag;
|
|
(c)
|
m/v
"Searose G" an 83,000 dwt OBO tanker built in 1994 with IMO number 9050096
registered in the name of BHOBO Three Ltd. under the Bahamas
flag;
|
|
(d)
|
m/v
"Xxxxx X. Xxxxx" a 75,000 dwt OBO tanker built in 1992 with IMO number
9009396 registered in the name of RMJ OBO Shipping Ltd. under the Bahamas
flag; and
|
|
(e)
|
m/v
"Sagamore" a 68,000 dwt tanker built in 1991 with IMO number 9002192
registered in the name of Sagamore Shipping Ltd. under the Bahamas
flag.
|
Ship Management Agreement
means, in respect of each Ship, the BIMCO "XXXXXXX 98" Standard Ship Management
Agreement dated 1 July 2009 between the Approved Manager and the relevant Ship
Owning Borrower.
Ship Owning Borrowers means
each of the Borrowers owning a Ship, being:
|
(f)
|
BHOBO
One Ltd., a
corporation incorporated in the Xxxxxxxx Islands whose registered offices
are at Trust Company Complex, Ajeltake Island, Majuro, Xxxxxxxx Islands
MH96960 and whose principal office is at Par la Ville Place, 14 Par la
Xxxxx Xxxx, Xxxxxxxx XX 00,
Xxxxxxx;
|
|
(g)
|
BHOBO
Two Ltd., a corporation incorporated in the Xxxxxxxx Islands whose
registered offices are at Trust Company Complex, Ajeltake Island, Majuro,
Xxxxxxxx Islands MH96960 and whose principal office is at Par la Ville
Place, 14 Par la Xxxxx Xxxx, Xxxxxxxx XX 00,
Xxxxxxx;
|
|
(h)
|
BHOBO
Three Ltd., a
corporation incorporated in the Xxxxxxxx Islands whose registered offices
are at Trust Company Complex, Ajeltake Island, Majuro, Xxxxxxxx Islands
MH96960 and whose principal office is at Par la Ville Place, 14 Par la
Ville Road, Xxxxxxxx XX 08,
Bermuda;
|
|
(i)
|
RMJ
OBO Shipping Ltd., a corporation incorporated in the Xxxxxxxx Islands
whose registered offices are at Trust Company Complex, Ajeltake Island,
Majuro, Xxxxxxxx Islands MH96960 and whose principal office is at Par la
Ville Place, 14 Par la Xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx;
and
|
|
(j)
|
Sagamore
Shipping Ltd., a corporation incorporated in the Xxxxxxxx Islands whose
registered offices are at Trust Company Complex, Ajeltake Island, Majuro,
Xxxxxxxx Islands MH96960 and whose principal office is at Par la Ville
Place, 14 Par la Xxxxx Xxxx, Xxxxxxxx XX 00,
Xxxxxxx.
|
XXX means Seapowet Trading
Limited.
Swap Bank means Bank of
Scotland plc.
Swap Exposure means, as at any
relevant date and in relation to the Swap Bank, the amount certified by the Swap
Bank to be the aggregate net amount in Dollars which would be payable by the
Borrowers to the Swap Bank under (and calculated in accordance with) section
6(e) (Payments on Early Termination) of the Master Agreement entered into by the
Swap Bank with the Borrowers if an Early Termination Date had occurred on the
relevant date in relation to all continuing Designated Transactions entered into
between the Borrower and the Swap Bank.
Total Loss means, in relation
to a Ship:
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of the
Ship;
|
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than its 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 1 year
without any right to an extension) unless it is within 1 month redelivered
to the full control of the Ship Owning Borrower owning the
Ship;
|
|
(c)
|
any
arrest, capture, seizure or detention of the Ship (including any hijacking
or theft) unless it is within 14 days redelivered to the full control of
the Ship Owning Borrower owning the
Ship.
|
Total Loss Date means, in
relation to a Ship:
|
(a)
|
in
the case of an actual loss of the Ship, the date on which it occurred or,
if that is unknown, the date when the Ship was last heard
of;
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total loss of
the 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 Ship Owning Borrower owning the Ship with the Ship's insurers in which
the insurers agree to treat the 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 Lender that the event constituting the
total loss occurred.
|
Transaction has the meaning
given in each Master Agreement.
|
1.2
|
Interpretation
|
In this
Agreement, unless otherwise specified:
|
(a)
|
words
denoting the singular number shall include the plural and vice
versa;
|
|
(b)
|
references
in Clause 1.1
to a Finance Document or any other document being in the form of a
particular appendix include references to that form with any modifications
to that form which the Lender approves or reasonably
requires;
|
|
(c)
|
the
expression this Clause
shall, unless followed by reference to a specific provision, be
deemed to refer to the whole clause (not merely the sub-clause, paragraph
or other provision) in which the expression
occurs;
|
|
(d)
|
references
to, or to a provision of, a Finance Document or any other document are
references to it as amended, varied, novated or supplemented, whether
before the date of this Agreement or
otherwise;
|
|
(e)
|
references
to, or to a provision of, any law include any amendment, extension,
re-enactment, consolidation or replacement, whether made before the date
of this Agreement or otherwise;
|
|
(f)
|
the
list of contents and headings are for ease of reference only and shall not
be taken into account in construing this
Agreement;
|
|
(g)
|
the
words include,
including and
in particular
shall be construed as being by way of illustration or emphasis only and
shall not be construed as, nor shall they take effect as, limiting the
generality of any preceding words;
|
|
(h)
|
the
words other and
otherwise shall
not be construed ejusdem generis with any foregoing words where a wider
construction is possible;
|
|
(i)
|
approved means, for the
purposes of Clause 12, approved in writing by the
Lender;
|
|
(j)
|
asset includes every
kind of property, asset, interest or right, including any present, future
or contingent right to any revenues or other
payment;
|
|
(k)
|
company or corporation includes any
company, corporation, body corporate, partnership, joint venture and
unincorporated association whereever and howsoever incorporated or
established;
|
|
(l)
|
consent includes an
authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and
legalisation;
|
|
(m)
|
contingent liability
means a liability which is not certain to arise and/or the amount of which
remains unascertained;
|
|
(n)
|
debt or indebtedness includes
any obligation, whether incurred as principal or as surety, for the
payment or repayment of money, whether present or future, actual or
contingent and whether owed jointly or severally or in any other
capacity;
|
|
(o)
|
document includes a
deed; also a letter, fax or telex;
|
|
(p)
|
excess risks means, in
relation to a Ship, the proportion of claims for general average, salvage
and salvage charges not recoverable under the hull and machinery policies
in respect of the Ship in consequence of its insured value being less than
the value at which the Ship is assessed for the purpose of such
claims;
|
|
(q)
|
expense means any kind
of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other
tax;
|
|
(r)
|
law includes any
legislation, any common or customary law, constitution, decree, judgment,
order, ordinance, or any treaty or international convention, any
regulation or resolution of the Council of the European Union, the
European Commission, the United Nations or its Security Council or other
legislative measure in any
jurisdiction;
|
|
(s)
|
legal or administrative
action means any legal proceeding or arbitration and any
administrative or regulatory action or
investigation;
|
|
(t)
|
legislation includes any
statute, by-law, regulation, rule, subordinate or delegated legislation or
order;
|
|
(u)
|
references to
liabilities include any obligation whether incurred as principal or
surety, whether or not in respect of indebtedness, whether present or
future, actual or contingent and whether owed jointly or severally or in
any other capacity;
|
|
(v)
|
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:
|
|
(i)
|
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
|
|
(ii)
|
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;
|
(w)
|
obligatory insurances
means, in relation to a Ship, all insurances effected, or which the
Borrower owning the Ship is obliged to effect, under Clause 12 or any
other provision of this Agreement or another Finance
Document;
|
|
(x)
|
parent company has the
meaning given to it in paragraph (cc);
|
|
(y)
|
person includes any
company or corporation; any state, political sub-division of a state and
local or municipal authority; and any international organisation; and
person includes
that person's successors in title and assigns or
transferees;
|
|
(z)
|
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;
|
|
(aa)
|
protection and indemnity
risks means the usual risks covered by a protection and indemnity
association within the International Group of such associations, 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 in
them 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 clause 6
of the Institute Hull Clauses (1/11/02) or the Institute Amended Running
Down Clause (1/10/71) or any equivalent
provision;
|
|
(bb)
|
regulation includes any
regulation, rule, official directive, request or guideline whether or not
having the force of law but if not having the force of law, 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;
|
|
(cc)
|
a
company (S) is a subsidiary of another
company (P) if:
|
|
(i)
|
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
|
|
(ii)
|
P
has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S;
or
|
|
(iii)
|
P
has the direct or indirect power to appoint or remove a majority of the
directors of S; or
|
|
(iv)
|
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;
|
(dd)
|
tax includes any present
or future tax, duty, impost, levy, deduction, withholding or charge of any
kind, or any amount on account of or as security for any of the foregoing,
by whomsoever on whomsoever and wherever imposed, levied, collected,
withheld or assessed, together with any connected penalties, additions,
fines, surcharges or interest; and taxation shall be
construed accordingly; and
|
|
(ee)
|
war risks includes the
risk of mines and all risks excluded by clause 23 of the Institute
Time Clauses (Hulls)(1/10/83) or clause 24 of the Institute Time
Clauses (Hulls)(1/11/1995) or clause 29 of the Institute Hull Clauses
(1/11/02).
|
|
2
|
Facility
|
|
2.1
|
Subject
to the other provisions of this Agreement, with effect from the issuance
by the Lender of the Effective Date Notice, the terms of and conditions
applicable to the loan facility under the Existing Loan Agreement shall be
replaced and superseded by the terms and the conditions set out in this
Agreement and the amount of the outstanding advances under the Existing
Loan Agreement shall be treated as having been advanced under, and as
being subject to the terms of, this
Agreement.
|
|
2.2
|
The
provisions of this Clause 2 shall not take effect unless and until the
Lender issues the Effective Date
Notice.
|
|
3
|
Drawdown
|
|
3.1
|
Request
for Advance
|
Subject
to the following conditions, the Borrowers may request that the Lender issues an
Effective Date Notice by ensuring that the Lender receives a completed Drawdown
Notice not later than 11.00 a.m. (London time) 3 Business Days prior to the
intended Drawdown Date.
|
3.2
|
Availability
|
The
conditions referred to in Clause 3.1 are that:
|
(a)
|
a
Drawdown Date has to be a Business Day during the Availability
Period;
|
|
(b)
|
the
amount of the Advance shall not exceed the amount referred to in
Clause 2;
|
|
(c)
|
the
amount of the Advance shall not exceed the
Commitment;
|
|
(d)
|
the
amount of the Advance shall be used to repay the full amount of all
outstanding advances under the Existing Loan Agreement together with
accrued interest and breakage costs as at the Effective Date (the Refinanced Amount);
and
|
|
(e)
|
the
Lender shall have issued the Effective Date
Notice.
|
|
3.3
|
Drawdown
Notice irrevocable
|
The
Drawdown Notice must be signed by an Authorised Officer of a Borrower and, once
served, the Drawdown Notice cannot be revoked without the prior consent of the
Lender.
|
3.4
|
Disbursement
of Advance by issuance of the Effective Date
Notice
|
Subject
to the provisions of this Agreement, on the Drawdown Date the Lender shall issue
the Effective Date Notice which shall constitute the making of the Advance for
the purpose of this Agreement and whereupon:
|
(a)
|
the
Lender shall be deemed to have made the Advance to the Borrowers in an
amount equal to the Refinanced Amount and all the Borrowers shall at that
time become indebted, as principal and direct obligors, to the Lender in
that amount; and
|
|
(b)
|
the
Borrowers shall become obliged, as principal and direct obligors, to pay
and discharge all amounts from time to time (whether before, on or after
the Effective Date) falling due and payable under the Existing Loan
Agreement other than the Refinanced
Amount.
|
|
4
|
Interest
|
|
4.1
|
Payment
of normal interest
|
Subject
to the provisions of this Agreement, interest on the Advance in respect of each
Interest Period shall be paid by the Borrowers on the last day of that Interest
Period.
|
4.2
|
Normal
rate of interest
|
Subject
to the provisions of this Agreement, the rate of interest on the Advance in
respect of an Interest Period shall be the aggregate of:
|
(a)
|
the
Margin;
|
|
(b)
|
LIBOR;
and
|
|
(c)
|
the
Mandatory Cost;
|
for that
Interest Period.
|
4.3
|
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.
|
4.4
|
Notification
of market disruption
|
The
Lender shall promptly notify the Borrowers if no rate is quoted on Moneyline
Telerate Page 3750 or if no rate is quoted on the ISDA Page or if for any reason
the Lender is unable to obtain Dollars in the London interbank market in order
to fund an Advance during any Interest Period, stating the circumstances which
have caused such notice to be given.
|
4.5
|
Suspension
of drawdown.
|
If the
Lender's notice under Clause 4.4 is served before the Advance is made, the
Lender's obligation to make the Advance shall be suspended while the
circumstances referred to in the Lender's notice continue.
|
4.6
|
Negotiation
of alternative rate of interest
|
If the
Lender's notice under Clause 4.4 is served after the Advance is made, the
Borrowers and the Lender shall use reasonable endeavours to agree, within the 30
days after the date on which the Lender serves its notice under Clause 4.4
(the Negotiation
Period), an alternative interest rate or (as the case may be) an
alternative basis for the Lender to fund or continue to fund the Advance during
the Interest Period concerned.
|
4.7
|
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.
|
4.8
|
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 Lender shall set an interest period and
interest rate representing the cost of funding of the Lender in Dollars or in
any available currency of the relevant Advance plus the Margin and (if
applicable) the Mandatory Cost; and the procedure provided for by this
Clause 4.8
shall be repeated if the relevant circumstances are continuing at the end of the
interest period so set by the Lender.
|
4.9
|
Notice
of prepayment
|
If the
Borrowers do not agree with an interest rate set by the Lender under
Clause 4.8, the Borrowers may give the Lender not less than 15 Business
Days' notice of their intention to prepay at the end of the interest period set
by the Lender.
|
4.10
|
Prepayment
|
A notice
under Clause 4.9 shall be irrevocable; and on the last Business Day of the
interest period set by the Lender, the Borrowers shall prepay (without premium
or penalty) the Advance, together with accrued interest at the rate set by the
Lender under Clause 4.8
plus the Margin and (if applicable) the Mandatory Cost.
|
4.11
|
Application
of prepayment
|
The
provisions of Clause 7 shall apply in relation to the
prepayment.
|
5
|
Interest
Periods
|
|
5.1
|
Commencement
of Interest Periods
|
The first
Interest Period applicable to the Advance shall commence on the relevant
Drawdown Date and each subsequent Interest Period applicable to the Advance
shall commence on the expiry of the preceding Interest Period.
|
5.2
|
Duration
of normal Interest Periods
|
Subject
to Clauses 5.3, 5.4
and 5.5, each Interest Period shall be:
|
(a)
|
3
or 6 months as notified by the Borrowers to the Lender not later than
11.00 a.m. (London time) 3 Business Days before the commencement of the
Interest Period (although the Borrowers acknowledge that a 1 month
Interest Period shall only be available a maximum of 3 times in any
calendar year); or
|
|
(b)
|
3
months, if the Borrowers fail to notify the Lender by the time specified
in paragraph (a); or
|
|
(c)
|
such
other period as the Lender may agree with the
Borrowers.
|
|
5.3
|
Duration
of Interest Periods for repayment
instalments
|
In
respect of an amount due to be repaid under Clause 7 on a particular
Repayment Date, an Interest Period shall end on that Repayment
Date.
|
5.4
|
Non-availability
of matching deposits for Interest Period
selected
|
If, after
the Borrowers have selected and the Lender has agreed an Interest Period longer
than 3 months, the Lender notifies the Borrowers by 11.00 a.m. (London time) on
the second 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.
|
6
|
Default
interest
|
|
6.1
|
Payment
of default interest on overdue
amounts
|
The
Borrowers shall pay interest in accordance with the following provisions of this
Clause on any amount payable by the Borrowers under any Finance Document which
the Lender 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.
|
|
6.2
|
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 Lender to be 2 per cent. above:
|
(a)
|
|
(b)
|
in
the case of any other overdue amount, the rate set out at Clause 6.3(b).
|
|
6.3
|
Calculation
of default rate of interest
|
The rates
referred to in Clause 6.2 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 applicable to it);
|
|
(b)
|
the
Margin plus the Mandatory Cost plus, in respect of successive periods of
any duration (including at call) up to 3 months which the Lender may
select from time to time:
|
|
(i)
|
LIBOR;
or
|
|
(ii)
|
if
the Lender determines that Dollar deposits for any such period are not
being made available to it by leading banks in the London interbank market
in the ordinary course of business, a rate from time to time determined by
the Lender by reference to the cost of funds to it from such other sources
as the Lender may from time to time
determine.
|
|
6.4
|
Notification
of interest periods and default
rates
|
The
Lender shall promptly notify the Borrowers of each interest rate determined by
it under Clause 6.3 and of each period selected by it for the purposes of
paragraph (b) of that Clause; but this shall not be taken to imply that the
Borrowers are liable to pay such interest only with effect from the date of the
Lender's notification.
|
6.5
|
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.
|
6.6
|
Compounding
of default interest
|
Any
interest due under this Clause which is not paid at the end of the period by
reference to which it was determined shall be compounded.
|
6.7
|
Application
to Master Agreements
|
For the
avoidance of doubt, this Clause does not apply to any amount payable under the
Master Agreement in respect of any continuing Designated Transaction as to which
section 2(e) (Default Interest; Other Amounts) of the Master Agreement shall
apply.
|
7
|
Repayment
and prepayment
|
|
7.1
|
Amount
of repayment instalments
|
|
7.1.1
|
Subject
to Clause 7.1.2,
the Borrowers shall repay the Advance in consecutive quarterly instalments
of $100,000, the first repayment to be made on 31 March
2010.
|
|
7.1.2
|
If
on any Repayment Date the condition set out in Clause 7.1.3
is not satisfied, the repayment which would otherwise be due on that date
under Clause 7.1.1
shall be deferred until the first date thereafter on which that condition
is satisfied. This does not prejudice the Borrowers’ obligation under
Clause 7.3
to repay the full outstanding balance of the Advance on the final
Repayment Date.
|
|
7.1.3
|
The
condition referred to in Clause 7.1.2
is that either:
|
|
(i)
|
repayment
of the deferred reductions as set out in paragraph (a) (i) and (a) (ii) of
Clause 6.2
of the Nordea Facility (repayment of loan)
shall have been made in full and the requirements of clause 20.2.3 of the
Nordea Facility (minimum
value) shall have been complied with;
or
|
|
(ii)
|
the
Nordea Facility shall have been fully repaid and
discharged.
|
|
7.1.4
|
|
7.2
|
Mandatory
repayment of Excess Cash
|
|
7.2.1
|
Any
Excess Cash allocated to this Agreement shall, in the period commencing on
the Effective Date under the Nordea Facility, be paid to the Lender to be
applied in the order set out in Clause 17.1.
|
|
7.2.2
|
The
Borrowers or the Guarantor (as the case may be) shall provide the Lender
with a calculation of Cash and Cash Equivalents (as required when
providing a Compliance Certificate under Clause 10.13)
no later than five (5) Business Days prior to each Repayment
Date. Any Excess Cash shall thereafter on the relevant
Repayment Date be applied as
follows:
|
|
(a)
|
firstly
in payment to the lenders under the Nordea Facility to reduce the deferred
reductions as set out in paragraph a)(i) and (ii) of Clause 6.2 (Repayment
of Loans) of the Nordea Facility until such deferred reductions have been
reduced in full;
|
|
(b)
|
secondly,
after such deferred reductions under the Nordea Facility have been reduced
in full, in payment to the Lender provided
that:
|
|
(i)
|
in
any calendar quarter (ending 31/3, 30/6, 30/9 and 31/12 in any year) the
Lender shall not be entitled to receive more than USD 100,000 pursuant to
this Clause 7.2.2(b) (which amount shall form part of (and not be in
addition to) the quarterly repayment instalments set out in Clause 7.1.1;
and
|
|
(ii)
|
the
Lender shall not be entitled to receive any amount under this Clause 7.2.2
at any time when the OBO Borrowers are not in compliance with the
requirements of Clause 20.3.3 (Minimum value) of the Nordea Faciliy;
and
|
|
(c)
|
thirdly,
any remaining balance of any Excess Cash shall be distributed between the
lenders under the Nordea Facility and the Lender on a pro rata basis
calculated on basis of the outstanding amount under Nordea Facility and
under this Agreement at the relevant time, however always observing the
first priority status of the lenders under the Nordea
Facility.
|
|
7.2.3
|
If
at any date when Excess Cash is to be paid to the Lender in accordance
with this Clause 7,
the amount standing to the credit of the Earnings Accounts is less than
the Excess Cash to be paid to the Lender, the Borrowers shall procure the
Guarantor to make a payment to the Lender in an amount equal to (a) the
repayment instalment then due and payable on the Repayment Date or (b) the
pro rata share of the Excess Cash to be paid to the Lender at such time
(as the case may be and without prejudice to the joint and several
obligation of the other Borrowers to make such
repayment).
|
|
7.3
|
Final
Repayment Date
|
On
31 December 2011 the Borrowers shall repay the full outstanding balance of
the Advance and shall also pay to the Lender all other sums then accrued or
owing under any Finance Document.
|
7.4
|
Voluntary
prepayment
|
Subject
to the following conditions, the Borrowers may prepay the whole or any part of
an Advance on the last day of an Interest Period relating to such
Advance.
|
7.5
|
Conditions
for voluntary prepayment
|
The
conditions referred to in Clause 7.4 are that:
|
(a)
|
the
Lender has received from the Borrowers at least 5 Business Days' prior
written notice specifying the amount to be prepaid and the date on which
the prepayment is to be made;
|
|
(b)
|
the
Borrowers have provided evidence satisfactory to the Lender that any
consent required by any Borrower or any Security Party in connection with
the prepayment has been obtained and remains in force, and that any
regulation relevant to this Agreement which affects any Borrower or any
Security Party has been complied with;
and
|
|
(c)
|
if
the prepayment is not made on the last day of an Interest Period, such
fees as are specified in Clause
21.2.
|
|
7.6
|
Effect
of notice of prepayment
|
A
prepayment notice may not be withdrawn or amended without the consent of the
Lender and the amount specified in the prepayment notice shall become due and
payable by the Borrowers on the date for prepayment specified in the prepayment
notice.
|
7.7
|
Mandatory
prepayment
|
|
7.7.1
|
If
a Ship becomes a Total Loss, the Borrowers shall be obliged to make a
prepayment of the Advance equal to such proportion of the Advance then
outstanding as is attributable to that Ship, and for these purposes 20% of
the initial Advance is attributable to each of the five Ships. By way of
example therefore, following a Total Loss and prepayment in respect of one
Ship, the prepayment required pursuant to this Clause 7.7.
following a Total Loss of a second Ship shall be equal to 25% of the
Advance. Such prepayment is subject to (i) the receipt by the Agent in
full of the amount to be prepaid pursuant to Clause 7.1 (Mandatory prepayment –
Total Loss and sale) of the Nordea Facility and (ii) the reduction in full
of the deferred reductions as set out in paragraph a)(i) and (ii) of
Clause 6.2 (Repayment of
Loan) of the Nordea Facility. Any prepayment due to the Lender
under this Clause 7.7.1 shall be made on the earlier of the date falling
120 days after the Total Loss Date and the date of receipt by the Lender
of the proceeds of insurance relating to such Total
Loss.
|
|
7.7.2
|
|
7.8
|
Amounts
payable on prepayment
|
A
prepayment shall be made together with accrued interest (and any other amount
payable under Clause 19.2,
Clause 21 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.
|
7.9
|
Application
of partial prepayment
|
Each
partial prepayment of the Advance shall be applied in the order set out in
Clause 17.1.
|
7.10
|
No
reborrowing
|
No amount
prepaid may be reborrowed.
|
8
|
Conditions
precedent
|
|
8.1
|
Documents,
fees and no default
|
The
Lender's obligation to make the Advance is subject to the following conditions
precedent:
|
(a)
|
that,
on or before the date of this
Agreement:
|
|
(i)
|
the
Lender receives the documents described in Part A of Schedule 2
in form and substance satisfactory to it and its
lawyers;
|
|
(ii)
|
each
of the other conditions referred to in Part A of Schedule 2 have been
satisfied;
|
|
(b)
|
that,
on the Drawdown Date but prior to the Advance being disbursed, the Lender
receives the documents described in Part B of Schedule 2
in form and substance satisfactory to it and its
lawyers;
|
|
(c)
|
that,
on or before the service of the Drawdown Notice, the Lender receives the
arrangement fee referred to in
Clause 20.1;
|
|
(d)
|
that,
on or before the service of any Drawdown Notice, the Lender has received
payment of the expenses referred to in Clause 20.2;
and
|
|
(e)
|
that
both at the date of the Drawdown Notice and on the 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
Advance;
|
|
(ii)
|
the
representations and warranties in Clause 9.1 and those of any
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;
and
|
|
(iii)
|
none
of the circumstances contemplated by Clause 4.4 has occurred and is
continuing; and
|
|
(f)
|
that,
on the Drawdown Date, either (i) the Lender is satisfied that the
Refinanced Amount does not exceed the Commitment or (ii) if the
Lender has notified the Borrowers that the Refinanced Amount exceeds the
Commitment, the Lender has received an amount equal to the excess from the
Existing Borrowers in cleared
funds;
|
|
(g)
|
that,
if the ratio set out in Clause 15.1 were applied immediately
following the making of the Advance, the Borrowers would not be obliged to
provide additional security or prepay the Advance under that Clause;
and
|
|
(h)
|
that,
on or before the service of any Drawdown Notice, the Lender has received
evidence, which shall be in form satisfactory to the Lender, (1) that STL
is a 100% subsidiary (direct or indirect) of the Guarantor, (2) STL owns a
50% equity interest in Xxxxxx (3) that Xxxxxx owns a 100% economic
interest (via a bareboat charter with an option to purchase arrangement)
in the vessel m.v. Seapowet, and Xxxxxx'x ownership interest is free of
all liens and encumbrances, and (4) evidence of the terms and conditions
governing the relationship of STL with the other shareholders of Xxxxxx
and (5) evidence of the terms of Xxxxxx'x option to purchase the vessel
m.v. Seapowet;
|
|
(i)
|
that,
on or before the service of any Drawdown Notice, the Lender has received
evidence, which shall be in form satisfactory to the Lender, that the
amount secured by existing security interests in relation to the shares of
STL (excluding security interests in favour of the Agent) does not exceed
$2.5 million plus interest and
costs;
|
|
(j)
|
that,
on or before the service of any Drawdown Notice, the Lender has received
such other information, which shall be in form satisfactory to the Lender,
relating to the vessel m.v. Seapowet (including information relating to
the terms of the loans or other claims secured on that vessel) as the
Lender may request; and
|
|
(k)
|
that
the Lender has received, and found to be acceptable to it, any further
opinions, consents, agreements and documents in connection with the
Finance Documents which the Lender may request by notice to the Borrowers
prior to the Drawdown Date;
|
|
8.2
|
Waivers
of conditions precedent
|
If the
Lender, at its discretion, permits the Advance to be borrowed before certain of
the conditions referred to in Clause 8.1 are satisfied, the Borrowers shall
ensure that those conditions are satisfied within 5 Business Days after the
Drawdown Date (or such longer period as the Lender may specify).
|
9
|
Representations
and warranties
|
|
9.1
|
General
|
Each
Borrower (in respect of itself and each of the other Borrowers) represents and
warrants to the Lender as follows.
|
9.2
|
Status
|
Each
Borrower is duly incorporated and validly existing and in good standing under
the laws of the Xxxxxxxx Islands (in the case of OBO Holdings, the Original
Borrowers, Boss Tankers and the Ship Owning Borrowers) and Liberia (in the case
of Isabelle)
|
9.3
|
Share
capital and ownership
|
|
9.3.1
|
Each
of the Ship Owning Borrowers and Boss Tankers has an authorised share
capital of $500 divided into 500 registered shares of $1 each, all of
which shares have been issued fully paid, and the legal title and
beneficial ownership of all those shares is held, free of any Security
Interest or other claim, by the
Shareholder.
|
|
9.3.2
|
Each
of the Existing Borrowers has an authorised share capital of $500 divided
into 500 registered shares of $1 each, all of which shares have been
issued fully paid, and the legal title and beneficial ownership of all
those shares is held, free of any Security Interest or other claim, by the
Shareholder.
|
|
9.3.3
|
The
Shareholder has an authorised share capital of $1,000 divided into 1,000
registered shares of $1 each, all of which shares have been issued fully
paid, and the legal title and beneficial ownership of all those shares is
held, free of any Security Interest or other claim, by the
Guarantor.
|
|
9.3.4
|
STL
has the corporate capacity, and has taken all corporate action and
obtained all consents necessary to be registered as the sole beneficial
and legal owner of 50% of the issued share capital of
Xxxxxx.
|
|
9.3.5
|
Xxxxxx
has an authorised share capital of 1,000 divided into 1,000 registered
shares of $1 each, all of which shares have been issued fully paid, and
the legal title and beneficial ownership of 50% of those shares is held,
free of any Security Interest or other claim (other than the Xxxxxx Senior
Security Documents), by STL.
|
|
9.3.6
|
STL
is a 100% subsidiary, indirect of the Guarantor, (1) STL owns a 50% equity
interest in Xxxxxx (2) Xxxxxx owns a 100% economic interest (via an option
to purchase arrangement pursuant to the terms of a bareboat charter) in
the vessel m.v. Seapowet and Xxxxxx'x option to purchase m.v.
Seapowet is free of all liens and encumbrances other than as referred
to in Clause 9.3.7 below;
|
|
9.3.7
|
The
principal amount of the financing provided under the Seapowet bareboat
charter on which Xxxxxx'x purchase option is based does not exceed
$8,000,000 and the amount secured by the first pledge of the Xxxxxx shares
held by STL in favour Nordea Bank Norge ASA (as lender under a certain USD
8,000,000 term loan facility agreement dated 5 September 2006 (as amended)
between Nordea Bank Norge ASA and Seapowet Trading Ltd.) not
exceed $2,500,000 plus interest and
costs;
|
|
9.3.8
|
the
total amount of outstanding advances and accrued interest under the Nordea
Facility does not exceed
$63,000,000.
|
|
9.4
|
Corporate
power
|
|
9.4.1
|
Each
of the Ship Owning Borrowers has the corporate capacity, and has taken all
corporate action and obtained all consents necessary for it to register
the Ship owned by it in its name under Bahamas
flag.
|
|
9.4.2
|
Each
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 that Borrower is a party;
and
|
|
(b)
|
to
borrow under this Agreement, to enter into Designated Transactions under
the Master Agreement and to make all the payments contemplated by, and to
comply with, those Finance
Documents.
|
|
9.5
|
Consents
in force
|
All the
consents referred to in Clause 9.4 remain in force and nothing has occurred
which makes any of them liable to revocation.
|
9.6
|
Legal
validity; effective Security
Interests
|
The
Finance Documents to which each 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):
|
(a)
|
constitute
that Borrower's legal, valid and binding obligations enforceable against
that 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.
|
9.7
|
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)
|
each
Borrower which is a party to that Finance Document 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.
|
|
9.8
|
No
conflicts
|
The
execution by each Borrower of each Finance Document to which it is a party, and
the borrowing by that Borrower of each Advance, 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 that Borrower;
or
|
|
(c)
|
any
contractual or other obligation or restriction which is binding on that
Borrower or any of its assets.
|
|
9.9
|
No
withholding taxes
|
All
payments which each Borrower is liable to make under the Finance Documents to
which it is a party may be made without deduction or withholding for or on
account of any tax payable under any law of any Pertinent
Jurisdiction.
|
9.10
|
No
default
|
No Event
of Default or Potential Event of Default has occurred and is
continuing.
|
9.11
|
Information
|
|
9.11.1
|
All
information which has been provided in writing by or on behalf of the
Borrowers or any Security Party to the Lender in connection with any
Finance Document satisfied the requirements of
Clause 10.5.
|
|
9.11.2
|
All
audited and unaudited accounts which have been so provided satisfied the
requirements of Clause 10.7.
|
|
9.11.3
|
There
has been no material adverse change in the financial position or state of
affairs of any Borrower or Security Party from that disclosed in the
latest of those accounts.
|
|
9.12
|
No
litigation
|
No legal
or administrative action involving any Borrower (including action relating to
any alleged or actual breach of the ISM Code or the ISPS Code) has been
commenced or taken or, to any Borrower's knowledge, is likely to be commenced or
taken which, in either case, would be likely to have a material adverse effect
on any Borrower's financial position or profitability.
|
9.13
|
Compliance
with certain undertakings
|
At the
date of this Agreement, the Borrowers are in compliance with the Nordea Facility
and with Clauses 0, 10.4, 10.9 and 10.13.
|
9.14
|
Taxes
paid
|
|
9.14.1
|
Each
Borrower has paid all taxes applicable to, or imposed on or in relation to
that Borrower or its business.
|
|
9.14.2
|
Each
Ship Owning Borrower has paid all taxes applicable to, or imposed on or in
relation to the Ship owned by it.
|
|
9.15
|
ISM
Code and ISPS Code compliance
|
All
requirements of the ISM Code and ISPS Code as they relate to the Ship Owning
Borrowers, the Approved Manager and each Ship have been complied
with.
|
9.16
|
No
filing or stamp taxes
|
Under the
law of its jurisdiction of incorporation it is not necessary that any of the
Finance Documents be filed, recorded or enrolled with any court or other
authority in that jurisdiction, or that any stamp, registration or similar tax
be paid on or in relation to any of the Finance Documents or any of the
transactions contemplated by the Finance Documents.
|
9.17
|
Own
account
|
In
relation to the borrowing by each Borrower, the performance and discharge of its
respective obligations and liabilities under the Finance Documents to which it
is a party and the transactions and other arrangements effected or contemplated
by the Finance Documents to which it is a party, it 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 Communities).
|
9.18
|
Pari
passu ranking
|
The
payment obligations of each Borrower under the Finance Documents rank at least
pari passu with all other present and future claims of all its other unsecured
and unsubordinated creditors, except for obligations mandatorily preferred by
law applying to companies generally.
|
9.19
|
No
sovereign immunity
|
Each
Borrower is subject to private commercial law with respect to its obligations
under the Finance Documents and neither the Borrowers nor any of their assets
are entitled to any right of sovereign immunity and the entry into and
performance of such Finance Documents by each of the Borrowers constitutes
private and commercial acts.
|
9.20
|
Barge
|
In the
good faith opinion of the Guarantor and the Borrowers, Straits Offshore Ltd.,
which has contracted to purchase the Barge, is presently entitled to cancel its
obligation to purchase the Barge without any requirement to pay any
compensation.
|
10
|
General
undertakings
|
|
10.1
|
General
|
Each
Borrower (in respect of itself and each of the other Borrowers) and the
Guarantor undertakes with the Lender to comply, and to procure compliance, with
the following provisions of this Clause at all times during the Security
Period, except as the Lender may otherwise permit.
|
10.2
|
Title;
negative pledge
|
|
10.2.1
|
Each
Ship Owning Borrower shall hold the legal title to, and own the entire
beneficial interest in the Ship owned by it, her Insurances and Earnings,
free from all Security Interests and other interests and rights of every
kind, except for those created by the Finance Documents and the effect of
assignments contained in the Finance Documents and except for Permitted
Security Interests.
|
|
10.2.2
|
Each
Borrower shall not create or permit to arise any Security Interest (except
for Permitted Security Interests) over any other asset, present or future
(including, but not limited to, the Borrower's rights against the Swap
Bank under a Master Agreement or all or any part of the Borrower's
interest in any amount payable to the Borrower by a Swap Bank under a
Master Agreement).
|
|
10.2.3
|
The
Guarantor shall not create or permit to arise any Security Interest
(except for Permitted Security Interests) over its shares in OBO Holdings
Ltd.
|
|
10.2.4
|
OBO
Holdings shall not create or permit to arise any Security Interest (except
for Permitted Security Interests) over (i) any of its shares in the
Ship Owning Borrowers or (ii) the Retention
Account.
|
|
10.2.5
|
The
Guarantor shall procure that STL shall not create or permit to arise any
Security Interest (except for Permitted Security Interests) over its
shares in Xxxxxx.
|
|
10.2.6
|
The
Guarantor shall procure that Straits Offshore Ltd. shall not create or
permit to arise any Security Interest (except for Permitted Security
Interests) over the property subject to the Safecom Assignment
Agreement.
|
|
10.3
|
No
disposal of assets
|
No
Borrower or the Guarantor shall transfer, lease or otherwise dispose (each a
Disposal)
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,
|
it being
agreed that any chartering arrangements permitted pursuant to Clause 13.12
shall not constitute a Disposal.
|
10.4
|
No
other liabilities or obligations to be
incurred
|
No Ship
Owning Borrower shall incur any liability or obligation except liabilities or
obligations reasonably incurred in the ordinary course of operating and
chartering the Ship owned by it.
|
10.5
|
Information
provided to be accurate
|
All
financial and other information which is provided in writing by or on behalf of
a Borrower under or in connection with any Finance Document will be true and not
misleading and will not omit any material fact or consideration.
|
10.6
|
Provision
of financial statements and other
information
|
The
Guarantor shall send or cause to be sent to the Lender:
|
(a)
|
its
audited accounts and its audited consolidated accounts as soon as possible
but in no event later than 180 days after the end of each applicable
financial year;
|
|
(b)
|
as
soon as possible but in no event later than 45 days after the end of
each quarter in each financial year of the Guarantor, the consolidated
consolidated group accounts of the Guarantor and the unaudited accounts of
Boss Tankers Ltd. each certified as to their correctness by the chief
financial officer of Boss Tankers
Ltd.; and
|
|
(c)
|
as
soon as possible but in no event later than one month before
the beginning of each applicable financial year of Boss Tankers Ltd.,
a budget in a format approved by Lender which shows all anticipated income
and expenditures of each of the Ship Owning Borrowers during the next
financial year in respect of the Ship owned by
it.
|
|
10.7
|
Form
of financial statements
|
All
accounts (audited and unaudited) delivered under Clause 10.6
shall:
|
(a)
|
be
prepared in accordance with all applicable laws and generally accepted
accounting principles;
|
|
(b)
|
give
a true and fair view of the state of affairs of the relevant Borrower 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 relevant
Borrower.
|
|
10.8
|
Shareholder
and creditor notices
|
Each
Borrower shall send the Lender, at the same time as they are despatched, copies
of all communications which are despatched to that Borrower's shareholders or
creditors or any class of them.
|
10.9
|
Consents
|
Each
Borrower shall maintain in force and promptly obtain or renew, and will promptly
send certified copies to the Lender of, all consents required:
|
(a)
|
for
that Borrower to perform its obligations under any Finance Document to
which it is a party;
|
|
(b)
|
for
the validity or enforceability of any Finance Document to which it is a
party;
|
|
(c)
|
for
that Borrower (to the extent it is a Ship Owning Borrower) to continue to
own and operate the Ship owned by
it;
|
and that
Borrower shall comply with the terms of all of those consents.
|
10.10
|
Maintenance
of Security Interests
|
Each
Borrower shall:
|
(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), 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 may be 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.
|
|
10.11
|
Notification
of litigation
|
|
10.11.1
|
Each
Borrower shall provide the Lender with details of any legal or
administrative action involving that Borrower, any Security Party or the
Approved Manager as soon as such action is instituted or it becomes
apparent to that 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 any Finance
Document.
|
|
10.11.2
|
Each
Ship Owning Borrower shall provide the Lender with details of any legal or
administrative action involving the Ship owned by it , the Earnings or the
Insurances as soon as such action is instituted or it becomes apparent to
that 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 any Finance Document.
|
|
10.12
|
No
amendment to Master Agreements
|
No
Borrower shall agree to any amendment or supplement to, or waive or fail to
enforce, any Master Agreement or any of its provisions.
|
10.13
|
Confirmation
of no default
|
|
10.13.1
|
The
chief financial officer of the Guarantor shall, on a three-monthly basis
commencing 31 March 2010, serve on the Lender a Compliance
Certificate, which is signed by the chief financial officer of the
Guarantor and which, as the case may
be:
|
|
(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; or
|
|
(c)
|
includes
such other confirmations and supporting evidence that may be reasonably
requested by the Lender.
|
|
10.13.2
|
Each
Borrower shall, within 2 Business Days after service by the Lender of a
written request, serve on the Lender a notice which is signed by 2
directors of the Borrower and which, as the case may
be:
|
|
(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.
|
|
10.14
|
Notification
of default
|
Each
Borrower shall notify the Lender as soon as that 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 shall
keep the Lender fully up-to-date with all developments.
|
10.15
|
Provision
of further information
|
|
10.15.1
|
Each
Borrower shall, as soon as practicable after receiving the request,
provide the Lender with any additional financial or other information
reasonably relating to any matter relevant to, or to any provision of, a
Finance Document which may be requested by the Lender at any
time.
|
|
10.15.2
|
Each
Ship Owning Borrower shall, as soon as practicable after receiving the
request, provide the Lender with any additional financial or other
information relating to that Ship Owning Borrower, the Ship owned by it,
the Earnings or the Insurances.
|
|
10.16
|
Due
diligence
|
Promptly
upon the Lender's request, each Borrower will supply, or procure the provision
of documentation or evidence as is reasonably requested by the Lender in order
for the Lender to carry out and be satisfied with the results of all necessary
"know your customer" internal requirements and to the identity of any parties to
the Finance Documents.
|
10.17
|
Further
Information
|
The
Borrowers shall provide to the Lender promptly after the date of this Agreement
and in any event not later than 28 February 2010, confirmation in respect of
cash flow projections to the satisfaction of the Lender, including the full
amount of the Advance and of the deferred reductions in accordance with
paragraph (a)(i) and (ii) of clause 6.2 of the Nordea Facility (Repayment of Loans),
evidencing sufficient cash flow of the Borrowers and the Guarantor up until (and
including) the Final Repayment Date.
|
10.18
|
New
equity undertaking
|
|
10.18.1
|
The
Guarantor shall raise a minimum of $7,000,000, of which minimum $5,000,000
shall be raised by 31 May 2010 and the balance amount up to $7,000,000 by
30 September 2010 to improve its liquidity by any combination of one or
more of the following:
|
|
(a)
|
new
equity (or other capital acceptable to the Lender);
and
|
|
(b)
|
sale
of one or more of the Guarantor's assets, to generate sufficient free cash
ensuring that their budgeted expenses (including, but not limited to,
principal and interest payments towards its lenders) are covered until 31
December 2011.
|
|
10.18.2
|
Subject
to the full reduction of the deferred scheduled reductions in clause
6.2(a)(i) and (ii) of the Nordea Facility (Repayment of Loans),
any capital raised in accordance with this Clause 10.18
shall not be included when calculating the Excess Cash to be mandatorily
prepaid in accordance with Clause 7.2
(Mandatory reduction –
Excess Cash).
|
|
10.19
|
Information
on Trade Debt
|
|
10.19.1
|
The
Borrowers and the Guarantor shall provide the Lender with evidence on a
monthly basis no later than five (5) Business Days (or such longer period
as may be agreed by the Lender) after the end of each calendar month, of
the status of repayment of the Guarantor's trade debt (on a consolidated
basis), starting on 7 January 2010 (for December
2009).
|
|
10.19.2
|
The
Borrowers shall procure that such repayment of trade debt shall be in
accordance with the payment schedule outlined in the report prepared by
Xx. Xxxxx Xxxxxxxxxxxxx and published on Intralinks on 25 November 2009
(the Payment
Report) and so that the third party trade debt as set out in the
Payment Report shall be repaid on 30 September 2010 at the latest,
bringing the total acceptable third party debt to a maximum of $3,500,000
and not above a maximum of $3,500,000 at any point
thereafter.
|
|
10.19.3
|
The
Guarantor's total third party outstanding trade debt (on a consolidated
basis), shall at all times following 30 September 2010 be a maximum of
$3,500,000.
|
|
10.19.4
|
If
the amount of Cash and Cash Equivalents of the Guarantor at the end of any
month until 30 September 2010 exceeds $5,000,000, such excess amount
(above $5,000,000) shall be used to repay the Guarantor's trade debt (on a
consolidated basis) until the total third party debt is a maximum of
$3,500,000. Any such repayment of trade debt as set out in this Clause 10.19.4
shall accelerate the repayment schedule as set out in the Payment Report
by a corresponding amount.
|
|
10.19.5
|
The
Lender shall, at the cost of the Borrowers, appoint an adviser (which
shall be the same advisor as appointed by the Agent under the Nordea
Facility) to provide the Lender with confirmations with regard
to:
|
|
(a)
|
the
Guarantor's trade debt balance (on a consolidated
basis);
|
|
(b)
|
the
compliance with the provisions set out in Clauses 10.19.1, 10.19.2 and
10.19.3 above;
|
|
(c)
|
the
Guarantor's commitments and Financial Indebtedness as set out in Clause
11.3.4; and
|
|
(d)
|
such
other information as the Lender may require from time to
time,
|
on a
monthly basis.
|
10.20
|
Restriction
on prepayments of the Nordea
Facility
|
The
Borrowers and the Guarantor shall procure that no prepayments or repayments
under the Nordea Facility are made other than:
|
(a)
|
payments
of Excess Cash as provided for in Clause 6.3
of the Nordea Facility (Mandatory prepayment – Excess Cash) made
concurrently with a prepayment of the Advance in accordance with
Clause 7.2 of this Agreement;
|
|
(b)
|
any
prepayments required by Clause 7.1 of the Nordea Facilty;
and
|
|
(c)
|
any
other prepayment of the Nordea Facility made concurrently with a
prepayment of the Advance bearing the same proportion to the Advance as
the prepayment of the Nordea Facility bears to the outstanding balance
under the Nordea Facility.
|
|
10.21
|
Information
relating to chartering and financing of the
Barge
|
|
10.21.1
|
Subject
to Clause 10.21.3, the Guarantor shall and the Borrowers shall procure
that Straits Offshore Ltd. shall provide evidence satisfactory to the
Lender of a satisfactory charter agreement and long term financing of the
Barge, at the earlier of 30 September 2010 and (b) one (1) month prior to
the delivery date of the Barge to Straits Offshore
Ltd.
|
|
10.21.2
|
Subject
to Clause 10.21.3, the Guarantor and the Borrowers shall procure that the
other companies in the Group (including the Guarantor (on a consolidated
basis)) shall not incur any further costs, expenses or capital expenses
related to the Barge in the period commencing on the date of this
Agreement and ending on 30 June 2010, or, if later, the date of compliance
with the provisions of Clause 10.18
(New equity
undertaking).
|
|
10.21.3
|
The
obligations of the Borrower under this Clause 10.21 and any of obligations
set out in this Agreement in respect of the Safecom Assignment Agreement
and the Safecom Co-ordination Agreement shall cease to apply if the
Borrowers deliver to the Lender evidence satisfactory to the Lender
establishing that Straits Offshore Ltd. has cancelled its obligation to
acquire the Barge and that no member of the Group has incurred any
additional liability in respect of the obligation to acquire the Barge or
its cancellation.
|
|
10.22
|
Payments
into retention account
|
|
10.22.1
|
The
Borrowers and the Guarantor shall procure that the provisions of
clause 6.4 of the Nordea Facility are complied with within the time
periods set out therein.
|
|
10.22.2
|
OBO
Holdings shall maintain the Retention Account with the Agent which shall
be blocked and pledged on a second priority basis in favour of the Lender
under the Retention Account Charge
Agreement.
|
|
10.22.3
|
The
Borrowers shall procure that on the last day of each calendar month an
amount equal to 1/3 of the amount of interest falling due for payment
under Clause 4
on the next following Repayment Date is transferred from the Earnings
Accounts to the Retention Account.
|
|
10.22.4
|
After
any application required under clause 6.4 of the Nordea Facility, the
accumulated amount in the Retention Account shall automatically be applied
against the next following payment of interest due under Clause 4
on the relevant Repayment Date.
|
|
10.22.5
|
Each
of the Borrowers hereby irrevocably authorises the Lender to instruct the
Agent to make any transfer required under this Clause 10.22.
|
|
10.23.1
|
Not
later than 15 Business Days after the date of this Agreement, the
Guarantor shall provide the Lender with a cashflow forecast (with
assumptions as agreed with the Lender and in a form approved by the
Lender) showing the unaudited consolidated cashflow forecast for the Group
with respect to the period from 1 January 2010 to 31 December
2017.
|
|
10.23.2
|
Not
later than 30 days after the end of each calendar month, the Guarantor
shall provide the Lender with unaudited consolidated monthly management
accounts and financial statements for the Group with respect to the
previous calendar month.
|
|
10.24
|
Guarantor's
consent and confirmation
|
The
Guarantor hereby:
|
(a)
|
consents
to the Existing Borrowers entering into this Agreements and the other
Finance Documents;
|
|
(b)
|
consents
to this Agreement replacing and superseding the Existing Loan Agreement
and consents to the Borrowers executing the Second Deed of Accession
amending the Existing Master
Agreement;
|
|
(c)
|
confirms
and undertakes to the Lender that the Guarantee shall continue to be in
full force and effect and shall be extended so as to secure the full
payment and discharge of all of the Secured
Liabilities;
|
|
(d)
|
confirms
and undertakes to the Lender that its obligations under the Guarantee
shall not be prejudiced, restricted or diminished by reason of the
execution of this Agreement or the Second Deed of Accession by the
Existing Borrowers;
|
|
(e)
|
agrees
that the Guarantee shall be amended so that the expression "Finance
Documents" when used in the Guarantee shall have the meaning given to that
expression in this Agreement.
|
|
11
|
Corporate
undertakings
|
|
11.1
|
General
|
Each
Borrower (on behalf of itself and the other Borrowers) also undertakes with the
Lender to comply with the following provisions of this Clause at all times
during the Security Period except as the Lender may otherwise
permit.
|
11.2
|
Maintenance
of status
|
Each
Borrower shall maintain its separate corporate existence and remain in good
standing under the laws of the Xxxxxxxx Islands (in the case of OBO Holdings,
the Existing Borrowers and the Ship Owning Borrowers) or Liberia (in the case of
the Guarantor and Isabelle).
|
11.3
|
Negative
undertakings
|
|
11.3.1
|
No
Ship Owning Borrower shall carry on any business other than the ownership,
chartering and operation of the Ship owned by
it.
|
|
11.3.2
|
Boss
Tankers Ltd shall not, without the consent of the Lender, carry on any
business other than the ownership of the shares in the Existing
Borrowers.
|
|
11.3.3
|
OBO
Holdings shall not, without the consent of the Lender, carry on any
business other than the ownership of the shares in Ship Owning Borrowers
and ownership of the Retention
Account.
|
|
11.3.4
|
With
effect from the date of the Agreement and subject to Clause 11.3.2, each
of the Existing Borrowers shall not carry on any business other than
receiving debts outstanding or monies due to it and ancillary to the
business of operating the vessel previously operated by it and shall not
shall incur any liability or obligation except liabilities or obligations
pursuant to this Agreement or any Finance
Document.
|
|
11.3.5
|
None
of the Borrowers shall enter into any new Financial Indebtedness or assume
or grant any guarantee liabilities, other than current liabilities related
to the day to day operation of the
Vessels.
|
|
11.3.6
|
No
Borrower shall:
|
|
(a)
|
alter
its financial year;
|
|
(b)
|
subject
to Clause 11.3.7,
pay any dividend or make any other form of distribution or effect any form
of redemption, purchase or return of share capital or repay any loans to
its shareholders; or
|
|
(c)
|
provide
any form of credit or financial assistance
to:
|
|
(i)
|
a
person who is directly or indirectly interested in that 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 that Borrower than those which it could
obtain in a bargain made at arms' length;
|
(d)
|
open
or maintain any account with any bank or financial institution except
accounts with the Lender for the purposes of the Finance Documents and
Permitted Accounts;
|
|
(e)
|
issue,
allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share
capital;
|
|
(f)
|
acquire
any shares or other securities other than US or UK Treasury bills and
certificates of deposit issued by major North American or European banks,
or enter into any transaction in a derivative other than Designated
Transactions; or
|
|
(g)
|
enter
into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
|
|
11.3.7
|
Each
Borrower shall be entitled to pay a dividend to its shareholders
if:
|
|
(a)
|
at
the relevant time, no Potential Event of Default or Event of Default is
continuing; and
|
|
(b)
|
no
Potential Event of Default or Event of Default would occur as a result of
such payment.
|
|
12
|
Insurance
|
|
12.1
|
General
|
Each
Borrower also undertakes with the Lender to comply with the following provisions
of this Clause at all times during the Security Period except as the Lender
may otherwise permit.
|
12.2
|
Maintenance
of obligatory insurances
|
Each Ship
Owning Borrower shall keep the Ship owned by it insured at the expense of that
Borrower against:
|
(a)
|
fire
and usual marine risks (including hull and machinery and excess
risks);
|
|
(b)
|
war
risks;
|
|
(c)
|
protection
and indemnity risks; and
|
|
(d)
|
any
other risks against which the Lender considers, having regard to practices
and other circumstances prevailing at the relevant time, it would in the
opinion of the Lender be reasonable for that Borrower to insure and which
are specified by the Lender by notice to that
Borrower.
|
|
12.3
|
Terms
of obligatory insurances
|
|
12.3.1
|
Subject
to Clause 12.3.2,
each Ship Owning Borrower 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 of at least 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 and in the international marine
insurance market;
|
|
(d)
|
in
relation to protection and indemnity risks in respect of the full 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.
|
|
12.3.2
|
The
Ship Owning Borrowers shall ensure that in the case of fire and usual
marine risks and war risks insurance relating to all Ships, the aggregate
insured value is at all times at least 120% of the aggregate of
(i) the Advance, (ii) the Swap Exposure and (iii) the
outstanding amount under the Nordea Facility, in each case as at the
commencement of each policy year.
|
|
12.4
|
Further
protections for the Lender
|
In
addition to the terms set out in Clause 12.3, each Ship Owning Borrower
shall procure that the obligatory insurances shall:
|
(a)
|
whenever
the Lender requires name (or be amended to name) the Lender as additional
named assured for its rights and interests, warranted no operational
interest and with full waiver of rights of subrogation against the Lender,
but without the Lender thereby being liable to pay (but having the right
to pay) premiums, calls or other assessments in respect of such
insurance;
|
|
(b)
|
name
the Lender as loss payee with such directions for payment as the Lender
may specify;
|
|
(c)
|
provide
that all payments by or on behalf of the insurers under the obligatory
insurances to the Lender shall be made without set-off, counterclaim or
deductions or condition whatsoever;
|
|
(d)
|
provide
that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the
Lender;
|
|
(e)
|
provide
that the Lender may make proof of loss if any of the Ship Owning Borrowers
fail to do so.
|
|
12.5
|
Renewal
of obligatory insurances
|
Each Ship
Owning Borrower shall:
|
(a)
|
at
least 21 days before the expiry of any obligatory insurance effected by
it:
|
|
(i)
|
notify
the Lender of the brokers (or other insurers) and any protection and
indemnity or war risks association through or with whom that Borrower
proposes to renew that obligatory insurance and of the proposed terms of
renewal; and
|
|
(ii)
|
obtain
the Lender's approval to the matters referred to in paragraph
(i);
|
|
(b)
|
at
least 10 days before the expiry of any obligatory insurance (or such later
date as will be agreed by the Lender where the Borrower demonstrates
to the Lender's satisfaction that meaningful negotiations with
brokers or insurers continue within the 10 day period and that there is no
likelihood the obligatory insurance in respect of an applicable
Ship will not be obtained before the expiration of such period)
effected by it, renew that obligatory insurance in accordance with the
Lender'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 Lender in writing of the terms and
conditions of the renewal.
|
|
12.6
|
Copies
of policies; letters of undertaking
|
Each Ship
Owning Borrower shall ensure that all approved brokers provide the Lender with
pro forma copies of all policies relating to the obligatory insurances which
they are to effect or renew and of a letter or letters or undertaking in a form
required by the Lender 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 12.4;
|
|
(b)
|
they
will hold such policies, and the benefit of such insurances, to the order
of the Lender in accordance with the loss payable clause referred to in
paragraph (a);
|
|
(c)
|
they
will advise the Lender immediately of any material change to the terms of
the obligatory insurances;
|
|
(d)
|
they
will notify the Lender, 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 Ship Owning Borrower or its agents and, in
the event of their receiving instructions to renew, they will promptly
notify the Lender of the terms of the instructions;
and
|
|
(e)
|
they
will not set off against any sum recoverable in respect of a claim
relating to the Ship owned by that Ship Owning Borrower 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 that Ship immediately upon being so requested by the
Lender.
|
|
12.7
|
Copies
of certificates of entry
|
Each Ship
Owning Borrower shall ensure that any protection and indemnity and/or war risks
associations in which the Ship owned by it is entered provides the Lender
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
Lender; and
|
|
(c)
|
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.
|
|
12.8
|
Deposit
of original policies
|
Each Ship
Owning Borrower shall use its best endeavours to ensure that all policies
relating to obligatory insurances effected by it are deposited with the approved
brokers through which the insurances are effected or renewed.
|
12.9
|
Payment
of premiums
|
Each Ship
Owning Borrower shall punctually pay all premiums or other sums payable in
respect of the obligatory insurances effected by it and produce all relevant
receipts when so required by the Lender.
|
12.10
|
Guarantees
|
Each Ship
Owning Borrower 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.
|
12.11
|
Compliance
with terms of insurances
|
No Ship
Owning Borrower shall do nor omit to do (nor 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 under an
obligatory insurance repayable in whole or in part; and, in
particular:
|
(a)
|
each
Ship Owning Borrower 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 12.7(c)
ensure that the obligatory insurances are not made subject to any
exclusions or qualifications to which the Lender has not given its prior
approval;
|
|
(b)
|
no
Ship Owning Borrower 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
Ship Owning Borrower shall make (and promptly supply copies to the Lender
of) 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
Ship Owning Borrower 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.
|
|
12.12
|
Alteration
to terms of insurances
|
No Ship
Owning Borrower shall either make or agree to any alteration to the terms of any
obligatory insurance nor waive any right relating to any obligatory
insurance.
|
12.13
|
Settlement
of claims
|
No Ship
Owning Borrower 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 Lender to collect or recover any moneys which at any time become payable in
respect of the obligatory insurances.
|
12.14
|
Provision
of copies of communications
|
Each Ship
Owning Borrower shall provide the Lender, at the time of each such
communication, copies of all written communications between that Borrower
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
Ship Owning Borrower'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 Ship Owning Borrower and any of the
persons referred to in paragraphs (a) or (b) relating wholly or partly to
the effecting or maintenance of the obligatory
insurances.
|
|
12.15
|
Provision
of information
|
In
addition, each Ship Owning Borrower shall promptly provide the Lender (or any
persons which it may designate) with any information which the Lender (or any
such designated person) 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 12.16
below or dealing with or considering any matters relating to any such
insurances;
|
and the
Borrowers shall, immediately upon demand, indemnify the Lender in respect of all
fees and other expenses incurred by or for the account of the Lender in
connection with any such report as is referred to in paragraph (a).
|
12.16
|
Mortgagee's
interest, additional perils
|
The
Lender shall be entitled from time to time to effect, maintain and renew a
mortgagee's interest additional perils insurance in respect of any Ship and a
mortgagee's interest marine insurance for an amount up to 120 per cent. of the
aggregate of each Advance and a proportionate share of the Swap Exposure, on
such terms, through such insurers and generally in such manner as the Lender may
from time to time consider appropriate and the Borrowers shall upon demand fully
indemnify the Lender in respect of all premiums and other expenses which are
incurred in connection with or with a view to effecting, maintaining or renewing
any such insurance or dealing with, or considering, any matter arising out of
any such insurance.
|
13
|
Ship
covenants
|
|
13.1
|
General
|
Each
Borrower also undertakes with the Lender to comply with the following provisions
of this Clause at all times during the Security Period except as the Lender
may otherwise permit.
|
13.2
|
Ship's
name and registration
|
Each Ship
Owning Borrower shall:
|
(a)
|
keep
the Ship owned by it registered in its name as a Bahamas ship at the port
of Nassau;
|
|
(b)
|
not
do or allow to be done anything as a result of which such registration
might be cancelled or imperilled;
and
|
|
(c)
|
not
change the name or port of registry of the Ship owned by
it.
|
|
13.3
|
Repair
and classification
|
|
13.3.1
|
The
Borrowers shall ensure that no Ship Owning Borrower shall change the
classification society of any of the
Ships.
|
|
13.3.2
|
Each
Ship Owning Borrower 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 notation available for ships of a similar
type and specification free of recommendations and conditions save to the
extent agreed by the Lender in writing;
and
|
|
(c)
|
so
as to comply with all laws and regulations applicable to vessels
registered at ports in Bahamas or to vessels trading to any jurisdiction
to which the Ship owned by it may trade from time to time including but
not limited to the ISM Code and the ISPS
Code.
|
|
13.4
|
Modification
|
No Ship
Owning Borrower shall make any modification or repairs to, or replacement of,
any Ship or equipment installed on the Ship which would or might materially
alter the structure, type or performance characteristics of any Ship or
materially reduce its value.
|
13.5
|
Removal
of parts
|
No Ship
Owning Borrower shall remove any material part of any Ship, or any material item
of equipment installed on any Ship, unless the part or item so removed is
immediately 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 Lender and becomes
on installation on the relevant Ship the property of the relevant Ship Owning
Borrower and subject to the security constituted by the relevant Mortgage and
the Deed of Covenant provided that a Ship Owning Borrower may install equipment
owned by a third party if the equipment can be removed without any risk of
damage to the Ship owned by it.
|
13.6
|
Surveys
|
Each Ship
Owning Borrower 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 Lender provide the Lender, with copies of all survey
reports.
|
13.7
|
Inspection
|
Each Ship
Owning Borrower shall permit the Lender (by surveyors or other persons appointed
by it for that purpose) to board the Ship owned by it to inspect its condition
or to satisfy themselves about proposed or executed repairs and shall afford all
proper facilities for such inspections. The Lender shall be permitted to arrange
no more than one inspection per Ship in each calendar year (unless an Event of
Default or Potential Event of Default has occurred and is
continuing).
|
13.8
|
Prevention
of and release from arrest
|
Each Ship
Owning Borrower 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, the Earnings or the
Insurances;
|
|
(b)
|
all
taxes, dues and other amounts charged in respect of the Ship owned by it,
the Earnings or the Insurances; and
|
|
(c)
|
all
other outgoings whatsoever in respect of the Ship owned by it, the
Earnings or the Insurances;
|
and,
immediately upon receiving notice of the arrest of the Ship owned by it, or of
its detention in exercise or purported exercise of any lien or claim, that Ship
Owning Borrower shall procure its release by providing bail or otherwise as the
circumstances may require.
|
13.9
|
Compliance
with laws etc.
|
Each Ship
Owning Borrower shall:
|
(a)
|
comply,
or procure compliance with the ISM Code, ISPS Code, all Environmental Laws
and all other laws or regulations relating to the Ship owned by it, its
ownership, operation and management or to the business of that Ship Owning
Borrower;
|
|
(b)
|
not
employ the Ship owned by it nor allow its 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 owned by it to enter or trade to any
zone which is declared a war zone by any government or by the Ship's
war risk insurers, unless that Ship Owning Borrower has (at its expense)
effected any special, additional or modified insurance
cover as may be normally required by insurers in such
circumstances to maintain cover.
|
|
13.10
|
Provision
of information
|
Each Ship
Owning Borrower shall promptly provide the Lender with any information which it
requests regarding:
|
(a)
|
the
Ship owned by it, its 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 owned by it and any payments
made in respect of that Ship;
|
|
(d)
|
any
towages and salvages;
|
|
(e)
|
its
compliance, the Approved Manager's compliance or the compliance of the
Ship owned by it with the ISM Code and the ISPS
Code;
|
and, upon
the Lender's request, provide copies of any current charter relating to the Ship
owned by it, of any current charter guarantee and of the Ship's Document of
Compliance.
|
13.11
|
Notification
of certain events
|
Each Ship
Owning Borrower shall immediately notify the Lender by fax, confirmed
immediately afterwards by letter of:
|
(a)
|
any
casualty which is or is likely to be or to become a Major
Casualty;
|
|
(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 owned by it, any exercise or purported
exercise of any lien on that Ship or its Earnings or any requisition of
that Ship for hire;
|
|
(e)
|
any
intended dry docking of the Ship owned by
it;
|
|
(f)
|
any
Environmental Claim made against that Ship Owning Borrower or in
connection with the Ship owned by it, or any Environmental
Incident;
|
|
(g)
|
any
claim for breach of the ISM Code or the ISPS Code being made against that
Ship Owning Borrower, the Approved Manager or otherwise in connection with
the Ship owned by it; 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 that
Ship Owning Borrower shall keep the Lender advised in writing on a regular basis
and in such detail as the Lender shall require of that Ship Owning Borrower's,
the Approved Manager's or any other person's response to any of those events or
matters.
|
13.12
|
Restrictions
on chartering, appointment of managers etc.; undertaking to replace or
extend charterparties
|
|
13.12.1
|
Without
the prior written approval of the Lender, no Ship Owning Borrower shall,
in relation to the Ship owned by
it:
|
|
(a)
|
let
that Ship on bareboat charter for any
period;
|
|
(b)
|
enter
into any agreement related to the chartering and operation of that Ship,
including any time or consecutive voyage charter, for a term
which exceeds, or which by virtue of any optional extensions may exceed,
12 months;
|
|
(c)
|
enter
into any charter in relation to that Ship under which more than 2 months'
hire (or the equivalent) is payable in
advance;
|
|
(d)
|
charter
that Ship otherwise than on bona fide arm's length terms at the time when
that Ship is fixed;
|
|
(e)
|
appoint
a manager of that Ship other than the Approved Manager or agree to any
alteration to the terms of the Approved Manager's appointment;
or
|
|
(f)
|
de-activate
or lay up that Ship.
|
|
13.12.2
|
The
Borrowers shall within 31 December 2010 or by 31 January 2011 at the
latest facilitate new charterparties for the Ships or extension of the
existing Charterparties (which expire during 2011) by nine (9) months on
average, in any event at average rates for all Ships sufficient to
cover the Borrowers’ budgeted expenses (including, but not limited to,
principal and interest payments to their lenders) until 31 December
2011.
|
|
13.13
|
Notice
of Mortgage
|
Each Ship
Owning Borrower shall keep the relevant Mortgage registered against the Ship
owned by it as a valid first priority mortgage, carry on board that Ship a
certified copy of the relevant Mortgage and place and maintain in a conspicuous
place in the navigation room and the Master's cabin of that Ship a framed
printed notice stating that that Ship is mortgaged by that Ship Owning Borrower
to the Lender.
|
13.14
|
Sharing
of Earnings
|
No Ship
Owning Borrower shall enter into any agreement or arrangement for the sharing of
any Earnings. For the avoidance of doubt, this shall not preclude any Ship
Owning Borrower from entering into commercial pooling arrangements in relation
to a Ship in the ordinary course of its business.
|
14
|
Financial
covenants
|
|
14.1
|
Definitions
|
For the
purposes of the financial covenants set out herein, the following definitions
shall apply:
Cash and Cash Equivalents
means, in respect of the Group, and at any time:
|
(a)
|
cash
in hand or on deposits with any acceptable bank available for cash
management purposes;
|
|
(b)
|
investment
grade certificates of deposit or investment grade marketable debt
securities, maturing within one (1) year after the relevant
date of calculation; or
|
|
(c)
|
any
other instrument, security or investment approved by the Lender, in each
case, to which any member of the Group beneficially entitled at that time
and which is capable of being applied against the Total
Debt,
|
Equity means Total Assets less
Total Debt;
Equity Ratio means Equity
divided by Total Assets;
Quarter Date means each 31
March, 30 June, 30 September and 31 December.
Total Assets means, on a
consolidated basis, the aggregate book value of all of the assets of the
Guarantor (on a consolidated basis), however excluding Cash and Cash Equivalents
in excess of the minimum Cash and Cash Equivalents requirements in Clause 14.2.4
(Cash and Cash
Equivalents).
Total Debt means, on a
consolidated basis, the aggregate book value of all provisions, other long term
liabilities and current liabilities of the Borrowers and the Guarantor (on a
consolidated basis) however reduced by Cash and Cash Equivalents in excess of
the minimum Cash and Cash Equivalents requirements in Clause 14.2.4
(Cash and Cash
Equivalents).
Value Adjusted Equity means
Value Adjusted Total Assets less Total Debt.
Value Adjusted Total Assets
means, on a consolidated basis, the total market value of all of the assets of
the Guarantor (on a consolidated basis), however excluding Cash and Cash
Equivalents in excess of the minimum Cash and Cash Equivalents requirements in
Clause 14.2.4
(Cash and Cash
Equivalents).
|
14.2
|
Financial
covenants
|
|
14.2.1
|
Minimum
Value Adjusted Equity
|
The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain a minimum Value Adjusted Equity of $30,000,000.
|
14.2.2
|
Positive
working capital
|
The
Guarantor (on a consolidated basis) shall at all times following the delivery of
the Compliance Certificate for the period ending on 30 June 2010, ensure that
its current assets exceed its current liabilities (excluding the current portion
of long term debt), all as determined in accordance with GAAP.
|
14.2.3
|
Minimum
value
|
The
Borrowers shall ensure that the Market Value of the Ships be at least the higher
of:
|
(a)
|
one
hundred and thirty-five per cent (135%) of the amount outstanding under
the Nordea Facility at any time;
and
|
|
(b)
|
one
hundred and twenty per cent (120%) of the aggregate of (i) the amount
outstanding under the Nordea Facility and (ii) the
Advance;
|
|
14.2.4
|
Cash
and Cash Equivalents
|
The
Guarantor (on a consolidated basis) shall at all times in the period from the
Effective Date and ending on the earlier of (i) 30 September 2010 and
(ii) the delivery of the Barge to Straits Offshore Ltd., ensure that it has
Cash and Cash Equivalents equal to or greater than $4,000,000 and at all times
thereafter ensure that the Guarantor (on a consolidated basis) has Cash and Cash
Equivalents equal to or greater than $6,000,000.
|
14.2.5
|
Minimum
Equity Ratio
|
The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain an Equity Ratio of minimum twenty-five per cent
(25.00%).
|
15
|
Security
cover
|
|
15.1
|
Minimum
required security cover
|
Clause 15.2
applies if the Lender notifies the Borrowers that:
|
(a)
|
the
aggregate of the Market Values of the Ships;
plus
|
|
(b)
|
the
net realisable value of any additional security previously provided under
this Clause;
|
is below,
either:
|
(i)
|
one
hundred and thirty-five per cent (135%) of the amount outstanding under
the Nordea Facility at any time;
and
|
|
(ii)
|
one
hundred and twenty per cent (120%) of the aggregate of (i) the amount
outstanding under the Nordea Facility and (ii) the
Advance.
|
|
15.2
|
Provision
of additional security; prepayment
|
If the
Lender serves a notice on the Borrowers under Clause 15.1,
the Borrowers shall, within 1 month after the date on which the Lender's notice
is served, either:
|
(a)
|
provide,
or ensure that a third party provides, additional security which, in the
opinion of the Lender, has a net realisable value at least equal to the
shortfall and is documented in such terms as the Lender may approve or
require; or
|
|
(b)
|
pay
to the Lender such amount so as to ensure once such sum has been applied
in accordance with Clause 15.1, such shortfall will have been
eliminated.
|
|
15.3
|
Value
of additional vessel security
|
The net
realisable value of any additional security which is provided under
Clause 15.2
and which consists of a Security Interest over a vessel shall be determined in
accordance with its Market Value.
|
15.4
|
Valuations
binding
|
Any
valuation under Clause 2 (b), 15.2
or 15.3
shall be binding and conclusive as regards the Borrowers, as shall be any
valuation which the Lender makes of any additional security which does not
consist of or include a Security Interest.
|
15.5
|
Provision
of information
|
The
Borrowers shall promptly provide the Lender and any shipbroker or expert with
any information which the Lender or the shipbroker or expert may request for the
purposes of determining the Market Values. If the Borrowers fail to
provide the information by the date specified in the request, the valuation may
be made on any basis and assumptions which the shipbroker or the Lender (or the
expert appointed by it) considers prudent.
|
15.6
|
Payment
of valuation expenses
|
Without
prejudice to the generality of the Borrowers' obligations under Clauses 20.2,
20.3
and 21.3,
the Borrowers shall, on demand, pay the Lender the amount of the fees and
expenses of any shipbroker or expert instructed by the Lender under this Clause
and all legal and other expenses incurred by the Lender in connection with any
matter arising out of this Clause. Provided no Event of Default or Potential
Event of Default has occurred and is continuing, the Borrower shall only be
required to pay such fees and expenses for one valuation per Ship in each
calendar year.
|
16
|
Payments
and calculations
|
|
16.1
|
Currency
and method of payments
|
All
payments to be made by any Borrower to the Lender under a Finance Document shall
be made to the Lender:
|
(a)
|
by
not later than 11.00 a.m. (New York City time) on the due
date;
|
|
(b)
|
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 Lender shall specify as being customary at the
time for the settlement of international transactions of the type
contemplated by this Agreement);
and
|
|
(c)
|
to
such account as the Lender may from time to time notify to the
Borrowers.
|
|
16.2
|
Payment
on non-Business Day
|
If any
payment by any 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
|
Lender
accounts
|
The
Lender shall maintain an account showing the amounts advanced by the Lender and
all other sums owing to the Lender from the Borrowers and each Security Party
under the Finance Documents and all payments in respect of those amounts made by
the Borrowers and any Security Party.
|
16.5
|
Accounts
prima facie evidence
|
If the
account maintained under Clause 16.4 shows an amount to be owing by a
Borrower or a Security Party to the Lender, that account shall be prima facie
evidence that that amount is owing to the Lender.
|
16.6
|
Source
of funds
|
|
16.6.1
|
The
Lender may at any time require evidence satisfactory to the Lender that
any payment under this Agreement is legally compliant and until such
evidence has been provided to the Lender, the Lender shall not be obliged
to accept any such payment but shall be entitled to place such payment
into a suspense account and such payment shall not be an effective
discharge of the liabilities of the Borrowers under this
Agreement.
|
|
16.6.2
|
For
the purposes of this Clause legally compliant means that the
payment of any funds under this Agreement and their source (whether direct
or indirect) and their receipt and handling is or will be in the opinion
of the Lender in all respects in accordance with any European Community
legislation (including any regulation or directive), the common law,
United Kingdom legislation (including subordinate legislation and any
order or regulations made under such legislation), any law or order of any
court or administrative tribunal which is in force in the United Kingdom,
all laws of any relevant jurisdiction and all regulatory requirements, and
the receipt of such funds by the Lender will not or is not reasonably
likely in the opinion of the Lender to impose on the Lender any obligation
to make a report to any authority or to repay such
funds.
|
|
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 the Lender under or by virtue of any Finance Document after service
of notice on the Borrowers under Clause 19.2(a)
or (b)
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 Lender or the Swap Bank under the Finance Documents other than those
amounts referred to at paragraphs (ii) and
(iii);
|
|
(ii)
|
secondly,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Lender or the Swap Bank under the Finance
Documents and any net amount which the Borrowers shall have become liable
to pay or deliver under section 2(e) (obligations) of any
Master Agreement but shall have failed to pay or deliver to the Swap Bank
at the time of distribution under this Clause;
and
|
|
(iii)
|
thirdly,
in or towards satisfaction pro rata of the Advance and of the Swap
Exposure calculated as at the actual Early Termination Date applying to
each particular Designated Transaction or, if no such Early Termination
Date has 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 Lender, by notice to the Borrower
and the Security Parties, states in its opinion (acting reasonably and
with due regard to the facts existing at such time) 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
provisions of paragraph (a);
and
|
|
(c)
|
THIRDLY:
any surplus shall be paid to the Borrowers or to any other person
appearing to be entitled to it.
|
|
17.2
|
Variation
of order of application
|
The
Lender may, by notice to the Borrowers and the Security 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
Lender 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 and any notice which the Lender gives under Clause 17.2 shall
override any right of appropriation possessed, and any purported appropriation
made, by any Borrower or any Security Party.
|
18
|
Application
of Earnings
|
|
18.1
|
Payment
of Earnings
|
Each Ship
Owning Borrower undertakes with the Lender to ensure that, throughout the
Security Period (and subject only to the provisions of the Assignment Agreement)
all the Earnings of the Ship owned by it are paid into the Earnings Account for
that Ship all payments by the Swap Bank to a Borrower under each Designated
Transaction are paid into the Earnings Account held in the name of that
Borrower.
|
18.2
|
Location
of accounts
|
Boss
Tankers shall promptly:
|
(a)
|
comply
with any requirement of the Lender as to the location or re-location of
the Boss Tankers Account ; and
|
|
(b)
|
execute
any documents which the Lender specifies to create or maintain in favour
of the Lender a Security Interest over (and/or rights of set-off,
consolidation or other rights in relation to) the Boss Tankers Account
.
|
|
18.3
|
Debits
for expenses etc.
|
The
Lender shall be entitled (but not obliged) from time to time to debit any
Earnings Account without prior notice in order to discharge any amount due and
payable to it under Clause 20 or 21 or payment of which it has become
entitled to demand under Clause 20 or 21.
|
19
|
Events
of Default
|
|
19.1
|
Events
of Default
|
An Event
of Default occurs if:
|
(a)
|
any
Borrower or any Security Party fails to pay when due or (if so payable) on
demand any sum payable under a Finance Document or under any document
relating to a Finance Document; or
|
|
(c)
|
any
breach by any Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraph (a) or (b)) if,
in the opinion of the Lender, such default is capable of remedy and such
default continues unremedied 10 days after written notice from the Lender
requesting action to remedy that default;
or
|
|
(d)
|
(subject
to any applicable grace period specified in any Finance Document) any
breach by any of the Borrowers or any Security Party occurs of any
provision of a Finance Document (other than a breach covered by paragraph
(a), (b) or (c)); or
|
|
(e)
|
any
representation, warranty or statement made by, or by an officer of, a
Borrower or a Security Party in a Finance Document or in the 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 any
Borrower or the Guarantor:
|
|
(i)
|
any
Financial Indebtedness of any Borrower or the Guarantor is not paid when
due or, if so payable, on demand;
or
|
|
(ii)
|
any
Financial Indebtedness of any Borrower or the Guarantor 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 an Event of
Default (as defined in the Nordea Facility) occurs;
or
|
|
(iii)
|
a
lease, hire purchase agreement or charter creating any Financial
Indebtedness of any Borrower or the Guarantor 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 any Borrower or the Guarantor 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 any Borrower or
the Guarantor becomes enforceable;
or
|
|
(g)
|
any
of the following occurs in relation to any Borrower or the
Guarantor:
|
|
(i)
|
any
Borrower or the Guarantor suspends payment of its debts or is unable or
admits its inability to pay its debts as they fall due;
or
|
|
(ii)
|
any
Borrower or the Guarantor begins negotiations with any creditor with a
view to the readjustment or rescheduling of any of its Financial
Indebtedness; or
|
|
(iii)
|
any
Borrower or the Guarantor proposes or enters into any composition or other
arrangement for the benefit of its creditors generally or any class of
creditors; or
|
|
(iv)
|
any
assets of any Borrower or the Guarantor are subject to any form of
execution, attachment, arrest, sequestration, distress in respect of a sum
of, or sums aggregating, $250,000 or more or the equivalent in another
currency (other than a ship arrest or attachment arising in the usual
course of business and which is, in the reasonable opinion of the Lender,
adequately secured); or
|
|
(h)
|
any
person takes any action or any legal procedure is commenced or other steps
are taken (including the making of an application, the presentation of a
petition or the filing or service of a notice) with a view
to:
|
|
(i)
|
any
Borrower or the Guarantor being adjudicated or found insolvent;
or
|
|
(ii)
|
the
winding-up or dissolution of any Borrower or the Guarantor other than in
connection with a solvent reconstruction, the terms of which have been
previously approved in writing by the Lender
;or
|
|
(iii)
|
any
Borrower or the Guarantor obtaining a moratorium or other protection from
its creditors; or
|
|
(iv)
|
the
appointment of a trustee, receiver, administrative receiver, administrator
or similar officer in respect of any Borrower or the Guarantor or any of
its assets; or
|
|
(i)
|
any
adjudication, order or appointment is made under or in relation to any of
the proceedings referred to in paragraph (h);
or
|
|
(j)
|
|
(k)
|
any
Borrower or the Guarantor ceases or suspends carrying on its business or a
part of its business which, in the opinion of the Lender, is material in
the context of this Agreement; or
|
|
(l)
|
it
becomes unlawful in any Pertinent Jurisdiction or
impossible:
|
|
(i)
|
for
any Borrower or any Security Party to discharge any liability under a
Finance Document or to comply with any other obligation which the Lender
considers material under a Finance Document;
or
|
|
(ii)
|
for
the Lender or the Swap Bank to exercise or enforce any right under, or to
enforce any Security Interest created by, a Finance Document;
or
|
|
(m)
|
any
consent necessary to enable any Ship Owning Borrower to own, operate or
charter the Ship owned by it or to enable any Borrower or any Security
Party to comply with any provision which the Lender considers 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
|
|
(n)
|
it
appears to the Lender that, without its prior consent, a change has
occurred or probably has occurred after the date of this Agreement in the
ultimate beneficial ownership of any of the shares in the Borrowers or the
Guarantor or in the ultimate control of the voting rights attaching to any
of those shares; or
|
|
(o)
|
any
provision which the Lender considers 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
|
|
(p)
|
the
security constituted by a Finance Document is in any way imperilled or in
jeopardy; or
|
|
(q)
|
any
of the Ships is arrested or otherwise detained and is not released from
such detention within a period of 14 days;
or
|
|
(r)
|
an
Event of Default (as defined in section 14 of a Master Agreement) occurs;
or
|
|
(s)
|
a
Master Agreement is terminated, suspended, rescinded or revoked or
otherwise ceases to remain in full force and effect for any reason except
with the prior written consent of the
Lender;
|
|
(t)
|
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 any
Borrower or the Guarantor; or
|
|
(ii)
|
any
accident or other event (including an Environmental Incident) involving
any Ship or another vessel owned, chartered or operated by any Borrower or
the Guarantor;
|
in the
light of which the Lender considers that there is a significant risk that the
Security Parties are, or will later become, unable to discharge their
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 the Lender
may:
|
(a)
|
serve
on the Borrowers a notice stating that all obligations of the Lender to
the Borrowers under this Agreement are terminated;
and/or
|
|
(b)
|
serve
on the Borrowers a notice stating that the Advance, together with all
accrued interest and all other amounts accrued or owing under this
Agreement, is immediately due and payable or is due and payable on demand;
and/or
|
|
(c)
|
take
any other action which, as a result of the Event of Default or any notice
served under paragraph (a) or (b), the Lender or the Swap Bank is entitled
to take under any Finance Document or any applicable
law.
|
|
19.3
|
Termination
of Commitment
|
On the
service of a notice under Clause 19.2(a)
the Commitment, and all other obligations of the Lender to the Borrowers under
this Agreement, shall terminate.
|
19.4
|
Acceleration
of the Advances
|
On the
service of a notice under Clause 19.2(b),
the Advance, all accrued interest and all other amounts accrued or owing from
the Borrowers 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.
|
19.5
|
Multiple
notices; action without notice
|
The
Lender may serve notices under Clauses 19.2(a)
and (b)
simultaneously or on different dates and it may take any action referred to in
Clause 19.2
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
|
Exclusion
of Lender/Swap Bank liability
|
Neither
the Lender nor the Swap Bank nor any receiver or manager appointed by the Lender
shall have any liability to a 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.
|
|
19.7
|
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.
|
20
|
Fees
and expenses
|
|
20.1
|
Arrangement
fee
|
The
Borrowers shall pay to the Lender on or before the date of this Agreement, an
arrangement fee of $75,000.
|
20.2
|
Costs
of negotiation, preparation etc.
|
The
Borrowers shall pay to the Lender on its demand the amount of all expenses
incurred by the Lender 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.
|
20.3
|
Costs
of variations, amendments, enforcement
etc.
|
The
Borrowers shall pay to the Lender, on the Lender's demand, the amount of all
expenses incurred by the Lender 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 Lender or the Swap Bank 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 or any
other matter relating to such security;
or
|
|
(d)
|
any
step taken by the Lender or the Swap Bank 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 (d) 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
|
Certification
of amounts
|
A notice
which is signed by 2 officers of the Lender, which states that a specified
amount, or aggregate amount, is due to the Lender under this Clause 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
|
|
21.1
|
Indemnities
regarding borrowing and repayment of the
Advance
|
The
Borrowers shall fully indemnify the Lender on its demand in respect of all
claims, expenses, liabilities and losses which are made or brought against or
incurred by the Lender, or which the Lender reasonably and with due diligence
estimates that it will incur, as a result of or in connection with:
|
(a)
|
the
Advance not being borrowed on the date specified in a Drawdown Notice for
any reason other than a default by the
Lender;
|
|
(b)
|
the
receipt or recovery of all or any part of the Advance 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 Borrowers 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 Borrowers
on the amount concerned under
Clause 6);
|
|
(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 Advance under
Clause 19.
|
|
21.2
|
Breakage
costs
|
Without
limiting its generality, Clause 21.1 covers any claim, expense, liability
or loss, including a loss of a prospective profit, incurred by the
Lender:
|
(a)
|
in
liquidating or employing deposits from third parties acquired or arranged
to fund or maintain all or any part of the Advances and/or any overdue
amount (or an aggregate amount which includes the Advances 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) to hedge any
exposure arising under this Agreement or a number of transactions of which
this Agreement is one.
|
|
21.3
|
Miscellaneous
indemnities
|
The
Borrowers shall fully indemnify the Lender on its demand in respect of all
claims, expenses, liabilities and losses which may be made or brought against or
incurred by the Lender, in any country, as a result of or in connection
with:
|
(a)
|
any
action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by the Lender or by any receiver appointed under
a Finance Document;
|
|
(b)
|
any
other Pertinent Matter;
|
other
than claims, expenses, liabilities and losses which are shown to have been
directly and mainly caused by the dishonesty or wilful misconduct of the
officers or employees of the Lender.
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, ISPS Code or any Environmental Law.
|
21.4
|
Currency
indemnity
|
If any
sum due from any Borrower or any Security Party to the Lender 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 any 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
Borrowers shall indemnify the Lender against the loss arising when the amount of
the payment actually received by the Lender is converted at the available rate
of exchange into the Contractual Currency.
In this
Clause 21.4,
the available rate of
exchange means the rate at which the Lender is able at the opening of
business (London time) on the Business Day after it receives the sum concerned
to purchase the Contractual Currency with the Payment Currency.
This
Clause 21.4
creates a separate liability of the Borrowers which is distinct from their other
liabilities under the Finance Documents and which shall not be merged in any
judgment or order relating to those other liabilities.
|
21.5
|
Application
to Master Agreements
|
For the
avoidance of doubt, Clause 21.4
does not apply in respect of sums due from the Borrowers to the Swap Bank under
or in connection with a Master Agreement as to which sums the provisions of
section 8 (contractual
currency) of that Master Agreement shall apply.
|
21.6
|
Certification
of amounts
|
A notice
which is signed by 2 officers of the Lender, which states that a specified
amount, or aggregate amount, is due to the Lender under this Clause 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.
|
22
|
No
set-off or Tax Deduction; value added
tax
|
|
22.1
|
Definitions
|
In this
Clause:
Tax Credit means a credit
against, relief from, or remission or repayment of any tax.
Tax Deduction means a
deduction or withholding for or on account of tax from a payment under a Finance
Document.
Tax Payment means either an
increase in a payment made by a Borrower to the Lender under Clause 22.3
or a payment under Clause 22.4.
VAT means value added tax as
provided for in the Value Added Tax Xxx 0000 and legislation (or purported
legislation and whether delegated or otherwise) supplemental to that Act or in
any primary or secondary legislation promulgated by the European Community or
any official body or agency of the European Community, and any tax similar or
equivalent to value added tax imposed by any country other than the United
Kingdom and any similar or turnover tax replacing or introduced in addition to
any of the foregoing.
|
22.2
|
No
set-off and counterclaim
|
All
payments by the Borrowers under this Agreement shall be made without set-off or
counterclaim.
|
22.3
|
Tax
gross-up
|
|
22.3.1
|
Each
Borrower shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by
law.
|
|
22.3.2
|
If
a Tax Deduction is required by law to be made by a Borrower, the amount of
the payment in respect of which the Tax Deduction is required to be made
shall be increased to the amount which (after the Tax Deduction) will
leave an amount equal to the payment which would have been due if no Tax
Deduction had been required.
|
|
22.3.3
|
If
a Borrower is required to make a Tax Deduction, that Borrower shall make
the Tax Deduction, and any payment required in connection with the Tax
Deduction within the time allowed and in the minimum amount required by
law.
|
|
22.3.4
|
Within
30 days of making a Tax Deduction or a payment required in connection with
a Tax Deduction, the Borrower making the Tax Deduction or payment shall
deliver to the Lender evidence reasonably satisfactory to the Lender that
the Tax Deduction or payment has been
made.
|
|
22.4
|
Tax
indemnity
|
|
22.4.1
|
If
the Lender is or will be subject to any liability or required to make any
payment for or on account of tax in relation to any sum received or
receivable (or any sum deemed for tax purposes to be received or
receivable) under any Finance Document, the Borrowers shall (within 3
Business Days of demand) pay to the Lender the amount determined by the
Lender in its absolute discretion to be equal to the loss, liability or
cost which it will or has (directly or indirectly) suffered for or on
account of tax by the Lender as a result of that liability or
payment.
|
|
22.4.2
|
Sub-clause 22.4.1
shall not apply:
|
|
(a)
|
in
relation to any tax assessed on the
Lender:
|
|
(i)
|
under
the law of the jurisdiction in which the Lender is incorporated or, if
different, the jurisdiction (or jurisdictions) in which it is treated as
resident for tax purposes; or
|
|
(ii)
|
under
the law of the jurisdiction in which the Lender's lending office is
located, in respect of amounts received or receivable in that
jurisdiction;
|
if that
tax is imposed on or calculated by reference to the net income received or
receivable (but not any sum deemed to be received or receivable) by the Lender;
or
|
(b)
|
to
the extent that the liability or requirement is compensated for by an
increased payment under Clause 22.3.
|
|
22.5
|
Tax
Credit
|
If a
Borrower makes a Tax Payment and the Lender determines in its absolute
discretion that it has obtained, utilised and retained a Tax Credit which is
attributable to either:
|
(a)
|
an
increased payment of which that Tax Payment forms part;
or
|
|
(b)
|
that
Tax Payment;
|
the
Lender shall pay to that Borrower the amount determined by the Lender in its
absolute discretion to be the amount which will leave the Lender (after the
payment) in the same after-tax position as it would have been in had the Tax
Payment not been required to be made by that Borrower.
|
22.6
|
Stamp
taxes
|
The
Borrowers shall, within 3 Business Days of demand, indemnify the Lender against
any cost, loss or liability which the Lender incurs in relation to any stamp
duty, registration tax or other similar tax which is payable in respect of any
of the Finance Documents.
|
22.7
|
Value
added tax
|
|
22.7.1
|
All
consideration which is expressed to be payable under any of the Finance
Documents by the Borrowers to the Lender is exclusive of any
VAT. If VAT is chargeable on any supply made by the Lender in
connection with any of the Finance Documents, the Borrowers shall pay to
the Lender (in addition to and at the same time as paying the
consideration for the supply) an amount equal to the amount of the
VAT.
|
|
22.7.2
|
Where
a Borrower is required by any of the Finance Documents to reimburse the
Lender in respect of any cost or expense, that Borrower shall at the same
time indemnify the Lender against any VAT incurred by the Lender in
respect of the cost or expense to the extent that the Lender reasonably
determines that it is not entitled to any credit or repayment in respect
of that VAT.
|
|
23
|
Illegality,
etc.
|
|
23.1
|
Illegality
|
This
Clause applies if the Lender notifies the Borrowers 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
Lender to maintain or give effect to any of its obligations under this Agreement
in the manner contemplated by this Agreement.
|
23.2
|
Notification
and effect of illegality
|
On the
Lender notifying the Borrowers under Clause 23.1, the Commitment shall
terminate; and thereupon or, if later, on the date specified in the Lender's
notice under Clause 23.1 as the date on which the notified event would
become effective the Borrowers shall prepay the Advances in full in accordance
with Clause 7.
|
23.3
|
Mitigation
|
If
circumstances arise which would result in a notification under Clause 23.1
then, without in any way limiting the rights of the Lender under
Clause 23.3, the 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 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
|
Definitions
|
In this
Clause the following definitions apply.
Change means, in relation to
the Lender (or any parent company of the Lender), the introduction,
implementation, repeal, withdrawal or change in, or in the interpretation or
application of:
|
(a)
|
any
law, regulation, practice or concession;
or
|
|
(b)
|
any
directive, requirement, request or guidance (whether or not having the
force of law but if not having the force of law, one which applies
generally to a class or category of financial institutions of which the
Lender (or that company) forms part and compliance with which is in
accordance with the general practice of those financial institutions) of
the European Community, any central bank including the European Central
Bank, the Financial Services Authority, or any other fiscal, monetary,
regulatory or other authority.
|
Increased Cost means any cost
to, or reduction in the amount payable to, or reduction in the return on capital
or regulatory capital achieved by, the Lender (or any parent company of the
Lender) to the extent that it arises, directly or indirectly, as a result of the
Change and is attributable to the loan facility made available to the Borrowers
under this Agreement or any Advance or the funding of any Advance
including:
|
(a)
|
any
Tax Liability (other than Tax on Overall Net Income) incurred by the
Lender;
|
|
(b)
|
any
changes in the basis or timing of taxation of the Lender in relation to
the loan facility made available to the Borrowers under this Agreement or
any Advance or to the funding of any
Advance;
|
|
(c)
|
the
cost to the Lender (or any parent company of the Lender) of complying
with, or the reduction in the amount payable to or reduction in the return
on capital or regulatory capital achieved by the Lender (or any parent
company of the Lender) as a result of complying with, any capital adequacy
or similar requirements howsoever arising, including as a result of an
increase in the amount of capital to be allocated to the loan facility
made available to the Borrowers under this Agreement or of a change to the
weighting of the commitment under it or any
Advance;
|
|
(d)
|
the
cost to the Lender of complying with any reserve, cash ratio, special
deposit or liquidity requirements (or any other similar requirements);
and
|
|
(e)
|
the
amount of any fees payable by the Lender to any supervisory or regulatory
authority.
|
Tax Liability means, in
respect of any person:
|
(a)
|
any
liability or any increase in the liability of that person to make any
payment of or in respect of tax;
|
|
(b)
|
the
loss of any relief, allowance, deduction or credit in respect of tax which
would otherwise have been available to that
person;
|
|
(c)
|
the
setting off against income, profits or gains or against any tax liability
of any relief, allowance, deduction or credit in respect of tax which
would otherwise have been available to that person;
and
|
|
(d)
|
the
loss or setting off against any tax liability of a right to repayment of
tax which would otherwise have been available to that
person.
|
For the
purposes of this definition of Tax Liability, any question of whether or not any
relief, allowance, deduction, credit or right to repayment of tax has been lost
or set off, and if so, the date on which that loss or set-off took place, shall
be conclusively determined by the relevant person.
Tax on Overall Net Income
means, in relation to the Lender, tax (other than tax deducted or
withheld from any payment) imposed on the net profits of the Lender by the
jurisdiction in which its lending office or its head office is
situated.
|
24.2
|
Increased
Costs
|
|
24.2.1
|
If,
after the date of this Agreement, a Change occurs which causes an
Increased Cost to the Lender (or any parent company of the Lender) then
the Borrowers shall pay (as additional interest) to the Lender within
5 Business Days of demand all amounts which the Lender (or any parent
company of the Lender) certifies to be necessary to compensate the Lender
for the Increased Cost.
|
|
24.2.2
|
Any
demand made under this Clause shall set out in reasonable detail so
far as is practicable the basis of computation of the Increased
Cost.
|
|
24.2.3
|
The
Borrowers shall not be obliged to make a payment in respect of an
Increased Cost under this Clause if and to the extent that the
Increased Cost has been compensated for by the payment of the Mandatory
Cost or the operation of Clause 22.3.
|
|
24.3
|
Optional
prepayment
|
If the
Borrowers are required to pay any amount to the Lender under this Clause, then,
without prejudice to that obligation and so long as the circumstances giving
rise to the relevant Increased Cost are continuing and subject to the Borrowers
giving the Lender not less than 14 days' prior notice (which shall be
irrevocable), the Borrowers may prepay all, but not part, of the Advances at the
end of an Interest Period together with accrued interest on the amount
prepaid. Any such prepayment shall be subject to Clause 7.
|
25
|
Set-off
|
|
25.1
|
Set-off
of matured or contingent
liabilities
|
|
25.1.1
|
In
consideration of the Lender making or continuing to make banking
facilities available to the Borrowers, each of the Borrowers hereby
authorises the Lender (without prior notice) to
apply:
|
|
(a)
|
any
credit balance (whether or not then due) in any currency which is at any
time held by the Lender at any office of the Lender in any country for the
account of that Borrower on any account whatsoever;
and
|
|
(b)
|
any
other amount owed by the Lender to that Borrower on any account whatsoever
(whether in connection with any Finance Document or
otherwise)
|
in or
towards satisfaction of all or any of the monies, obligations and liabilities
which may now or at any time in the future be due owing or incurred by that
Borrower to the Lender whether actual or contingent and whether alone severally
or jointly as principal, guarantor, surety or otherwise and until all contingent
liabilities shall have been fully discharged and satisfied. The Lender may
retain such monies under as the Lender in its absolute discretion may consider
necessary to meet such obligations or liabilities.
|
25.1.2
|
If
the obligations to be set-off against each other under Clause 25.1.1 are
in different currencies, the Lender may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of
the set-off.
|
|
25.2
|
Existing
rights unaffected
|
The
Lender shall not be obliged to exercise any of its rights under
Clause 25.1.1 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 the Lender is entitled (whether under the general law or any
document).
|
25.3
|
No
Security Interest
|
This
Clause gives the Lender a contractual right of set-off only, and does not
create any equitable charge or other Security Interest over any credit balance
of the Borrower.
|
26
|
Transfers
and changes in lending office
|
|
26.1
|
Transfer
by Borrowers
|
No
Borrower may, without the consent of the Lender, transfer any of its rights or
obligations under any Finance Document.
|
26.2
|
Assignment
by Lender
|
The
Lender may assign all or any of the rights and interests which it has under or
by virtue of the Finance Documents without the consent of any
Borrower.
|
26.3
|
Rights
of assignee
|
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, a direct or indirect assignee of any of the Lender's rights or
interests under or by virtue of the Finance Documents shall be entitled to
recover damages by reference to the loss incurred by that assignee as a result
of the breach or misrepresentation irrespective of whether the Lender would have
incurred a loss of that kind or amount.
|
26.4
|
Sub-participation;
subrogation assignment
|
The
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, any Borrower; and the Lender may assign, in any manner and terms
agreed by it, all or any part of those rights to an insurer or surety who has
become subrogated to them.
|
26.5
|
Disclosure
of information
|
The
Lender may disclose to any Permitted Disclosee any information which the Lender
has received in relation to any Borrower, any Security Party or their affairs
under or in connection with any Finance Document.
For these
purposes each of the following is a Permitted Disclosee:
|
(i)
|
any
potential transferee, assignee or sub-participant of the Lender's rights
and interests under the Finance Documents and their affiliates and
professional advisers
|
|
(ii)
|
rating
agencies and their professional
advisers;
|
|
(iii)
|
any
party (and the professional advisers of any party) with (or through) whom
the Lender enters into (or may potentially enter into), whether directly
or indirectly, any transaction under which payments are to be made or may
be made by reference to any of the Finance
Documents;
|
|
(iv)
|
any
party (and the professional advisers of any party) who invests in or other
finances a transaction where the Lender has assigned or transferred all or
any of its rights and interests under the Finance
Documents;
|
|
(v)
|
any
party (and the professional advisers of any party) to whom or for whose
benefit the Lender charges, assigns or otherwise creates security over its
rights and interest under the Finance
Documents;
|
|
(vi)
|
the
Lender's affiliates and professional
advisers;
|
|
(vii)
|
administrative,
settlement or numbering service providers,
and
|
|
(viii)
|
persons
required for legal or regulatory
purposes.
|
|
26.6
|
Change
of lending office
|
The
Lender may change its lending office by giving notice to the Borrowers and the
change shall become effective on the later of:
|
(a)
|
the
date on which the Borrowers receive the notice;
and
|
|
(b)
|
the
date, if any, specified in the notice as the date on which the change will
come into effect.
|
|
27
|
Variations
and waivers
|
|
27.1
|
Variations,
waivers etc. by Lender
|
A
document shall be effective to vary, waive, suspend or limit any provision of a
Finance Document, or the Lender's rights or remedies under such a provision or
the general law, only if the document is signed, or specifically agreed to by
fax or telex, by the Borrowers and the Lender and, if the document relates to a
Finance Document to which a Security Party is party, by that Security
Party.
|
27.2
|
Exclusion
of other or implied variations
|
Except
for a document which satisfies the requirements of Clause 27.1, no
document, and no act, course of conduct, failure or neglect to act, delay or
acquiescence on the part of the Lender (or any person acting on its behalf)
shall result in the Lender (or any person acting on its behalf) 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
|
|
(c)
|
a
breach by a 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
|
Method
and delivery
|
Any
notice, consent, approval, demand, authorisation, instruction, waiver or
certificate or other communication (a notice) to be given under this
Agreement or any other Finance Document to which a Borrower is a party shall
be:
|
(a)
|
in
writing in English;
|
|
(b)
|
signed
by or on behalf of a person duly authorised to do so by the party giving
the notice; and
|
|
(c)
|
and no
notice by a Borrower may be withdrawn or revoked without the written consent of
the Lender.
|
28.2
|
Addresses
|
The
addresses and numbers of the parties for the purposes of Clause 28.1
are:
|
(a)
|
the
Borrowers
|
Par La
Ville Place
00 Xxx Xx
Xxxxx Xxxx
Xxxxxxxx
XX00
Xxxxxxx
Xxxxxxxxx: Mrs.
Xxxxxxx Xxxxx
Fax
number: 000-000-0000
|
(b)
|
the
Lender
|
The
Governor and Company of the Bank of Scotland
New
Uberior House
00 Xxxx
Xxxx Xxxxxx
Xxxxxxxxx XX0
0XX
Attention: Marine
Finance
Fax
number: x00
000 000 0000
or such
other address or fax number in England as the addressee may substitute by
notice, and such notice shall only be effective on:
|
(a)
|
any
effective date specified in that notice;
or
|
|
(b)
|
if
no date is specified or the date specified is less than 5 Business Days
after the date when notice is received, the date falling 5 Business Days
after the notice has been received.
|
|
28.3
|
Receipt
|
A notice
shall be deemed to have been received in the absence of earlier
receipt:
|
(a)
|
if
delivered by hand or sent by prepaid recorded delivery or registered post
at the time of actual delivery (provided that if delivery occurs on a day
which is not a Business Day or after 5.30 p.m. it shall be deemed to be
delivered at 9.00 am on the next Business
Day);
|
|
(b)
|
if
sent by prepaid first class recorded delivery or registered post from and
to any place within the United Kingdom, 2 Business Days after posting
(provided that if the date of posting is not a Business Day, it shall be
deemed to have been posted at 9.00 am on the next Business Day) and proof
that any such notice was properly addressed, prepaid and posted shall be
sufficient evidence that such notice has been duly
served;
|
|
(c)
|
if
sent by registered airmail, 5 Business Days after posting (provided that
if the date of posting is not a Business Day, it shall be deemed to have
been posted at 9.00 am on the next Business Day) and proof that any such
notice was properly addressed, prepaid and posted shall be sufficient
evidence that such notice has been duly
served;
|
|
(d)
|
if
sent by fax, upon receipt by the addressee of the complete text in legible
form upon sending, subject to:
|
|
(i)
|
confirmation
of uninterrupted and error-free transmission by a transmission report;
and
|
|
(ii)
|
there
having been no telephonic communication by the recipient to the sender
that the fax has not been received in legible
form:
|
|
(aa)
|
within
3 hours after sending, if sent on a Business Day and between the hours of
9.00 a.m. and 4.00 p.m.; or
|
|
(bb)
|
by
noon on the next following Business Day if sent by 4.00 p.m. on a Business
Day but before 9.00 a.m. on the next following Business
Day.
|
|
28.4
|
Electronic
communication
|
For the
avoidance of doubt, a notice given under this Agreement shall not be validly
served if sent by electronic communication.
|
28.5
|
Service
Documents
|
The
provisions of this Clause shall not apply in relation to the service of Service
Documents.
|
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.
|
|
29
|
Joint
and several liability
|
|
29.1
|
General
|
All
liabilities and obligations of the Borrowers under this Agreement shall, whether
expressed to be so or not, be several and, if and to the extent consistent with
Clause 29.2, joint.
|
29.2
|
No
impairment of Borrower's
obligations
|
The
liabilities and obligations of a Borrower shall not be impaired by:
|
(a)
|
this
Agreement being or later becoming void, unenforceable or illegal as
regards any other Borrower;
|
|
(b)
|
the
Lender entering into any rescheduling, refinancing or other arrangement of
any kind with any other Borrower;
|
|
(c)
|
the
Lender releasing any other Borrower or any Security Interest created by a
Finance Document; or
|
|
(d)
|
any
combination of the foregoing.
|
|
29.3
|
Principal
debtors
|
Each
Borrower declares that it is and will, throughout the Security Period, remain a
principal debtor for all amounts owing under this Agreement and the Finance
Documents and no Borrower shall in any circumstances be construed to be a surety
for the obligations of any other Borrower under this Agreement.
|
29.4
|
Subordination
|
Subject
to Clause 29.5, during the Security Period, no Borrower shall:
|
(a)
|
claim
any amount which may be due to it from any other Borrower whether in
respect of a payment made, or matter arising out of, this Agreement or any
Finance Document, or any matter unconnected with this Agreement or any
Finance Document; or
|
|
(b)
|
take
or enforce any form of security from any other Borrower for such an
amount, or in any other way seek to have recourse in respect of such an
amount against any asset of any other Borrower;
or
|
|
(c)
|
set
off such an amount against any sum due from it to any other Borrower;
or
|
|
(d)
|
prove
or claim for such an amount in any liquidation, administration,
arrangement or similar procedure involving any other Borrower or other
Security Party; or
|
|
(e)
|
exercise
or assert any combination of the
foregoing.
|
|
29.5
|
Borrower's
required action
|
If during
the Security Period, the Lender, by notice to a Borrower, requires it to take
any action referred to in paragraphs (a) to (d) of Clause 29.4, in
relation to any other Borrower, that Borrower shall take that action as soon as
practicable after receiving the Lender's notice.
|
30
|
Relationship
between the Lender and the Swap
Bank
|
Each
Borrower acknowledges that:
|
(a)
|
it
has or will enter into certain documents with the Swap Bank (including the
Master Agreements) and may, under certain circumstances, become indebted
to the Swap Bank;
|
|
(b)
|
pursuant
to arrangements between the Lender and the Swap Bank, the Lender has
agreed to hold the benefit of each of the Security Interests created
pursuant to the Finance Documents (including the Security Interests
created pursuant to each Mortgage) on trust for itself and the Swap
Bank;
|
|
(c)
|
the
Secured Liabilities include those obligations owed by the Borrowers to the
Swap Bank pursuant to the Master Agreement and the other Finance Documents
entered into between the Borrowers and the Swap
Bank.
|
|
31
|
Supplemental
|
|
31.1
|
Rights
cumulative, non-exclusive
|
The
rights and remedies which the Finance Documents give to the Lender
are:
|
(a)
|
cumulative;
|
|
(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.
|
|
31.2
|
Invalidity
|
If at any
time any provision of a Finance Document is or becomes invalid, illegal or
unenforceable in any respect under the law of any jurisdiction, that shall not
in any way affect or impair:
|
(a)
|
the
validity, legality or enforceability in that jurisdiction of any other
provision of that Finance Document;
or
|
|
(b)
|
the
validity, legality or enforceability under the law of any other
jurisdiction of that or any other provision of that Finance
Document.
|
|
31.3
|
Counterparts
|
A Finance
Document may be executed in any number of counterparts and by the parties on
separate counterparts. Each counterpart shall constitute an original
of the relevant Finance Document, but together the counterparts shall constitute
one document.
|
31.4
|
Third
party rights
|
The
parties do not intend that any term of this Agreement shall be enforceable
solely by virtue of the Contracts (Rights of Third Parties) Xxx 0000 by any
person who is not a party to this Agreement.
|
31.5
|
Entire
Agreement
|
The
parties agree that this Agreement replaces and supersedes the Existing Loan
Agreement and together with the Finance Documents, sets out the entire agreement
between the parties in relation to the subject matter of the Existing Loan
Agreement.
|
32
|
Governing
law
|
This
Agreement, and any non-contractual obligations arising out of or in connection
with it, shall be governed by and construed in accordance with English
law.
|
33
|
Jurisdiction
|
|
33.1
|
Jurisdiction
of the English courts
|
The
parties irrevocably agree, for the benefit of the Lender, and subject to
Clause 33.2,
that the English courts shall have exclusive jurisdiction to settle any dispute,
including any dispute relating to a non-contractual obligation, arising out of
or in connection with this Agreement.
|
33.2
|
Proceedings
in other jurisdictions
|
Nothing
in this Clause shall limit the right of the Lender in respect of any such
dispute, to take proceedings against any Borrower in any other court of
competent jurisdiction.
|
33.3
|
Waiver
of objections
|
Each
Borrower irrevocably agrees to waive any objection to any court specified in
this Clause, whether on the grounds of venue, or on the grounds that the forum
is not appropriate. Each Borrower further irrevocably agrees that a judgment of
any court specified in this Clause shall be conclusive and binding upon them and
may be enforced in the courts of any other jurisdiction.
|
34
|
Service
of process
|
|
34.1
|
Address
for service
|
The
Borrowers' address for service under this Clause is Ince & Co, International
House, 0 Xx. Xxxxxxxxx'x Xxx, Xxxxxx X0X 0XX. Items served at this
address must be marked for the personal attention of Xx. Xxxx
Xxxxxxx.
|
34.2
|
Agreed
method of service
|
Any
Service Document may be served on a Borrower by posting it by pre-paid first
class recorded delivery post to the address for service specified in this
Clause, or to such other address for service within England as may be notified
in accordance with Clause 28
to the Lender.
This Agreement has been
entered into on the date stated at the beginning of this Agreement.
GRK/54321.31100/8688553.08 Page
Schedule 1 -
Drawdown Notice
|
To:
|
Bank
of Scotland plc (the Lender)
|
|
|
Attention:
Marine Finance
|
Fax: 0131
658 3220
Drawdown
Notice
|
1
|
We
refer to the loan agreement (the Loan Agreement) dated January 2010 and
made between ourselves, as Borrowers, and yourselves, as Lender, in
connection with a facility of up to $3,975,230. Terms defined
in the Loan Agreement have their defined meanings when used in this
Drawdown Notice.
|
|
2
|
We
request to borrow as follows:
|
|
(a)
|
Amount:The
lower of (i) the Commitment and (ii) the amount notified to us by the
Lender as being the sum of all outstanding advances under the Existing
Loan Agreement together with accrued interest and breakage costs as at the
Effective Date (the Total
Accrued Debt);
|
|
(b)
|
Drawdown
Date: ** ;
and
|
|
(c)
|
the
first Interest Period applicable to the Advance shall be
** months
commencing on the Effective Date.
|
|
3
|
We
represent and warrant that:
|
|
(a)
|
the
representations and warranties in Clause 9 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;
and
|
|
(b)
|
no
Event of Default or Potential Event of Default has occurred or will result
from the borrowing of the Advance.
|
|
4
|
We
acknowledge and agree that:
|
|
(a)
|
the
Total Accrued Debt:
|
|
(i)
|
at
the date of this notice is
$** ;
and
|
|
(ii)
|
as
of the Drawdown Date will be
$** ;
|
|
(b)
|
during
the period from 19 November 2009 to the date of the notice, the interest
periods applicable to the Existing Loan have been periods of less than one
month as particularly specified in correspondence between the Lender and
the Guarantor; and
|
|
(c)
|
as
of the Effective Date, the interest period applicable to the Existing Loan
will terminate and in accordance with Clause 21.2 of the Existing Loan
Agreement we shall be liable for all breakage costs associated with such
termination on that date, which costs shall form part of the Total Accrued
Debt.
|
|
5
|
This
notice cannot be revoked without the prior consent of the
Lender.
|
[Name of
Signatory]
……………………………….
Director
for and
on behalf of
[ ]
*delete
as appropriate
GRK/54321.31100/8688553.08 Page
Schedule 2 -
Condition precedent documents
Part
A
The
following are the documents referred to in Clause 8.1(a).
|
1
|
A
duly executed original of each Finance Document (and of each document
required to be delivered by each Finance Document) other than those
referred to in Part B.
|
|
2
|
Copies
of the certificate of incorporation and constitutional documents of each
Borrower and each Security Party.
|
|
3
|
Copies
of resolutions of the shareholders and directors of each Borrower and each
Security Party authorising the execution of each of the Finance Documents
to which that Borrower or that Security Party is a party and, in the case
of a Borrower, authorising named officers or attorneys (each an Authorised Officer) to
give the Drawdown Notice 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 a Security
Party.
|
|
5
|
Copies
of all consents which any Borrower or any Security Party requires to enter
into, or make any payment under, any Finance
Document.
|
|
6
|
The
originals of any mandates or other documents required in connection with
the opening or operation of the Earnings
Accounts.
|
|
7
|
Documentary
evidence that the agent for service of process named in Clause 34
has accepted its appointment.
|
|
8
|
Written
confirmation from the Borrowers and the Guarantor acknowledging and
agreeing to the amount of the Total Accrued Debt (as defined in the
Drawdown Notice) as set out in the Effective Date
Notice.
|
|
9
|
Such
"know your customer" documentary evidence as the Lender may require in
relation to the Borrower and each Security Party to be provided in
accordance with the Lender's anti-money laundering
regulations.
|
|
10
|
Favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of England, Liberia, the Bahamas and the Xxxxxxxx
Islands and such other relevant jurisdictions as the Lender may
require.
|
|
11
|
If
the Lender so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Lender.
|
|
12
|
The
Lender being satisfied that:
|
|
(d)
|
no
litigation by any entity (private or governmental) shall be pending or
threatened with respect to the transactions contemplated hereunder or any
documentation executed in connection therewith, or which the Lender shall
determine is reasonably likely to have a materially adverse effect on the
business, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, any Security Party or their
subsidiaries, either individually or taken as a
whole;
|
|
(e)
|
all
necessary governmental approvals (domestic and foreign) and third party
approvals and/or consents in connection with transactions contemplated by
the transactions contemplated hereunder and otherwise referred to herein
shall have been obtained and remain in effect, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which, in the judgment of the Lender, restrains, prevents, or
imposes materially adverse conditions contemplated by the transactions
contemplated hereunder or otherwise referred to
herein. Additionally, there shall not exist any judgment,
order, injunction or other restraint prohibiting or imposing materially
adverse conditions upon the transactions contemplated by the transactions
contemplated hereunder; and
|
|
(f)
|
nothing
shall have occurred (and the Lender shall not have become aware of facts
or conditions not previously known to it), which the Lender shall
determine is reasonably likely to have a material adverse effect on the
rights or remedies of the Lender, or on the ability of the Borrowers or
any Security Party or their subsidiaries, either individually or taken as
a whole, to perform their obligations to the Lender, or which is
reasonably likely to have a materially adverse effect on the business,
property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrowers, the Security Parties or their subsidiaries,
either individually or taken as a
whole.
|
GRK/54321.31100/8688553.08 Page
Part
B
The
following are the documents referred to in Clause 8.1(b)
and apply in relation to each of the Ship Owning Borrowers and the Ship
respectively owned by them:
|
1
|
A
duly executed original of the:
|
|
(a)
|
Mortgage;
|
|
(b)
|
Assignment
Agreement;
|
|
(c)
|
Deed
of Covenant;
|
|
(d)
|
Accounts
Charge,
|
|
(e)
|
Charterparty
Assignment
|
(and of
each document to be delivered by each of them).
|
2
|
Documentary
evidence that:
|
|
(a)
|
the
Ship is definitively and permanently registered in the name of the Ship
Owning Owner under the Bahamas flag at the Port of
Nassau;
|
|
(b)
|
the
Ship is in the absolute and unencumbered ownership of the Ship Owning
Borrower save as contemplated by the Finance Documents and the Senior Ship
Security Documents;
|
|
(c)
|
the
Ship maintains the following class free of all overdue recommendations and
conditions of such Classification
Society:
|
|
(i)
|
in
respect of m.v. "Xxxxxx Xxxxxxxxx" and m.v. "Xxxxx X. Xxxxx", class 1 A1
Bulk Carrier or Tanker for Oil ESP HC-E E0 with Det Norske
Veritas;
|
|
(ii)
|
in
respect of m.v. "Rip Hudner", class 1 A1 Bulk Carrier or Tanker for Oil
ESP XX-XX X0 with Det Norske
Veritas;
|
|
(iii)
|
in
respect of m.v. "Searose G", class 1 A1 Bulk Carrier or Tanker for Oil ESP
XX-XX GRAIN-U PST E0 LCS-SI IB(+) with Det Norske Veritas;
and
|
|
(iv)
|
in
respect of mv. "Sagamore", class NKK NS* (Tob) (ESP)/MNS* with Nippon
Kaiji Kyokai.
|
|
(f)
|
the
Mortgage has been duly registered against the Ship as a valid second
priority ship mortgage in favour of the Lender in accordance with the laws
of the Bahamas; and
|
|
(d)
|
the
Ship is insured in accordance with the provisions and all requirements of
this Agreement in respect of insurances have been complied
with
|
|
3
|
Documents
establishing that the Ship will, as from the Drawdown Date, be managed by
the Approved Manager on terms acceptable to the Lender, together
with:
|
|
(a)
|
a
certified copy of the Ship Management Agreement and a letter of
undertaking executed by the Approved Manager in favour of the Lender in
the terms required by the Lender agreeing certain matters in relation to
the management of the Ship and subordinating the rights of the Approved
Manager against the Ship Owning Borrower to the rights of the Lender under
the Finance Documents; and
|
|
(b)
|
copies
of the Approved Manager's Document of Compliance and of Ship's Safety
Management Certificate (together with any other details of the applicable
safety management system which the Lender
requires).
|
|
4
|
Evidence
that the relevant Borrowers have established the relevant Earnings Account
and the Retention Account.
|
|
5
|
Favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of England, the Bahamas, Liberia the Xxxxxxxx Islands
and such other relevant jurisdictions as the Lender may
require.
|
|
6
|
A
favourable opinion from BankServe Insurance Services Limited on such
matters relating to the insurances for the Ships as the Lender may
require.
|
|
7
|
The
Lender being satisfied that:
|
|
|
(a)
|
no
litigation by any entity (private or governmental) shall be pending or
threatened with respect to the transactions contemplated hereunder or any
documentation executed in connection therewith, or which the Lender shall
determine is reasonably likely to have a materially adverse effect on the
business, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, any Security Party or their
subsidiaries, either individually or taken as a
whole;
|
|
|
(b)
|
all
necessary governmental approvals (domestic and foreign) and third party
approvals and/or consents in connection with transactions contemplated by
the transactions contemplated hereunder and otherwise referred to herein
shall have been obtained and remain in effect, and all applicable waiting
periods shall have expired without any action being taken by any competent
authority which, in the judgment of the Lender, restrains, prevents, or
imposes materially adverse conditions contemplated by the transactions
contemplated hereunder or otherwise referred to
herein. Additionally, there shall not exist any judgment,
order, injunction or other restraint prohibiting or imposing materially
adverse conditions upon the transactions contemplated by the transactions
contemplated hereunder; and
|
|
|
(c)
|
nothing
shall have occurred (and the Lender shall not have become aware of facts
or conditions not previously known to it), which the Lender shall
determine is reasonably likely to have a material adverse effect on the
rights or remedies of the Lender, or on the ability of the Borrowers or
any Security Party or their subsidiaries, either individually or taken as
a whole, to perform their obligations to the Lender, or which is
reasonably likely to have a materially adverse effect on the business,
property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrowers, the Security Parties or their subsidiaries,
either individually or taken as a
whole.
|
GRK/54321.31100/8688553.08 Page
Schedule 3 –
Mandatory Cost formula
|
1
|
The
Mandatory Cost is an addition to the interest rate to compensate the
Lender for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any
other authority which replaces all or any of its functions) or (b) the
requirements of the European Central
Bank.
|
|
2
|
The
Mandatory Cost where the Lender is lending from a lending office in a
Participating Member State will be the percentage notified by the Lender
to the Borrowers. This percentage will be certified by the
Lender in its notice to the Borrowers to be its reasonable determination
of the cost (expressed as a percentage of all Advances made by the Lender
from that lending office) of complying with the minimum reserve
requirements of the European Central Bank in respect of loans made from
that lending office.
|
|
3
|
The
Mandatory Cost where the Lender is lending from a lending office in the
United Kingdom will be calculated by the Lender as a percentage rate per
annum on the first day of each Interest Period (or as soon as practicable
thereafter) as follows
|
|
E x 0.01
|
per
cent per annum
|
|
300
|
where "E"
is designed to compensate the Lender for amounts payable under the Fees Rules
and is calculated by the Lender as being the rate of charge payable by the
Lender to the Financial Services Authority pursuant to the Fees Rules in respect
of the relevant financial year of the Financial Services Authority (calculated
for this purpose by the Lender as being the average of the Fee Tariffs
applicable to the Lender for that financial year) and expressed in pounds per
£1,000,000.
|
4
|
For
the purposes of this Schedule:
|
|
(a)
|
Fees Rules means the
rules on periodic fees contained in the FSA Supervision Manual or such
other law or regulation as may be in force from time to time in respect of
the payment of fees for the acceptance of
deposits;
|
|
(b)
|
Fee Tariffs means the
fee tariffs specified in the Fees Rules under the activity group A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required
pursuant to the Fees Rules but taking into account any applicable discount
rate);
|
|
(c)
|
Participating Member
State means any member state of the European Communities that
adopts or has adopted the euro as its lawful currency in accordance with
legislation of the
European Community relating to Economic and Monetary Union;
and
|
|
(d)
|
Tariff Base has the
meaning given to it in, and will be calculated in accordance with, the
Fees Rules.
|
|
5
|
Any
determination by the Lender pursuant to this Schedule in relation to a
formula, the Mandatory Cost or any amount payable to the Lender shall, in
the absence of manifest error, be conclusive and binding on the
Borrowers.
|
|
6
|
The
Lender may from time to time, after consultation with the Borrowers,
determine and notify to the Borrowers any amendments which are required to
be made to this Schedule in order to comply with any change in law,
regulation or any requirements from time to time imposed by the Bank of
England, the Financial Services Authority or the European Central Bank
(or, in any case, any other authority which replaces all or any of its
functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on the
Borrowers.
|
Schedule 4 –
Form of Effective Date Notice
Bank
of Scotland plc
New
Uberior House
00 Xxxx
Xxxx Xxxxxx
Xxxxxxxxx
XX0 0XX
|
To:
|
BHOBO
One Ltd.;
|
BHOBO Two
Ltd.;
BHOBO
Three Ltd.;
RMJ OBO
Shipping Ltd.;
Sagamore
Shipping Ltd.;
OBO
Holdings Ltd.;
Agawam
Shipping Corp.;
Aquidneck
Shipping Corp.;
Anawan
Shipping Corp.;
Isabelle
Shipholdings Corp.
Boss
Tankers Ltd.
Date: ____
February 2010
Dear
Sirs
Effective
Date Notice
We refer
to :
|
(i)
|
the
loan agreement (the Existing Loan Agreement)
dated 7 December 2007 between Agawam Shipping Corp., Aquidneck Shipping
Corp., Anawan Shipping Corp., Isabelle Shipholdings Corp., Boss Tankers
Ltd. (the Existing
Borrowers) and Bank of Scotland plc relating to a $34,00,000
facility to finance four MR product tankers;
and
|
|
(ii)
|
the replacement
loan agreement (the New
Facility) dated ___ February 2010 between BHOBO One Ltd., BHOBO Two
Ltd., BHOBO Three Ltd., RMJ OBO Shipping Ltd., Sagamore Shipping Ltd., OBO
Holdings Ltd. Agawam Shipping Corp., Aquidneck Shipping Corp., Anawan
Shipping Corp., Isabelle Shipholdings Corp., and Boss Tankers Ltd. (as
joint and several borrowers) and Bank of Scotland plc relating to a
$3,975,230 loan facility which replaces and supersedes the Existing Loan
Agreement.
|
We write
to confirm that:
|
|
(i)
|
** 2010
is the Effective Date for the purpose of the New Facility and accordingly
the provisions of Clause 2 of the New Facility shall apply;
and
|
(ii) the
Total Accrued Debt (as defined in the Drawdown Notice) as at today's date is
$** .
This
notice is governed by English law. Clause 32 of the Loan Agreement
(jurisdiction) applies
in relation to this letter in the same way as it applies in relation to the Loan
Agreement.
Yours
faithfully
_______________________________
for and
on behalf of Bank of Scotland
plc
GRK/54321.31100/8688553.08 Page
Schedule 5 –
Form of Compliance Certificate
COMPLIANCE
CERTIFICATE
To: Bank
of Scotland plc
|
From:
|
[·]
|
|
Date:
|
[•]
[To be delivered no
later than [one hundred and twenty (120) /forty-five (45)] days after each
Reporting Date]
|
$3,975,230
LOAN AGREEMENT DATED __ FEBRUARY 2010 (“AS AMENDED”) (THE
“AGREEMENT”)
We refer
to the Agreement. Terms defined in the Agreement shall have the same meaning
when used in this Compliance Certificate.
With
reference to clauses 10.13 (Compliance certificate) and
14 (Financial
covenants) of the Agreement, we confirm that as at [•] [insert relevant
Reporting Date]:
a) Minimum Value Adjusted
Equity
The
Minimum Value Adjusted Equity of the Guarantor (on a consolidated basis) was
US$[•].
The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain a Minimum Value Adjusted Equity of US$ 30,000,000.
The
covenant set out in Clause 14.2.1
(Minimum Value Adjusted
Equity) is thus [not] satisfied.
|
b)
|
Positive working
capital
|
The
working capital of the Guarantor (on a consolidated basis) was [·].
The
Guarantor (on a consolidated basis) shall at all times following the delivery of
the Compliance Certificate for the period ending 30 June 2010, ensure that its
current assets exceeds its current liabilities (excluding the current portion of
long term debt), all as determined in accordance with GAAP.
The
covenant set out in Clause 14.2.2
(Positive working
capital) is thus [not] satisfied.
c) Minimum value
The
Market Value of the Ships pursuant to the attached survey is [•].
The
Borrowers shall ensure that the Market Value of the Ships shall be at least the
higher of:
|
(a)
|
one
hundred and thirty-five per cent (135%) of the amount outstanding under
the Nordea Facility at any time;
and
|
|
(b)
|
[●]
per cent ([●]%) of the aggregate of (i) the amount outstanding under the
Nordea Facility and (ii) the Advance at any
time;
|
The
covenant in Clause 14.2.3
(Minimum value) is thus
[not] satisfied.]
d) Cash and Cash
Equivalents
The Cash
and Cash Equivalent of the Guarantor (on a consolidated basis) is [·].
The
Guarantor (on a consolidated basis) shall at any time in the period from the
Effective Date and ending on the earlier of (i) 30 September 2010 and (ii) the
delivery of the Barge to Straits Offshore Ltd., ensure that it has Cash and Cash
Equivalents equal to or greater than $4,000,000 and at all times thereafter
endure that (on a consolidated basis) has Cash and Cash Equivalents equal to or
greater than USD 6,000,000.
The
covenant in Clause 14.2.4
(Cash and Cash
Equivalents) is this [not] satisfied.
e) Minimum Equity
Ratio
The
Equity Ratio of the Guarantor (on a consolidated basis) is [·]%.
The
Guarantor (on a consolidated basis) shall at all times during the Security
Period maintain an Equity Ratio of minimum twenty-five per cent
(25%).
The
covenant in Clause 14.2.5
(Minimum Equity Ratio)
is thus [not] satisfied.
|
f)
|
Insurance. We confirm
that each of the Ships is insured against such risks and in such amounts
as set out in Appendix 1 hereto.
|
|
g)
|
We
confirm that, as of the date hereof (i) each of the representations and
warranties set out in clause 9 (Representations and
warranties) of the Agreement is true and correct; and (ii) no event
or circumstances has occurred and is continuing which constitute or may
constitute an Event of Default.
|
Yours
sincerely
for and
on behalf of
[·]
By:
__________________________________
Name:
Title: [authorised
officer]
GRK/54321.31100/8688553.08 Page
Borrowers
Signed
by )
duly
authorised for and on behalf
of )
BHOBO One
Ltd. )
Signed
by )
duly
authorised for and on behalf
of )
BHOBO Two
Ltd. )
Signed
by )
duly
authorised for and on behalf
of )
BHOBO Three
Ltd. )
Signed
by )
duly
authorised for and on behalf
of )
RMJ OBO Shipping
Ltd. )
Signed
by )
duly
authorised for and on behalf
of )
Sagamore Shipping
Ltd. )
Signed
by )
duly
authorised for and on behalf
of )
OBO Holdings
Ltd. )
Signed
by )
duly
authorised for and on behalf
of )
Boss Tankers
Ltd. )
Signed
by )
duly
authorised for and on behalf
of )
Agawam Shipping
Corp. )
Signed
by )
duly
authorised for and on behalf
of )
Aquidneck Shipping
Corp. )
Signed
by )
duly
authorised for and on behalf
of )
Anawan Shipping
Corp. )
Signed
by )
duly
authorised for and on behalf
of )
Isabelle Shipholdings
Corp. )
Guarantor
Signed
by )
duly
authorised for and on behalf
of )
B+H Ocean Carriers
Ltd. )
Lender
Signed
by )
duly
authorised for and on behalf
of )
Bank of Scotland
plc )
GRK/54321.31100/8688553.08 Page
