Private and confidential
Dated: February 16, 2005
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1
(as Lenders)
-and-
ABN AMRO BANK N.V.
(as Account Bank, Agent and joint-Arranger)
-and-
CREDIT SUISSE
(as joint Arranger)
-and-
CASTALIA SERVICES LTD.
FIANNA NAVIGATION X.X.
XXXXXX LIMITED
TEAGAN SHIPHOLDING S.A. and
XXXXXXXX ENTERPRISES CO.
(as joint and several Borrowers)
==========================================
LOAN AGREEMENT
for a loan facility of up to US$95,000,000
==========================================
TABLE OF CONTENTS
CLAUSE HEADINGS PAGE
------ -------- ----
1. PURPOSE AND INTERPRETATION .............................................. 1
2. THE COMMITMENT AND THE ADVANCES .........................................14
3. INTEREST AND INTEREST PERIODS ...........................................
4. REPAYMENT AND PREPAYMENT ................................................
5. FEES, COMMITMENT COMMISSION AND EXPENSES ................................
6. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS ...........................
7. REPRESENTATIONS AND WARRANTIES ..........................................
8. UNDERTAKINGS ............................................................
9. CONDITIONS ..............................................................41
10. EVENTS OF DEFAULT .......................................................42
11. INDEMNITIES .............................................................47
12. UNLAWFULNESS AND INCREASED COSTS.........................................48
13. APPLICATION, SECURITY AND SET-OFF - ACCOUNTS ............................50
14. ASSIGNMENT, TRANSFER AND LENDING OFFICE .................................55
15. ARRANGERS AND AGENT .....................................................58
16. NOTICES AND OTHER MATTERS ...............................................63
17. GOVERNING LAW AND JURISDICTION ..........................................
SCHEDULES
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1. The Lenders and their Commitment
2. Form of Drawdown Notice
3. Documents and evidence required as conditions precedent
4. Form of Transfer Certificate
5. Form of Compliance Certificate
THIS AGREEMENT is dated February 16, 2005 and made BETWEEN:
(1) THE BANKS AND FINANCIAL INSTITUTIONS, whose names and addresses are set out
in Schedule 1, as lenders (hereinafter called the "Lenders") which
expression shall include their respective successors and permitted
assigns);
(2) ABN AMRO BANK N.V., as Agent, joint Arranger and Account Bank;
(3) CREDIT SUISSE, as joint Arranger: and
(4) (a) CASTALIA SERVICES LTD., a company duly incorporated in the Republic of
Liberia and having its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx and includes its successors in title (hereinafter called
"Castalia");
(b) FIANNA NAVIGATION S.A., a company duly incorporated in the Republic of
Liberia and having its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx and includes its successors in title (hereinafter called
"Fianna");
(c) XXXXXX LIMITED, a company duly incorporated in the Republic of Liberia
and having its registered office at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx
and includes its successors in title (hereinafter called "Xxxxxx");
(d) TEAGAN SHIPHOLDING S.A., a company duly incorporated in the Republic
of Liberia and having its registered office at 00 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx and includes its successors in title (hereinafter
called "Teagan"); and
(e) XXXXXXXX ENTERPRISES Co., a company duly incorporated in the Republic
of Liberia and having its registered office at 00 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx and includes its successors in title (hereinafter
called "Xxxxxxxx"),
as joint and several borrowers (hereinafter together called the
"Borrowers") and "Borrower" means any of them).
IT IS XXXXXX AGREED as follows:
1. PURPOSE AND INTERPRETATION
1.1 Purpose. This Agreement sets out the terms and conditions upon and subject
to which the Lenders agree to make available to the Borrowers, jointly and
severally, a loan of up to $95,000,000 to be made available by way of up to
five (5) Advances for the purpose of partly financing the Purchase Price of
the Vessels, each such Advance to be up to the lesser of (a) the amount of
the Facility undrawn at the relevant time and (b) the lesser of (i) 60% of
the Purchase Price of the Vessel to be financed by such Advance and (ii)
60% of the Market Value of such Vessel at delivery thereof .
1.2 Definitions. In this Agreement, unless the context otherwise requires:
"Account Bank" means ABN AMRO Bank N.V., a bank incorporated under the laws
of the Kingdom of the Netherlands, acting in its capacity as account bank
through its office at 330 El. Venizelou Avenue, Kallithea, GR 176 75
Athens, Greece or such other bank as may be designated by the Agent as the
Account Bank for the purpose of this Agreement (and includes its successors
and assigns);
"Accounts Pledge Agreement" an agreement to be made between the Borrowers
and the Creditors for the creation of a pledge in favor of the Creditors
over the Earnings Accounts, the Retention Account and the Debt Reserve
Account in form and substance as the Lenders may approve or require as the
same may from time to time be amended and/or supplemented;
"Advance" means each borrowing of a proportion of the Total Commitment by
the Borrowers or (as the context may require) the principal amount of such
borrowing and "Advances" means any or all of them;
"Agent" means the Agent referred to at the beginning of this Agreement
acting in its capacity as agent for the Lenders through its office at 330
El. Venizelou Avenue, Kallithea, Athens, Greece, or through an other office
notified to the Borrowers and the Lenders (and includes its successors and
permitted assigns and any replacement agent retirement or removal of the
then Agent under arrangements separately agreed between the Agent and the
Lenders, as may be appointed as agent by the Lenders pursuant to Clause
15.13;
"Approved Vessel" means a bulker motor vessel of about 40,000-70,000 dwt,
built not earlier than 1994 and of such type, tonnage and other
characteristics of the approval of the Lenders (which approval the Lenders
shall be in full liberty to withhold) to be acquired by a Borrower pursuant
to the relevant MOA and which upon her Delivery shall be registered in the
ownership of such Borrower at the Registry and under the laws and flag of a
Flag State with a name of her Owner's choice and for which an Advance
relative to such Xxxxxx is made hereunder; and
"Arranger" means each of
(a) ABN AMRO Bank NV., acting in its capacity as arranger through its
office at 330 El. Venizelou Avenue, Xxxxxxxxx, XX 000 00 Xxxxxx,
Xxxxxx, or of such other address as may last have been notified to the
Borrowers pursuant to Clause 14.9 and includes its successors in
title; and
(b) Credit Suisse, acting in its capacity as arranger through its branch
at St. Xxxxx-Xxxxxx 0, XX-0000 Xxxxx, Xxxxxxxxxxx, or of such other
address as may last have been notified to the Borrowers pursuant to
Clause 14.9 and includes its successors in title;
"Assignee" has the meaning ascribed thereto in Clause 14.3;
"Banking Day" means a day on which dealings in deposits in Dollars are
carried on in the London Interbank Market and (other than Saturday or
Sunday) on which banks are open for business in London, New York City,
Basel (Switzerland) and Athens (or any other relevant place of payment
under Clause 6);
"Bill of Sale" in relation to a Vessel means the bill of sale to be
executed by the relevant Seller in favor of the Owner thereof transferring
title on such Vessel from the relevant Seller to such Owner;
"Borrowed Money" means Indebtedness in respect of (i) money borrowed or
raised and debit balances at banks, (ii) any bond, note, loan stock,
debenture or similar debt instrument, (iii) acceptance or documentary
credit facilities, (iv) receivables sold or discounted (otherwise than on a
non-recourse basis), (v) deferred payments for assets or services acquired,
(vi) finance leases and hire purchase contracts, (vii) swaps, forward
exchange contracts, futures and other derivatives, (viii) any other
transaction (including without limitation forward sale or purchase
agreements) having the commercial effect of a borrowing or raising of money
or of any of (ii) to (vii) above and (ix) guarantees in respect of
Indebtedness of any person falling within any of (i) to (viii) above;
"Casualty Amount" means five hundred thousand Dollars ($500,000) (or the
equivalent in any other currency);
"Charterparty Assignment" means in relation to a Vessel, the assignment of
any Long Charterparty, executed or (as the context may require) to be
executed by the Owner thereof in favor of the Lenders, in form and
substance as the Lenders may approve or require as the same may from lime
to time be amended and/or supplemented (together the "Charterparties
Assignments");
"Charterparty Assignment Acknowledgement" means the acknowledgement of
notice of the assignment in respect of the relevant Long Charterparty to be
given by the relevant charterer, in the form scheduled to the relevant
Charterparty Assignment (together the "Charterparties Assignments
Acknowledgements");
"Classification" means, in respect of each Vessel, the classification
"[ o ]", with the Classification Society or such other classification as
the Majority Lenders shall, at the request of the Borrowers, have agreed in
writing to be treated as the Classification for the purposes of the
Security Documents;
"Classification Society" means, in respect of each Vessel, Lloyds Register
of Shipping, American Bureau of Shipping, Bureau Veritas, Det Norske
Veritas, NKK or such other classification society which is a member of IACS
and which the Majority Lenders shall, at the request of the Borrowers, have
agreed in writing to be treated as the Classification Society for the
purposes of the Security Documents;
"Commitment" means in relation to each Lender the amount set out opposite
its name in the column headed "Commitment" in schedule 1, and/or, in the
case of a Transferee, the amount transferred as specified in the relevant
Transfer Certificate, as reduced in each case by any relevant term of this
Agreement;
"Compulsory Acquisition" means requisition for title or other compulsory
acquisition, requisition, appropriation, expropriation, deprivation,
forfeiture or confiscation for any reason of a Vessel by any Government
Entity or other competent authority, whether de jure or de facto, but shall
exclude requisition for use or hire not involving requisition of title;
"Contribution" means, in relation to each lender, the principal amount of
the Loan owing to such Lender under this Agreement at any relevant time;
"Creditors" means the Account Bank, the Agent, the Arrangers and the
Lenders and "Creditor" means any of them;
"Debt Reserve Account" means an interest bearing account in the joint names
of the Borrowers with the Account Bank or with any other branch of the
Account Bank or any other bank or financial institution other than the
Account Bank which is designated by the Agent as the Debt Reserve Account
for the purposes of the Agreement;
"Debt Service" in relation to a period means the amount required during
such period for the repayment of the instalments due and payable under
Clause 4.1 and the payment of the interest accrued on the Loan;
"Default" means any Event of Default or any event or circumstance which
with the giving of notice or lapse of time or the satisfaction of any other
condition (or any combination thereof) would constitute an Event of
Default;
"Default Rate" means that rate of interest per annum which is determined in
accordance with the provisions of Clause 3.4;
"Delivery" in relation to a Vessel means the delivery of such Vessel by the
relevant Seller to, and the acceptance of such Vessel by, the relevant
Borrower pursuant to the relevant MOA;
"Delivery Date" means the date upon which Delivery of a Vessel occurs;
"DOC" means a document of compliance issued to an Operator in accordance
with rule 13 of the ISM Code;
"Dollars" and "$" mean the lawful currency of the United States of America
and in respect of all payments to be made under any of the Security
Documents mean funds which are for same day settlement in the New York
Clearing House Interbank Payments System (or such other U.S. dollar funds
as may at the relevant time be customary for the settlement of
international banking transactions denominated in U.S. dollars);
"Drawdown Date" means any date being a Business Day falling during the
Drawdown Period, on which an Advance is, or is to be, made available or (as
the context may require) the date on which such Advance is actually
advanced to the Borrowers hereunder;
"Drawdown Notice" means a notice substantially in the terms of schedule 2;
"Drawdown Period" means the period commencing on the date hereof and ending
on the 30th September, 2005 or until such later date as the Agent may, with
the authorization of all the Lenders, agree in writing or on such earlier
date (if any), on which the Total Commitment is fully borrowed, cancelled
or terminated pursuant to the provisions of this Agreement;
"Earnings" in relation to a Vessel, means all earnings of such Vessel, both
present or future, including all freight, hire and passage moneys,
compensation payable to the Owner thereof in the event of requisition of
such Vessel for hire, remuneration for salvage and towage services,
demurrage and detention moneys, contributions of any nature whatsoever in
respect of general avenge, damages for breach (or payments for variation or
termination) of any charterparty or other contract for employment of such
Vessel and any other earnings whatsoever due or to become due to the Owner
thereof in respect of such Vessel and all sums recoverable under any
Insurances in respect of loss of Earnings and includes, if and whenever
such Xxxxxx is employed on terms whereby any and all such moneys as
aforesaid are pooled or shared with any other person, that proportion of
the net receipts of the relevant pooling or sharing agreement which is
attributable to such Vessel;
"Earnings Account" in relation to each Borrower means the account with the
Account Bank or with any other branch of the Account Bank or any other bank
or financial institution other than the Account Bank which is designated by
the Agent as an Earnings Account for the purposes of the Agreement and
"Earnings Accounts" means any or all of them;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest or other encumbrance of any kind securing any obligation of any
person or any type of preferential arrangement (including: without
limitation title transfer and/or retention arrangements having a similar
effect);
"Environmental Affiliate" means any agent or employee of any of the
Borrowers or any other Relevant Party or any person having a direct
contractual relationship with any of the Borrowers or any other Relevant
Party in connection with any Relevant Ship or its operation or the carriage
of cargo thereon or therefrom;
"Environmental Approval" means any consent, authorisation, licence or
approval of any governmental or public body or authorities or courts
applicable to any Relevant Ship or its operation or the carriage of cargo
thereon or therefrom required under any Environmental Law;
"Environmental Claim" means any and all material enforcement, clean-up,
removal or other governmental or regulatory actions or orders instituted or
completed pursuant to any Environmental Law or any Environmental Approval
together with claims made by any third party relating-to damage,
contribution, loss or injury, resulting from any actual or threatened
emission, spill, release or discharge of a Material of Environmental
Concern from any Relevant Ship;
"Environmental Laws" means all national, international and state laws,
rules, regulations, treaties and conventions applicable to any Relevant
Ship pertaining to the pollution or protection of human health or the
environment including, without limitation, the carriage of Materials of
Environmental Concern and actual or threatened emissions, spills, releases
or discharges of Materials of Environmental Concern;
"Event of Default" means any of the events or circumstances described in
Clause 10.1 or any of the Events of Mandatory Repayment where repayment has
not been made within the specified time limit as described in Clause 4.4;
"Expenses" means the aggregate at any relevant time (to the extent that the
same have not been received or recovered by the Creditors) of:
(a) all losses, liabilities, costs, charges, expenses, damages and
outgoings of whatever nature, (including, without limitation, Taxes,
repair costs, registration fees and insurance premiums, crew wages,
repatriation expenses and seamen's pension fund dues) suffered,
incurred, charged to or paid or committed to be paid by the Creditors
(or any of them) in connection with the exercise of the powers
referred to in or granted by any of the Security Documents or
otherwise payable by the Borrowers in accordance with the terms of any
of the Security Documents to the Creditors;
(b) the expenses referred to in Clause 5.3; and
(c) interest on all such losses, liabilities, costs, charges, expenses,
damages and outgoings from, in the case of Expenses referred to in
sub-paragraph (a) above, the date on which such Expenses were demanded
by the Agent from the Borrowers and in all other cases, the date on
which the same were suffered, incurred or paid by the Agent until the
date of receipt or recovery thereof (whether before or after
judgement) at the Default Rate per annum (as conclusively certified by
the Agent);
"Facility" means the aggregate amount not exceeding Dollars ninety five
million ($95,000,000) which the Lenders have agreed to lend to the
Borrowers under clause 2.1 by the Advances as reduced by any relevant term
of this Agreement;
"Final Maturity Date" in relation to each Advance relative to:
(a) a 1994-1996 built Vessel and the "BIRTHDAY" means the date falling
ninety six (96) months after the Drawdown Date in respect of such
Advance; or
(b) a 1997-2004 built Vessel means the date falling one hundred and twenty
(120) months after the Drawdown Date in respect of such Advance;
"Financial Year" in relation to:
(a) each Borrower, means the period commencing on the Delivery Date of its
Vessel and ending on the 31st of December of the following year and
thereafter the 12 month period commencing on the 1st of January of the
relevant year and ending on the 31st of December following; and
(b) any other member of the Group means the 12 month period commencing on
the 1st of January of the relevant year and ending on the 31st of
December following;
"Flag State" means in the case of each of "ISMINAKI", "FIRST ENDEAVOUR" and
"EMERALD", the Republic of Panama and in the case of "BIRTHDAY", the
Commonwealth of The Bahamas, or such other state or territory designated in
writing by the Agent on behalf of the Majority Lenders, at the request of a
Borrower, as being the "Flag State" of such Xxxxxxxx's Vessel for the
purposes of the Security Documents;
"General Assignment" means in relation to each Vessel the deed of general
assignment of the Earnings, Insurances and Requisition Compensation thereof
executed or (as the context may require) to be executed by the Owner
thereof in favour of the Lenders in form and substance as the Lenders may
approve or require as the same may from time to time be amended and/or
supplemented (together the "General Assignments");
"Government Entity" means and includes (whether having a distinct legal
personality or not) any national or local government authority, board,
commission, department, division, organ, instrumentality, court or agency
and any association, organisation or institution of which any of the
foregoing is a member or to whose jurisdiction any of the foregoing is
subject or in whose activities any of the foregoing is a participant;
"Governmental Withholdings" means withholdings and any restrictions or
conditions resulting in any charge whatsoever imposed, either now or
hereafter, by any sovereign state or by any political sub-division or
taxing authority of any sovereign state;
"Group" means together the Borrowers, the Manager, the Guarantor, any
Subsidiary of any thereof and each company whose vessel is managed by the
Manager and "member of the Group" shall be construed accordingly;
"Guarantee" means the guarantee of the Guarantor in favor of the Lenders in
respect of the obligations of the Borrowers under this Agreement and the
Security Documents in form and substance as the Lenders may approve or
require as the same may from time to time be amended and/or supplemented;
"Guarantor" means Excel Maritime Carriers Ltd., a company organised and
existing under the laws of the Republic of Liberia, having its registered
address at 00 Xxxxx Xxxxxx, Xxxxxxxx, Liberia and/or any other person
nominated by the Borrowers and acceptable to the Lenders which may give a
Guarantee;
"Indebtedness" means, in relation to any person, any obligation for the
payment or repayment of money, whether as principal or as surety and
whether present or future, actual or contingent, secured or unsecured;
"Insurances" and "Requisition Compensation" have in relation to each
Vessel, the meanings given to those terms in the Mortgage and General
Assignment relative thereto;
"Interest Payment Date" in relation to the Loan (or any part thereof) means
the last day of an Interest Period and in case of any Interest Period
longer than three (3) months the date(s) falling at successive three (3)
monthly intervals during such longer Interest Period and the last day of
such longer Interest Period;
"Interest Period" means, in relation to the Loan (or any part thereof),
each period for the calculation of interest in respect thereof ascertained
in accordance with Clauses 3.2 and 3.3;
"ISM Code" means the International Safety Management Code for the Safe
Operating of Ships and for Pollution Prevention constituted pursuant to
Resolution A.741 (18) of the International Maritime Organisation and
incorporated into the Safety of Life at Sea Convention and includes any
amendments or extensions thereto and any regulation issued pursuant
thereto;
"ISPS Code" means the International Security of Ships and Port Safety Code
and includes any amendments or extensions thereto and any regulation issued
pursuant thereto;
"ISSC" means an International Ship Security Certificate issued in respect
of the relevant Vessel pursuant to the ISPS Code;
"Lender" means (a) any of the banks referred to in the beginning of this
Agreement and listed in Schedule 1 and acting through its branch or office
indicated beneath its name in Schedule 1 and (b) any bank or financial
institution to which its rights and/or obligations under this Agreement are
assigned or transferred in accordance with the terms of Clause 14 (and
includes its assigns, successors and Transferees (together the "Lenders"));
"LIBOR" means in relation to any amount and for any period
(a) the offered rate (if any) per annum for deposits in Dollars for such
amount and for such period which is the rate, for such period,
appearing on the relevant page of the Xxxxxx screen at or about 11
a.m. London time on the Quotation Date (or, if the Lenders shall have
made a determination pursuant to Clause 3.6 such later time (not being
later than 1 p.m. (London time) on the first day of such period) as
the Agent may determine) or such other page as may replace the
relevant Page of the Xxxxxx screen 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 the British Bankers'
Association Interest Settlement Rates for Dollars; and
(b) if on such date no such rate is so displayed, LIBOR for such period
shall be the rate determined by the Agent in accordance with its usual
practices to obtain similar deposit(s) in Dollars on the basis of the
rates quoted by the Reference Lenders at the request of the Agent as
such Reference Xxxxxx's offered rate for deposits in Dollars in an
amount approximately equal to the amount in relation to which LIBOR is
to be determined for a period equivalent to such period in the London
Interbank Market at or about 11:00 a.m. (London time) on the second
Banking Day before the first day of such period;
"Loan" means the aggregate principal amount owing to the Lenders under this
Agreement at any relevant time;
"Long Charterparty" means, in relation to a Vessel, any time charter or
contract of affreightment, agreement or related document in respect of the
employment of such Vessel whether now existing or hereinafter entered into
by the Owner thereof, as owner and any charterer for a period for more than
12 months (and shall include any addenda thereto);
"Majority Lenders" means, at any relevant time, (a) with respect to
decisions regarding change of the repayment schedules of the Loan, increase
any Lender's Commitment, change the currency in which any amount is payable
by any Security Party under any of the Security Documents, change any
provision of any of the Security Documents which expressly or impliedly
requires the approval or consent of all of the Lenders such that the
relevant approval or consent may be given otherwise than with the sanction
of all of the Lenders, change the order of distribution under Clause 13.1
(application of moneys), change Clause 15.11 or any definition referred to
in Clause 15.11, change of pricing, change of a Final Maturity Date, amend
this definition and/or release of the securities constituted or to be
constituted by the Security Documents, Lender(s) the aggregate of whose
Commitments is equal to 100% of the Total Commitment at such time or, after
the Loan has been drawn down, Lender(s) the aggregate of whose
Contributions at such relevant time is equal to 100% of the Loan and (b)
with respect to decisions on any other matter, Xxxxxx(s), the aggregate of
whose Commitments at any relevant time equals to sixty six point sixty
seven percent (66.67%) of the Total Commitment or, after the Loan has been
drawn down, Lender(s), the aggregate of whose Contributions at any relevant
time is equal to sixty six point sixty seven percent (66.67%) of the Loan;
"Management Agreement" means in relation to each Vessel, the management
agreement made between the Owner thereof and the Manager in a form
previously approved in writing by the Agent or any other agreement
previously approved in writing by the Agent between such Owner and the
Manager providing (inter alia) for the Manager to manage such Vessel
(together, the "Management Agreements");
"Manager" means Maryville Maritime Inc., a company organised and existing
under the laws of the Republic of Liberia, having its registered address at
00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx, having an office established in Greece
(67 Akti Miaouli, 185 37 Piraeus, Greece) pursuant to the Greek laws 89/67,
378/68, 27/75 and 814/78, as amended, or such other person as may from time
to time be appointed by an Owner (with the prior written consent of the
Majority Lenders, such consent not to be unreasonably withheld) for the
purpose of managing its Vessel and includes its successors and permitted
assigns;
"Manager's Undertaking" means in relation to each Vessel, an undertaking
executed or (as the context may require) to be executed by the Manager in
favour of the Lenders, such undertaking to be in form and substance as the
Lenders may approve or require as the same may from time to time be amended
and/or supplemented (together, the "Manager's Undertakings");
"Margin" means one point two seven per centum (1.27%) per annum;
"Market Value" means in relation to a Vessel, the market value of such
Vessel as determined in accordance with Clause 8.2(b);
"Material of Environmental Concern" means and includes pollutants,
contaminants, toxic substances, oil as defined in the United States Oil
Pollution Act of 1990 and all hazardous substances as defined in the United
States Comprehensive Environmental Response, Compensation and Liability Act
1980;
"MOA" means in relation to a Vessel, the Memorandum of Agreement entered
into between relevant Seller, as seller and the relevant Borrower, as buyer
in respect of the sale by such Seller and the purchase by such Borrower of
such Vessel and any and all Addenda thereto (together the "MOAs");
"month" means a period beginning in one calendar month and ending in the
next calendar month on the day numerically corresponding to the day of the
calendar month on which it started, provided that (a) if the period started
on the last Banking Day in a calendar month or if there is no such
numerically corresponding day, it shall end on the last Banking Day in such
next calendar month and (b) if such numerically corresponding day is not a
Banking Day, the period shall end on the next following Banking Day in the
same calendar month but if there is no such Banking Day it shall end on the
preceding Banking Day and "months" and "monthly" shall be construed
accordingly;
"Mortgage" means in relation to each Vessel the first preferred [priority
statutory] ship mortgage [and the deed of covenant supplemental thereto,
both] executed or (as the context may require) to be executed by the Owner
thereof in favour of the Lenders in form and substance as the Lenders may
approve or require as the same may from time to time be amended and/or
supplemented (together the "Mortgages");
"Mortgaged Vessel" means, at any relevant time, any Vessel which is at such
time subject to a Mortgage and/or the Earnings, the Insurances and
Requisition Compensation (each as defined in the relevant Mortgage or, as
the case may be, General Assignment) of which are subject to an Encumbrance
pursuant to the relevant Security Documents and a Vessel shall for the
purposes of this Agreement be deemed to be a Mortgaged Vessel as from
whichever shall be the earlier of (a) the drawdown of the relevant Advance
for that Vessel and (b) the date that the Mortgage of that Vessel shall
have been executed and registered in accordance with this Agreement until
whichever shall be the earlier of (i) the payment in full of the amount
required to be paid by the Borrowers pursuant to Clause 4.3 following the
sale or Total Loss of such Vessel and (ii) the date on which the
Outstanding Indebtedness has been repaid in full;
"Operating Expenses" in relation to a Vessel means the voyage expenses and
the expenses for crewing, victualling, insuring, maintenance (including the
cost of any special survey, dry-docking and required improvements), spares,
management and operation of such Vessel which are reasonably incurred for a
vessel of the size and type of such Vessel;
"Operator" means any person who is from time to time during the Security
Period concerned in the operation of the Vessels (or any of them) and falls
within the definition of "Company" set out in rule 1.1.2. of the ISM Code;
"Outstanding Indebtedness" means the aggregate of the Loan and interest
accrued and accruing thereon, the Expenses and all other sums of money from
time to time owing by the Borrowers to the Creditors, whether actually or
contingently under this Agreement and the other Security Documents;
"Owners" means the Borrowers and "Owner" in relation to a Vessel means the
registered owner thereof;
"Permitted Encumbrance" means any Encumbrance in favour of the Lenders
created pursuant to the Security Documents and Permitted Liens;
"Permitted Liens" means any lien on a Vessel for master's, officer's or
crew's wages outstanding in the ordinary course of trading, any lien for
salvage and any Vessel repairer's or outfitter's possessory lien for a sum
not (except with the prior written consent of the Agent) exceeding the
Casualty Amount;
"Protocol of Delivery and Acceptance" means a protocol of delivery and
acceptance to be signed by or on behalf of the relevant Seller and the
relevant Borrower evidencing the delivery and acceptance of the relevant
Vessel pursuant to the relevant MOA, such protocol to be in a form
satisfactory to the Agent;
"Purchase Price" means, in relation to each Vessel, the price payable by
the relevant Borrower to the relevant Seller in accordance with the
relevant MOA, being in relation to:
(a) "ISMINAKF, $39,750,000;
(b) "FIRST ENDEAVOUR", $31,250,000;
(c) "BIRTHDAY", $32,000,000; and
(d) "EMERALD", $30,000,000;
"Quotation Date" means, in respect of any period in respect of which LIBOR
falls to be determined under this Agreement, the second Banking Day before
the first day of such period;
"Receiving Bank" means ABN AMRO Bank N.V. situated at 000 Xxxxxxx Xxx, 00xx
xxxxx, 00000 Xxx Xxxx, X.X., U.S.A., or such other bank in New York as may
from time to time be notified by the Agent to the Lenders and notify to the
Borrowers;
"Reference Lenders" means the Lenders and includes, if applicable, any
other bank appointed for this purpose by the Agent pursuant to Clause 3.7;
"Regulatory Agency' means the Government Entity or other organisation in a
Flag State which has been designated by the government of such Flag State
to implement and/or administer and/or enforce the provisions of the ISM
Code;
"Registry" means the offices of the Panamanian Consulate in Piraeus, Greece
or, as the case may be, the offices of the Bahamian Maritime Authority in
London or any registrar, commissioner or representative of the Flag State
of a Vessel who is duly authorised and empowered to register such Vessel,
the relevant Borrower's title to such Vessel and the relevant Mortgage
under the laws of such Flag State through the relevant Registry;
"Relevant Jurisdiction" means any jurisdiction in which or where any
Security Party is incorporated, resident, domiciled, has a permanent
establishment, carries on, or has a place of business or is otherwise
effectively connected;
"Relevant Party" means the Borrowers and any other Security Party;
"Relevant Ship" means each Vessel and any other vessel from time to time
(whether before or after the date of this Agreement) owned, managed or
crewed by, or chartered to, any Relevant Party;
"Repayment Dates" means, subject to clause 6.3, in respect of each Advance,
each of the dates on which a repayment installment is falling due for
payment pursuant to the provisions of Clause 4.1;
"Retention Account" means an interest-bearing Dollar account of the
Borrowers opened or (as the context may require) to be opened jointly by
the Borrowers with the Account Bank and includes any sub-accounts thereof
and any other account designated in writing by the Agent to be the
Retention Account for the purposes of this Agreement;
"Security Documents" means this Agreement, the Guarantee, the Mortgages,
the General Assignments, the Accounts Pledge Agreement, any Charterparty
Assignments, the Manager's Undertakings and any other documents as may have
been or shall from time to time after the date of this Agreement be
executed by the Security Parties or any other person to guarantee and/or
secure all or any part of the Loan, interest thereon and other moneys from
time to time owing under or in connection with this Agreement and/or any of
the documents referred to in this definition;
"Security Party" means the Borrowers, the Manager, the Guarantor and any
other person who may at any time be a party to any of the Security
Documents (other than the Creditors);
"Security Period" means the period commencing on the date hereof and
terminating on the date on which on the date upon which all moneys payable
or to become payable at any time and from time to time pursuant to the
terms of this Agreement and/or any of the Security Documents shall have
been paid and discharged in full and any period during which any Commitment
is in force;
"Security Requirement" means the amount in Dollars (as certified by the
Agent whose certificate shall, in the absence of manifest error, be
conclusive and binding on the Borrowers) which is at any relevant time one
hundred thirty five percent (135%) of the Loan;
"Security Value" means the amount in Dollars (as certified by the Agent
whose certificate shall, in the absence of manifest error, be conclusive
and binding on the Borrowers) which, at any relevant time is the aggregate
of (a) the Market Value of the Vessels as most recently determined in
accordance with Clause 8.2(b); and (b) the market value of any additional
security, plus the amounts (if any) standing to the credit of the Retention
Account and the Debt Reserve Account;
"Seller" in relation to a Vessel means the company referred to in the MOA
relative thereto as the seller of such Xxxxxx;
"SMC" means a safety management certificate issued in respect of any Vessel
in accordance with rule 13 of the ISM Code;
"Subsidiary" of a person means any company or entity directly or indirectly
controlled by such person, and for this purpose "control" means either the
ownership of more than 50 per cent of the voting share capital (or
equivalent rights of ownership) of such company or entity or the power to
direct its policies and management, whether by contract or otherwise;
"Taxes" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature together with interest thereon and
penalties in respect thereof (with the exception of taxes concerning Bank's
net income) and "Taxation" shall be construed accordingly;
"Termination Date" means the last day of the Drawdown Period;
"Total Commitment" means, at any relevant time, the aggregate of the
Commitments of all the Lenders at such time;
"Total Loss" in relation to a Vessel means:
(a) actual, constructive, compromised or arranged total loss of such
Vessel; or
(b) the Compulsory Acquisition of such Vessel; or
(c) the hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of such Xxxxxx (other than where the same
amounts to the Compulsory Acquisition of such Vessel) by any
Government Entity, or by persons acting or purporting to act on behalf
of any Government Entity, unless such Xxxxxx be released and restored
to the Borrowers from such hijacking, theft, condemnation, capture,
seizure, arrest, detention or confiscation within thirty days after
the occurrence thereof;
"Transfer Certificate" means a certificate substantially in the form set
out in Schedule 4;
"Transferee" has the meaning ascribed thereto in Clause 14.4;
"Vessels" means:
(a) the m/v "UNITED SEAS", of about 38,864gt and 24,517nt, built in Japan
in 1998, presently registered under the Xxxxxxxx Islands flag with
Official No. 2024, and purchased by Fianna pursuant to the relevant
MOA and which Vessel upon delivery shall be registered under the laws
and flag of the Republic of Panama in the ownership of Fianna through
the relevant Registry with the new name "ISMINAKI" (the "ISMINAKF");
(b) the m/v "LORD FORTUNE", of about 35,879gt and 23,407nt, built in Japan
in 1994, presently registered under the Xxxxxxxx Islands flag with
Official No. 1812, and purchased by Teagan pursuant to the relevant
MOA and which Vessel upon delivery shall be registered under the laws
and flag of the Republic of Panama in the ownership of Teagan through
the relevant Registry with the new name "FIRST ENDEAVOUR" (the "FIRST
ENDEAVOUR");
(c) the m/v "GALATEIA", of about 38,131gt and 24,124nt, built in Japan in
1993, presently registered under the Bahamian flag with Official No. [
o ], and purchased by Xxxxxxxx pursuant to the relevant MOA and which
Vessel upon delivery shall be registered under the laws and flag of
the Commonwealth of The Bahamas in the ownership of Xxxxxxxx through
the relevant Registry with the new name "BIRTHDAY" (the "BIRTHDAY");
(d) the m/v "SEABONI", of about 26,028gt and 14,924nt, built in Japan in
1998, presently registered under the Maltese flag with Official No.
8051, and purchased by Xxxxxx pursuant to the relevant MOA and which
Vessel upon delivery shall be registered under the laws and flag of
the Republic of Panama in the ownership of Xxxxxx through the relevant
Registry with the new name "EMERALD" (the "EMERALD"); and
(e) the Approved Vessel(s),
and "Vessel" means any of them as the context may require.
1.3 Headings Clause headings and the table of contents are inserted for
convenience of reference only and shall be ignored in the interpretation of
this Agreement.
1.4 Construction of certain terms In this Agreement, unless the context
otherwise requires:
(a) subject to any specific provision of this Agreement or of any
assignment and/or participation or syndication agreement of any nature
whatsoever, reference to each of the parties hereto and to the other
Security Documents shall be deemed to be reference to and/or to
include, as appropriate, their respective successors and permitted
assigns;
(b) reference to a person shall be construed as including reference to an
individual, firm, company, corporation, unincorporated body of persons
or any State or any agency thereof,
(c) where the context so admits, words in the singular include the plural
and vice versa;
(d) the words "including" and "in particular" shall not be construed as
limiting the generality of any foregoing words;
(e) references to (or to any specified provisions of) this Agreement and
all documents referred to in this Agreement shall be construed as
references to this Agreement, that provision or that document as are
in force for the time being and as are amended and/or supplemented
from time to time;
(f) reference to this Agreement includes all the terms of this Agreement
and any Schedules, Annexes or Appendices to this Agreement, which form
an integral part of same;
(g) reference to Clauses, Sub-Clauses and Schedules are to Clauses,
Sub-Clauses and Schedules in this Agreement;
(h) reference to the opinion of any Creditor or a determination or
acceptance by any Creditor or to documents, acts, or persons
acceptable or satisfactory to any Creditor or the like shall be
construed as reference to opinion, determination, acceptance or
satisfaction of such Creditor at the sole discretion of such Creditor
and such opinion, determination, acceptance or satisfaction of such
Creditor shall be conclusive and binding on the Borrowers;
(i) references to a "regulation" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not
having the force of law) of any agency, authority, central bank or
government department or any self regulatory or other national or
supra-national authority;
(j) references to any person include such person's assignees and
successors in title;
(k) reference to a "guarantee" include references to an indemnity or other
assurance against financial loss including, without limitation, an
obligation to purchase assets or services as a consequence of a
default by any other person to pay any Indebtedness and "guaranteed"
shall be construed accordingly; and
(l) references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended.
1.5 Agreed forms In this Agreement any document expressed to be "in the agreed
form" means a document in a form agreed by (and for the purposes of
identification initialed by and on behalf of) the Borrowers and the
Lenders.
1.6 Majority Lenders Where any of the Security Documents provides for any
matter to be determined by reference to the opinion of the Majority Lenders
or to be subject to the consent or request of the Majority Lenders or for
any action to be taken on the instructions of the Majority Lenders, such
opinion, consent, request or instructions shall (as between the Lenders)
only be regarded as having been validly given or issued by the Majority
Lenders if all the Lenders shall have received prior notice of the matter
on which such opinion, consent, request or instructions are required to be
obtained and the relevant majority of Lenders shall have given or issued
such opinion, consent request or instructions.
1.7 Xxxxxx's Commitment For the purpose of the definition of "Majority Lenders"
in Clause 1.2, references to the Commitment of a Lender shall, if the Total
Commitment of all the Lenders have, at any relevant time, been reduced to
zero, be deemed to be a reference to the Commitment of that Lender
immediately prior to such reduction to zero.
2. THE COMMITMENT AND THE ADVANCES
2.1 Agreement to lend The Lenders, relying upon each of the representations and
warranties in Clause 7, agree to lend by way of loan to the Borrowers upon
and subject to the terms of this Agreement the principal sum of up to
Dollars ninety five million ($95,000,000) as set forth in Clause 1.1. The
obligation of each Lender under this Agreement shall be to contribute that
proportion of each Advance which, as at the Drawdown Date of such Advance,
its Commitment bears to the Total Commitment.
2.2 Drawdown Notice and Commitment to Borrow Subject to the terms and
conditions of this Agreement, each Advance shall be made following receipt
by the Agent from the Borrowers of a Drawdown Notice not later than 11 a.m.
on the third Banking Day before the date, which shall be a Banking Day
falling within the Drawdown Period, on which such Advance is intended to be
made. A Drawdown Notice shall be effective on actual receipt by the Agent
and, once given, shall, subject as provided in Clause 3.6(a), be
irrevocable.
2.3 Limitation of Advances
(a) The aggregate total amount of the Advances shall not exceed
$95,000,000.
(b) There shall be no more than five (5) Advances.
(c) Each Advance shall be made in accordance with clause 6.2.
2.4 Availability Upon receipt of a Drawdown Notice complying with the terms of
this Agreement the Agent shall promptly notify each Lender and each of the
Lenders shall, subject to the provisions of Clause 9, on the date specified
in such Drawdown Notice make available to the Agent its portion of the
Facility for payment by the Agent in accordance with Clause 6.2. Each of
the Borrowers acknowledges that payment of any Advance to the relevant
Seller in accordance with Clause 6.2 shall satisfy the obligation of the
Lenders to lend that Advance to the Borrowers under this Agreement.
2.3 Termination of Total Commitment Any part of the Total Commitment undrawn at
the end of the Drawdown Period shall no longer be available to the
Borrowers pursuant to this Agreement and the Lenders shall have no further
obligation to the Borrowers in respect of that undrawn part of the Total
Commitment.
2.6 Application of proceeds Without prejudice to the Borrowers' obligations
under Clause 8.1(c), none of the Agent and the Lenders shall have any
responsibility for the application of proceeds of the Loan by the Borrower.
or any of then.
2.7 Interest to co-borrow The Borrowers have an interest in borrowing jointly
and severally in that they are companies which have close financial
co-operation and mutual assistance and in that the Facility would not have
been available to each one of the Borrowers separately.
2.8 Cancellation of the Facility The Borrowers shall be entitled to cancel any
undrawn part of the Facility under this Agreement upon giving the lender
not less than three (3) Business Days' notice in writing to that effect,
provided that no Drawdown Notice has been given to the Lenders for the full
amount of the Facility or in respect of the portion thereof in respect of
which cancellation is required by the Borrowers. Any such notice of
cancellation, once given, shall be irrevocable. Any amount cancelled may
not be drawn.
2.9 Disbursement of Advance to Seller's bank Notwithstanding the foregoing
provisions of this Clause 2, in the event that an Advance is required to be
drawn down prior to the satisfaction of the requirements of Clause 9 and
remitted to the bank referred to in the relevant MOA as the relevant
Seller's bank (the "Seller's bank"), the Agent may in its absolute
discretion agree to remit such amount to the Seller's bank prior to
satisfaction of the requirements of Clause 9 provided that:
(a) such amount is remitted to the Seller's bank to be held by it in an
account in the Agent's name (the "deposit account") and to the order
of the Agent;
(b) the principal amount (the "deposited amount") of such funds will only
be released to the relevant Seller upon such Seller's presentation to
the Seller's bank of a copy of the Protocol of Delivery and Acceptance
for the relevant Vessel in the form agreed between the relevant Seller
and the Owner thereof, duly signed on behalf of the relevant Seller
and such Owner and countersigned on behalf of the Agent;
(c) the deposited amount so released may be used only for payment to the
account of the relevant Seller with the Seller's bank in satisfaction
of the Purchase Price under the relevant MOA;
(d) in the event that none of the said amount so remitted is released in
accordance with the Agent's instructions or a part thereof is not so
released, the Agent may, after expiry of three (3) days from the
expected Delivery Date, instruct the Seller's bank to pay the amount
of the Loan and any earned interest to another account of the Agent
and the Borrowers shall be obliged to indemnify each Creditor in
accordance with Clause 11.1. Thereafter, as and when any further
Drawdown Notice is given by the Borrowers in respect of the Facility,
the provisions of this Clause shall apply again (mutatis mutandis).
(e) When either:
(i) the Facility is disbursed (whether on the expected Delivery Date
or thereafter) in accordance with Clause 2.9(a) and (b) or
(ii) the Agent withdraws the deposited amount under Clause 2.9(d);
the Borrowers shall forthwith upon demand by the Agent pay to the
Agent such amounts that may be certified by the Agent as being the
amount required to indemnify the Lenders in respect of the cost to the
Lenders of funding the deposited amount from the date of payment
thereof to the Seller's Bank to the date of disbursement of the
deposited amount to the relevant Seller or the refund of the deposited
amount to the Agent less the amount (if any) of the earned interest
received by the Agent from the Seller's bank. For this purpose, the
cost of the Lenders funding the deposited amount shall be deemed to be
interest at a rate equal to the aggregate of (i) the Margin and (ii)
LIBOR for comparable deposits on a call (day to day) basis.
(f) The Agent shall have no liability to the Borrowers if the Seller's
bank fails to carry out any instruction given to it by the Agent to
disburse or refund the deposited amount.
(g) If, upon being instructed to do so by the Agent, the Seller's bank
fails either to apply the deposited amount in full in accordance with
Clause 2.9(c) or to refund the deposited amount in full in accordance
with Clause 2.9(d):
(i) the Agent shall cease to be obliged to make the relevant Advance
available unless and until the Seller's bank carries out such
instructions;
(ii) the continued failure of the Seller's bank to do so for five
Banking Days after the giving of such instruction shall be deemed
to be an Event of Default for the purposes of this Agreement;
(iii) the Borrowers shall indemnify the Lenders on demand in respect
to all losses certified by the Agent as suffered or incurred by
the Lenders as a consequence of the Seller's bank failure to
carry out instructions; and
(iv) without prejudice to the obligations of the Borrowers so to
indemnify the Lenders on demand, the Agent shall in good faith
take reasonable and proper steps diligently to seek recovery of
the deposited amount from the Seller's bank (provided that prior
to taking such action the Borrowers shall have agreed to
indemnify the Agent for all costs and expenses which may be
incurred in seeking recovery of such amount, including, without
limitation, all legal fees and disbursements reasonably and
properly incurred) and if the Agent shall recover any part of the
deposited amount (and provided that it has previously recovered
full indemnification under Clause 2.9(g)(iii)) the Agent shall,
so long as no Default has occurred and is continuing and subject
to Clause 2.9(d), pay to the Borrowers the balance (if Any) of
the amount so recovered (after, also, subtracting any tax
suffered or incurred thereon by the Agent or any Lender) the
amount representing the relevant Borrowers' equity.
(h) If, at the time prior to the deposit of funds by the Agent with the
Seller's bank, the Agent considers in its absolute discretion that the
Seller's bank may be or will be unable or unwilling for any reason
(including, without limitation, by reason of the Seller's bank's
financial position or regulatory requirements applicable to the
Seller's bank) to take and fully apply such deposit in accordance with
the requirements of this Clause 2.9, the Agent may in its absolute
discretion decide not to make such deposit and this Agreement shall
thereupon take effect as if this Clause 2.9 does not apply and the
relevant Advance shall, without prejudice to Clause 9, be made and
disbursed in the manner set out in this Agreement.
2.10 Obligations several The oblations of the Lenders under this Agreement are
several according to their respective Commitments and/or Contributions; the
failure of any Lender to perform such obligations shall not relieve any
other Creditor or the Borrowers of any of their respective obligations or
liabilities under this Agreement nor shall any Creditor be responsible for
the obligations of any Lender ( except for its own obligations, if any, as
a Lender) nor shall any Lender be responsible for the obligations of any
other Lender under this Agreement.
2.11 Interests several Notwithstanding any other term of this Agreement (but
without prejudice to the provisions of this Agreement relating to or
requiring action by the Majority Lenders) the interests of the Creditors
are several and the amount due to any Creditor is a separate and
independent debt. Each Creditor shall have the right to protect and enforce
its rights arising out of this Agreement and it shall not be necessary for
any other Creditor to be jointed as an additional party in any proceedings
for this purpose.
3. INTEREST AND INTEREST PERIODS
3.1 Normal interest rate The Borrowers shall pay interest on each Advance in
respect of each Interest Period relating thereto on each Interest Payment
Date at the rate per annum determined by the Agent to be the aggregate of:
(a) the Margin; and
(b) LIBOR for such Interest Period.
3.2 Selection of Interest Periods The Borrowers may by notice received by the
Agent not later than 11 a.m. on the second Banking Day before the beginning
of each Interest Period for each Advance specify whether such Interest
Period shall have a duration of 1, 2, 3, 6, 9, or 12 months or such other
period as the Borrowers may select and the Agent may, in its absolute
discretion, agree.
3.3 Determination of Interest Periods Every Interest Period shall be of the
duration required by, or specified by the Borrowers pursuant to, Clause 3.2
but so that:
(a) the first Interest Period in respect of each Advance shall commence on
the date on which such Advance is made and each subsequent Interest
Period shall commence on the last day of the previous Interest Period
relative to such Advance;
(b) the Agent, acting on the instructions of the Majority Lenders, may
determine that the initial Interest Period in respect of each Advance
other than the first Advance shall end on the same day as the then
current Interest Period for such Advance and, on the last day of each
such Interest Period, all Advances shall be consolidated into, and
shall thereafter constitute, one Advance for the purpose of
determining the length of any Interest Period hereunder;
(c) if any Interest Period for any Advance or, as the case may be, the
Loan would otherwise overrun a Repayment Date, then, in the case of
the last Repayment Date, such Interest Period shall end on such
Repayment Date, and in the case of any other Repayment Date or
Repayment Dates such Advance or, as the case may be, the Loan shall be
divided into parts so that there is one part in the amount of the
repayment instalment due on each Repayment Date falling during that
Interest Period and having an Interest Period ending on the relevant
Repayment Date and another part in the amount of the balance of such
Advance or, as the case may be, the Loan having an Interest Period
ascertained in accordance with Clause 3.2 and the other provisions of
this Clause 3.3;
(d) if the Borrowers fail to specify the duration of an Interest Period in
accordance with the provisions of Clause 3.2 and this Clause 3.3 such
Interest Period shall have a duration of one month or such other
period as shall comply with this Clause 3.3; and
(e) if the Agent determines that the duration of an Interest Period
specified by the Borrowers in accordance with Clause 3.2 is not
readily available, then that Interest Period shall have such duration
as the Agent, in consultation with the Borrowers, may determine.
3.4 Default interest If the Borrowers (or any of them) fall to pay any sum
(including, without limitation, any sum payable pursuant to this Clause
3.4) on its due date for payment under any of the Security Documents, the
Borrowers shall pay interest on such sum on demand from the due date up to
the date of actual payment (as well after as before judgment) at a rate
determined by the Agent pursuant to this Clause 3.4. The period beginning
on such due date and ending on such date of payment shall be divided into
successive periods of not more than three months as selected by the Agent
(in consultation with the Lenders) each of which periods (other than the
first, which shall commence on such due date) shall commence on the last
day of the preceding such period. The rate of interest applicable to each
such period shall be the aggregate (as determined by the Agent) of:
(a) two per cent per annum;
(b) the Margin; and
(c) LIBOR for such period.
Such interest shall be due and payable on the last day of each such period
as determined by the Agent and each such day shall, for the purposes of
this Agreement, be treated as an Interest Payment Date, provided that if
such unpaid sum is an amount of principal which became due and payable, by
reason of a declaration by the Lenders under Clause 10.2(b) or a prepayment
pursuant to Clauses 4.2, 4.3, 4.6, 8.2 or 12.1 on a date other than an
Interest Payment Date relating thereto, the first such period selected by
the Agent at its discretion shall be of a duration equal to the period
between the due date of such principal sum and such Interest Payment Date
and interest shall be payable on such principal sum during such period at a
rate two per cent above the rate applicable thereto immediately before it
shall have become so due and payable. If, for the reasons specified in
Clause 3.6(a), the Lenders are unable to determine a rate in accordance
with the foregoing provisions of this Clause 3.4, each Lender shall
promptly notify the Agent of the cost of funds to such Lender and interest
on any sum not paid on its due date for payment shall be calculated at a
rate determined by the Agent to be two per cent (2%) per annum above the
aggregate of the Margin and costs of funds to such Lender as conclusively
determined by such Lender save for manifest error. Interest payable by the
Borrowers as aforesaid shall be compounded quarterly (or if the period
fixed by the Agent is longer, at the end of such longer period) and shall
be payable on demand.
3.5 Notification of Interest Periods and interest rate The Agent shall notify
the Borrowers promptly of the duration of each Interest Period and of each
rate of interest determined by it under this Clause 3 without prejudice to
the right of the Agent and/or the Lenders to make determinations at its
sole discretion. However, omission of the Agent and/or the Lenders to make
such notification (without the application of the Borrowers) will not
constitute and will not be interpreted as if to constitute a breach of
obligation of the Agent and/or the Lenders except in case of willful
misconduct.
3.6 Market disruption; non-availability
(a) If and whenever, at any time prior to the commencement of any Interest
Period, the Agent shall have reasonably determined (which
determination shall, in the absence of manifest error, be conclusive):
(i) that adequate and fair means do not exist for ascertaining LIBOR
during such Interest Period; or
(ii) where applicable, none or only one of the Reference Lenders
supplies the Agent with a quotation for the purpose of
calculating LIBOR; or
(iii) the Agent shall have received notification from any Lender that
deposits in Dollars are not available to the Lenders in the
ordinary course of business in sufficient amounts to fund its
Contribution for such Interest Period; or
(iv) that LIBOR for that Interest Period will not adequately reflect
the cost of funding of the Loan for that Interest Period to all
Lenders,
the Agent shall forthwith give notice (a "Determination Notice")
thereof to the Borrowers and to the Lenders. A Determination Notice
shall contain particulars of the relevant circumstances giving rise to
its issue. After the giving of any Determination Notice the undrawn
amount of the Facility shall not be borrowed until notice to the
contrary is given to the Borrowers by the Agent.
(b) During the period of 10 days after any Determination Notice has been
given by the Agent under Clause 3.6(a), the Lenders and the Borrowers
shall negotiate in good faith (but without incurring any legal
obligations) with a view to arriving to an acceptable alternative
basis (the "Substitute Basis") for maintaining the Loan failing which
the Borrowers shall promptly, on first demand or within the time limit
which may be determined by the Agent, prepay the Loan together with
accrued interest thereon to the date of prepayment (calculated at the
rate or rates most lately applicable to the Loan) and all other sums
payable by the Borrowers under the Security Documents and the Total
Commitment shall be reduced to zero. In such case the Borrowers shall
also reimburse to the Lenders such amount as may be determined by the
Agent to be necessary to compensate them for the increased cost (if
any) of maintaining the Loan during the period of negotiation referred
to in this Clause 3.6 until such prepayment. In case the Lenders agree
to a Substitute Basis for funding the Loan, the Agent shall certify
such Substitute Basis to the Borrowers. The Substitute Basis may
(without limitation) include alternative interest periods, alternative
currencies or alternative rates of interest but shall include a margin
above the cost of funds to the Lenders equivalent to the Margin. Each
Substitute Basis so certified shall be binding upon the Borrowers and
shall take effect in accordance with its terms from the date specified
in the Determination Notice until such time as the Agent notifies the
Borrowers that none of the circumstances specified in Clause 3.6(a)
continues to exist whereupon the normal interest rate fixing
provisions of this Agreement shall apply.
3.7 Reference Lender quotations If any Reference Lender is unable or otherwise
fails to furnish a quotation for the purposes of calculating LIBOR the
interest rate shall be determined subject to Clause 3.6 on the basis of
quotations furnished by the other Reference Xxxxxx(s), provided that if all
the Reference Lenders fail so to provide a quotation, the relevant rate of
interest shall be ascertained in accordance with the terms of Clause 3.6.
If a Reference Xxxxxx ceases for any reason to be able and willing to act
as such, the Agent, after consultation with the Borrowers and the Lenders,
shall appoint a replacement
4. REPAYMENT AND PREPAYMENT
4.1 Repayment
The Borrowers shall repay each Advance in equal quarterly repayment
instalments, one each of such repayment instalments to be repaid on each of
the Repayment Dates as follows:
(a) in case the Vessel financed by the relevant Advance is a 1994-1996
built Vessel and in the case of "BIRTHDAY": such Advance shall be
repaid by thirty two (32) equal quarterly repayment instalments so
that the first be repaid on the date falling three (3) months after
the Drawdown Date of such Advance and each of the subsequent ones
consecutively falling due for payment on each of the dates falling
three (3) months after the immediately preceding Repayment Date with
the last (the 32nd of such repayment instalments falling due for
payment on the date falling ninety six (96) months after such Drawdown
Date; subject to the provisions of this Agreement, the amount of each
of such repayment instalment shall be in an amount equal to 1/32nd of
the amount of the Advance drawn down in relation to such Advance;
(b) in case the Vessel financed by the relevant Advance is a 1997-2004
built Vessel: such Advance shall be repaid by (i) forty (40) equal
quarterly repayment instalments so that the first be repaid on the
date falling three (3) months after the Drawdown Date of such Advance
and each of the subsequent ones consecutively falling due for payment
on each of the dates falling three (3) months after the immediately
preceding Repayment Date with the last (the 40th) of such repayment
instalments falling due for payment on the date falling one hundred
and twenty (120) months after such Drawdown Date; subject to the
provisions of this Agreement, the amount of each of such repayment
instalment shall be in an amount equal to 1/40th of the 80% of the
amount of the Advance drawn down in relation to such Advance and (ii)
a balloon payment in an amount equal to 20% of the amount of the
Advance drawn down in relation to such Advance (the "Balloon
Installment") payable together with the last (the 40th) of such
repayment installments,
Provided that (i) if the last Repayment Date for any Advance would
otherwise fall after the Final Maturity Date relative to such Advance,
such last Repayment Date shall be the Final Maturity Date relative to
such Advance, (ii) there shall be no Repayment Dates for any Advance
after the Final Maturity Date relative to such Advance, (iii) on the
Final Maturity Date relative to the Advance last drawn down, the
Borrowers shall also pay to the Agent any and all other monies then
and payable to the Creditors under this Agreement and the other
Security Documents, and (iv) if any of the repayment instalments shall
become due on a day which is not a Banking Day, the due date therefor
shall be extended to the next succeeding Banking Day unless such
Banking Day falls in the next calendar month, in which event such due
date shall be the immediately preceding Banking Day; and
Provided further, that after the Termination Date the Lenders may
decide to consolidate the repayment schedule of all Advances by
amending to the extend required for such purpose this Agreement and
the Security Documents and each of the Borrowers undertakes,
immediately on being requested to do so by the Agent and at the cost
of the Borrowers, to enter into, and procure that the other Security
Parties shall enter into, such documents as may be necessary or
desirable to the Lenders to amend this Agreement and the Security
Documents.
4.2 Voluntary prepayment The Borrowers may prepay the Loan in whole or part
(being $2,000,000 or any larger sum which is an integral multiple of
$2,000,000) on any Interest Payment Date without premium or penalty.
Any such prepayment may take place only on the last day of an Interest
Period relating to an Advance or, as the case may be, the whole of the Loan
provided, however, that if the Borrowers shall request consent to make such
prepayment on another day and the Lenders shall accede to such request (it
being in the sole discretion of the Lenders to decide whether or not to do
so) the Borrowers will pay in addition to the amount to be prepaid, any
such sum as may be payable to the Creditors pursuant to Clause 11.1.
4.3 Prepayment on Total Loss or sale of any Vessel
(a) Prepayment on Total Loss
(i) On any Mortgaged Vessel becoming a Total Loss or suffering damage
or being involved in an incident which in the reasonable opinion
of the Majority Lenders may result in such Vessel being
subsequently determined to be a Total Loss before the Advance for
such Vessel is drawn down, the obligation of the Lenders to
advance the Advance for such Vessel shall immediately cease and
the part of the Total Commitment in relation to such Vessel shall
be reduced to zero.
(ii) On the date one hundred and twenty (120) days after that on which
a Mortgaged Vessel has become a Total Loss or the incident which
may result, in the reasonable opinion of the Majority Lenders, in
the relevant Vessel being subsequently determined to be a Total
Loss has occurred or, if earlier, on the date upon which the
insurance proceeds in respect of such Total Loss are or
Requisition Compensation (as defined in the relevant
Mortgage/General Assignment) is received by the Owner thereof (or
the Agent pursuant to the Security Documents), the Borrowers
shall prepay the Required Amount relative to such Vessel and the
amount so prepaid shall be applied by the Lenders in prepayment
of the Advance relative to such Vessel and, if necessary, in
partial prepayment of the balance of the Outstanding
Indebtedness.
(iii) For the purposes of this Agreement, a Total Loss shall be deemed
to have occurred:
aa) in the case of an actual total loss of a Vessel on the
actual date and at the time such Vessel was lost or if such
date is not known, on the date on which such Vessel was last
reported;
bb) in the case of a constructive total loss of a Vessel, upon
the date and at the time notice of abandonment of such
Xxxxxx is given to the insurers of such Vessel for the time
being;
cc) in the case of a compromised or arranged total loss, on the
date upon which a binding agreement as to such compromised
or arranged total loss has been entered into by the insurers
of a Vessel;
dd) in the case of Compulsory Acquisition, on the date upon
which the relevant requisition of title or other compulsory
acquisition occurs; and
ee) in the case of hijacking, theft, condemnation, capture,
seizure, arrest, detention or confiscation of a Vessel
(other than where the same amounts to Compulsory Acquisition
of such Vessel) by any Government Entity, or by persons
purporting to act on behalf of any Government Entity, which
deprives the Owner thereof of the use of such Vessel for
more than thirty days, upon the expiry of the period of
thirty days after the date upon which the relevant
hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation occurred.
(b) Prepayment on sale of a Mortgaged Vessel
(i) In the event of a sale or other disposal of a Mortgaged Vessel or
in case of refinancing by another bank or if the Borrowers
request the Lenders' consent for the discharge of the Mortgage
registered on such Vessel, the Borrowers shall prepay the
Required Amount relative to such Vessel and the amount so prepaid
shall be applied by the Lenders in prepayment of the amount
outstanding in respect of the Advance relative to such Vessel
and, if necessary, in partial prepayment of the balance of the
Outstanding Indebtedness.
(ii) Without prejudice to the right of the Lenders not to consent to
such sale (but such consent not to be unreasonably withheld),
disposal or discharge, in the event of a sale or other disposal
of any Mortgaged Vessel, or in case of refinancing by another
bank or if the Borrowers request the Lenders' consent for the
discharge of the Mortgage on any Mortgaged Vessel, the Borrowers
shall prepay such part of the Loan which is equal to the Required
Amount. Save in case of prepayment made by way of refinancing by
a bank or financial institution other than the Lenders in which
case Clause 4.6. shall apply, the amount so prepaid shall be
applied by the Lenders in or towards reduction of the Balloon
Instalment and the outstanding repayment instalments referred to
in Clause 4.1 in the inverse order of maturity.
For the purpose of this Clause 4.3 "Required Amount" in relation to any
Mortgaged Vessel, means the amount which is required to be repaid to the
Agent out of the insurance proceeds or, as the case may be, the sale or
such other disposal proceeds which is equal to the higher of (i) the full
amount of such insurance or sale or other disposal proceeds (ii) the
principal amount of the Advance related to such Vessel outstanding on the
date of the discharge of the relevant Mortgage or, as the case may be, at
the time of payment to the Agent of the insurance proceeds and (iii) such
amount of the Loan as shall be necessary to result in the ratio
Loan/Security Value being, after such prepayment, at least the same as has
been immediately prior to such prepayment. In addition, the Borrowers shall
be obliged together with such Required Amount to pay to the Agent the
amount of the interest accrued to the date of prepayment and all other sums
(other than the balance of principal of the Loan remaining outstanding
after such prepayment having been made) due and payable by the Borrowers to
the Creditors pursuant to the Security Documents (or any of them) including
without limitation, any amounts payable under Clause 12 as the Agent may
determine.
Provided however that if the relevant Mortgaged Vessel so lost or sold or
otherwise disposed of is the last Mortgaged Vessel, then the full amount of
the insurance or, as the case may be, the sale proceeds shall be paid to
the Agent and shall be applied against repayment of the Outstanding
Indebtedness and in case the amount of such proceeds is not sufficient for
the repayment of the Outstanding Indebtedness in full the Borrowers shall
additionally pay to the Agent the balance (if any) of the Outstanding
Indebtedness.
4.4 Mandatory Repayment
(a) Repayment Notwithstanding anything herein contained, on the occurrence
of an Event of Mandatory Repayment (as hereinafter defined) the
obligation of the Lenders to advance the Facility (or any part
thereof) shall immediately cease and the Total Commitment shall be
reduced to zero. On the date three (3) days after that on which:
(i) such either of the Events of Mandatory Repayment under (b)(i) and
(ii) occurred, the Borrowers shall prepay the full amount of the
Loan, together with accrued interest to the date of prepayment,
and any and all other sums payable by the Borrowers to the
Creditors pursuant to the Security Documents (or any of them),
including, without limitation, any amounts payable under Clause
11, as the Agent shall in its absolute discretion determine; and
(ii) any of the Events of Mandatory Repayment under (b)(iii), (iv) and
(v) occurred, the Borrowers shall prepay the Required Amount,
together with accrued interest to the date of prepayment, and any
and all other sums (other than the balance of principal of the
Loan remaining outstanding after such prepayment having been
made) then payable by the Borrowers to the Creditors pursuant to
the Security Documents (or any of them), including, without
limitation, any, amounts payable under Clause 11, as the Agent
shall in its absolute discretion determine.
(b) Events of Mandatory Repayment Each of the following shall constitute
an Event of Mandatory Repayment:
(i) Unlawfulness: if it becomes impossible or unlawful at any time
for any Security Party to fulfill any of the covenants and
obligations expressed to be assumed by it in any of the Security
Documents or for the Lenders to exercise the rights or any of
them vested in it under any of the Security Documents or
otherwise;
(ii) Shareholdings: without the prior written consent of the Agent,
the Guarantor ceases to maintain a shareholding of 100% of the
issued and outstanding share capital in each of the Borrower;
(iii) Arrest: any of the Vessels is arrested, confiscated, seized,
taken in execution, impounded, forfeited, detained in exercise or
purported exercise of any possessory lien or other claim or
otherwise taken from the possession of the relevant Owner and
such Owner shall fail to procure the release of its Vessel within
a period of thirty (30) days thereafter;
(iv) Unrest: the Flag State of any of the Vessels becomes involved in
hostilities or civil war or there is a seizure of power in such
Flag State by unconstitutional means if, in any such case, such
event could in the opinion of the Lenders reasonably be expected
to have a material adverse effect on the security constituted by
any of the Security Documents; and
(v) Total Loss: any Vessel becomes a Total Loss or suffers damage or
is involved in an incident which in the reasonable opinion of the
Majority Lenders may result in such Vessel being subsequently
determined to be a Total Loss and the insurance indemnity is not
paid by the insurers to the Lenders under the relevant General
Assignment within a period of one hundred eighty (180) days from
the earlier of: (1) the date such Total Loss occurred and (2) the
date on which in the reasonable opinion of the Agent the incident
may result in the relevant Vessel being subsequently determined
to be a Total Toss has occurred; or
Amounts payable on prepayment Subject to Clause 4.3 any prepayment of all or
part of the Loan under this Agreement shall be made together with
(a) accrued interest on the amount to be prepaid to the date of such
prepayment (calculated, in the case of prepayment pursuant to Clause
3.6(b) at a rate equal to the aggregate of the Margin and the cost of
the Lenders of funding the Loan or, as the case may be, the relevant
Advance);
(b) any additional amount payable under Clause 6.6 or 12.2; and
(c) all others sums due and payable by the Borrowers to the Creditors
under this Agreement or any of the other Security Documents including,
without limitation, any accrued commitment commission payable under
Clause 5.2 and any amounts payable under Clause 11.
4.5 Notice of prepayment; reduction of repayment instalments No prepayment may
be effected under Clause 4.2 unless the Borrowers shall have given the
Agent at least ten (10) Banking Days prior written notice of their
intention to make such prepayment. Every notice of prepayment shall be
effective only on actual receipt by the Agent, shall be irrevocable, shall
specify the amount to be prepaid and the Advance in relation to which such
prepayment is made and shall oblige the Borrowers to make such prepayment
on the date specified. Subject to Clause 2.9, no amount prepaid may be
reborrowed and any amount prepaid pursuant to Clause 4.2 or Clause 8.2(a)
shall be applied in repayment, first, of the Balloon Instalment relative to
such Advance (if any) and then, of the repayment instalments of the
relevant Advance under Clause 4.1 in the inverse order of their maturity.
The Borrowers may not prepay the Loan or any part thereof save as expressly
provided in this Agreement.
5. FEES, COMMITMENT COMMISSION AND EXPENSES
5.1 Fees As an inducement for the Creditors to enter into this Agreement the
Borrowers have to pay to the Agent:
(a) for the account of the Arrangers (1/2 each) an up front fee, of 0.50%
of the amount of the Facility, out of which 0.10% of the amount of the
Facility has already been paid by the Borrowers and 0.40% of the
amount of the Facility shall be paid on the date hereof; and
(b) for the account of the Agent an annual agency fee, of the amount of
$12,000 (Dollars twelve thousand), such agency fee to be payable in
advance on the date of this Agreement and on each anniversary thereof.
5.2 Commitment commission The Borrowers shall pay to the Agent, for the account
of the Lenders pro-rata to their Commitments, on each of the dates falling
at three monthly intervals after the date hereof until the earlier of (a)
the last day of the Drawdown Period (b) the Drawdown Date of the Advance
last to be drawn down) and (c) the date of cancellation of the Facility in
full by the Borrowers (the "Commitment Commission Period") commitment
commission at the rate of 0.45% per annum on the daily undrawn and
uncancelled amount of the Facility, computed from the date hereof (in the
case of the first payment of commission) and from the date of the preceding
payment of commission (in the case of each subsequent payment) until the
last day of the Commitment Commission Period.
The fees and the commitment commission referred to in this Clause 5 are not
refundable and shall be payable by the Borrowers to the Agent whether or
not any part of the Facility is ever advanced.
5.3 Expenses The Borrowers shall pay to the Agent on a full indemnity basis on
demand all expenses (including legal, printing and out-of-pocket expenses)
incurred by the Creditors:
(a) in connection with the negotiation, preparation, execution and, where
relevant, registration of the Security Documents and of any amendment
or extension of or the granting of any waiver or consent under, any of
the Security Documents; and
(b) in contemplation of, or otherwise in connection with, the enforcement
of, or preservation of any rights under, any of the Security
Documents, or otherwise in respect of the moneys owing under any of
the Security Documents
together with interest at the rate referred to in Clause 3.4 from, in the
case of expenses referred to in sub-paragraph (a) above the date on which
such expenses were demanded by the Agent from the Borrowers, and in the
case of expenses referred to in sub-paragraph (b) above, the date on which
such expenses were incurred, in each case to the date of payment (as well
after as before judgment).
5.4 Value Added Tax All fees and expenses payable pursuant to this Clause 5
shall be paid together with value added tax or any similar tax (if any)
properly chargeable thereon. Any value added tax chargeable in respect of
any services supplied by the Creditors (or any of them) under this
Agreement shall, on delivery of the value added tax invoice, be paid in
addition to any sum agreed to be paid hereunder.
5.5 Stamp and other duties The Borrowers shall pay all stamp, documentary,
registration or other like duties or taxes (including any duties or taxes
payable by any of the Creditors) imposed on or in connection with any of
the MOAs, the Management Agreements, the Security Documents or the Loan and
shall indemnify the Creditors against any liability arising by reason of
any delay or omission by the Borrowers or any of them to pay such duties or
taxes.
6. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
6.1 No set-off or counterclaim The Borrowers acknowledge that in
performing their respective obligations under this Agreement, the
Lenders will be incurring liabilities to third parties in relation to
the funding of amounts to the Borrowers, such liabilities matching the
liabilities of the Borrowers to the Lenders and that it is reasonable
for the Lenders to be entitled to receive payments from the Borrowers
gross on the due date in order that the Lenders are put in a position
to perform their matching obligations to the relevant third parties.
Accordingly, all payments to be made by the Borrowers under any of the
Security Documents shall be made in full, without any set-off or
counterclaim whatsoever and, subject as provided in Clause 6.6, free
and clear of any deductions or withholdings, in Dollars on the due
date to the account of the Agent at the Receiving Bank, Acc. No. [ o ]
reference: "CASTALIA SERVICES LTD., FIANNA NAVIGATION S.A., XXXXXX
LIMITED, TEAGAN SHIPHOLDING S.A. and XXXXXXXX ENTERPRISES CO./Loan
Agreement dated [ o ], 2005" or to such other account at such other
bank in such place as the Agent may from time to time specify for this
purpose.
6.2 Payment by the Lenders All sums to be advanced by the Lenders to the
Borrowers under this Agreement in respect of the Loan shall be remitted in
Dollars on the Drawdown Date for the relevant Advance to the account or
accounts as specified in the Drawdown Notice for such Advance.
6.3 Payment on Banking Days All payments due under any of the Security
Documents shall be made on a Banking Day. When any payment under any of the
Security Documents would otherwise be due on a day which is not a Banking
Day, the due date for payment shall be extended to the next following
Banking Day unless such Banking Day falls in the next calendar month in
which case payment shall be made on the immediately preceding Banking Day.
6.4 Calculations All interest and other payments of an annual nature under any
of the Security Documents shall accrue from day to day and be calculated on
the basis of actual days elapsed and a 360 day year.
6.5 Evidence - Certificates conclusive It is hereby expressly agreed and
admitted by the Borrowers that abstracts or photocopies or other
reproductions of the books of the Agent and/or the Lenders as well as
statements of accounts or a certificate signed by an authorised officer of
the Agent or the relevant Lender shall (save for manifest error) be
conclusive, binding and full evidence on the Borrowers as to the existence
and/or the amount of the at any time Outstanding Indebtedness, of any
amount due under this Agreement, of the applicable Interest Rate or Default
Rate or any other rate provided for or referred to in this Agreement, the
Interest Period, the value of additional securities under Clause 8.2(e),
the payment or non payment of any amount and/or the occurrence of any other
Event of Default
Any certificate or determination of the Agent as to any rate of interest or
any other amount pursuant to and for the purposes of any of the Security
Documents shall in the absence of manifest error, be conclusive and binding
on the Borrowers.
6.6 Grossing-up for Taxes If at any time any law, regulation, regulatory
requirement or requirement of any governmental authority, monetary agency,
central bank or the like compels the Borrowers to make payment subject to
Governmental Withholdings, or any other deduction or withholding. the
Borrowers shall pay to the Agent such additional amounts as may be
necessary to ensure that there will be received by the Creditors on the due
date for such payment (and retains, free from any liability in respect of
such deduction or withholding) a net amount equal to the full amount which
would have been received had payment not been made subject to such
Governmental Withholdings or other deduction or withholding. The Borrowers
shall indemnify each Creditor against any losses or costs incurred by such
Creditor by reason of any failure of the Borrowers (or any of them) to make
any such deduction or withholding or by reason of any increased payment not
being made on the due date for such payment.
The Borrowers shall, not later than thirty (30) days after each deduction,
withholding or payment of any Governmental Withholdings, forward to the
Agent official receipts and any other documentary receipts and any other
documentary evidence reasonably required by the Agent in respect of the
payment made or to be made of any deduction or withholding or Governmental
Withholding. The obligations of the Borrowers under this provision shall,
subject to applicable law, remain in force notwithstanding the repayment of
the Loan and the payment of all interest due thereon pursuant to the
provisions of this Agreement.
6.7 Loan account Each Lender shall maintain, in accordance with its usual
practice, an account (which shall together constitute the "account current"
if such term is referred to in the Mortgages (or any of them)) evidencing
the amounts from time to time lent by, owing to and paid to it under the
Security Documents. Each Lender shall maintain a control account showing
the Loan and other sums owing by the Borrowers under the Security Documents
and all payments in respect thereof made by the Borrowers from time to
time. Such account shall, in the absence of manifest error, be conclusive
as to the amount from time to time owing by the Borrowers under the
Security Documents.
6.8 Agent may assume receipt Where any sum is to be paid under any of the
Security Documents to the Agent for the account of another person, the
Agent may assume that the payment will be made when due and the Agent may
(but shall not be obliged to) make such sum available to the person so
entitled. If it proves to be the case that such payment was not made to the
Agent, then the person to whom such sum was so made available shall on
request refund such sum to the Agent together with interest thereon
sufficient to compensate the Agent for the cost of making available such
sum up to the date of such repayment and the person by whom such sum was
payable shall indemnify the Agent for any and all loss or expense which the
Agent may sustain or incur as a consequence of such sum not having been
paid on its due date.
6.9 Partial payments If, on any date on which a payment is due to be made by
the Borrowers under any of the Security Documents, the amount received by
the Agent from the Borrowers falls short of the total amount of the payment
due to be made by the Borrowers on such date then, without prejudice to any
rights or remedies available to the Agent and the Lenders under any of the
Security Documents, the Agent shall apply the amount actually received from
the Borrowers in or towards discharge of the obligations of the Borrowers
under the Security Documents in the following order, notwithstanding any
appropriation made, or purported to be made, by the Borrowers:
(a) firstly, in or towards payment, on a pro-rata basis, of any unpaid
fees, costs and expenses of the Agent under any of the Security
Documents;
(b) secondly, in or towards payment to the Lenders, on a pro rata basis,
of any accrued interest which shall have become due under any of the
Security Documents but remains unpaid;
(c) thirdly, in or towards payment to the Lenders, on a pro rata basis, of
any principal which shall have become due under any of the Security
Documents but remains unpaid; and
(d) fourthly, in or towards payment of any other sum which shall have
become due under any of the Security Documents but remains unpaid
(and, if more than one such sum so remains unpaid, on a pro rata
basis).
The order of application set out in this Clause 6.9(b) to (d) may be varied
by the Agent if all the Lenders so direct.
7. REPRESENTATIONS AND WARRANTIES
7.1 Continuing representations and warranties The Borrowers jointly and
severally represent and warrant to the Lenders that;
(a) Due incorporation / Valid Existence each of the corporate Security
Parties is duly incorporated and validly existing in good standing
under the laws of its respective country of incorporation as limited
liability company and has power to carry on its respective businesses
as they are now being lawfully conducted and to own its respective
property and other assets and to purchase, own, finance and operate
vessels, or, as the case may be, manage vessels, as well as to
undertake the obligations which have undertaken or shall undertake
pursuant to the Security Documents;
(b) Due Corporate power each of the Borrowers has power to execute,
deliver and perform its obligations under the Security Documents to
which each is or is to be a party and to borrow the Facility and each
of the other Security Parties has power to execute and deliver and
perform its obligations under the Security Documents to which it is or
is to be a party; all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and
performance of the same and no limitation on the powers of any of the
Borrowers to borrow will be exceeded as a result of borrowing the
Loan;
(c) Valid and Binding obligations the Security Documents constitute (or
upon their execution - and in the case of any mortgage upon its
registration at the appropriate registry - will constitute) valid and
legally binding obligations of the relevant Security Parties
enforceable against the Borrowers and the other Security Parties in
accordance with their respective terms and that there are no other
agreements or arrangements which may adversely affect or conflict with
the Security Documents or the security thereby created;
(d) No conflict with other obligations the execution and delivery of; the
performance of its obligations under, and compliance with the
provisions of, the Security Documents by the relevant Security Parties
will not (i) contravene any existing applicable law, statute, rule or
regulation or any judgment, decree or permit to which any of the
Borrowers or any other Security Party is subject, (ii) conflict with,
or result in any breach of any of the terms of, or constitute a
default under, any agreement or other instrument to which any of the
Borrowers or any other Security Party is a party or is subject or by
which it or any of its property is bound, (iii) contravene or conflict
with any provision of the memorandum and articles of
association/articles of incorporation/bylaws/statutes or other
constitutional documents of any of the Borrowers or any other Security
Party or (iv) result in the creation or imposition of or oblige any of
the Borrowers or any other Security Party to create any Encumbrance
(other than a Permitted Encumbrance) on any of the undertakings,
assets, rights or revenues of any of the Borrowers or any other
Security Party;
(e) No litigation no litigation, arbitration or administrative proceeding
is taking place, pending or, to the best of the knowledge of the
officers of each of the Borrowers, threatened against any of the
Borrowers or any other Security Party which could have a material
adverse effect on the business, assets or financial condition of any
of the Borrowers or any other Security Party;
(f) No filings required save for the registration of each Mortgage in the
relevant register under the laws of the relevant Flag State through
the relevant Registry it is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of the Security
Documents that they or any other instrument be notarised, filed,
recorded, registered or enrolled in any court, public office or
elsewhere in any Relevant Jurisdiction or that any stamp, registration
or similar tax or charge be paid in any Relevant Jurisdiction on or in
relation to the Security Documents and each of the Security Documents
is in proper form for its enforcement in the courts of each Relevant
Jurisdiction;
(g) Perfected Securities when duly executed, the Security Documents will
create a perfected security interest in favour of the Lenders, with
the intended priority, in the assets and revenues intended to be
covered, valid and enforceable against the Borrowers and the other
Security Parties;
(h) Valid Choice of law, the choice of English law to govern the Security
Documents (other than the Mortgages), the choice of the laws of each
Flag State to govern the relevant Mortgage and the submissions by the
Security Parties to the non-exclusive jurisdiction of the English
courts are valid and binding;
(i) No immunity none of the Borrowers nor any other Security Party nor any
of their respective assets is entitled to immunity on the grounds of
sovereignty or otherwise from any legal action or proceeding (which
shall include, without limitation, suit, attachment prior to
judgement, execution or other enforcement);
(j) Consents obtained every consent, authorisation, licence or approval of
or registration with or declaration to, governmental or public bodies
or authorities or courts required by any Security Party to authorise,
or required by any Security Party in connection with, the execution,
delivery, validity, enforceability or admissibility in evidence of
each of the Security Documents or the performance by each Security
Party of its obligations under the Security Documents to which is or
is to be a party has been obtained or made and is in full force and
effect; and there has been no default in the observance of any of the
conditions or restrictions (if any) imposed in, or in connection with,
any of the same;
(k) Financial Condition to the knowledge of the Directors/Officers of the
Borrowers, the financial condition of the Borrowers (or any of them)
and of the other Security Parties has not suffered any material
deterioration since that condition was last disclosed to the Agent;
(l) AMEX Listing the Guarantor is listed in AMEX and at the date hereof
its shares continue to be traded thereat;
(m) Shareholdings each of the Borrowers is legally and beneficially owned
by the persons described to the Agent in the negotiation of this
Agreement; and
(n) Acting for its own account each of the Borrowers by entering this
Agreement in the Security Documents is acting on its own behalf and
for its own account.
7.2 Initial representations and warranties The Borrowers jointly and severally
further represent and warrant to the Lenders that:
(a) Pari passu the obligations of the Borrowers under this Agreement are
direct, general and unconditional obligations of the Borrowers and
rank at least pari passu with all other present and future unsecured
and unsubordinated Indebtedness of the Borrowers with the exception of
any obligations which are mandatorily preferred by law and not by
contract;
(b) No default under other Indebtedness none of the Borrowers nor any
other Security Party is (nor would with the giving of notice or lapse
of time or the satisfaction of any other condition or combination
thereof be) in breach of or in default under any agreement relating to
Indebtedness to which it is a party or by which it may be bound;
(c) Information the information, exhibits and reports furnished by any
Security Party to the Arrangers and/or the Agent in connection with
the negotiation and preparation of the Security Documents are true and
accurate in all material respects and not misleading, do not omit
material facts and all reasonable enquiries have been made to verify
the facts and statements contained therein; to the best knowledge of
the Borrowers there are no other facts the omission of which would
make any fact or statement therein misleading;
(d) No Taxes no Taxes are imposed by deduction, withholding or otherwise
on any payment to be made by any Security Party under the Security
Documents or are imposed on or by virtue of the execution or delivery
by the Security Parties of the Security Documents or any other
document or instrument to be executed or delivered under any of the
Security Documents. In case that any Tax exists now or will be imposed
in the future, it will be borne by the Borrowers;
(e) No Default no Default has occurred and is continuing;
(f) No Default under MOA none of the Borrowers is in default of any of its
obligations under the relevant MOA to which it is a party;
(g) MOAs Valid the copy of each MOA delivered to the Bank is a true and
complete copy of such document constituting valid and binding
obligations of the parties thereto enforceable in accordance with its
terms and no amendments thereto or variations thereof shall have been
(or will be) agreed nor shall any action been taken by the parties
thereto which would in any way render such document inoperative or
unenforceable;
(h) No Rebates there will be no commissions, rebates premiums or other
payments by or to or on account of the Borrowers (or any of them), any
other Security Party or, to the knowledge of the Borrowers (or any of
them), any other person in connection with the MOAs (or any of them)
other than as shall be disclosed to the Bank by the Borrowers in
writing;
(i) No filings required save for the registration of each Mortgage under
the laws of the relevant Flag State through the relevant Registry it
is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of any of the Security Documents that they
or any other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any Relevant
Jurisdiction or that any stamp, registration or similar tax or charge
be paid in any Relevant Jurisdiction on or in relation to the Security
Documents and each of the Security Documents is in proper form for its
enforcement in the courts of each Relevant Jurisdiction;
(j) the Vessels each of the Vessels will on the Delivery Date for such
Vessel be:
(i) in the absolute and unencumbered ownership of the relevant
Borrower who will on and after such Delivery Date be the sole,
legal and beneficial Owner of such Vessel;
(ii) registered in the name of the relevant Borrower under the laws
and flag of the relevant Flag State;
(iii) operationally seaworthy and in every way fit for service;
(iv) classed with the Classification (free all requirement) and
overdue recommendations of the Classification Society;
(v) insured in accordance with the provisions of the relevant
Mortgage; and
(vi) managed by the Manager;
(k) No charter save for the existing Long Charterparties of "ISMINAKI",
"FIRST ENDEAVOUR", "EMERALD", and "BIRTHDAY" and save as may be agreed
in writing by the Lenders, none of the Vessels will on or before the
Delivery Date for such Vessel be subject to any charter or contract or
to any agreement to enter into any charter or contract which, if
entered into after the date of the relevant Mortgage/General
Assignment would have required the consent of the Lenders and on such
Delivery Date there will not be any agreement or arrangement whereby
the Earnings may be shared with any other person;
(l) No Encumbrances none of the Vessels nor their respective Earnings,
Insurances or Requisition Compensation (each as defined in the
relevant Mortgage/General Assignment) nor any other properties or
rights which are, or are to be, the subject of any of the Security
Documents nor any part thereof will be, on the Delivery Date for such
Vessel, subject to any Encumbrance save the Permitted Liens;
(m) Compliance with Environmental Laws and Approvals except as may already
have been disclosed by the Borrowers in writing to, and acknowledged
in writing by, the Agent:
(i) the Borrowers and the Manager have complied with the provisions
of all Environmental Laws;
(ii) the Borrowers and the Manager have obtained all Environmental
Approvals and are in compliance with all such Environmental
Approvals; and
(iii) none of the Borrowers and the Manager nor any other Relevant
Party nor to the best of the Borrowers' knowledge and belief
(having made due enquiry) any of their respective Environmental
Affiliates has received notice of any Environmental Claim that
any of the Borrowers and the Manager is not in compliance with
any Environmental Law or any Environmental Approval;
(n) No Environmental Claims except as may already have been disclosed by
the Borrowers in writing to, and acknowledged in writing by, the
Agent, there is no Environmental Claim pending or, to the best of the
Borrowers' knowledge and belief, threatened against any of the
Borrowers or the Manager or any of the Vessels or any other Relevant
Party or any other Relevant Ship or to the best of the Borrowers'
knowledge and belief (having made due enquiry) any of their respective
Environmental Affiliates;
(o) No potential Environmental Claims except as may already have been
disclosed by the Borrowers in writing to, and acknowledged in writing
by, the Agent, there has been no emission, spill, release or discharge
of a Material of Environmental Concern from any of the Vessels or any
other Relevant Ship owned by, managed or crewed by or chartered to the
Borrowers and/or the Manager nor to the best of the Borrowers'
knowledge and belief (having made due enquiry) from any Relevant Ship
owned by, managed or crewed by or chartered to any other Relevant
Party which could give rise to an Environmental Claim;
(p) No material adverse change to the best of their knowledge and belief
there has been no material adverse change in the financial position of
the Borrowers or the consolidated financial position of the Borrowers
from that described to the Agent in the negotiation of this Agreement;
(q) Copies true and complete the copies of MOAs and the Management
Agreements delivered or to be delivered to the Agent pursuant to
Clause 9.1 are, or will when delivered be, true and complete copies of
such documents, each of such documents will when delivered constitute
valid and binding obligations of the parties thereto enforceable in
accordance with its terms and there will have been no amendments or
variations thereof or defaults thereunder;
(r) Compliance with ISM Code, Application made for DOC and SMC the
Operator complies with the requirements of the ISM Code, has obtained
a DOC for itself, has applied to the appropriate Regulatory Agency for
an SMC in respect of each of the Vessels to be issued pursuant to the
ISM Code within any time limit required or recommended by such
Regulatory Agency and that neither the Borrowers nor any Operator is
aware of any reason why such application may be refused; and
(s) ISPS Code as from the Delivery of each Vessel, the Owner thereof shall
have a valid and current ISSC in respect of such Vessel and such
Vessel shall be in compliance with the ISPS Code.
7.3 Representations correct at the time of entering into this Agreement all
above representations and warranties or any other information given by the
Borrowers (or any of them) and/or the Guarantor to the Creditors are true
and accurate.
7.4 Repetition of representations and warranties on and as of the date of each
Drawdown Date and on each Interest Payment Date the Borrowers shall (a) be
deemed to repeat the representations and warranties in Clauses 7.1 and 7.2
as if made with reference to the facts and circumstances existing on such
day and (b) be deemed to further represent and warrant to the Creditors
that the then latest audited financial statements delivered to the Agent
(if any) have been prepared in accordance with the United States Generally
Accepted Accounting Principles (herein "US-GAAP") and present fairly and
accurately the financial position of the Borrowers respectively as at the
end of the financial period to which the same relate and the results of the
operations of the Borrowers respectively for the financial period to which
the same relate and, as at the end of such financial period, none of the
Borrowers had any significant liabilities (contingent or otherwise) or any
unrealised or anticipated losses which are not disclosed by, or reserved
against or provided for in, such financial statements.
8. UNDERTAKINGS
8.1 General Each of the Borrowers undertakes with the Lenders that, from the
date of this Agreement and so long as any moneys are owing under any of the
Security Documents and while all or any part of the Loan remain
outstanding, it will:
(a) Notice on adverse change or Default immediately inform the Agent upon
becoming aware of any occurrence which might adversely affect the
ability of any Security Party to perform its obligations under any of
the Security Documents and, without limiting the generality of the
foregoing, will inform the Agent of any Default forthwith upon
becoming aware thereof and will from time to time, if so requested by
the Agent, confirm to the Agent in writing that, save as otherwise
stated in such confirmation, no Default has occurred and is
continuing;
(b) Consents and licences without prejudice to Clauses 7.1 and 9, obtain
or cause to be obtained, maintain in full force and effect and comply
in all material respects with the conditions and restrictions (if any)
imposed in, or in connection with, every consent, authorisation,
licence or approval of governmental or public bodies or authorities or
courts and do or cause to be done, all other acts and things which may
from time to time be necessary or desirable under applicable law for
the continued due performance of all the obligations of the Security
Parties under each of the Security Documents;
(c) Use of proceeds use the Loan exclusively for the purpose specified in
Clause 1.1;
(d) Pari passu ensure that its obligations under this Agreement shall,
without prejudice to the provisions of Clause 8.3, at all times rank
at least pari passu with all its other present and future unsecured
and unsubordinated Indebtedness with the exception of any obligations
which are mandatorily preferred by law and not by contract;
(e) Financial statements prepare:
(i) audited consolidated financial statements including balance
sheet and profit and loss accounts of the Guarantor (including
the Borrowers), prepared by auditors acceptable to the Agent and
in accordance with the US-GAAP in respect of each Financial Year
and deliver as many copies of the same as the Agent may
reasonably require as soon as practicable but not later than 120
days after the end of the Financial Year to which they relate;
(ii) (starting with the year 2005) interim semi-annual un-audited
financial statements of the Guarantor and deliver same to the
Agent promptly but not later than 90 days after the end of the
semester period to which they relate; and
(iii) un-audited financial statements of each Borrower in respect of
each Financial Year of such Xxxxxxxx and deliver same to the
Agent 150 days after the end of the Financial Year to which they
relate;
(f) Delivery of reports deliver to the Lenders as many copies as the Agent
may reasonably require of every report, circular, notice or like
document issued by any Security Party to its shareholders or creditors
generally;
(g) Delivery of Compliance Certificate deliver to the Agent a Compliance
Certificate for the relevant period, substantially in the form set out
in Schedule 5, together with the audited financial statements referred
to in Clause 8.1(e);
(h) Financial Information provide the Agent from time to time as the Agent
may request and in form and substance satisfactory to the Agent with
information on the financial conditions, actual and projected for the
following 12 month period, cash flow position, commitments and
operations of each Owner including cash flow analysis and voyage
accounts of the Vessel owned by it with a breakdown of income and
running expenses showing net trading profit, trade payables and trade
receivables, such financial details to be certified by one of the
directors of the relevant Owner as to their correctness;
(i) Obligations under Security Documents duly and punctually perform each
of the obligations expressed to be assumed by it under the Security
Documents; and
(j) Payment on demand pay to the Agent on demand any sum of money which is
payable by the Borrowers to the Creditors under this Agreement but in
respect of which it is not specified in any other Clause when it is
due and payable.
8.2 Security value maintenance
(a) Security shortfall If at any time on or after the Delivery Date for
the first of the Vessels to be delivered, the Security Value shall be
less than the applicable Security Requirement, the Agent may, and if
so directed by the Lenders, give notice to the Borrowers requiring
that such deficiency be remedied and then the Borrowers shall either:
(i) prepay within a period of thirty (30) days of the date of receipt
by the Borrowers of the Agent's said notice such sum in Dollars
as will result in the applicable Security Requirement after such
prepayment (taking into account any other repayment of the Loan
made between the date of the notice and the date of such
prepayment) being equal to the Security Value; or
(ii) within fifteen (15) days of the date of receipt by the Borrowers
of the Agent's said notice constitute to the satisfaction of the
Agent such further security for the Loan as shall be acceptable
to the Agent (acting on the instructions of the Majority Lenders)
having a value for security purposes (as determined by the Agent
(acting on the instructions of the Majority Lenders) in its
absolute discretion) at the date upon which such further security
shall be constituted which, when added to the Security Value,
shall not be less than the applicable Security Requirement as at
such date. Such additional security shall be constituted by;
aa) additional pledged cash deposits in favour of the Lenders in
an amount equal to such shortfall with the Lenders and in an
account and manner to be determined by the Agent; and/or
bb) any other security acceptable to the Lenders at their
absolute discretion to be provided in a manner determined by
the Lenders.
The provisions of Clause 4.3 and 4.4 shall apply to
prepayments under Clause 8.2(a)(i).
(b) Valuation of Vessels Each of the Mortgaged Vessels shall, for the
purposes of this Clause 8.2, be valued in Dollars, ten (10) days prior
to the relevant Delivery Date and thereafter at least twice a year and
as and when the Agent (acting on the instructions of the Majority
Lenders) shall require by one (1) first class independent firm of
internationally known shipbrokers appointed by the Agent (acting on
the instructions of the Majority Lenders) such valuation to be made
without, unless requited by the Agent, physical inspection, and on the
basis of a sale for prompt delivery for cash at arms length on normal
commercial terms as between a willing buyer and a willing seller
without taking into account the benefit of any charterparty or other
engagement concerning the relevant Mortgaged Vessel. In case the
Borrowers disagree with the first valuation of a Vessel the Agent
shall obtain a second valuation of the relevant Vessel on the same
basis as aforesaid through an independent firm of internationally
known shipbrokers acceptable to the Agent, provided however that in
case there is a difference of more than 10% between the said two
valuations the Agent shall be entitled to obtain a third valuation of
the relevant Vessel on the same basis as aforesaid through an
independent firm of internationally known shipbrokers acceptable to
the Agent. The mean of such two (2) or, as the case may be, three (3)
valuations shall constitute the value of the relevant Vessel for the
purposes of this Clause 8.2 and shall be binding upon the parties
hereto until such time as any further such valuation in respect of
such Vessel shall be obtained.
(c) Information Each of the Borrowers undertakes to the Creditors to
supply to the Agent and to any such shipbrokers such information
concerning its Vessel and its condition as such shipbrokers may
reasonably require for the purpose of making any such valuation.
(d) Costs All costs in connection with the Agent obtaining any valuation
of the Mortgaged Vessels referred to in Clause 8.2(b), and any
valuation either of any additional security for the purposes of
ascertaining the Security Value at any time or necessitated by the
Borrowers electing to constitute additional security pursuant to
Clause 8.2(a)(ii) shall be borne by the Borrowers.
(e) Valuation of additional security For the purpose of this Clause 81,
the market value of any additional security provided or to be provided
to the Lenders shall be determined by the Agent (acting on the
instructions of the Majority Lenders) in its absolute discretion
without any necessity for the Agent assigning any reason thereto.
(f) Documents and evidence In connection with any additional security
provided in accordance with this Clause 8.2, the Agent shall be
entitled to receive such evidence and documents of the kind referred
to in Schedule 3 as may in the Agent's opinion be appropriate and such
favorable legal opinions as the Agent shall in its absolute discretion
require.
8.3 Negative undertakings Each of the Borrowers undertakes with the Lenders
that, from the date of this Agreement and so long as any moneys are owing
under the Security Documents and while all or any part of the Loan remains
outstanding, it will not, without the prior written consent of the Majority
Lenders):
(a) Negative pledge permit any Encumbrance (other than a Permitted
Encumbrance) to subsist, arise or be created or extended over all or
any part of its present or future undertakings, assets, rights or
revenues to secure or prefer any present or future Indebtedness or
other liability or obligation of such Borrower or any other person;
(b) No merger will procure that none of the Borrowers will, without the
prior written consent of the Agent (acting on the instructions of the
Majority Lenders), merge or consolidate with any other person;
(c) Disposals sell, transfer, abandon, lend or otherwise dispose of or
cease to exercise direct control over any part (being either alone or
when aggregated with all other disposals falling to be taken into
account pursuant to this Clause 8.3(c) material in the opinion of the
Agent in relation to the undertakings, assets, rights and revenues of
such Borrower) of its present or future undertaking, assets, rights or
revenues (otherwise than by transfers, sales or disposals for full
consideration in the ordinary course of trading) whether by one or a
series of transactions related or not;
(d) Other business undertake any business other than the ownership and
operation of its Vessel and the chartering of such Vessel to third
parties;
(e) Acquisitions acquire any further assets other than its Vessel and
rights arising under contracts entered into by or on behalf of such
Borrower in the ordinary course of its business of owning, operating
and chartering its Vessel;
(f) Other obligations incur any obligations except for obligations arising
under the Security Documents or contracts entered into in the ordinary
course of its business of owning, operating and chartering its Vessel
(and for the purposes of this Clause 8.3(f) fees to be paid pursuant
to the Management Agreements shall be considered as permitted
obligations);
(g) No borrowing incur any Borrowed Money except for Borrowed Money
pursuant to the Security Documents;
(h) Repayment of borrowings repay the principal of, or pay interest on or
any other sum in connection with, any of its Borrowed Money except for
Borrowed Money pursuant to the Security Documents;
(i) Guarantees issue any guarantees or indemnities or otherwise become
directly or contingently liable for the obligations of any person,
firm, or corporation except pursuant to the Security Documents and
except for guarantees or indemnities from time to time required in the
ordinary course by any protection and indemnity or war risks
association with which each of the Vessels is entered, guarantees
required to procure the release of any of the Vessels from any arrest,
detention, attachment or levy or guarantees or undertakings required
for the salvage of such Vessel);
(j) Loans make any loans or grant any credit (save for normal trade credit
in the ordinary course of business) to any person or agree to do so;
(k) Sureties permit any Indebtedness of such Borrower to any person (other
than the Lenders) to be guaranteed by any person (save, in the case of
the Borrowers, for guarantees or indemnities from time to time
required in the ordinary course by any protection and indemnity or war
risks association with which each of the Vessels is entered,
guarantees required to procure the release of any of the Vessels from
any arrest, detention, attachment or levy or guarantees or
undertakings required for the salvage of such Vessel);
(l) Share capital and distribution (a) purchase or otherwise acquire for
value any shares of its capital or declare or distribute any of its
present or future assets, undertakings, rights or revenues to any of
its shareholders or (b) so long as an Event of Default having occurred
and being continuing, pay any dividends (save for dividends paid with
the prior written consent of the Lenders);
(m) Subsidiaries without the prior written consent of the Lenders form or
acquire any Subsidiaries;
(m) Maintenance of Business Structure not change the nature, organisation
and conduct of its business as, upon the relevant Delivery, Owner of
the relevant Vessel or carry on any business other than the business
carried on the date hereof;
(n) Maintenance of Legal Structure ensure that none of the documents
defining the constitution of the Borrowers (or any of them) shall be
altered in any manner whatsoever without the prior written consent of
the Lenders (such consent not to be unreasonably withheld);
(o) Control ensure that, throughout the Security Period, no change shall
be made directly or indirectly in the ownership, beneficial ownership,
control or management of the Borrowers (or any of them) or any share
therein or, upon the relevant Delivery, of the Vessel owned by it from
that evidenced to the Lenders at the date of this Agreement without
the prior written consent of the Lenders (which shall not be
unreasonably withheld);
(p) No Freight Derivatives not (without the prior written consent of the
Agent) enter into any freight derivatives or any other instruments
which have the effect of hedging forward exposures to freight
derivatives; and
(q) Debt Reserve Account open prior to the Delivery of the Vessel first to
be delivered and maintain the Debt Reserve Account throughout the
Security Period and comply with the provisions of Clause 8.6
throughout the Security Period.
8.4 Covenants Concerning the Vessels Each of the Borrowers hereby further
undertakes and agrees with the Lenders that it will:
(a) Conveyance on default where a Vessel is (or is to be) sold in exercise
of any power conferred on the Lenders, execute, forthwith upon request
by the Agent, such form of conveyance of such Vessel as the Agent may
require;
(b) Flag State not later than one month prior to the Delivery Date of each
Vessel obtain the Lenders' written approval of the relevant Flag State
for such Vessel;
(c) Ownership/Management/Control ensure that each of the Vessels will be
registered upon her Delivery under the laws of the relevant Flag State
and thereafter maintain her present ownership, management, control and
beneficial ownership;
(d) Class ensure that each Vessel will remain in class free of overdue
recommendations, notations or average damage affecting class or
permitted by the classification society and provide the Agent on
demand with copies of all class and trading certificates of each
Vessel;
(e) Insurances ensure that all Insurances (as defined in the relevant
Mortgage/General Assignment) of each Vessel are maintained and comply
with all insurance requirements specified in this Agreement and in the
relevant Mortgage and in case of failure to maintain any Vessel so
insured, authorise the Agent (and such authorisation is hereby
expressly given to the Agent) to have the right but not the obligation
to effect such Insurances on behalf of the relevant Owner (and in case
that any Vessel remains in port for an extended period) to effect port
risks insurances at the cost of the Borrowers which, if paid by the
Creditors, shall be Expenses;
(f) Transfer/Encumbrances not without the prior written consent of the
Agent (acting on the instructions of the Majority Lenders) sell or
otherwise dispose of the Vessel owned by it or any share therein or
create or agree to create or permit to subsist any Encumbrance over
the Vessel owned by it or the other Vessel (or any share or interest
in any of them) other than Encumbrances created or to be created
pursuant to the Security Documents;
(g) Not imperil Flag, Ownership, Insurances ensure that each of the
Vessels is maintained and trades in conformity with the laws of the
relevant Flag State, of its owning company or of the nationality of
the officers, the requirements of the Insurances and nothing is done
or permitted to be done which could endanger the flag of any of the
Vessels or its unencumbered (other than Encumbrances in favour of the
Lenders and Encumbrances permitted by this Agreement) ownership or its
Insurances;
(h) Mortgages execute, and procure the execution of, the relevant Mortgage
under the laws and flag of the relevant Flag State immediately upon
Delivery of each Vessel and always comply with all the covenants
provided for in the relevant Mortgage;
(i) Assignment of Earnings assign or agree to assign otherwise than to the
Lenders the Earnings or any part thereof;
(j) Chartering not (without the prior written consent of the Agent, acting
on the instructions of the Majority Lenders (such consent not to be
unreasonably withheld)), enter into or agree to enter into in respect
of the employment of its Vessel;
(i) on demise charter for any period; or
(ii) a Long Charterparty;
(k) Manager not (without the prior written consent of the Majority Xxxxxxx
(and then only subject to such conditions as the Agent, acting on the
instructions of the Majority Lenders, may impose) appoint a manager of
its Vessel (other than the Manager)) or terminate or amend the terms
of any Management Agreement;
(l) Compliance with Environmental Laws comply with, and procure that all
Environmental Affiliates of each of the Borrowers comply with, all
Environmental Laws including without limitation, requirements relating
to xxxxxxx and establishment of financial responsibility and to obtain
and comply with, and procure that all Environmental Affiliates of each
of the Borrowers obtain and comply with, all Environmental Approvals
and to notify the Agent forthwith:
(i) of any Environmental Claim for an amount or amounts in aggregate
exceeding $300,000 made against any of the Vessels and/or any of
the Borrowers; and
(ii) upon becoming aware of any incident which may give rise to an
Environmental Claim and to keep the Agent advised in writing of
the Borrowers' response to such Environmental Claim on such
regular basis and in such detail as the Lenders shall require;
(m) Vessels' Inspection permit the Lenders, at Borrowers' expense: (t) by
surveyors or other persons appointed by the Lenders to board each
Vessel at all reasonable times for the purpose of inspecting her
condition or for the purpose of satisfying itself in regard to
proposed or executed repairs and to afford all proper facilities for
such inspection and (ii) at any time by financial or insurance
advisors or other persons appointed by the Lenders to review the
operating and insurance records of each of the Borrowers and each of
the Vessels;
(n) Compliance with ISM Code and ISPS Code with effect from the
respective Delivery of each Vessel, procure that the Manager and any
Operator:
(i) will comply with and ensure that each Vessel and any Operator by
no later than the respective Delivery Date complies with the
requirements of the ISM Code, including (but not limited to) the
maintenance and renewal of valid certificates pursuant thereto
throughout the Security Period;
(ii) immediately inform the Agent if there is any threatened or actual
withdrawal of the relevant Owner's, the Manager's or an
Operator's DOC or the SMC in respect of the Vessel owned by such
Owner:
(iii) promptly inform the Agent upon the issue to either Owner, the
Manager or any Operator of a DOC and to either Vessel of an SMC
or the receipt by either Owner, the Manager or any Operator of
notification that its application for the sane has been realised;
(iv) maintain at all times a valid and current ISSC in respect of
such Vessel;
(v) immediately notify the Agent in writing of any actual or
threatened withdrawal, suspension, cancellation or modification
of the ISSC in respect of such Vessel; and
(vi) procure that such Xxxxxx will comply at all times with the ISPS
Code.
8.5 Validity of Securities - Earnings - Taxes etc. Each of the Borrowers hereby
further undertakes and agrees with the Lenders that it will:
(a) Validity ensure and procure that all governmental or other consents
required by law and/or any other steps required for the validity,
enforceability and legality of this Agreement and the other Security
Documents are maintained in full force and effect and/or appropriately
taken;
(b) Earnings ensure and procure that, unless and until directed by the
Lenders otherwise (i) all the Earnings of each of the Vessels shall be
paid to the relevant Earnings Account and (ii) the persons from whom
the Earnings are from time to time due are irrevocably instructed to
pay them to such Earnings Account or to such other account in the name
of the relevant Borrower or the Borrowers as shall be from time to
time determined by the Agent in accordance with the provisions hereof
and of the relevant Security Documents;
(c) Taxes pay all Taxes, assessments and other governmental charges when
the same fall due, except to the extent that the same are being
contested in good faith by appropriate proceedings and adequate
reserves have been set aside for their payment if such proceedings
fail; and
(d) Additional Documents from time to time and within ten (10) days after
the Agent's request execute and deliver to the Agent or procure the
execution and delivery to the Agent of all such documents as shall be
deemed desirable at the reasonable discretion of the Agent for giving
full effect to this Agreement, and for perfecting, protecting the
value of or enforcing any rights or securities granted to the Lenders
under any one or more of this Agreement, the other Security Documents
and any other documents executed pursuant hereto or thereto and in
case that any conditions precedent (with the Lenders' consent) have
not been fulfilled prior to the relevant Drawdown Date, such
conditions shall be complied with within fourteen (14) days of such
Drawdown Date (unless the Agent (acting on the instructions of the
Majority- Lenders) agrees otherwise in writing) and failure to comply
with this covenant shall be an Event of Default. Provided however,
that following the Borrowers'/Guarantor's request, the Agent, if it
considers it appropriate or necessary, may grant a reasonable
extension to the aforementioned periods in case the Borrowers cannot
disclose/provide the requested information/document, under the
circumstances arising at the time of the Agent's request and within
the time limit specified hereinabove and the Borrowers/Guarantor shall
disclose/provide the requested information/documents within the period
set by the Agent.
8.6 Excess Cash reserve
(a) The Agent shall, in relation to each Excess Cash Calculation Period of
each Financial Year, on receipt of the financial statements of the
Borrowers for each such Excess Cash Calculation Period pursuant to
Clause 8.1(e), calculate by reference to such statements the amount of
the Excess Cash for such Excess Cash Calculation Period and, if such
Excess Cash is a positive figure, notify the Borrowers (and the
Lenders) thereof and of the amount of such Excess Cash.
(b) Immediately after each such notification of Excess Cash to the
Borrowers in respect of an Excess Cash Calculation Period, the
Borrowers shall pay to the Debt Reserve Account such amount as is
equal to forty per cent (40%) of the amount of the Excess Cash for
such Excess Cash Calculation Period.
(c) The Agent shall, following receipt each year pursuant to Clause 8.1(e)
of the annual audited financial statements of the Borrowers,
recalculate the Excess Cash in relation to each Excess Cash
Calculation Period falling within the Financial Year to which such
financial statements relate. If the Agent agrees with such
calculation, then the amount standing in the Debt Reserve Account will
be applied by the Agent within three (3) Banking Days in prepayment of
the Loan as the Agent deems fit.
(d) If, as a result of a recalculation by the Agent pursuant to Clause
8.6(c), the Excess Cash in relation to any Excess Cash Calculation
Period falling within the relevant Financial Year is determined by the
Agent (the "Recalculated Excess Cash") to be greater than the Excess
Cash for such Excess Cash Calculation Period originally determined
pursuant to Clause 8.6(a) or otherwise (the "Original Excess Cash"),
the Agent shall promptly notify the Borrowers (a) (and the Lenders) in
writing of such discrepancy and the Borrowers shall, within five (5)
Banking Days of receiving such notification, pay to the Debt Reserve
Account an amount equal to the Recalculated Excess Cash less the
Original Excess Cash.
(e) Subject to no Event of Default having occurred, the amount standing to
the credit of the Debt Reserve Account to be applied by the Agent
within 150 days after the end of the relevant Excess Cash Calculation
Period in prepayment of the Loan in or towards payment first of the
Balloon Instalment and then the outstanding repayment instalments in
inverse order of their maturity. However, upon the occurrence of any
Event of Default any amount standing to the credit of the Debt Reserve
Account shall be applied at the Lenders' absolute discretion. The
Borrowers shall not be entitled to draw any funds from the Debt
Reserve Account.
For the purposes of this Clause 8.6:
(i) "Excess Cash" means, in relation to each Mortgaged Vessel and
each Excess Cash Calculation Period, the amount, calculated by
the Agent pursuant to Clause 8.6(a), by reference to the then
latest financial statements provided to the Agent pursuant to
Clause 8.1(e) in respect of such Excess Cash Calculation Period,
which is equal to the aggregate Earnings of the relevant
Mortgaged Vessel, minus (i) the Debt Service in respect of the
Advance relative to such Mortgaged Vessel and (ii) the total
Operating Expenses incurred in relation to such Mortgaged Vessel,
in each case, in respect of such Excess Cash Calculation Period;
and
(ii) "Excess Cash Calculation Period" means each of the first two (2)
twelve (12) month periods of the Security Period commencing on
the Delivery Date of the Vessel first to be delivered.
8.7 Covenants for the Securities Parties Each of the Borrowers hereby further
undertakes and agrees with the Lenders that it will ensure and procure that
all other Security Parties and each of them duly and punctually comply with
the covenants in Clauses 8.1 to 8.6, which are applicable to them/it
mutatis mutandis.
9. CONDITIONS
9.1 Documents and evidence
(a) Prior to this Agreement being executed The obligation of each Lender
to make its Commitment available shall be subject to the condition
that the Agent, or its duly authorised representative, shall have
received not later than two (2) Banking Days before the date of this
Agreement, the documents and evidence specified in Part 1 of schedule
3 in form and substance satisfactory to the Agent.
(b) Prior to each Advance being made The obligation of the Lenders to make
an Advance available shall be subject to the condition that the Agent,
or its duly authorised representative, shall have received, not later
than two (2) Banking Days before the day on which the Drawdown Notice
for such Advance is given, the documents and evidence specified in
Part 2 of Schedule 3 in form and substance satisfactory to the Agent.
9.2 General conditions precedent The obligation of each of the Lenders to make
its Commitment (or any part thereof) available shall be subject to the
further conditions that, at the time of the giving of the Drawdown Notice
in respect of each Advance, and at the time of the making of such Advance:
(a) the representations and warranties contained in Clauses 7.1 and 7.2
are true and correct on and as of each such time as if each was made
with respect to the facts and circumstances existing at such time;
(b) no Default shall have occurred and be continuing or would result from
the making available of such Advance; and
(c) the Agent shall be satisfied that there has been no change in the
ownership, management, operations and/or adverse change in the
financial condition of any Security Party which (change) might, in the
sole opinion of the Agent, be detrimental to the interests of the
Creditors.
9.3 Waiver of conditions precedent The conditions specified in this Clause 9
are inserted solely for the benefit of the Lenders and may be waived by the
Agent (acting on the instructions of the Majority Lenders) in whole or in
part and with or without conditions by the Agent (acting on the
instructions of the Majority Lenders).
9.4 Further conditions precedent Not later than five (5) Banking Days prior to
each Drawdown Date and not later than ten (10) Banking Days prior to each
Interest Payment Date, the Agent may request and the Borrowers shall, not
later than five (5) Banking Days prior to such date, deliver to the Agent
on such request further favorable certificates and/or opinions as to any or
all of the matters which are the subject of Clauses 7, 8, 9 and 10 hereof
and Clauses 4 and 5 of the Guarantee. Provided however, that following the
Borrowers /Guarantors request, the Agent, if it considers it appropriate or
necessary, may shall grant a reasonable extension to the aforementioned
periods in case the Borrowers cannot disclose/provide the requested
information/document, under the circumstances arising at the time of the
Agent's request and within the time limit specified hereinabove and the
Borrowers/Guarantor shall disclose/provide the requested
information/documents within the period set be the Agent.
10. EVENTS OF DEFAULT
10.1 Events. There shall be an Event of Default if:
(a) Non-payment: any Security Party fails to pay any sum payable by it
under any of the Security Documents at the time, in the currency and
in the manner stipulated in the Security Documents (and so that, for
this purpose, sums payable on demand shall be treated as having been
paid at the stipulated time if paid within three (3) Banking Days of
demand); or
(b) Breach of Insurance and certain other obligations: any of the
Borrowers falls to obtain and/or maintain the Insurances (as defined
in, and in accordance with the requirements of, the Security
Documents) or if any insurer in respect of such Insurances cancels the
Insurances or disclaims liability by reason, in either case, of
mis-statement in any proposal for the Insurances or for any other
failure or default on the part of any of the Borrowers or any other
person or any of the Borrowers commits any breach of or omits to
observe any of the obligations or undertakings expressed to be assumed
by it under Clause 8.2 or 8.3 or 8.4; or
(c) Breach of financial covenants: the Borrowers and/or the Guarantor fail
to comply with any of the financial covenants set out in Clause 8.6;
or
(d) Breach of other obligations: any Security Party commits any breach of
or omits to observe any of its obligations or undertakings expressed
to be assumed by it under any of the Security Documents (other than
those referred to in Clauses 10.1(a), 10.1(b) and 10.1(c) above) and,
in respect of any such breach or omission which in the opinion of the
Agent (acting on the instructions of the Majority Lenders) is capable
of remedy, such action as the Agent (acting on the instructions of the
Majority Lenders) may require shall not have been taken within
fourteen (14) days of the Agent notifying the relevant Security Party
of such default and of such required action; or
(e) Misrepresentation: any representation or warranty made or deemed to be
made or repeated by or in respect of any Security Party in or pursuant
to any of the Security Documents or in any notice, certificate or
statement referred to in or delivered under any of the Security
Documents is or proves to have been incorrect or misleading in any
material respect; or
(f) Cross-default: any Indebtedness of the Security Parties (or any of
them) and/or any other member of the Group is not paid when due or
becomes due and payable, or any creditor of the Security Parties (or
any of them) and/or any other member of the Group becomes entitled to
declare any such Indebtedness due and payable prior to the date when
it would otherwise have become due, or any guarantee or indemnity
given or any obligation or covenant undertaken or agreement made by
the Security Parties (or any of them) and/or any other member of the
Group in respect of Indebtedness is not honoured when due unless the
relevant Security Party and/or the relevant member of the Group shall
have satisfied the Lenders that such Indebtedness will not affect or
prejudice in any way such Security Party's and/or the relevant
member's of the Group's ability to pay its debts as they fall due; or
(g) Legal process: any judgment or order made or commenced in good faith
by a person against any of the Security Parties relating to an amount
over $500,000 is not stayed or complied with within fourteen (14) days
or a good faith creditor attaches or takes possession of, or a
distress, execution, sequestration or other bonefide process is levied
or enforced upon or sued out against, any of the undertakings, assets,
rights or revenues of any Security Party and is not discharged within
fifteen (15) days; or
(h) Insolvency: any Security Party becomes insolvent or stops or suspends
making payments (whether of principal or interest) with respect to all
or any class of its debts or announces an intention to do so; or
(i) Reduction or loss of capital: a meeting is convened by any of the
Security Parties for the purpose of passing any resolution to
purchase, reduce or redeem any of its share capital; or
(j) Winding up: any petition is presented or other step is taken for the
purpose of winding up any Security Party or an order is made or
resolution passed for the winding up of any Security Party or a notice
is issued convening a meeting for the purpose of passing any such
resolution; or
(k) Administration: any petition is presented or other step is taken for
the purpose of the appointment of an administrator of any Security
Party or the Lenders believes that any such petition or other step is
imminent or an administration order is made in relation to any
Security Party; or
(l) Appointment of receivers and managers: any administrative or other
receiver is appointed of any Security Party or any part of its assets
and/or undertaking or any other steps are taken to enforce any
Encumbrance over all or any part of the assets of any Security Party;
or
(m) Compositions: any steps are taken, or negotiations commenced, by any
Security Party or by any of its creditors with a view to the general
readjustment or rescheduling of all or part of its indebtedness or to
proposing any kind of composition, compromise or arrangement involving
such company and any of its creditors, provided however that if the
Security Parties are able to provide such evidence as is satisfactory
in all respects to the Agent that such rescheduling will not relate to
any payment default or anticipated default the same shall not
constitute an Event of Default; or
(n) Analogous proceedings: there occurs, in relation to any Security
Party, in any country or territory in which any of them carries on
business or to the jurisdiction of whose courts any part of their
assets is subject, any event which, in the reasonable opinion of the
Agent, appears in that country or territory to correspond with, or
have an effect equivalent or similar to, any of those mentioned in
Clauses 10.1(f) to (11) (inclusive) or any Security Party otherwise
becomes subject, in any such country or territory, to the operation of
any law relating to insolvency, bankruptcy or liquidation; or
(o) Cessation of business: any Security Party suspends or ceases or
threatens to suspend or cease to carry on its business; or
(p) Seizure: all or a material part of the undertaking, assets, rights or
revenues of, or shares or other ownership interests in, any Security
Party are seized, nationalised, expropriated or compulsorily acquired
by or under the authority of any government; or
(q) Invalidity: any of the Security Documents shall at any time and for
any reason become invalid or unenforceable or otherwise cease to
remain in full force and effect, or if the validity or enforceability
of any of the Security Documents shall at any time and for any reason
be contested by any Security Party which is a party thereto, or if
any such Security Party shall deny that it has any, or any further,
liability thereunder; or
(r) Unlawfulness: it becomes impossible or unlawful at any time for any
Security Party, to fulfil any of the covenants and obligations
expressed to be assumed by it in any of the Security Documents or for
the Lenders to exercise the rights or any of them vested in it under
any of the Security Documents or otherwise; or
(s) Repudiation: any Security Party repudiates any of the Security
Documents or does or causes or permits to be done any act or thing
repudiating any of the Security Documents; or
(t) Encumbrances enforceable: any Encumbrance (other than Permitted Liens)
in respect of any of the property (or part thereof) which is the
subject of any of the Security Documents becomes enforceable; or
(u) Material adverse change: any material adverse change occurs in the
financial condition, state of affairs or prospects of any of the
Borrowers and the Guarantor which in the opinion of the Majority
Lenders would materially impair the ability of any of the Borrowers or
the Guarantor to perform their respective obligations under this
Agreement and the Security Documents to which each is a party, or
(v) Material qualification: any material qualification is made by the
Group's auditors in the consolidated financial statements of the Group
delivered to the Agent pursuant to Clause 8.1(e); or
(w) Registration: the registration of any of the Vessels under the laws
and flag of the relevant Flag State is cancelled or terminated without
the prior written consent of the Agent (acting on the instructions of
the Majority Lenders) or, if a Vessel is only provisionally registered
on the Delivery Date for such Vessel is not permanently registered
under the laws and flag of the relevant Flag State at least fifteen
(15) days prior to the deadline for completing such permanent
registration; or
(x) Environment: any of the Borrowers falls to comply with any
Environmental Law or any Environmental Approval or any of the
Borrowers and/or any other Relevant Party and/or any of their
respective Environmental Affiliates or any of the Vessels or any other
Relevant Ship is involved in any incident which gives rise or may give
rise to an Environmental Claim if, in any such case, such
non-compliance or incident or the consequences thereof could, in the
opinion of the Agent (acting on the instructions of the Majority
Lenders) reasonably be expected to have a material adverse effect on
the business, assets, operations, property or financial condition or
prospects of any of the Borrowers or any other Security Party or on
the security constituted by any of the Security Documents; or
(y) P&I: any of the Borrowers or any other person fails or omits to comply
with any requirements of the protection and indemnity association or
other insurer with which any of the Vessels is entered for insurance
or insured against protection and indemnity risks (including oil
pollution risks) to the effect that any cover (including, without
limitation, any cover in respect of liability for Environmental Claims
arising in jurisdiction where any of the Vessels operates or trades)
is or may be liable to cancellation, qualification or exclusion at any
time; or
(z) Ownership: there is any change in the legal and/or beneficial
ownership in any Owner unless such change results in the legal and/or
beneficial ownership remaining within the same persons as advised to
the Agent; or
(aa) Change of Management: any Vessel ceases to be managed by the Manager
(for any reason other than the reason of a Total Loss or sale of such
Vessel) without the approval of the Agent (acting on the instructions
of the Majority Lenders) and the relevant Owner fails to appoint a
Manager prior to the termination of the relevant Management Agreement
with the previous Manager, or
(bb) Material events: any other event occurs or circumstance arises or
develop in the light of which the Lenders consider that there is a
significant risk that which, in the opinion of the Agent (acting on
the instructions of the Majority Lenders) is likely materially and
adversely to affect either:
(i) the ability of any Security Party to perform all or any of its
obligations under or otherwise to comply with the terms of any of
the Security Documents; or
(ii) the security created by any of the Security Documents; or
(cc) Imperilment-jeopardy: the security constituted by a Security Document
is in any way imperilled or in jeopardy; or
(dd) Shareholdings: without the prior written consent of the Agent there is
any change in the legal and beneficial shareholding of any of the
Borrowers from that evidenced to the Lenders prior to the date of this
Agreement; or
(ee) Not listed: the Guarantor ceases to be listed in AMEX or any other
organized stock exchange in the United States; or
(ff) ISM Code and ISPS Code: for any reason whatsoever the provisions of
Clause 8.4(n) are not complied with and/or any of the Vessels ceases
to comply with the ISM Code and/or the ISPS Code; or
(gg) Other events of default: any event of default (howsoever described)
specified in any of the Security Documents.
10.2 Consequences of Default - Acceleration The Agent may, and if so requested
by the Majority Lenders, without prejudice to any other rights of the
Creditors (which will continue to be in force concurrently with the
following), at any time after the happening of an Event of Default:
(a) by notice to the Borrowers declare that the obligation of each lender
to make its Commitment (or any part thereof) available shall be
terminated, whereupon the Total Commitment shall be reduced to zero
forthwith; and/or
(b) by notice to the Borrowers declare that the Loan and all interest and
commitment commission accrued and all other sums payable under the
Security Documents have become due and payable, whereupon the same
shall, immediately or in accordance with the terms of such notice,
become due and payable without any further diligence, presentment,
demand of payment, protest or notice or any other procedure from the
Agent and/or the other Creditors which are expressly waived by each of
the Borrowers; and/or
(c) put into force and exercise all or any of the rights, powers and
remedies possessed by it under this Agreement and/or under any
Guarantee and/or any other Security Document and/or as mortgagee of
the Vessels, mortgagee, chargee or assignee or as the beneficiary of
any other property right or any other security (as the case may be) of
the assets charged or assigned to it under the Security Documents or
otherwise (whether at law, by virtue of any of the Security Documents
or otherwise).
10.3 Multiple notices; action without notice The Agent may serve notices under
Clause 10.2(a) and (b) simultaneously or on different dates and it may take
any action referred to in that Clause if no such notice is served or
simultaneously with or at any time after service of both or either of such
notices.
10.4 Demand basis if, pursuant to Clause 10.2(b), the Agent declares the Loan to
be due and payable on demand, the Agent may (and if so requested by the
Majority Lenders) by written notice to the Borrowers (a) call for repayment
of the Loan on such date as may be specified whereupon the Loan shall
become due and payable on the date so specified together with all interest
and commitment commission accrued and all other sums payable under this
Agreement or (b) withdraw such declaration with effect from the date
specified in such notice.
10.5 Proof of Default It is agreed that (a) the non-payment of any sum of money
in time will be proved conclusively by mere passage of time and (b) the
occurrence of this (non payment) shall be proved conclusively by a mere
written statement of the Agent (save for manifest error).
10.6 Exclusion of Creditors liability Neither the Creditors nor any receiver or
manager appointed by the Agent, shall have any liability to the Borrowers
or a Security Party:
(a) for any loss caused by an exercise of rights under, or enforcement of
an Encumbrance created by, a Security Document or by any failure or
delay to exercise such a right or to enforce such an Encumbrance; 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 an Encumbrance or for any reduction (however caused)
in the value of such an asset,
except that this does not exempt the Creditors or a receiver or manager
from liability for losses shown to have been caused by the willful
misconduct of such Creditor's own officers and employees or (as the case
may be) such receiver's or manager's own partners or employees.
11. INDEMNITIES
11.1 Miscellaneous indemnities The Borrowers shall on demand indemnity each
Creditor, without prejudice to any of the Creditors' other rights under any
of the Security Documents, against any loss (including loss of Margin) or
expense which the Agent shall certify as sustained or incurred by it as a
consequence of:
(a) any default in payment by the Borrowers and the Guarantor (or any of
them) of any sum under any of the Security Documents when due; and/or
(b) the occurrence of any other Event of Default; and/or
(c) any prepayment of the Loan or part thereof being made under Clause
4.3, 8.2(a) or 12.1, or any other repayment of the Loan or part
thereof being made otherwise than on an Interest Payment Date relating
to the part of the Loan prepaid or repaid; and/or
(d) any Advance not being advanced for any reason (excluding any default
by the Lenders) after the relevant Drawdown Notice subject to the
terms of Clause 2.9(h)(iii) in relation thereto has been given;
including in any such case, but not limited to, any loss or expense
sustained or incurred in maintaining or funding the Loan or any part
thereof or in liquidating or re-employing deposits from third parties
acquired to effect or maintain the Loan or any part thereof.
11.2 Currency indemnity If any sum due from any of the Borrowers under any of
the Security Documents or any order or judgment given or made in relation
thereto has to be converted from the currency (the "first currency") in
which the same is payable under the relevant Security Document or under
such order or judgment into another currency (the "second currency") for
the purpose of (a) making or filling a claim or proof against the Borrowers
or any of them, (b) obtaining an order or judgment in any court or other
tribunal or (c) enforcing any order or judgment given or made in relation
to any of the Security Documents, the Borrowers shall indemnify and hold
harmless the Lenders from and against any loss suffered as a result of any
difference between (i) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (ii) the rate or rates of exchange at which the Lenders may in
the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in
part, of any such order, judgment, claim or proof. Any amount due from the
Borrowers or any of them under this Clause 11.2 shall be due as a separate
debt and shall not be affected by judgment being obtained for any other
sums due under or in respect of any of the Security Documents and the term
"rate of exchange" includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency.
11.3 Environmental indemnity The Borrowers shall indemnify the Lenders on demand
and hold the Lenders harmless from and against all costs, expenses,
payments, charges, losses, demands, liabilities, actions, proceedings
(whether civil or criminal), penalties, fines, damages, judgements, orders,
sanctions or other outgoings of whatever nature which may be suffered,
incurred or paid by, or made or asserted against the Lenders at any time,
whether before or after the repayment in full of principal and interest
under this Agreement, relating to, or arising directly or indirectly in any
manner or for any cause or reason whatsoever out of an Environmental Claim
made or asserted against the Lenders if such Environmental Claim would not
have been, or been capable of being, made or asserted against the Lenders
if it had not entered into any of the Security Documents and/or exercised
any of its rights, powers and discretion thereby conferred and/or performed
any of its obligations thereunder and/or been involved in any of the
transactions contemplated by the Security Documents.
12. UNLAWFULNESS AND INCREASED COSTS
12.1 Unlawfulness If any change in, or introduction of, any law, regulation or
regulatory requirement or any directive or request of any central bank,
monetary, regulatory or other authority or any order of any court renders
it unlawful or contrary to any such regulation, requirement, request or
order for any Lender to advance its Commitment or to maintain or fund its
Contribution, notice shall be given promptly by the Agent to the Borrowers
whereupon the Total Commitment shall be reduced to zero and the Borrowers
shall be obliged to prepay the Loan in accordance with such notice,
together with accrued interest thereon to the date of prepayment and all
other sums payable by the Borrowers under this Agreement.
12.2 Increased costs If the result of any change in, or in the interpretation or
application of, or the introduction of, any law or any regulation,
directive, request or requirement (whether or not having the force of law,
but, if not having the force of law, with which any Lender or, as the case
may be, its holding company habitually complies), including (without
limitation) those relating to Taxation, stock or capital adequacy, any type
of liquidity, reserve assets, cash ratio deposits and special deposits or
other banking or monetary controls or requirements which affects the manner
in which a Lender allocates capital resources to its obligations hereunder,
and those (including, but not limited to, "Basle II") which shall replace,
amend and/or supplement the provisions set out in the statement (as in
effect as of the date of this Agreement) of the Basle I committee on
banking supervision dated July 1988 and entitled "international convergence
of capital measurement and capital structures" or any amendatory or
substitute agreement thereof, is to:
(a) subject such Lender to Taxes or change the basis of Taxation of such
Lender with respect to any payment under any of the Security Documents
(other than Taxes or Taxation on the overall net income, profits or
gains of such Lender imposed in the jurisdiction in which its
principal or lending office under this Agreement is located); and/or
(b) increase the cost to, or impose an additional cost on, such Lender or
its holding company in making or keeping available or funding or
maintaining its Commitment or its Contribution or being a party to
this Agreement; and/or
(c) reduce the amount of any payment or the effective return to such
Lender under any of the Security Documents; and/or
(d) reduce such Lender's or its holding company's rate of return on its
overall capital by reason of a change in the manner in which it is
required to allocate capital resources to such Lender's obligations
under any of the Security Documents; and/or
(e) require such Lender or its holding company to make a payment or forgo
a return on or calculated by reference to any amount received or
receivable by such Lender under any of the Security Documents; and/or
(f) require such Lender or its holding company to incur or sustain a loss
(including a loss of future potential profits) by reason of being
obliged to deduct all or part of its Commitment or the Loan from its
capital for regulatory purposes,
then and in each such case (subject to Clause 12.3):
(i) such Lender shall notify the Agent (with reasonable supporting
information from such Xxxxxx) and the Agent shall notify the
Borrowers in writing of such event promptly upon its becoming
aware of the same; and
(ii) the Agent (acting on the instructions of the Majority Lenders)
shall negotiate with the Borrowers in good faith with a view to
restructuring the transaction constituted by the Security
Documents in a way which will satisfactorily avoid either the
unlawfulness or increased costs concerned (each as the case may
be) without either decreasing the amounts or net returns due to
such Lender under the Security Documents or which would, but for
such unlawfulness or such increased costs (each as the case may
be), have been so due, or otherwise adversely affecting the
rights, interests and security of such Lender under the
transaction as presently constituted and will not increase the
cost to the Borrowers of or otherwise adversely affect the
rights, and interests of the Borrowers under the transactions
(and unless the Agent nominates a longer period (which it shall
be at liberty to do), such negotiations shall continue for a
period of thirty (30) days after the Borrowers have been given
notice under Clause 12.2(i) or for such lesser period as is
permitted under applicable law having regard to either the
unlawfulness or the increased costs concerned (such period called
the "Negotiation Period"); and
(iii) if at the end of the Negotiation Period the Agent (acting on the
instructions of the Majority Lenders) and the Borrowers have not
reached agreement on a restructuring of the transaction on the
basis described in sub-Clause (ii) above then the Borrowers shall
on demand, made at any time after expiry of the Negotiation
Period whether or not the Loan has been repaid, pay to the Agent
for the account of such Lender the amount which the Agent
specifies (in a certificate (which shall be conclusive in the
absence of manifest error) setting forth the basis of the
computation of such amount but not including any matters which
such Lender regards as confidential in relation to its funding
arrangements) is required to compensate such Lender for such
alternative funding, increased cost, reduction, payment or
forgone return.
For the proposes of this Clause 12.2 "holding company" means, in
relation to a Lender, the company or entity (if any) within the
consolidated supervision of which such Lender is included.
12.3 Claim for increased cost The Agent will promptly notify the Borrowers of
any intention to claim indemnification pursuant to Clause 12.2 and such
notification will be a conclusive and full evidence binding on the
Borrowers as to the amount of any increased cost or reduction and the
method of calculating the same. A claim under Clause 12.2 may be made at
any time and must be discharged by the Borrowers within three (3) days of
demand. It shall not be a defence to a claim by a Lender under this Clause
12.2 that any increased cost or reduction could have been avoided by such
Lender. Any amount due from the Borrowers under Clause 12.2 shall be due as
a separate debt and shall not be affected by judgment being obtained for
any other sums due under or in respect of this Agreement.
12.4 Exception Nothing in Clause 12.2 shall entitle a Lender to receive any
amount in respect of compensation for any such liability to Taxes,
increased or additional cost, reduction, payment, foregone return or loss
to the extent that the same is the subject of an additional payment under
Clause 6.6.
13. APPLICATION, SECURITY AND SET-OFF - ACCOUNTS
13.1 Application of moneys All moneys received by the Agent and/or Lenders under
or pursuant to any of the Security Documents and expressed to be applicable
in accordance with the provisions of this Clause 13.1 shall be applied in
the following manner:
(a) first in or toward payment of all unpaid fees, commissions and
Expenses which may be owing to the Creditors under any of the Security
Documents;
(b) secondly in or towards payment of any arrears of interest owing in
respect of the Loan or any part thereof;
(c) thirdly in or towards repayment of the Loan (whether the same is due
and payable or not);
(d) fourthly in or towards payment to the Lenders for any loss suffered by
reason of any such payment in respect of principal not being effected
on an Interest Payment Date relating to the part of the Loan repaid
and which amounts are so payable under this Agreement;
(e) fifthly in or towards payment to the Lenders of any other sums owing
to it under any of the Security Documents; and
(f) sixthly the surplus (if any) shall be paid to the Borrowers or to
whomsoever else may be entitled to receive such surplus.
13.2 Securities As security for the due and punctual repayment of the Loan and
payment of interest thereon as provided in this Agreement and of all other
Outstanding Indebtedness, the Borrowers shall ensure and procure that the
following Security Documents are duly executed and, where required,
registered in favour of the Lenders in form and substance satisfactory to
the Agent at the time specified herein or otherwise as required by the
Agent and ensure that such security consists of, on the relevant Drawdown
Date (as provided in this Agreement), of:
(a) each of the Mortgages duly registered over the relevant Vessel through
the Registry;
(b) the General Assignments and the notices of assignment in respect
thereto;
(c) the Guarantee;
(d) the Accounts Pledge Agreement;
(e) any Charterparty Assignments and any Charterparty Assignments
Acknowledgements and Confirmations; and
(f) the Manager's Undertakings.
13.3 Set-off Each of the Borrowers authorises each Lender (without prejudice to
any of the Lenders' (or any of them) rights at law, in equity or otherwise)
at any time and without notice to the Borrowers:
(a) to apply any credit balance to which any of the Borrowers is then
entitled standing upon any account of any of the Borrowers with any
branch of such Lender in or towards satisfaction of any sum due and
payable from the Borrowers or any of them to the Lenders under any of
the Security Documents;
(b) in the name of the Borrowers or any of them and/or the Lenders to do
all such acts and to execute all such documents as may be necessary or
expedient to effect such application; and
(c) to combine and/or consolidate all or any accounts in the name of the
Borrowers or any of them with such Lender.
For this purpose, each Lender is authorised to purchase with the moneys
standing to the credit of such account such other currencies as may be
necessary to effect such application. Any amount received by a Lender
pursuant to this Clause shall be paid to the Agent for onwards pro-rata
payment to the Lenders. No Lender shall be obliged to exercise any right
given to it by this Clause 13.3. Each Lender shall notify the Borrowers
forthwith upon the exercise or purported exercise of any right of set-off
giving full details in relation thereto.
13.4 Pro-rata payments If at any time the proportion which any Lender (the
"Recovering Lender") has received or recovered (other than from an
Assignee, a Transferee or a sub-participant in such Lender's Contribution
or any other payment of an amount due to the Recovering Lender for its sole
account pursuant to Clauses 3.6, 4.3, 5.1, 6.1, 11.1, 11.2, 12.1 and 12.2)
in respect of its share of any payment to be made for the account of the
Recovering Lender and one or more other Lenders under any of the Security
Documents is greater (the amount of the excess being referred to in this
Clause 13 as the "excess amount") than the proportion of the share of such
payment received or recovered by the Lender receiving or recovering the
smallest or no proportion of its share, then:
(a) within two (2) Banking Days of such receipt or recovery, the
Recovering Lender shall pay to the Agent an amount equal (or
equivalent) to the excess amount;
(b) the Agent shall treat such payment as if it were part of the payment
to be made by the Borrowers and shall distribute same in accordance
with Clause 6.9; and
(c) as between the Borrowers and the Recovering Lender the excess amount
shall be treated as not having been paid but the obligations of the
Borrowers to the other Lender shall, to the extent of the amount so
paid to them, be treated as discharged.
13.5 Each Lender shall forthwith notify the Agent of any such receipt or
recovery by such Lender other than by payment through the Agent. If any
excess amount subsequently has to be wholly or partly refunded by the
Recovering Lender which paid an amount equal thereto to the Agent under (a)
above each Lender to which any part of such amount was distributed shall on
request from the Recovering Lender repay to the Recovering Lender such
Lender's pro-rata share of the amount which has to be refunded by the
Recovering Lender. Each Lender shall on request supply to the Agent such
information as the Agent may from time to time request for the purpose of
this Clause 13.5. Notwithstanding the foregoing provisions of this Clause
13.5, no Recovering Lender shall be obliged to share any excess amount
which it receives or recovers pursuant to legal proceedings taken by it to
recover any sums owing to it under this Agreement with any other party
which has a legal right to, but does not, either join in such proceedings
or commence and diligently pursue separate proceedings to enforce its
rights in the same or another court (unless the proceedings instituted by
the Recovering Lender are instituted by it without prior notice having been
given to such party through the Agent).
13.6 No release For the avoidance of doubt is hereby declared that failure by
any Recovering Lender to comply with the provisions of Clause 13.5 shall
not release any other Recovering Lender from any of its obligations or
liabilities under Clause 13.5.
13.7 No charge The provisions of this Clause 13 shall not, and shall not be
construed so as to, constitute a charge by the Lenders over all or any part
of a sum received or recovered by it in the circumstances mentioned in
Clause 13.3.
13.8 Further assurance Each of the Borrowers undertakes that the Security
Documents shall both at the date of execution and delivery thereof and so
long as any moneys are owing under any of the Security Documents be valid
and binding obligations of the respective parties thereto and rights of the
Lenders enforceable in accordance with their respective terms and that it
will, at its expense, execute, sign, perfect and do, and will procure the
execution, signing, perfecting and doing by each of the other Security
Parties of, any and every such further assurance, document, act or thing as
in the opinion of the Lenders may be necessary or desirable for perfecting
the security contemplated or constituted by the Security Documents.
13.9 Conflicts In the event of any conflict between this Agreement and any of
the other Security Documents, the provisions of this Agreement shall
prevail.
13.10 Earnings Accounts -- Retention Account
(a) Each Borrower shall procure that all moneys payable in respect of the
Earnings of each Vessel owned by it shall be paid to the relevant
Earnings Account free of Encumbrances. Unless and until an Event of
Default shall occur (whereupon the provisions of Clause 13.1 shall be
applicable) no monies shall be withdrawn from the Earnings Accounts
save as hereinafter provided:
(i) first: in payment of any and all sums whatsoever due and payable
to the Creditors (or any of them) hereunder (such sums to be paid
in such order as the Agent may in its sole discretion elect);
(ii) second: during each month of the Security Period (but by no later
than in the case of the first such month, the date falling
fifteen (15) days after the Drawdown Date in respect of the
Advance of the Vessel first to be delivered and, in the case of
each subsequent month, the same date of that month), the
Borrowers shall cause to be transferred from the Earnings
Accounts to the Retention Account of the aggregate amount of the
Earnings received in the Earnings Accounts during the preceding
month:
a) one third (1/3rd) of the amount of the repayment instalment
specified in Clause 4.1 falling due for payment on the next
following Repayment Date; and
b) the relevant fraction of the amount of interest on the Loan
falling due on the next due date for payment of interest
under this Agreement.
The expression "relevant fraction" in relation to an amount of
interest on the Loan falling due for payment means a fraction
(which shall be notified by the Agent to the Borrowers at the
beginning of each Interest Period) where the numerator is always
one and where the denominator shall always be three except in the
case of an Interest Period of less than three months, in which
case the denominator shall be the number of months comprised in
such Interest Period; and
(iii) third: in payment of an amount to the Agent in or towards
payments of any instalments of interest or principal or any other
amounts then payable pursuant to the Security Documents;
(iv) fourth: in payment of the Operating Expenses of the Vessels; and
(v) fifth: any balance shall be released to the Borrowers.
(b) If the aggregate amount of the Earnings of the Vessels received in the
Earnings Accounts is insufficient in any month for the required
transfer to be made from the Earnings Accounts to the Retention
Account in accordance with Clause 13.10(a), the Borrowers shall make
up the amount of such insufficiency on demand from the Agent, but,
without prejudice to Lenders' right to make such demand through the
Agent, the Account Bank (acting on the instructions of the Majority
Lenders) may elect to make up the whole or any part of such
insufficiency by increasing the amount of any transfer to be made in
accordance with Clause 13.10(a)(ii) from the aggregate amount of such
Earnings received in the next or subsequent months.
(c) Until the occurrence of an Event of Default (or an event which, with
the giving of notice and/or lapse of time or other applicable
condition, might constitute an Event of Default), the Account Bank
shall on each Repayment Date and on each due date for the payment of
interest under this Agreement apply in accordance with the provisions
of Clause 6.1 the relevant part of the balance then standing to the
credit of the Retention Account as shall be required to make payment
of the repayment instalment specified in Clause 4.1 then due under the
terms of this Agreement or payment of interest then due under the
terms of this Agreement and such transfer shall constitute a pro rata
satisfaction of the Borrowers' obligations to pay such repayment
instalment or interest (as the case may be) then due under this
Agreement.
(d) Any amounts for the time being standing to the credit of the Retention
Account and the Debt Reserve Account shall bear interest at the rate
from time to time offered by the Account Bank to its customers for
Dollar deposits of similar amounts and for periods similar to those
for which such amounts are likely to remain standing to the credit of
the Retention Account or and the Debt Reserve Account, as the case may
be. Such interest shall, provided that the foregoing provisions of
this Clause 13.10 shall have been complied with and provided that no
Event of Default (or event which, with the giving of notice and/or
lapse of time or other applicable condition, might constitute an Event
of Default) shall have occurred, be released to the Borrowers.
(e) Nothing herein contained shall be deemed to affect the absolute
obligation of the Borrowers to pay interest on and to repay the Loan
as provided in Clauses 3 and 4 or shall constitute a manner or
postponement thereof.
(f) Each of the Borrowers hereby irrevocably authorises the Account Bank
to make from the Earnings Accounts and the Retention Account any and
all above payments and repayments as and when the same fall due or at
any time thereafter. The Account Bank shall advise the Borrowers in
respect of any such payment or repayment.
(g) Each of the Borrowers will comply with any written requirement of the
Account Bank from time to time as to the location or re-location of
the Earnings Accounts and the Retention Account (or any of them) and
will from time to time enter into such documentation as the Agent
(acting on the instructions of the Majority Lenders) may require in
order to create or maintain in favour of the Lenders and the Agent an
Encumbrance in the Earnings Accounts and the Retention Account, all at
cost and expense of the Borrowers.
(h) Each of the Borrowers hereby covenants with the Creditors that the
Earnings Accounts, the Retention Account and any moneys therein shall
not be charged, assigned, transferred or pledged nor shall there be
granted by any Borrower or suffered to arise any third party rights
over or against the whole or any part of the Earnings Accounts and the
Retention Account (or any of them) other than in favour of the Lenders
and the Agent.
(i) Each Earnings Account shall be operated in accordance with the Account
Bank's usual terms and coalitions (full knowledge of which each of the
Borrowers hereby acknowledges) and subject to the Account Bank's usual
charges levied on such accounts and/or transactions conducted on such
accounts (as from time to time notified by the Account Bank to the
Borrowers).
(j) Each of the Borrowers hereby warrants that sufficient monies to meet
the next repayment instalment plus interest thereon wi11 be
accumulated each and every month in the Retention Account.
(k) After the occurrence of an Event of Default the Account Bank shall be
entitled, but not bound, to apply the balance (if any) including any
accrued interest standing to the credit of the Earnings Accounts and
the Retention Account (or any of them) in accordance with the
provisions of Clause 13.1.
(l) Upon payment in full of all principal, interest and all other amounts
due to the Creditors under the terms of this Agreement and the other
Security Documents, any balance then standing to the credit of the
Retention Account and/or the Earnings Accounts shall be released and
paid to the Borrower or to whomsoever else may be entitled to receive
such balance.
14. ASSIGNMENT. TRANSFER AND LENDING OFFICE
14.1 Benefit and burden This Agreement shall be binding upon, and enure for the
benefit of, the Creditors and the Borrowers and their respective
successors.
14.2 No assignment by Borrowers None of the Borrowers and the other Security
Parties shall assign or transfer any of their rights and/or obligations
under this Agreement or any of the other Security Documents or any
documents executed pursuant to this Agreement and/or the other Security
Documents.
14.3 Assignment by Lenders Any Lender may, without the consent of the Security
Parties, at any time assign all or any part of its rights under this
Agreement or under any of the other Security Documents to (a) any party if
an Event of Default has occurred and is continuing (b) any Subsidiary or
holding company of such Lender or to any Subsidiary of any thereof (an
"Assignee") and (c) any other bank or financial institution (an
"Assignee"). The Agent shall give prompt notice to the Borrowers of such
assignment.
14.4 Transfer by Lenders Any Lender (an "Existing Lender") may transfer,
whether by way of assignment or otherwise, all or any part of its rights,
benefits and/or obligations under this Agreement to another person (a
"Transferee"). Such Lender shall notify the Borrowers of its intention to
effect such transfer. In the case of a transfer, such transfer shall be
effected upon not less than five (5) Banking Days' prior notice by
delivery to the Agent of a duly completed Transfer Certificate duly
executed by the Existing Lender and the Transferee, with a copy to the
Borrowers. On the Effective Date (as specified and defined in a Transfer
Certificate so executed and delivered), to the extent that the Commitment
and Contribution of the Existing Lender are expressed (in the case of a
transfer) in a Transfer Certificate to be the subject of the transfer in
favour of the Transferee effected pursuant to this Clause 14.4, by virtue
of the counter-signature of the Transfer Certificate by the Agent (for
itself and the other parties to this Agreement):
(a) the existing parties to this Agreement and the Existing Lender shall
be released from their respective obligations towards one another
under this Agreement ("discharged obligations") and their respective
rights against one another under this Agreement ("discharged rights")
shall be cancelled;
(b) the Transferee party to the relevant Transfer Certificate and the
existing parties to this Agreement (other than such Existing Lender if
the Transfer Certificate relates to the whole of its Commitment and
Contribution) shall assume obligations towards each other which differ
from the discharged obligations only insofar as they are owed to or
assumed by such Transferee instead of, by or against such Existing
Lender;
(c) the Transferee party to the relevant Transfer Certificate and the
existing parties to this Agreement (other than such Existing Lender if
the Transfer Certificate relates to the whole of its Commitment and
Contribution) shall acquire rights against each other which differ
from the discharged rights only insofar as they are exercisable by or
against such Transferee instead of, by or against such Existing
Lender; and
(d) the Agent shall promptly notify the other Lender(s) and the Borrowers
of the receipt by it of any Transfer Certificate and shall promptly
deliver a copy of such Transfer Certificate to the Borrowers.
14.5 Reliance on Transfer Certificate The Agent and the Borrowers shall be
fully entitled to rely on any Transfer Certificate delivered to the Agent
in accordance with the foregoing provisions of this Clause 14 which is
complete and regular on its face as regards its contents and purportedly
signed on behalf of the relevant Existing Lender and the Transferee and
neither the Agent nor the Borrowers (or any of them) shall have any
liability or responsibility to any party as a consequence of placing
reliance on and acting in accordance with any such Transfer Certificate if
it proves to be the case that the same was not authentic or duly
authorised.
14.6 Authorisation of Agent Each party to this Agreement irrevocably authorises
the Agent to countersign each Transfer Certificate on its behalf for the
purposes of Clause 14.5 without any further consent of, or consultation
with, the Borrowers or such party.
14.7 Construction of certain references If any Lender transfers all or any part
of its rights, benefits and obligations as provided in Clause 14.4, all
relevant references in this Agreement to such Lender shall thereafter be
construed as a reference to such Lender and/or its Transferee to the
extent of their respective interests.
14.8 Documenting transfers
(a) If any Lender transfers all or any part of its rights, benefits
and/or obligations as provided in Clause 14.4, each of the Borrowers
undertakes, immediately on being requested to do so by the Agent and
at the cost of the relevant Lender, to enter into, and procure that
the other Security Parties shall enter into, such documents as may
be necessary or desirable to transfer to the Transferee all or the
relevant part of such Lender's interest in the Security Documents
and all relevant references in this Agreement to such Lender shall
thereafter be construed as a reference to such Lender and/or its
Transferee (as the case may be) to the extent of their respective
interests.
(b) If any Lender transfers all or any part of its rights, benefits
and/or obligations as provided in Clause 14.3 each of the Borrowers
hereby undertakes immediately upon being requested to do so by the
Agent and at the cost of such Lender to sign, execute and deliver to
the Assignee or Transferee (as the case may be) an addendum to each
of the Mortgages and/or a new mortgage in such form as the Assignee
or Transferee shall require to the effect and purpose that the
Assignee or Transferee shall become (together with the other
Lender(s) in relation to such Mortgage) a registered mortgagee.
14.9 Lending offices Each Lender shall lend through its office or branch at the
address specified in Schedule 1 or, as the case may be, in any relevant
Transfer Certificate or through any other office or branch of such Lender
selected from time to time by it through which such Lender wishes to lend
for the purposes of this Agreement. If the office or branch through which
a Lender is lending is changed pursuant to this Clause 14.9, such Lender
shall notify the Agent promptly of such change and the Agent shall notify
the Borrowers.
14.10 Transfer Certificate required
No assignment or transfer of any right or obligation of a Lender under the
Finance Document is binding on, or effective in relation to, any Borrower,
the Agent and the other Creditors unless it is effected, evidence or
perfected by a Transfer Certificate.
However, if a Lender enters into any merger, de-merger or other
reorganisation as a result of which all its rights or obligations vest in
another person (the successor), the Agent may, if it sees fit, by notice to
the successor and the Borrowers and the other Creditors waive the need for
the execution and delivery of a Transfer Certificate; and, upon service of
the Agent's notice, the successor shall become a Lender with the same
Commitment and Contribution as were held by the predecessor Lender.
14.11 Disclosure of information
(a) Any Lender may with the consent of the Borrowers (such consent not
to be unreasonably withheld) and the request for which shall be
promptly responded to, disclose (on a confidential basis) to a
prospective assignee, transferee or to any other person who may
propose entering into contractual relations with such Lender in
relation to this Agreement such information about the Borrowers as
such Lender shall consider appropriate.
(b) The Lenders may (with the prior written consent of the Borrowers,
such consent not to be unreasonably withheld and the request for
which shall be promptly responded to) disclose to a prospective
assignee, substitute or transferee or to any other person who may
propose entering into contractual relations with the Lenders in
relation to this Agreement such information about the Borrowers as
the Lenders shall consider appropriate if such Bank first procures
that the relevant prospective assignee, substitute or transferee or
other person (such person together with any prospective assignee,
substitute or transferee being hereinafter described as the
"Prospective Assignee") shall undertake to the Borrowers to keep
secret and confidential and, not without the prior written consent
of the Borrowers, disclose to any third party any of the
information, reports or documents supplied by the Lenders provided
however that the Prospective Assignee shall be entitled to disclose
such information, reports or documents in the following situations:
(i) in relation to any proceedings arising out of this Agreement
or the other Security Documents to the extent considered
necessary by the Prospective Assignee to protect its interest;
or
(ii) pursuant to a court order relating to discovery or otherwise;
or
(iii) pursuant to any law or regulation or to any fiscal, monetary,
tax, governmental or other competent authority; or
(iv) to its auditors, legal or other professional advisers.
(c) In addition the Prospective Assignee shall be entitled (with the
prior written consent of the Borrowers, such consent not to be
unreasonably withheld and the request for which shall be promptly
responded to) to disclose or use any such information, reports or
documents if the information contained therein shall have emanated
in conditions fee from confidentiality, bona fide from some person
other than the Lenders or the Borrowers.
14.12 No additional costs If at the time of, or immediately after, any
assignment by any Lender of all or any part of its rights or benefits
under this Agreement or any transfer by any Lender of any part of the
rights, benefits and/or obligations under this Agreement, the Borrowers
would be obliged to pay to the Assignee or Transferee under Clause 6.6 or
Clause 12.2 any sum in excess of the sum (if any) which it would have
been obliged to pay to the relevant Lender under the relevant clause in
the absence of such assignment, transfer or change, the Borrowers shall
not be obliged to pay that excess.
14.13 Agent's fee The Assigns or Transferee will pay to the Agent a fee in the
amount of $1,000 (Dollars one thousand) in connection with the relevant
assignment or transfer.
14.14 Transfer costs If any Lender transfers all or any part of its rights,
benefits and obligations under the Security Documents, the Transferee
shall pay to the Agent on demand all costs, fees and expenses (including
but not limited to, legal fees and expenses) and any value added tax
thereon, verified by the Agent as having been incurred by it in connection
with such transfer.
15. ARRANGERS AND AGENT
15.1 Appointment of the Agent Each Lender irrevocably appoints the Agent as its
agent for the purposes of this Agreement and such of the Security
Documents to which it may be appropriate for the Agent (in its capacity as
Agent) to be party. By virtue of such appointment, each of the Lenders
hereby authorises the Agent (whether or not by or through employees or
agents) to take such action on such Xxxxxx's behalf and to exercise such
rights, remedies, powers and discretions as are specifically delegated to
the Agent by this Agreement and/or any other Security Document, together
with such powers and discretions as are reasonably incidental thereto.
Each Lender inevocably authorises the Agent to join in and execute each
such Security Document previously referred to in this Clause 15.1 in its
capacity as Agent.
15.2 Agent's actions Any action taken by the Agent under or in relation to this
Agreement or any of the other Security Documents and/or with requisite
authority, or on the basis of appropriate instructions, received from the
Majority Lenders (or as otherwise duly authorised) shall be binding on all
the Lenders.
15.3 Agent's duties The Agent shall:
(a) promptly notify each Lender of the contents of each notice,
certificate or other document received by the Agent from the
Borrowers under or pursuant to Clauses 8.1(a), 8.1(e), 8.I(f) and
16.1 and upon the request of any Lender any other document it may
reasonably require; and
(b) (subject to the other provisions of this Clause 15) take such action
or, as the case may be, refrain from taking such action with respect
to the exercise of any of its rights, remedies, powers and
discretion as agent, as the Majority Lenders may reasonably direct.
15.4 Agent's rights The Agent may:
(a) in the exercise of any right, remedy, power or discretion in
relation to any matter, or in any context, not expressly provided
for by this Agreement or any of the other Security Documents, act
or, as the case may be, refrain from acting in accordance with the
instructions of the Majority Lenders, and shall be fully protected
in so doing;
(b) unless and until it shall have received directions from the Majority
Lenders, take such action or, as the case may be, refrain from
taking such action or, as the case may be, refrain from taking such
action in respect of a Default of which the Agent has actual
knowledge as it shall deem advisable in the best interests of the
Lenders (but shall not be obliged to do so);
(c) refrain from acting in accordance with the instructions of the
Majority Lenders to institute legal proceedings arising out of or in
connection with this Agreement or any of the other Security
Documents until it has been indemnified and/or secured to its
satisfaction against any and all costs, expenses or liabilities
(including legal fees) which it would or might incur as a result;
(d) deem and treat (i) each Lender as the person entitled to the benefit
of the Contribution of such Lender for all purposes of this
Agreement unless and until a Transfer Certificate shall have been
filed with the Agent and shall have become effective, and (ii) the
office or branch set opposite the name of each Lender in Schedule 1
or, as the case may be, in any relevant Transfer Certificate as such
Lender's lending office unless and until a written notice of change
of lending office shall have been received by the Agent and the
Agent may act upon any such notice unless and until the same is
superseded by a further such notice;
(e) rely as to matters of fact which might reasonably be expected to be
within the knowledge of any Security Party upon a certificate signed
by any director or officer of the relevant Security Party on behalf
of the relevant Security Party; and
(f) do anything which is in its opinion necessary or desirable to comply
with any applicable law or regulation in any jurisdiction.
15.5 No liability of Arrangers and Agent None of the Arrangers, the Agent or
any of their respective employees and agents shall:
(a) be obliged to make any enquiry as to the use of any of the Loan
proceeds unless (in the case of the Agent) so required in writing by
any Lender, in which case the Agent shall promptly make the
appropriate request to the Borrowers; or
(b) be obliged to make any enquiry as to any breach or default by the
Borrowers (or any of them) or any other Security Party in the
performance or observance of any of the provisions of this Agreement
or any of the other Security Documents or as to the existence of a
Default unless (in the case of the Agent) the Agent has actual
knowledge thereof or has been notified in writing thereof by a
Lender, in which case the Agent shall promptly notify the Lenders of
the relevant event or circumstances; or
(c) be obliged to enquire whether or not any representation or warranty
made by the Borrowers (or any of them) or any other Security Party
pursuant to this Agreement or any of the other Security Documents is
true; or
(d) be obliged to do anything (including, without limitation, disclosing
any document or information) which would, or might in its opinion,
be contrary to any law or regulation or be a breach of any duty of
confidentiality or otherwise be actionable or render it liable to
any person; or
(e) be obliged to account to any Lender for any sum or the profit
element of any sum received by it for its own account; or
(f) be obliged to institute any legal proceedings arising out of or in
connection with this Agreement or any of the other Security
Documents other than on the instructions of the Majority Lenders; or
(g) be liable to any Lender for any action taken or omitted under or in
connection with this Agreement or any of the other Security
Documents or the Loan unless caused by its gross negligence or
willful misconduct.
For the purpose of this Clause 15, the Agent shall not be treated as
having actual knowledge of any matter of which the corporate finance or
any other division outside the agency or loan administration department of
the person for the time being acting as the Agent may become aware in the
context of corporate finance, advisory or lending activities from time to
time undertaken by the Agent for any Security Party or any other person
which may be a trade competitor of any Security Party or may otherwise
have commercial interests similar to those of any Security Party.
15.6 Non-reliance on Arrangers or Agent Each Lender acknowledges that it has
not relied on any statement, opinion, forecast or other representation
made by the Arrangers (or either of them) or the Agent to induce it to
enter into this Agreement or any of the other Security Documents and that
it has made and will continue to make, without reliance on the Agent or
the Arrangers and based on such documents as it considers appropriate, its
own appraisal of the creditworthiness of the Security Parties and its own
independent investigation of the financial condition, prospects and
affairs of the Security Parties in connection with the making and
continuation of the Loan under this Agreement. Neither the Arrangers nor
the Agent shall have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other
information with respect to any Security Party whether coming into its
possession before the advancing of the Loan or at any time or times
thereafter, other than (in the case of the Agent) as provided in Clause
15.3.
15.7 No responsibility on Arrangers or Agent for Xxxxxxxxx' performance Neither
the Arrangers nor the Agent shall have any responsibility or liability to
any Lender;
(a) on account of the failure of any Security Party to perform its
obligations under any of the Security Documents; or
(b) for the financial condition of any Security Party; or
(c) for the completeness or accuracy of any statements, representations
or warranties in any of the Security Documents or any document
delivered under any of the Security Documents; or
(d) for the execution, effectiveness, adequacy, genuineness, validity,
enforceability or admissibility in evidence of any of the Security
Documents or of any certificate, report or other document executed
or delivered under any of the Security Documents; or
(e) to investigate or make any enquiry into the title of the Borrowers
or any other Security Party to the Vessels or any other security or
any part thereof; or
(f) for the failure to register any of the Security Documents with any
official or regulatory body or office or elsewhere; or
(g) for taking or omitting to take any other action under or in relation
to any of the Security Documents or any aspect of any of the
Security Documents; or
(h) on account of the failure of (in the case of the Arrangers (or
either of them)) the Agent to perform or discharge any of their/its
duties or obligations under the Security Documents; or (a)
(i) otherwise in connection with the Loan or its negotiation or for
acting (or, as the case may be, refraining from acting) in
accordance with the instructions of the Majority Lenders.
15.8 Reliance on documents and professional advice Each of the Arrangers and
the Agent shall be entitled to rely on any communication, instrument or
document believed by it to be genuine and correct and to have been signed
or sent by the proper person and shall be entitled to rely as to legal or
other professional matters on opinions and statements of any legal or
other professional advisers selected or approved by it (including those in
the Agent's employment).
15.9 Other dealings Each of the Arrangers and the Agent may, without any
liability to account to the Lenders, accept deposits from lend money to,
and generally engage in any kind of banking or other business with, and
provide advisory or other services to, any Security Xxxxx or any of the
Lenders as if it were not the Arrangers or the Agent as the case may be.
15.10 Rights of Agent as Lender, no partnership With respect to its own
Commitment and Contribution (if any) the Agent shall have the same rights
and powers under the Security Documents as any other Lender and may
exercise the same as though it were not performing the duties and
functions delegated to it under this Agreement and the term "Lenders"
shall, unless the context clearly otherwise indicates, include the Agent
in its individual capacity as a Lender. This Agreement shall not and shall
not be construed so as to constitute a partnership between the parties or
any of them.
15.11 Amendments; waivers
(a) subject to Clause 15.11(b), the Agent may, with the written consent
of the Majority Lenders (or if and to the extent expressly
authorised by the other provisions of any of the Security Documents)
and, if so instructed by the Majority Lenders, shall;
(i) agree amendments or modification to any of the Security
Documents with any Security Party; and/or
(ii) waive breaches of, or defaults under, or otherwise execute
performance of, any provision of any of the other Security
Documents by any Security Party.
Any such action so authorised and effected by the Agent shall be
documented in such manner as the Agent shall (with the approval of
the Majority Lenders) determine, shall be promptly notified to the
Lenders by the Agent and (without prejudice to the generality of
Clause 15.2) shall be binding on all the Lenders.
(b) Except with the prior written consent of all the Lenders, the Agent
shall not have authority on behalf of the Lenders to agree with any
Security Party any amendment or modification to any of the Security
Documents or to grant waivers in respect of broaches or defaults or
to vary or excuse performance of or under any of the Security
Documents by any Security Party, if the effect of such amendment,
modification, waiver or excuse would be to:
(i) reduce the Margin;
(ii) postpone the due date or reduce the amount of any payment of
principal, interest, commitment commission or other amount
payable by any Security Party under any of the Security
Documents;
(iii) change the currency in which any amount is payable by any
Security Party under any of the Security Documents;
(iv) increase any Lender's Commitment;
(v) extend any Final Availability Date;
(vi) the definition of "Majority Lenders" in Clause 1.2;
(vii) change any provision of any of the Security Documents which
expressly or impliedly requires the approval or consent of all of
the Lenders such that the relevant approval or consent may be
given otherwise than with the sanction of all of the Lenders;
(viii) change the order of distribution under Clause 13.1 (application
of moneys);
(ix) change this Clause 15.11 or any definition referred to in this
Clause 15.11; or
(x) release any Security Party from the security constituted by any
Security Documents (except as required by the terms thereof or by
law) or change the terms and conditions upon which such security
or guarantee may, or is required to be, released.
15.12 Reimbursement and indemnity by Lenders Each Lender shall reimburse the
Agent (rateably in accordance with such Xxxxxx's Commitment or
Contribution), to the extent that the Agent is not reimbursed by the
Borrowers, for the costs, charges and expenses incurred by the Agent which
are expressed to be payable by the Borrowers under Clause 5.3 including
(in each case) the fees and expenses of legal or other professional
advisers. Each Lender shall on demand indemnify the Agent (rateably in
accordance with its Commitment or Contribution) against all liabilities,
damages, costs and claims whatsoever incurred by the Agent in connection
with any of the Security Documents or the performance of its duties under
any of the Security Documents, unless such liabilities, damages, costs or
claims arise from the Agent's own gross negligence or willful misconduct.
15.13 Retirement of Agent
(a) The Agent may (having given to the Borrowers and each of the Lenders
not less than 30 days' notice of its intention to do so) retire from
its appointment as Agent under this Agreement, provided that no such
retirement shall take effect unless there has been appointed by the
Lenders as a successor agent:
(i) a Lender nominated within a period of 28 days by the Majority
Lenders or, failing such a nomination,
(ii) any reputable and experienced bank or financial institution
nominated by the Agent.
Any corporation into which the Agent may be merged or converted or
any corporation with which the Agent may be consolidated or any
corporation resulting from any merger, conversion, amalgamation,
consolidation or other reorganisation to which the agent shall be a
party shall, to the extent permitted by applicable law, be the
successor Agent under this Agreement and the other Security
Documents without the execution or filing of any document or any
further act on the part of any of the parties to this Agreement and
the other Security Documents save that written proof of any such
merger, conversion, amalgamation, consolidation or other
reorganisation shall forthwith be provided to each Security Party
and the Lenders. Prior to any such successor being appointed, the
Agent agrees to consult with the Borrowers as to the identity of the
proposed successor and to take account of any reasonable objections
which the Borrowers (or any of them) may raise to such successor
being appointed.
15.14 Upon any such successor as aforesaid being appointed, the retiring Agent
shall be discharged from any further obligation under the Security
Documents (but shall continue to have the benefit of this Clause 15 in
respect of any action it has taken or refrained from taking prior to such
discharge) and its successor and each of the other parties to this
Agreement shall have the same rights and obligations among themselves as
they would have had if such successor had been a party to this Agreement
in place of the retiring Agent. The retiring Agent shall (at the expense
of the Borrowers) provide its successor with copies of such of its records
as its successor reasonably requires to carry out its functions under the
Security Document.
16. NOTICES AND OTHER MATTERS
16.1 Notices Every notice, request, demand or other communication under this
Agreement or (unless otherwise provided therein) under any of the other
Security Documents shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or facsimile transmission or other means of
telecommunication in permanent written form;
(b) be deemed to have been received, subject as otherwise provided in the
relevant Security Document, in the case of a letter, when delivered
personally or five (5) days after it has been put in to the post and,
in the case of a facsimile transmission or other means of
telecommunication in permanent written form, at the time of dispatch
(provided that if the date of dispatch is not a business day in the
country of the addressee or if the time of dispatch is after the close
of business in the country of the addressee it shall be deemed to have
been received at the opening of business on the next such business
day); and
(c) be sent:
(i) to the Borrowers at:
c/o Maryville Maritime Inc.,
00 Xxxx Xxxxxxx, 000 00
Xxxxxxx, Xxxxxx
Fax No.: +30210 0000000
Attention: Chief Financial Officer
(ii) to the Creditors at:
c/o ABN AMRO Bank N. V.
330 El. Venizelou Xxxxxx
Xxxxxxxxx, XX 000 00
Xxxxxx, Xxxxxx
Fax No.: +30210 0000000
Attention: Credit Administration
16.2 Notices through the Agent Every notice, request, demand or other
communication under this Agreement to be given by the Borrowers (or any of
them) to any other party shall be given to the Agent for onward
transmission as appropriate and to be given to the Borrowers (or any of
them) shall (except otherwise provided in the security documents) be given
to the Agent.
16.3 No implied waivers, remedies cumulative No failure, delay or omission by
the Lenders to exercise any right, remedy or power vested in the Lenders
under this Agreement and/or the other Security Documents or by law shall
impair such right or power, or be construed as a waiver of, or as an
acquiescence in any default by the Borrowers (or any of them) and/or the
Guarantor, nor shall any single or partial exercise by the Lenders of any
power, right or remedy preclude any other or further exercise thereof or
the exercise of any other power, right or remedy. In the event of the
Lenders on any occasion agreeing to waive any such right, remedy or power,
or consent to any departure from the strict application of the provisions
of this Agreement or of any Security Document, such waiver shall not in
any way prejudice or affect the powers conferred upon the Lenders under
this Agreement and the other Security Documents or the right of the
Lenders thereafter to act strictly in accordance with the terms of this
Agreement and the other Security Documents. No modification or waiver by
the Lenders of any provision of this Agreement or of any of the other
Security Documents nor any consent by the Lenders to any departure
therefrom by any Security Party shall be effective unless the same shall
be in writing and then shall only be effective in the specific case and
for the specific purpose for which given. No notice to or demand on any
such party in any such case shall entitle such party to any other or
further notice or demand in similar or other circumstances. The rights and
remedies of the Lenders contained in this Agreement and the other Security
Documents are cumulative and not exclusive of each other nor of any other
rights or remedies conferred by law.
16.4 English language All certificates, instruments and other documents to be
delivered under or supplied in connection with any of the Security
Documents shall be in the English language or shall be accompanied by a
certified English translation upon which the Lenders shall be entitled to
rely.
16.5 Joint and Several Liability
(a) Joint and several Notwithstanding anything to the contrary contained
in any of the Security Documents, the agreements, obligations and
liabilities of the Borrowers herein contained are joint and several
and shall be construed accordingly. Each of the Borrowers agrees and
consents to be bound by the Security Documents to which it is, or is
to be, a party notwithstanding that the other Borrowers (or any of
them) which is intended to sign or to be bound may not do so or be
effectually bound and notwithstanding that any of the Security
Documents may be invalid or unenforceable against the other Borrowers
(or any of them), whether or not the deficiency is known to the
Lenders.
(b) Borrowers as principal debtors Each Borrower acknowledges and confirms
that it is a principal and original debtor in respect of all amounts
which may become payable by the Borrowers in accordance with the terms
of this Agreement or any of the other Security Documents and agrees
that the Lenders may also continue to treat it as such, whether or not
the Lenders are or becomes aware that such Borrower is or has become a
surety for the other Borrowers (or any of them).
(c) Indemnity The Borrowers hereby agree jointly and severally to keep the
Lenders fully indemnified on demand against all damages, losses, costs
and expenses arising from failure of any of the Borrowers to perform
or discharge any purported obligation or liability of a Borrower which
would have been the subject of this Agreement had it been valid and
enforceable and which is not or ceases to be valid and enforceable
against a Borrower on any ground whatsoever, whether or not known to
the Lenders (including, without limitation, any irregular exercise or
absence of any corporate power or lack of authority of, or breach of
duty by, any person purporting to act on behalf of a Borrower (or any
legal or other limitation, whether under the Limitation Acts or
otherwise or any disability or death, bankruptcy, unsoundness of mind,
insolvency, liquidation, dissolution, winding up, administration,
receivership, amalgamation, reconstruction or any other incapacity of
any person whatsoever (including, in the case of a partnership, a
termination or change in the composition of the partnership) or any
change of name or style or constitution of any Security party)).
(d) Liability unconditional None of the obligations or liabilities of the
Borrowers under this Agreement or any other Security Document shall be
discharged or reduced by reason of:
(i) the death, bankruptcy, unsoundness of mind, insolvency,
liquidation, dissolution, winding-up, administration,
receivership, amalgamation, reconstruction or other incapacity of
any person whatsoever (including, in the case of a partnership, a
termination or change in the composition of the partnership) or
any change of name or style or constitution of a Borrower or any
other person liable;
(ii) the Lenders granting any time, indulgence or concession to, or
compounding with, discharging, releasing or varying the liability
of, a Borrower or any other person liable or renewing,
determining, varying or increasing any accommodation, facility or
transaction or otherwise dealing with the same in any manner
whatsoever or concurring in, accepting, varying any compromise,
arrangement or settlement or omitting to claim or enforce payment
from a Borrower or any other person liable; or
(iii) anything done or omitted which but for this provision might
operate to exonerate the Borrowers or any of them.
(e) Recourse to other security The Lenders shall not be obliged to make
any claim or demand or to resort to any Security Document or other
means of payment now or hereafter held by or available to it for
enforcing this Agreement or any of the Security Documents against a
Borrower or any other person liable and no action taken or omitted by
the lenders in connection with any such Security Document or other
means of payment will discharge, reduce, prejudice or affect the
liability of the Borrowers (or any of them) under this Agreement and
the Security Documents to which any of them is, or is to be, a Party.
(f) Waiver of Borrowers' rights Each Borrower agrees with the Lenders
that, from the date of this Agreement and so long as any moneys are
owing under the any of the Security Documents and while all or any
part of the Facility remains outstanding, it will not, without the
prior written consent of the Lenders:
(i) exercise any right of subrogation, reimbursement and indemnity
against the other Borrowers (or any of them) or any other person
liable;
(ii) demand or accept repayment in whole or in part of any
Indebtedness now or hereafter due to such Borrower from the other
Borrowers (or any of them) or from any other person liable or
demand or accept any guarantee, indemnity or other assurance
against financial loss or any document or instrument created or
evidencing an Encumbrance in respect of the same or dispose of
the same;
(iii) take any steps to enforce any right against the other Borrowers
(or any of them) or any other person liable in respect of any
such moneys; or
(iv) claim any set-off or counterclaim against the other Borrowers (or
any of them) or any other person liable or claiming or proving in
competition with the Lenders in the liquidation of the other
Borrowers (or any of them) or any other person liable or have the
benefit of or share in, any payment from or composition with, the
other Borrowers (or any of them) or any other person liable or
any other Security Document now or hereafter held by the Lenders
for any moneys owing under this Agreement or for the obligations
or liabilities of any other person liable but so that, if so
directed by the Lenders, it will prove for the whole or any part
of its claim in the liquidation of the other Borrowers (or any of
them) or other person liable on terms that the benefit of such
proof and all money received by it in respect thereof shall be
held on trust for the Lenders and applied in or towards discharge
of any moneys owing under this Agreement in such manner as the
Lenders shall deem appropriate.
16.6 Further assurance Each Borrower undertakes that the Security Documents
shall both at the date of execution and delivery thereof and so long as
any moneys are owing under any of the Security Documents be valid and
binding obligations of the respective parties thereto and rights of the
Lenders enforceable in accordance with their respective terms and that it
will, at its expense, execute, sign, perfect and do any and every such
further assurance, document, act or thing as in the opinion of the Lenders
may be necessary or desirable for perfecting the security contemplated or
constituted by the Security Documents.
16.7 Integration of Terms This Agreement contains the entire agreement of the
parties and its provisions supersede the provisions of the commitment
letter dated 20th December, 2004 addressed by the Arrangers to the
Guarantor (save for the provisions thereof which relate to fees) any and
all other prior correspondence and oral negotiation by the parties in
respect of the matters regulated by this Agreement.
16.8 Amendments This Agreement and any other Security Documents shall not be
amended or varied in their respective terms by any oral agreement or
representation or in any other manner other than by an instrument in
writing of even date herewith or subsequent hereto executed by or on
behalf of the parties hereto or thereto.
16.9 Invalidity of Terms In the event of any provision contained in one or more
of this Agreement, the other Security Documents and any other documents
executed pursuant hereto or thereto being invalid, illegal or
unenforceable in any respect under any applicable law in any jurisdiction
whatsoever, such provision shall be ineffective as to the jurisdiction
only without affecting the remaining provisions hereof or thereof. If
however, this event becomes known to the Lenders prior to the drawdown of
any Advance (or any part thereof) the Lenders shall be entitled to refuse
drawdown until this discrepancy is remedied. In case that the invalidity
of a part results in the invalidity of the whole agreement, it is hereby
agreed that there will exist a separate obligation of the Borrowers for
the prompt payment to the Lenders of all the Outstanding Indebtedness.
Where, however, the provisions of any such applicable law may be waived,
they are hereby waived by the parties hereto to the full extent permitted
by the law to the intent that this Agreement, the other Security Documents
and any other documents executed pursuant hereto or thereto shall be
deemed to be valid binding and enforceable in accordance with their
respective terms.
16.10 Conflicts In the event of any conflict or inconsistency between this
Agreement and any of the other Security Documents, the provisions of this
Agreement shall prevail.
16.11 Confidentiality
(a) Each of the parties hereto agrees and undertakes to keep
confidential any documentation and any confidential information
concerning the business, affairs, directors or employees of the
other which comes into its possession during this Agreement and not
to use any such documentation, information for any purpose other
than for which it was provided.
(b) Each of the Borrowers acknowledges and accepts that the Creditors
may disclose information and deliver documentation relating to the
Borrowers (or any of them) and the transactions and matters in
relation to this Agreement and/or the other Security Documents to:
(i) governmental or regulatory agencies and authorities if so
required by law, regulation or regulatory requirement or any other
request of any central bank or any court order; and (ii) auditors,
professional advisors or other persons who in the normal course of
business have access to the documents and affairs of any relative
party.
(c) Each of the Borrowers acknowledges and accepts that in case of
occurrence of any Event of Default the Lenders may disclose
information and deliver documentation relating to the Borrowers (or
any of them) and the transactions and matters in relation to this
Agreement and/or the other Security Documents to third parties to
the extend that this is necessary for the enforcement or the
contemplation of enforcement of the Lenders' rights or for any other
purpose for which in the opinion of the Lenders, such disclosure
should be useful or appropriate for the interests of the Lenders or
otherwise and each of the Borrowers expressly authorises any such
disclosure and delivery.
(d) Each of the Borrowers acknowledges and accepts that the Lenders may
be prohibited or it may be inappropriate for the Lenders to disclose
information to the Borrowers by reason of law or duties of
confidentiality owed or to be owed to other persons.
(e) Clause 16.11 shall be: (i) in addition to all other duties of
confidentiality imposed on the Agent, and the Lenders and their
professional advisers under applicable law; and (ii) subject to any
other applicable provisions contained in the Loan Agreement and the
Security Documents.
16.12 Third Party rights No term of this Agreement is enforceable under the
Contracts (Rights of Third Parties) Act 1999 by a person who is not a
party to this Agreement.
17. GOVERNING LAW AND JURISDICTION
17.1 Law
This Agreement is governed by and shall be construed in accordance with
English law.
17.2 Submission to jurisdiction
(a) For the exclusive benefit of each of the Creditors, each of the
Borrowers hereby (i) agrees that any legal action or proceedings
arising out or in connection with this Agreement against the Borrowers
(or any of them) or any of their respective assets may be brought in
the English Courts; and (ii) hereby irrevocably submits to the
exclusive jurisdiction of the High Court of Justice in London,
England. Further, each of the Borrowers hereby agrees that any
summons, writ or other legal process issued against them in England
shall be served upon Messrs. Xxxxxxx & Co. (attention: Xx. Xxxxxxx
Xxxxxxx), currently located at Princes House, 00 Xxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX, Xxxxxxx or their successors, who are hereby
authorised to accept such service, which shall be deemed to be good
service on the Borrowers. Provided, however, that each of the
Borrowers further hereby agrees that in the event that (i) Messrs.
Xxxxxxx Xxxxxxx & Co. close or fail to maintain a business presence in
England, or (ii) the Agent, in its sole discretion, shall determine
that service of process on the said agents is not feasible or may be
insufficient under the laws of England, then any summons, writ or
other legal process issued against them in England may be served upon
Messrs. The Law Debenture Corporate Services Limited, Fifth Floor, 000
Xxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, (hereinafter called the
"Process Agent for English Proceedings"), or their successors, who are
hereby authorised to accept such service, which shall be deemed to be
good service on the Borrowers. The Agent is hereby irrevocably
appointed by each of the Borrowers as the duly authorised attorney of
each of the Borrowers for the purpose of appointing the Process Agent
for English Proceedings as provided herein. The appointment of the
Process Agent for English Proceedings shall be valid and binding from
the date notice of such appointment is given by the Agent to the
Borrowers in accordance with Clauses 16.1 and/or 16.2. Finally, the
parties further agree that only the Courts of England and not those of
any other State shall have jurisdiction to settle any disputes arising
out of or in connection with this Agreement.
(b) The submission to such jurisdiction shall not (and shall not be
construed so as to) limit the right of the Creditors to commence
proceedings in relation to any matter which arises out or in
connection with this Agreement against the Borrowers (or any of them)
in the courts of any country other than England and which have or
claim jurisdiction to that matter nor shall the taking of proceedings
in any one or more jurisdictions preclude the taking of proceedings in
any other jurisdiction, whether concurrently or not.
(c) The parties further agree that subject to Clause 17.2(b) the Courts of
England shall have exclusive jurisdiction to determine any claim which
the Borrowers (or any of them) may have against the Creditors (or any
of them) arising out of or in connection with this Agreement and each
of the Borrowers hereby waives any objections to proceedings with
respect to this Agreement in such courts on the grounds of venue or
inconvenient forum.
17.3 Proceedings in any other country If it is decided by the Majority Lenders
that any such proceedings should be commenced in any country other than
England, then any objections as to the jurisdiction or any claim as to the
inconvenience of the forum is hereby waived by each of the Borrowers and
it is agreed and undertaken by each of the Borrowers to instruct lawyers
in that country to accept service of legal process and not to contest the
validity of such proceedings as far as the jurisdiction of the court or
courts involved is concerned and each of the Borrowers agrees that any
judgement or order obtained in an English court shall be conclusive and
binding on each of the Borrowers and shall be enforceable without review
in the courts of any other jurisdiction.
In this Clause 17 "proceedings" means proceedings of any kind, including
an application for a provisional or protective measure.
Schedule 1
----------
The Lenders and their Commitment
--------------------------------
--------------------------------------------------------------------------------
NAME LENDING OFFICE COMMITMENT
--------------------------------------------------------------------------------
ABN AMRO Bank N.V. 330 El. Venizelou Avenue $47,500,000
Xxxxxxxxx, XX 000 00 Xxxxxx,
Xxxxxx
Fax No.: +30210 0000000
e-mail: [_______________]
Xxxxxxxx.Xxxxxxxxxxxxxxx@xx.xxxxxxx.xxx
--------------------------------------------------------------------------------
CREDIT SUISSE St. Xxxxx-Xxxxxx 1. CH-4002 $47,500,000
Basel, Switzerland
Fax No.: 00 00 000 00 00
e-mail: [_______________]
xxxxxx.xxxx-xxxxxxx@xxxxxx-xxxxxx.xxx
--------------------------------------------------------------------------------
Schedule 2
----------
Form of Drawdown Notice
(referred to in Clause 2.2)
To: ABN AMRO BANK N.Y.,
330 El. Venizelou Ave.,
Xxxxxxxxx, GR 176 75 Athens, Greece;
(the "Agent") Dated: [ o ], 2005
RE: Loan Agreement dated [ o ], 2005 made between (1) Castalia Services Ltd.,
Fianna Navigation S.A., Xxxxxx Limited, Teagan Shipholding S.A. and Xxxxxxxx
Enterprises Co. (the `Borrowers"), (b) the Banks and Financial Institutions
listed in Schedule 1 (the "Lenders"), (c) the Agent, as Agent for the Lenders,
co-Arranger and Account Bank and (d) Credit Suisse, as co-Arranger, in respect
of a loan facility of up to US$95,000,000 (the "Loan Agreement")
--------------------------------------------------------------------------------
We refer to the above Loan Agreement and hereby give you notice that we wish to
draw down an Advance in respect of m/v [ o ] on [ o ] in the amount of $[ o ]
(Dollars [ o ] )[and select a first Interest Period in respect thereof of [ o ]
months] [the first Interest Period in respect thereof to expire on [ o ] The
finds should be credited to [name and number of account] with [details of bank
in New York City].
We confirm that:
(a) no event or circumstance has occurred and is continuing which constitutes a
Default;
(b) the representations and warranties contained in:
(i) Clauses 7.1 and 7.2 of the Loan Agreement; and
(ii) Clause 4 of the Guarantee: and
(iii) and expressed to be made or repeated on the date of the said Advance
are true and correct at the date hereof as if made with respect to
the facts and circumstances existing at such date; and
(c) the borrowing to be effected by the drawdown of the said Advance will be
within our corporate powers, has been validly authorised by appropriate
corporate action and will not cause any limit on our borrowings (whether
imposed by statute, regulation, agreement or otherwise) to be exceeded; and
(d) to the best of our knowledge and belief there has been no material adverse
change in our financial position from that described by us to the Lenders
in the negotiation of the Loan Agreement.
Words and expressions defined in the Loan Agreement shall have the same meanings
where used herein
For and on behalf
CASTALIA SERVICES LTD.
FIANNA NAVIGATION X.X.
XXXXXX LIMITED
TEAGAN SHIPHOLDING S.A. and
XXXXXXXX ENTERPRISES CO.
By: ______________________
Name:
Title: Attorney-in fact
Schedule 3
----------
Documents and evidence required as conditions precedent
-------------------------------------------------------
(referred to in Clause 9.1)
Part 1
I. Documents and conditions required as conditions precedent to the Loan
Agreement being executed
(a) Constitutional documents copies, certified by an officer of each
corporate Security Party as true, complete and up to date copies of
all documents which contain or establish or relate to the constitution
of that Security Party;
(b) Corporate authorisations copies of resolutions of the directors and,
if required, shareholders of each corporate Security Party approving
such of the Security Documents to which such Security Party is, or is
to be, party and authorising the signature, delivery and performance
of such Security Party's obligations thereunder, certified (in a
certificate dated no earlier than five (5) Banking Days prior to the
date of this Agreement) by an officer of such Security Party;
(i) being true and correct;
(ii) being duly passed at meetings of the directors of such Security
Party and, if required, of the shareholders of such Security
Party each duly convened and held;
(iii) not having been amended, modified or revoked; and
(iv) being in full force and effect,
together with-originals or certified copies of any powers of attorney
issued by any corporate Security Party pursuant to such resolutions;
(c) Certificates of incumbency a list of directors and officers of each
corporate Security Party specifying the names and positions of such
persons, certified in a certificate dated no earlier than five Banking
Days prior to the date of this Agreement) by an officer of such
Security Party to be true, complete and up to date;
(d) Xxxxxxxxx' consents and approvals a certificate (dated no earlier than
five (5) Banking Days prior to the date of this Agreement) from an
officer of each of the Borrowers that no consents, authorisations,
licences or approvals are necessary for such Borrower to authorise or
are required by such Borrower in connection with the borrowing by the
Borrowers jointly and severally of the Facility pursuant to this
Agreement or the execution, delivery and performance of the Security
Documents;
(e) Other consents and approvals a certificate (dated no earlier than five
(5) Banking Days prior to the date of this Agreement) from an officer
of each Security Party (other than the Borrowers) that-no consents,
authorisations, licences or approvals are necessary for such Security
Party to guarantee and/or grant security for the borrowing by the
Borrowers of the Facility pursuant to this Agreement and execute,
deliver and perform the Security Documents insofar as such Security
Party is a party thereto; and
(f) MOAs a copy of each MOA duly executed certified as true and complete
by the Borrowers' Lawyer.
Part 2
------
II Documents and evidence required as conditions precedent to each Advance
being made
(a) Drawdown Notice the Drawdown Notice in respect of the first Advance of
the relevant Advance duly executed;
(b) Conditions precedent evidence that the conditions precedent set out in
Part 1 of schedule 3 remain fully satisfied;
(c) Shareholdings evidence that there is no change in the legal and
beneficial shareholding of any of the Borrowers from that evidenced to
the Lenders prior to the date of this Agreement;
(d) No Default evidence that no Default has occurred and is continuing;
(e) First Secondary Shares Offerings evidence satisfactory to the Lenders
that prior to the drawdown of the first Advance the Guarantor will
have received at least twenty million Dollars ($20,000,000) from
secondary shares offerings to finance its equity participation in the
Purchase Price of the Vessel relative to such first Advance;
(f) Other Secondary Shares Offerings evidence satisfactory to the Lenders
that prior to the drawdown of each Advance (other than the first) the
Guarantor will have received sufficient proceeds from secondary shares
offerings to finance its equity participation in the Purchase Price of
the Vessel relative to such Advance;
(g) Fees and commissions payment of any fees and commissions due from the
Borrowers to the Creditors pursuant to the terms of Clause 5 or any
other provision of the Security Documents;
(h) Equity evidence of the payment of the sum representing the balance of
the Purchase Price of the relevant Vessel, such sum being equal to 40%
of such Purchase Price, to an account of the relevant Borrower with
the Account Bank;
(i) Payment of Purchase Price evidence that the Purchase Price for the
relevant Vessel has been (or upon drawdown of the relevant Advance
will have been) paid in full;
(j) Title and no encumbrance evidence that good title to the relevant
Vessel has passed to the relevant Borrower and that there is no
Encumbrance of any kind created or permitted by any person on or
relating to the relevant MOA other than Permitted Encumbrances;
(k) Export licences (if required) a copy, certified as a true and complete
copy by an officer of the relevant Borrower of any and all consents,
authorisations, licences and approvals (if any) required by such
Borrower and/or the relevant Seller in connection with the export by
such Seller of the relevant Vessel;
(l) Valuation valuation of the relevant Vessel made at the Borrowers'
expense as at a date determined by the Lenders but in any event before
the relevant drawdown, prepared on the basis specified in Clause
8.2(b) for the purpose of determining, on the basis of the said
valuation of such Vessel, the amount of the relevant Advance pursuant
to Clauses 1.1 and 2.1;
(m) Accounts evidence that the relevant Earnings Account(s), the Retention
Account and the Debt Reserve Account have been opened with the Agent:
(n) Vessel Conditions evidence that the relevant Vessel
(i) Registration and Encumbrances: is registered in the name of the
relevant Borrower through the relevant Registry under the laws
and flag of the relevant Flag State and that such Vessel and her
Earnings, Insurances and Requisition Compensation (each as
defined in the relevant Mortgage or General Assignment, as the
case may be), are free of Encumbrances;
(ii) Classification: maintains the Classification free of all
requirements and overdue recommendations of the Classification
Society;
(iii) Insurance: is insured in accordance with the provisions of the
Security Documents and all requirements of the Security Documents
in respect of such insurance have been complied with (including
without limitation, confirmation from the protection and
indemnity association or other insurer with which the relevant
Vessel is, or is to be, entered for insurance or insured against
protection and indemnity risks (including oil pollution risks)
that any necessary declarations required by the association or
insurer for the removal of any oil pollution exclusion have been
made and that any such exclusion does not apply to the relevant
Vessel);
(m) Security Documents and other documents the relevant Protocol of
Delivery and Acceptance, the relevant Bill of Sale transferring title
on the relevant Vessel from the relevant Seller to the relevant Owner,
the Guarantee, the relevant Management Agreement, the relevant
Mortgage, the relevant General Assignment, any relevant Charterparty
Assignments, any relevant Charterparty Assignment Acknowledgement and
the relevant Manager's Undertaking, each duly executed;
(n) Mortgage registration evidence that the relevant Mortgage has been or,
simultaneously with the drawdown of the relevant Advance will be,
registered against the relevant Vessel through the relevant Registry
under the laws and flag of the relevant Flag State;
(o) Notices of assignment and acknowledgements copies of duly executed
notices of assignment required by the terms of the Security Documents
and in the forms prescribed by the Security Documents;
(p) Mortgagee's Interest Insurance a mortgagee's interest insurance
(herein "MII") in respect of each Vessel which shall be effected by
the Agent in the name of the Lenders, but at the expenses of the
Borrowers under the Agent's wording and upon such other terms and with
such insurers as shall from time to time be determined by the Agent
but, in each case, for an amount not exceeding 120% of the amount of
the Loan, provided however, that the Agent shall in its absolute
discretion appoint and instruct in respect of any such MII policy the
insurance brokers in respect of such Insurance and provided further,
that in the event that the Agent effects any such Insurance on the
basis of any mortgagee's open cover, the Borrowers shall pay on demand
to the Agent its proportion of premium due in respect of each Vessel
for which such insurance cover has been effected by the Agent in the
name of the Lenders, and any certificate of the Agent in respect of
any such premium due by the Borrowers shall (save for manifest error)
be conclusive and binding upon the Borrowers;
(q) Fees and Commissions payment of any fees and commissions due from the
Borrowers to the Creditors pursuant to the terms of Clause 5 or any
other provision of the Security Documents;
(r) Acknowledgement of Receipt a receipt in writing in form and substance
satisfactory to the Agent including an acknowledgement and admission
of the Borrowers and/or any other Security Party to the effect that
the relevant Advance was drawn by the Borrowers and a declaration by
the Borrowers that all conditions precedent have been fulfilled, that
there is no Event of Default and that all the representations and
warranties are true and correct;
(s) Charterpartv evidence satisfactory to the Lenders that in case any
Borrower has entered into a Long Charterparty in relation to its
Vessel, such Vessel shall, upon its Delivery, be chartered under such
Long Charterparty;
(t) ISM Code true and complete copies of the DOC for the Operator and an
SMC for the relevant Vessel issued pursuant to the ISM Code;
(u) ISPS Code true and complete copy of the ISSC for the relevant Vessel
issued pursuant to the ISPS Code;
(v) Borrowers' process agent a copy, certified as a true copy by the
Borrowers' lawyers or other person acceptable to the Agent of a letter
from the Borrowers' agent for receipt of service of proceedings
referred to in Clause 17.2 accepting its appointment under the said
Xxxxxx and under each of the other Security Documents in which it is
or is to be appointed as the Borrowers' agent;
(x) Guarantor's process agent a copy, certified as a true copy by the
Borrowers' lawyers or other person acceptable to the Agent of a letter
from the Guarantor's agent for receipt of service of proceedings
referred to in Clause 10.2 of the Guarantee accepting its appointment
under the said Xxxxxx and under each of the other Security Documents
in which it is or is to be appointed as the Guarantor's agent;
(y) Flag State law opinion an opinion of the special legal advisers in the
relevant Flag State to the Lenders dated the Delivery Date for such
Vessel; and
(z) Further opinions any such further opinion as may be required by the
Agent.
Schedule 4
----------
Form of Transfer Certificate
----------------------------
(referred to in Clause 14.4)
[Lenders are advised not to employ Transfer Certificates without first
ensuring that the transaction complies with all applicable laws and
regulations, including the Financial Services Act 1986 and regulations
made thereunder]
To: ABN AMRO Bank N. V.,
330 El. Venizelou Ave.,
Kallithea, GR 17675
Athens, Greece
Date:
Transfer Certificate
This Transfer Certificate relates to the Loan Agreement (the "Agreement") dated
________________ between (1) Castalia Services Ltd., Fianna Navigation S.A.,
Xxxxxx Limited, Teagan Shipholding S.A. and Xxxxxxxx Enterprises Co., as joint
and several Borrowers, (2) the banks and financial institutions named therein as
Lenders, (3) ABN AMRO Bank N. V., as Agent for the Lenders, co-Arranger and
Account Bank and (4) Credit Suisse, as co-Arranger. Terms defined in the
Agreement shall have the same meaning in this Transfer Certificate.
1. [Name of Existing Lender] (the "Existing Lender") (a) confirms the accuracy
of the summary of its Commitment and Contribution set out in the Schedule
to this Transfer Certificate and (b) requests [name of Transferee] (the
"Transferee") to accept by way of transfer the portion of its Commitment
and Contribution specified in the Schedule to this Transfer Certificate by
countersigning and delivering this Transfer Certificate to the Agent at its
address for the service of notice in the Agreement.
2. The Transferee requests the Agent (on behalf of itself, the Borrowers and
the Lenders and the other parties to the Agreement) to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the
purposes of Clause 14.4 of the Agreement, so as to take effect in
accordance with its terms on [date of transfer, being not earlier than five
[5] Banking Days after date of delivery of the Certificate to the Agent]
(the "Effective Date").
3. The Agent (on behalf of itself and the other parties to the Agreement)
confirms the transfer effected by this Transfer Certificate pursuant to and
for the purposes of Clause 14.4 of the Agreement.
4. The Transferee confirms:
(a) that it has received a copy of the Agreement and each of the other
Security Documents and all other documentation and information
required by it in connection with the transactions contemplated by
this Transfer Certificate;
(b) that it has made and will continue to make its own assessment of the
validity, enforceability and sufficiency of this Agreement, the other
Security Documents and this Transfer Certificate and has not relied
and will not rely on the Existing Lender, the Arrangers or the Agent
or any statements made by any of them in that respect;
(c) that it has made and will continue to make its own credit assessment
of the Security Parties and has not relied and will not rely on the
Existing Lender, the Arrangers or the Agent or any statements made by
any of them in that respect;
(d) accordingly, none of the Existing Lender, the Arrangers or the Agent
shall have any liability or responsibility to the Transferee in
respect of any of the foregoing matters.
5. Execution of this Transfer Certificate by the Transferee constitutes its
representations to the Existing Lender and all other parties to the
Agreement that it has power to become party to the Agreement as a Lender on
the terms herein and therein set out and has taken all necessary steps to
authorise execution and delivery of this Transfer Certificate.
6. The Existing Lender makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of any of the Security Documents or any document
relating thereto and assumes no responsibility for the financial condition
of or for the performance and observance by any Security Party of any of
its obligations under any of the Security Documents or any document
relating thereto and any and all such conditions and warranties, whether
express or implied by law or otherwise, are hereby excluded.
7. The Transferee hereby undertakes to the Existing Lender, the Borrowers, the
Agent and any other party to the Agreement that it will perform in
accordance with their terms all those obligations which by the respective
terms of the Agreement will be assumed by it after acceptance of this
Transfer Certificate by the Agent and, if not already a lender, appoints
the Agent to act as its agent as provided in the Agreement and agrees to be
bound by the terms of the Agreement. The Transferee acknowledges that the
Existing Lender has no obligation to re-purchase or re-acquire any of the
rights and obligations transferred by virtue of this Transfer Certificate
or to support, indemnify or compensate the Transferee for any losses
suffered by the Transferee as a consequence of a transfer effected by
virtue of this Transfer Certificate.
8. The Existing Lender:
(a) warrants to the Transferee that it has full power to enter into this
Transfer Certificate and has taken all corporate action necessary to
authorise it to do so;
(b) warrants to the Transferee that this Transfer Certificate is binding
on the Transferor under the laws of England, the country in which the
Existing lender is incorporated and the country in which its lending
office is located; and
(c) agrees that it will, at the Transferee's expense, execute any
documents which the Transferee reasonably requests for perfecting in
any relevant jurisdiction the Transferee's title under this Transfer
Certificate or for a similar purpose.
9. The Transferee hereby undertakes with the Existing Lender and each of the
other parties of the Agreement and the other Security Documents that it
will perform in accordance with its terms all those obligations which by
the terms of the Agreement and the other Security Documents will be assumed
by it after delivery of the executed copies of this Transfer Certificate to
the Agent and satisfaction of the conditions (if any) subject to which this
Transfer Certificate is expressed to take effect.
10. By execution of this Transfer Certificate on their behalf by the Agent and
in reliance upon the representations and warranties of the Transferee, the
Borrowers, the Lenders, the Arrangers and the Agent accept the Transferee
as a party to the agreement and the other Security Documents with respect
to all those rights and/or obligations which by the terms of the Agreement
and the other Security Documents will be assumed by the Transferee
(including those about pro-rata sharing and the exclusion of liability on
the part of, and the indemnification of, the Agent as provided by the terms
of the Agreement) after delivery of the executed copies of this Transfer
Certificate to the Agent and satisfaction of the conditions (if any)
subject to which this Transfer Certificate is expressed to take effect
11. The agreements and undertakings of the Transferee in this Transfer
Certificate are given to, and for the benefit of, and made with, each of
the other parties to the Agreement and the other Security Documents.
12. This Transfer Certificate is governed by English law.
Note: This Transfer Certificate is not a security, bond, note, debenture,
investment or similar instrument. The execution of this Transfer Certificate
alone may not transfer a proportionate share of the Existing Xxxxxx's interest
in the security constituted by the Security Documents in the Existing Lender's
or Transferee's jurisdiction. It is the responsibility of each individual Lender
to ascertain whether any other documents are required to perfect a transfer of
such a share in the Existing Xxxxxx's interest in such security in any such
jurisdiction and, if so, to seek appropriate advice and arrange for execution of
the same.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
The Schedule
------------
--------------------------------------------------------------------------------
Next Interest Portion [novated]
Amount of Contribution [($)] Payment Date(s) [transferred] [($)]
--------------------------------------------------------------------------------
[ o ] [ o ] [ o ]
--------------------------------------------------------------------------------
Portion [novated]
[transferred]
Amount of Commitment [($)] [($)]
--------------------------------------------------------------------------------
[ o ] [ o ]
--------------------------------------------------------------------------------
Administrative Details of Transferee
------------------------------------
Lending office:
Account of payments:
Telephone:
Telefax:
[Telex]:
Attention:
[Existing Lender] ) [Transferee] )
By: ) By: )
)
Date: ) Date: )
[The other Lender(s)]
By: )
on its own behalf and
on behalf of the Borrowers and the
other parties to the Agreement
Date:
Schedule 5
----------
Form of Compliance Certificate
------------------------------
(referred to in Clause 8.1(g))
To: ABN AMRO Bank N.V., as Agent
From: Castalia Services Ltd.
Fianna Navigation X.X.
Xxxxxx Limited
Teagan Shipholding S.A. and Xxxxxxxx
Enterprises Co. (the "Borrowers")
Dated: [ o ]
Re: US$95,000,000-- Loan Agreement dated [ o], 2005 (the "Loan Agreement")
---------------------------------------------------------------------------
Terms defined in the Loan Agreement shall have the same meaning when used herein
We [ o ] and [ o ], each being a director of each of the Borrowers, refer to
Clause 8.1(g) of the Loan Agreement and hereby certify that, as at [insert date
of accounts] and on the date hereof;
1. Financial Covenants:
(a) the consolidated Leverage Ratio of the Group in respect of the
financial year concerned is [ o ] calculated as follows: [ o ];
(b) the consolidated interest cover ratio (EBITDA to interest expense) of
the Group in respect of the financial year concerned is [ o ]
calculated as follows: [ o ];
(c) the Liquid Funds of the Guarantor on a consolidated basis are at least
equal to 10% of the Total Debt and at least 30% of such Liquid Funds
are maintained with the Agent; and
(d) the Guarantor has not declared or made payments of dividends in
respect of the financial year concerned in an amount exceeding 50% of
the net profits of the Guarantor during such financial year.
2. Default
[No Default has occurred and is continuing]
or
[The following Default has occurred and is continuing: [provide details of
Default]. [The following steps are being taken to remedy it: [provide details of
steps being taken to remedy Default]].
Signed:______________________ Signed:______________________
Director Director
EXECUTION PAGE
--------------
IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed on the date first above written.
THE BORROWERS
SIGNED by
Mr. )
for and on behalf of )
CASTALIA SERVICES LTD., )
of Liberia, in the presence of: )
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx
Occupation: Attorney-at-law
SIGNED by )
Mr. )
for and on behalf of )
FIANNA NAVIGATION S.A., of Liberia )
in the presence of:
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx
Occupation Attorney-at-law
SIGNED by )
Mr. )
for and on behalf of )
XXXXXX LIMITED, of Liberia, )
in the presence of:
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx
Occupation Attorney-at-law
SIGNED by )
Mr. )
for and on behalf of )
TEAGAN SHIPHOLDING S.A., )
of Liberia, in the presence of:
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx
Occupation: Attorney-at-law
SIGNED by )
Mr. )
for and on behalf of )
XXXXXXXX ENTERPRISES CO., )
of Liberia, in the presence of:
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx
Occupation Attorney-at-law
THE LENDERS
-----------
SIGNED by )
Xx. Xxxxxxxxx Xxxxxxxxxxxxxxx and )
Xx. Xxxxxxxxx Xxxxxxxxxxx )
for and on behalf of )
ABN AMRO BANK N.V. )
in the presence of: )
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx
Occupation Attorney-at-law
SIGNED by )
Xx. Xxxxxxxxxxx X. Xxxxxxx )
for and on behalf of )
CREDIT SUISSE )
in the presence of: )
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx
Occupation Attorney-at-law
THE AGENT, JOINT ARRANGER AND ACCOUNT BANK
------------------------------------------
SIGNED by )
Xx. Xxxxxxxxx Xxxxxxxxxxxxxxx and )
Xx. Xxxxxxxxx Xxxxxxxxxxx )
for and on behalf of )
ABN AMRO BANK N.V. )
in the presence of: )
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxx
Occupation: Attorney-at-law
THE JOINT ARRANGER
------------------
SIGNED by )
Xx. Xxxxxxxxxxx X. Xxxxxxx )
for and on behalf of )
CREDIT SUISSE )
in the presence of: )
Witness:__________________
Name: Xxxxxxxxxx X. Xxxxxxx
Address: 00 Xxxxxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx
Occupation: Attorney-at-law
02545.0001 #553486
