Exhibit 4.39
Guarantee
14 March 2006
To: ▇▇▇▇ Maritime S.A. of ▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the
"Beneficiary")
1 In consideration of (i) the Beneficiary, which expression includes its
successors and assignees), at our request, agreeing to let the m.v.
Spotless (the "Ship") to Idi Shipping Company Limited (the "Charterer",
which expression includes its successors and assigns) pursuant to a
"Barecon 2001" bareboat charter dated 14 March 2006 (as amended and
supplemented from time to time, the "Charter") between the Beneficiary and
the Charterer and (ii) US$1 and other good and valuable consideration (the
receipt and adequacy of which is hereby acknowledged) we, Top Tankers Inc.
(the "Guarantor") irrevocably and unconditionally guarantee the due and
punctual payment of all sums payable by the Charterer to the Beneficiary
under or pursuant to the Charter (including, without limitation, all
charterhire, interest, fees, costs, charges and expenses) together with
interest to the date of payment (as well after as before judgment) at such
rates and upon such terms as may from time to time be expressed to be
payable by the Charterer and any damages (whether liquidated or otherwise
for breach of the Charter) on a full and unqualified indemnity basis and
undertake that if for any reason the Charterer shall fail to pay any sums
due under or pursuant to the Charter on the due date of payment thereunder
the Guarantor shall, on demand by the Beneficiary, unconditionally pay such
sum to the Beneficiary.
2 As a separate and independent stipulation, the Guarantor irrevocably and
unconditionally agrees that if any purported obligation or liability of the
Charterer which would have been the subject of this Guarantee had it been
valid and enforceable is not or ceases to be valid or enforceable against
the Charterer on any ground whatsoever whether or not known to the
Beneficiary (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 the Charterer or any legal or
other limitation, whether under the Limitation Acts or otherwise or any
disability or incapacity or any change in the constitution of the
Charterer) the Guarantor shall nevertheless be liable to the Beneficiary in
respect of that purported obligation or liability as if the same were fully
valid and enforceable and the Guarantor were the principal debtor in
respect thereof. The Guarantor hereby agrees to keep the Beneficiary fully
indemnified on demand against all damages, losses, costs and expenses
arising from any failure of the Charterer to perform or discharge any such
purported obligation or liability or from any invalidity or
unenforceability of any of the same against the Charterer.
3 The Guarantor's liability under this Guarantee shall not baslischarged in
whole or in part or otherwise be affected in any way by reason of (a) the
Beneficiary giving the Charterer time or any other concession or taking,
holding, varying, realising or not enforcing any other security for the
liabilities of the Charterer under the Charter, (b) any legal limitation or
incapacity relating to the Charterer, (c) the invalidity or
unenforceability of the obligations of the Charterer under the Charter or
(d) any other act or omission of the Beneficiary or any other circumstances
which but for this provision would discharge the Guarantor and any moneys
expressed to be payable by the Charterer under the terms of the Charter
which may not be recoverable from the Charterer for any such reason shall
be recoverable by the Beneficiary from the Guarantor as principal debtor.
4 This Guarantee shall expire upon termination by effluxion of time of the
Charter or otherwise in circumstances where all obligations of the
Charterer shall have been irrevocably and unconditionally discharged in
full.
5 The Beneficiary may enforce this Guarantee without first making demand on,
or taking any proceeding against, the Charterer.
6 All payments by the Guarantor hereunder shall be made without set-off or
counterclaim and, subject to paragraph 7 hereof, free and clear of any
deductions or withholdings in United States Dollars in same day funds (or
such other funds as may then be customary for the settlement of
international bank transactions in the relevant currency) not later than
10am (local time in the place of payment) on the due date to the account of
the Beneficiary notified to the Guarantor by the Beneficiary.
7 If at any time the Guarantor is required to make any deduction or
withholding in respect of any taxes (which for the purpose of this
Guarantee includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature together with interest thereon and
penalties in respect thereof) from any payment due under this Guarantee,
the sum due from the Guarantor in respect of such payment shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, the Beneficiary receives on the due date for such
payment (and retains, free from any liability in respect of such deduction
or withholding) a net sum equal to the sum which it would have received had
no such deduction or withholding been required to be made and the Guarantor
shall indemnify the Beneficiary against any losses or costs incurred by it
by reason of any failure of the Guarantor 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 Guarantor shall promptly deliver to the
Beneficiary any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any deduction or withholding
as aforesaid.
8 If any sum due from the Guarantor under this Guarantee or any order or
judgment given or made in relation hereto has to be converted from the
currency (the "first currency") in which the same is payable under this
Guarantee or under such order or judgment into another currency (the
"second currency") for the purpose of (i) making or filing a claim or proof
against the Guarantor, (ii) obtaining an order or judgment in any court or
other tribunal or (iii) enforcing any order to judgment given or made in
relation to this Guarantee, the Guarantor shall indemnify and hold harmless
the Beneficiary from and against any loss suffered as a result of any
difference between (a) the rate of exchange used for such purpose to
convert the sum in question from the first currency into the second
currency and (b) the rate or rates of exchange at which the Beneficiary 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 Guarantor under this clause 8 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 Guarantee 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.
9 The Guarantor represents and warrants to the Beneficiary that:
(a) the Guarantor is duly incorporated and validly existing in good standing
under the laws of the ▇▇▇▇▇▇▇▇ Islands as a limited liability corporation
and has power to carry on its business as it is now being conducted and to
own its property and other assets;
(b) the Guarantor has power to execute, deliver and perform its obligations
under this Guarantee, and 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 power of the Guarantor to give
guarantees will be exceeded as a result of this Guarantee;
(c) this Guarantee constitutes valid, legal and enforceable binding obligations
of the Guarantor;
(d) the execution and delivery of, the performance of its obligations under and
compliance with the provisions of this Guarantee by the Guarantor will not
(i) contravene any existing applicable law, statute, rule or regulation or
any judgment, decree or permit to which the Guarantor is subject, or (ii)
contravene or conflict with any provision of the Guarantor's Articles of
Incorporation, By-Laws or other constitutional documents;
(e) it is not necessary to ensure that legality, validity, enforceability or
admissibility in evidence of this Guarantee that it or any other instrument
be notarised, filed, recorded, registered or enrolled in any court, public
office or elsewhere in the ▇▇▇▇▇▇▇▇ Islands or that any stamp, registration
or similar tax or charge be paid in the ▇▇▇▇▇▇▇▇ Islands on or in relation
to this Guarantee and this Guarantee is in proper form for its enforcement
in the courts of the ▇▇▇▇▇▇▇▇ Islands;
(f) the choice by the Guarantor of English law to govern this Guarantee is
valid and binding; and
(g) neither the Guarantor nor any of its assets are 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
judgment, execution or other enforcement).
10 Guarantor's Undertakings
10.1 General Undertakings
The Guarantor hereby agrees and undertakes to the Beneficiary that it will
at all times until expiry of this Guarantee in accordance with paragraph 4
thereof deliver to the Beneficiary sufficient copies of each of the
following documents:
(a) not later than one hundred and eighty (180) days after the end of each
financial year, the audited balance sheet and profit and loss account
of the Guarantor and the audited consolidated balance sheet and the
consolidated profit and loss account of the Group for such financial
year and a cash flow statement for the Group for such financial year
together with the report of the auditors thereon, the notes thereto
and the directors' report thereon, if any;
(b) at the time of issue thereof every report, circular, notice or like
document issued by the Guarantor to its shareholders or creditors
generally;
(c) at the time of the delivery of the annual audited financial
statements, a statemerf from the Guarantor's auditors stating the
respective amounts of the Net Asset Value, Book Equity, the Total Debt
and the Total Market Value Adjusted Assets, in respect of or, as the
case may be, as at the end of the financial year to which such
financial statements relate indicating the manner in which the same
have been calculated and whether or not the limits imposed by
paragraphs 10.2.1, 10.2.4 and 10.2.5 have or have not been exceeded at
such time and so that each such statement shall (in the absence of
manifest error or in the absence of the Mortgagee reaching a different
determination pursuant to paragraph 10.2.8) be conclusive evidence of
such amounts or facts for the purposes of this Guarantee.
10.2 Financial Undertakings
The Guarantor hereby agrees and undertakes to the Beneficiary that it will
at all times until expiry of this guarantee in accordance with
paragraph 4 hereof:
10.2.1 ensure that:
(d) (i) a minimum amount of Twenty million United States Dollars
($US20,000,000) shall be standing to the credit of the Guarantor's
Account for the period commencing on the date of this Guarantee and
ending on 31 December 2006 and (ii) thereafter and until the expiry of
this Guarantee in accordance with paragraph 4 hereof a minimum amount
of Twenty five million United States Dollars ($US25,000,000) shall be
standing to the credit of the Guarantor's Account and further ensure
that there are no Encumbrances whatsoever existing over or in relation
to such minimum amount;
(e) it maintains cash balances of at least Fifty million United States
Dollars (US$50,000,000) in bank accounts in its name or in the name of
a member of the Group and agreed by the Beneficiary in writing from
time to time and for the purposes of this clause 7.2.1(b) the
expression "bank accounts" shall exclude any bank accounts which are
subject to an Encumbrance;
10.2.2 endeavour that any Excess Cash Flow in relation to the Ship will be paid
into the Guarantor's Account;
10.2.3 provide details to the Beneficiary at three (3) monthly intervals
starting from the date of this Guarantee evidencing the operating
expenses and the Earnings of the Ship;
10.2.4 ensure that its Net Asset Value at all times exceeds One hundred and
twenty five million United States Dollars (US$125,000,000); and
10.2.5 ensure that its Book Equity shall at all times exceed Seventy five
million United States Dollars ($US75,000,000).
10.2.6 For the purpose of this paragraph 10, the following expressions shall
have the following meanings:
"Applicable Accounting Principles" means accounting principles, concepts,
bases and policies generally adopted and accepted in the United States of
America consistently applied;
"Book Equity" means the aggregate of the amounts paid-up or credited as
paid-up on the Guarantor's issued share capital and the amount of the
consolidated capital and revenue reserves of the Group (including any
share premium account, capital redemption reserve fund and any credit
balance on the consolidated profit and loss account of the Group) all as
shown by the latest audited consolidated balance sheet and profit and
loss account of the Group delivered under this Guarantee but after:
(a) deducting any debit balance on such consolidated profit and loss
account;
(b) deducting any amount shown in such consolidated balance sheet in
respect of goodwill (including goodwill arising on consolidation) and
other intangible assets;
(c) deducting (so far as not otherwise excluded as attributable to
minority interests) a sum equal to the aggregate of the amount by
which the book value of any fixed assets of any member of the Group
has been written up after 31 December 2005 (or, in the case of a
company becoming a subsidiary after that date, the date on which that
company became a subsidiary) by way of revaluation. For the purposes
of this paragraph (c) any increase in the book value of any fixed
asset resulting from its transfer by one member of the Group to
another member of the Group shall be deemed to result ffom a writing
up of its book value by way of revaluation;
(d) excluding amounts set aside for taxation as at the date of such
balance sheet and making such adjustments as may be appropriate in
respect of any significant additional taxation expected to result from
transactions carried out by any member of the Group after such date
and not reflected in that balance sheet;
(e) deducting all amounts attributable to minority interests in
Subsidiaries;
(f) making such adjustments as may be appropriate in respect of any
variation in the amount of such paid up share capital or any such
reserves after the date of the relevant balance sheet (but so that no
such adjustment shall be made in respect of any variation in profit
and loss account except to the extent of any profit or loss,
calculated on a cumulative basis, recorded in the consolidated profit
and loss account of the Group delivered to the Beneficiary before the
date of this Deed, or under paragraph 10.1.1 in respect of any
subsequent period);
(g) making such adjustments as may be appropriate in respect of any
distribution declared, recommended or made by any member of the Group
(otherwise than attributable directly or indirectly to the Guarantor)
out of profits earned up to and including the date of the latest
audited balance sheet of that member of the Group to the extent that
such distribution is not provided for in that balance sheet;
(h) making such adjustments as may be appropriate in respect of any
variation in the interests of the Guarantor in its Subsidiaries since
the date of the latest published audited consolidated balance sheet of
the Group;
(i) if the calculation is required for the purpose of or in connection
with a transaction under or in connection with which any company is to
become or cease to be a Subsidiary of the Guarantor, making all such
adjustments as would be appropriate if that transaction had been
carried into effect; and
(j) making such adjustments as may be appropriate in the opinion of the
Beneficiary in order that the above amounts are calculated in
accordance with the Original Accounting Principles;
"Charter Earnings" means all moneys whatsoever from time to time payable by
the Charterer to the Beneficiary under or pursuant to the Charter and/or
any moneys payable to the Beneficiary under or pursuant to this Guarantee
and/or any guarantee, security or other assurance given to the Beneficiary
at any time in respect of the Charterer's obligations under or pursuant to
the Charter;
"Guarantor's Account" means the interest bearing Dollar account of the
Charter Guarantor opened or (as the context may require) to be opened with
the Agent (as defined in paragraph 12 below) with account number
24.07.56.150 and includes any sub-accounts thereof and any other account
designated in writing by the Agent to be the Guarantor's Account for the
purposes of this Guarantee;
"Earnings" means all earnings of the Ship payable under or pursuant to any
charters entered into by the Charterer in respect of the employment of the
Ship;
"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);
"Excess Cash Flow" means any Earnings of the Ship minus (a) the aggregate
of the Charter Earnings and (b) the operating expenses in relation to the
Ship;
"Finance Lease" means a lease treated as a finance lease pursuant to the
Applicable Accounting Principles.
"Group" means, together, the Guarantor and its Subsidiaries and "member of
the Group" means any of them;
"Net Asset Value" means, at any relevant time, the amount in Dollars
resulting after deducting the Total Debt from the Total Market Value
Adjusted Assets, in either case at such time;
"Original Accounting Principles" means those accounting principles,
standards and practices which were used in the preparation of the
consolidated audited financial statements of the Group as at 31 December
2005, and for the year then ended and, to the extent that they do not
conflict with those principles, standards and practices, such other
accounting principles, standards and practices as were generally acceptable
in the United States of America on 31 December 2005;
"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% 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;
"Total Debt" means the aggregate principal amount (including any fixed or
minimum premium payable on final repayment) of:
(a) moneys borrowed or raised by the Guarantor and its Subsidiaries;
(b) bonds, notes, loan stock, debentures, commercial paper or other debt
securities issued by the Guarantor or any of its Subsidiaries not for
the time being beneficially owned by the Guarantor or any of its
Subsidiaries;
(c) sums outstanding under acceptances by the Guarantor or any of its
Subsidiaries or by any bank or acceptance house under acceptance
credits opened on behalf of the Guarantor or any Subsidiary;
(d) deferred indebtedness of the Guarantor or any of its Subsidiaries for
payment of the acquisition or construction price for assets or
services acquired or constructed;
(e) rental payments under Finance Leases;
(f) receivables sold or discounted with a right of recourse to the
Guarantor or any of its Subsidiaries;
(g) the nominal amount of any issued and paid up share capital (other than
equity share capital) of any Subsidiary not beneficially owned by the
Guarantor or another Subsidiary;
(h) preference share capital redeemable prior to the last day of the
period of the Charter;
(i) indebtedness secured by any Encumbrance over all or any part of the
undertaking, property, assets, rights or revenues of the Guarantor or
any of its Subsidiaries irrespective of whether or not such
indebtedness is supported by a personal covenant on the part of the
Guarantor or any of its Subsidiaries;
(j) indebtedness incurred in respect of swaps, forward exchange contracts,
futures or other derivatives;
(k) any other liability arising from a transaction having the commercial
effect of a borrowing or the raising of money;
(l) obligations under guarantees in respect of the obligations of any
other person which, if such person were the Guarantor or a Subsidiary,
would fall within paragraphs (a) to (k) above,
PROVIDED THAT:
(i) moneys owing by the Guarantor to a Subsidiary or by a Subsidiary
to the Guarantor or to another Subsidiary shall not be taken into
account;
(ii) the principal amount of Total Debt deemed to be outstanding in
relation to Finance Leases or hire purchase agreements shall be
the present value of the minimum lease or hire payments
discounted at the interest rate implicit in the relevant lease or
hire purchase agreement; and
"Total Market Value Adjusted Assets" means the aggregate of:
(a) the value (less depreciation computed in accordance with generally
accepted international accounting principles consistently applied) on
a consolidated basis of all tangible fixed assets of the Group, as
stated in the relevant consolidated financial statements of the Group,
but excluding any ships at the relevant time owned by members of the
Group which, for the purposes of such consolidated financial
statements, are included in the consolidated tangible fixed assets of
the Group (for the purposes of paragraphs 10.2 and 10.3, the "Relevant
Ships"); and
(b) the aggregate of the market value of the Relevant Ships, as such
market value shall have been most recently determined (as of the date
of the relevant calculation) pursuant to the provisions of paragraph
10.3 of this Guarantee by means of valuations obtained by the
Beneficiary in accordance with the provisions of paragraph 10.3 of
this Guarantee (and not the value of the Relevant Ships as stated in
the relevant consolidated financial statements of the Group).
10.2.7 All the terms defined in this paragraph 10.2 and used in this Guarantee
are to be determined on a consolidated basis in respect of the Group and
(except as items are expressly included or excluded in the relevant
definition or clause) are used and shall be construed in accordance with
Applicable Accounting Principles and as determined from the latest
consolidated financial statements of the Group delivered to the
Beneficiary pursuant to paragraph 10.1.1.
10.2.8 The compliance of the Guarantor with the covenants set out in paragraphs
10.2.1, 10.2.4 and 10.2.5 shall be determined on the basis of
calculations made by the Beneficiary at any time by reference to then
latest consolidated financial statements of the Group delivered to the
Beneficiary pursuant to paragraph 10.1.1. For the avoidance of doubt, it
is hereby agreed that the Beneficiary shall be entitled to make such
determinations and/or calculations at any time when, and in relation to
any period in relation to which, the Guarantor shall be obliged to comply
with each of the covenants out in paragraphs 10.2.1, 10.2.4 and 10.2.5
without regard to when any such financial statements are due to be
delivered or have been actually delivered to the Beneficiary pursuant to
paragraph 10.1.
10.2.7 For the purposes of this paragraph 10.2:
(a) no item shall be deducted or credited more than once in any
calculation; and
(b) any amount expressed in a currency other than United States Dollars
shall be converted into United States Dollars in accordance with
Applicable Accounting Principles.
10.3 Valuation of Relevant Ships
10.3.1 Valuations
Each of the Relevant Ships shall, for the purposes of this paragraph [101
be valued in United States Dollars as and when the Beneficiary shall
require. Each such valuation of a Relevant Ship shall be made by an
independent firm of shipbrokers appointed by the Beneficiary. Such
valuation shall be made without, unless required by the Beneficiary,
physical inspection, and on the basis of a sale for prompt delivery for
cash at arm's length, on normal commercial terms as between a willing buyer
and a willing seller and without taking into account the benefit of any
charterparty or other employment of such Relevant Ship. The value of each
of the Relevant Ships determined in accordance with the provisions of this
paragraph 10.3 shall be binding upon the parties hereto for the purposes of
calculating the Total Market Value Adjusted Assets until such time as any
further such valuations shall be obtained.
10.3.2 Information
The Guarantor undertakes to the Beneficiary to supply to the Beneficiary
and to any such shipbroker such information concerning any Relevant Ship
and its condition as such shipbrokers may reasonably require for the
purpose of making any such valuation.
10.3.3 Costs
All costs in connection with the Beneficiary obtaining any valuation of
each of the Relevant Ships referred to in paragraph 10.3.1 of this
Guarantee shall be borne by the Guarantor.
11 No failure or delay on the part of the Beneficiary to exercise any right,
power or remedy under this Guarantee shall operate as a waiver thereof, nor
shall any single or partial exercise by the Beneficiary, of any right,
power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies provided in this
Guarantee are cumulative and are not exclusive of any remedies provided by
law.
12 The Guarantor may not assign any of its rights or obligations hereunder.
The Beneficiary may assign any of its rights hereunder to (i) Fortis Bank
(Nederland) N.V. of ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ Rotterdam, The Netherlands (the
"Agent") (acting as security agent and trustee on behalf of a syndicate of
banks and other ancillary parties) and/or (ii) ▇▇▇▇ Capital Investments
B.V. of R.01.1601, ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ Rotterdam, The Netherlands
("▇▇▇▇"). The Guarantor hereby agrees that it will promptly execute an
acknowledgement in favour of the Agent and/or ▇▇▇▇ of any notice of
assignment delivered to it relating to any such assignment.
13 Every claim or notice under this Guarantee shall be in writing and may be
given or made by post or fax to the Guarantor or the Beneficiary at their
respective addresses given above or to another address notified by the
Guarantor or the Beneficiary (or its assignee) to the other under this
Guarantee. Every notice shall be deemed to have been received, in the case
of a fax at the time of despatch (provided that if the date of despatch is
not a working day in the country of the addressee, it shall be deemed
received on the next working day), and in the case of a letter, when
delivered.
14 (a) This Guarantee shall be governed by and construed in accordance with
English law.
(b) The Guarantor agrees, for the benefit of the Beneficiary, that any
legal action or proceedings arising out of or in connection with this
Guarantee may be brought in English courts. The Guarantor irrevocably
and unconditionally submits to the jurisdiction of such courts and
irrevocably designates, appoints and empowers Top Tankers (UK) Limited
at present of ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ to receive for
it and on its behalf, service or process issued out of the English
courts in any such legal action or proceedings. The submission to such
jurisdiction shall not (and shall not be construed so as to) limit the
right of the Beneficiary to take proceedings against the Guarantor in
another court of competent jurisdiction 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.
15 No term of this Guarantee shall be enforceable pursuant to the Contracts
(Rights of Third Parties) ▇▇▇ ▇▇▇▇ by a person who is not a party to this
Guarantee.
Yours faithfully
EXECUTED as a DEED BY
for and on behalf of
TOP TANKERS INC.
Pursuant to a Power of Attorney
dated 2006
In the presence of:
Witness: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Solicitor
Address: ▇▇▇▇▇▇ ▇▇▇▇
Occupation Piraeus
