Exhibit 4.5
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CREDIT FACILITY PROVIDING FOR A
SENIOR SECURED TERM LOAN
OF UP TO US$154,000,000
TO BE MADE AVAILABLE TO
TOP TANKERS INC.,
as Borrower,
BY
HSH NORDBANK AG,
Acting through its Hamburg Branch,
as Arranger, Underwriter, Administrative Agent and Security Trustee,
and the Banks and Financial Institutions
identified on Schedule 1, as Lenders
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Date of Closing: November 7, 2005
CONTENTS
PAGE
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1. DEFINITIONS..............................................................1
1.1 Specific Definitions...............................................1
1.2 Computation of Time Periods; Other Definitional Provisions........14
1.3 Accounting Terms..................................................14
1.4 Certain Matters Regarding Materiality.............................14
1.5 Forms of Documents................................................14
2. REPRESENTATIONS AND WARRANTIES..........................................15
2.1 Representations and Warranties....................................15
(a) Due Organization and Power..................................15
(b) Authorization and Consents..................................15
(c) Binding Obligations.........................................15
(d) No Violation................................................15
(e) Filings; Stamp Taxes........................................15
(f) Litigation..................................................16
(g) No Default..................................................16
(h) Vessels.....................................................16
(i) Insurance...................................................16
(j) Financial Information.......................................16
(k) Tax Returns.................................................16
(l) Chief Executive Office......................................17
(m) Foreign Trade Control Regulations...........................17
(n) Equity Ownership............................................17
(o) Environmental Matters and Claims............................17
(p) Compliance with ISM Code, the ISPS Code and the MTSA........18
(q) No Threatened Withdrawal of DOC, ISSC or SMC................18
(r) Liens.......................................................18
(s) Financial Indebtedness......................................18
(t) No Proceedings to Dissolve..................................18
(u) Solvency....................................................18
(v) Pari Passu Ranking..........................................18
(w) Taxes on Payments...........................................19
(x) Jurisdiction/Governing Law..................................19
(y) Charters....................................................19
(z) Compliance with Laws........................................19
(aa) Survival....................................................19
3. THE ADVANCES............................................................19
3.1 (a) Purposes......................................................19
(b) Making of the Advances......................................19
3.2 Drawdown Notice...................................................20
3.3 Effect of Drawdown Notice.........................................20
3.4 Notation of Advances..............................................20
4. CONDITIONS..............................................................21
4.1 Conditions Precedent to the Initial Advance.......................21
(a) Corporate Authority.........................................21
(b) The Credit Facility Agreement and the Note..................21
(c) Guarantor Documents.........................................22
(d) Guarantor Solvency..........................................22
(e) Approved Manager Documents..................................22
(f) Environmental Claims........................................22
(g) Fees........................................................22
(h) Accounts....................................................22
(i) Compliance Certificate......................................22
(j) Vessel Appraisal and Inspection.............................22
(k) Money Laundering Due Diligence..............................22
(l) Legal Opinions..............................................23
4.2 Conditions Precedent re Delivery Advances.........................23
(a) The Vessels.................................................23
(b) Vessel Documents............................................23
(c) Additional Documents........................................24
(d) Vessel Liens................................................24
(e) ISM DOC.....................................................24
(f) Process Agent...............................................24
(g) Legal Opinions..............................................24
4.3 Further Conditions Precedent......................................25
(a) Drawdown Notice.............................................25
(b) Representations and Warranties..............................25
(c) No Event of Default.........................................25
(d) No Change in Laws...........................................25
(e) No Material Adverse Effect..................................25
4.4 Breakfunding Costs................................................25
4.5 Satisfaction after Drawdown.......................................25
5. REPAYMENT AND PREPAYMENT................................................25
5.1 Repayment.........................................................25
5.2 Voluntary Prepayment; No Re-Borrowing.............................26
5.3 Mandatory Prepayment..............................................26
5.4 Interest and Costs with Prepayments/Application of Prepayments....26
6. INTEREST AND RATE.......................................................26
6.1 Applicable Rate...................................................26
6.2 Default Rate......................................................27
6.3 Interest Periods..................................................27
6.4 Interest Payments.................................................27
7. PAYMENTS................................................................27
7.1 Place of Payments, No Set Off.....................................27
7.2 Tax Credits.......................................................28
7.3 Sharing of Setoffs................................................28
7.4 Computations; Banking Days. (a)..................................28
8. EVENTS OF DEFAULT.......................................................28
8.1 Events of Default.................................................28
(a) Non-Payment of Principal....................................28
(b) Non-Payment of Interest or Other Amounts....................29
(c) Representations.............................................29
(d) Impossibility; Illegality...................................29
(e) Mortgage....................................................29
(f) Covenants...................................................29
(g) Debt........................................................29
(h) Ownership of Guarantors.....................................29
(i) Bankruptcy..................................................29
(j) Termination of Operations; Sale of Assets...................30
(k) Judgments...................................................30
(l) Inability to Pay Debts......................................30
(m) Change in Financial Position................................30
(n) Change in Control...........................................30
(o) Cross-Default...............................................30
8.2 Indemnification...................................................31
8.3 Application of Moneys.............................................31
9. COVENANTS...............................................................31
9.1 Affirmative Covenants.............................................31
(a) Performance of Agreements...................................31
(b) Notice of Default, etc......................................32
(c) Obtain Consents.............................................32
(d) Financial Information.......................................32
(e) Vessel Valuations...........................................33
(f) Corporate Existence.........................................33
(g) Books and Records...........................................33
(h) Taxes and Assessments.......................................33
(i) Inspection..................................................33
(j) Inspection and Survey Reports...............................34
(k) Compliance with Statutes, Agreements, etc...................34
(l) Environmental Matters.......................................34
(m) Vessel Management...........................................34
(n) ISM Code, ISPS Code and MTSA Matters........................34
(o) Brokerage Commissions, etc..................................34
(p) Deposit Accounts; Assignment................................35
(q) Insurance...................................................35
(r) Interest Rate Agreements....................................35
9.2 Negative Covenants................................................35
(a) Liens.......................................................35
(b) Debt........................................................35
(c) Change of Flag, Class, Management or Ownership..............36
(d) Chartering..................................................36
(e) Change in Business..........................................36
(f) Sale or Pledge of Shares....................................36
(g) Sale of Assets..............................................36
(h) Changes in Offices..........................................36
(i) Consolidation and Merger....................................36
(j) Change Fiscal Year..........................................36
(k) Limitations on Ability to Make Distributions................36
(l) Use of Corporate Funds......................................36
(m) Issuance of Shares..........................................37
(n) No Money Laundering.........................................37
(o) Accounts....................................................37
(p) Use of Proceeds.............................................37
(q) Borrowers Chief Executive Officer...........................37
9.3 Financial Covenants...............................................37
(a) Adjusted Net Worth..........................................37
(b) EBITDA to Fixed Charges.....................................37
(c) Minimum Liquidity...........................................37
9.4 Asset Maintenance.................................................37
10. ASSIGNMENT..............................................................38
11. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.......................38
11.1 Illegality........................................................38
11.2 Increased Costs...................................................38
11.3 Nonavailability of Funds..........................................39
11.4 Lender's Certificate Conclusive...................................40
11.5 Compensation for Losses...........................................40
12. CURRENCY INDEMNITY......................................................40
12.1 Currency Conversion...............................................40
12.2 Change in Exchange Rate...........................................40
12.3 Additional Debt Due...............................................40
12.4 Rate of Exchange..................................................40
13. FEES AND EXPENSES.......................................................40
13.1 Fees..............................................................40
13.2 Expenses..........................................................41
14. APPLICABLE LAW, JURISDICTION AND WAIVER.................................41
14.1 Applicable Law....................................................41
14.2 Jurisdiction......................................................41
14.3 WAIVER OF JURY TRIAL..............................................42
15. THE AGENTS..............................................................42
15.1 Appointment of Agents.............................................42
15.2 Security Trustee as Trustee.......................................42
15.3 Distribution of Payments..........................................42
15.4 Holder of Interest in Note........................................42
15.5 No Duty to Examine, Etc...........................................42
15.6 Agents as Lenders.................................................43
15.7 Acts of the Agents................................................43
15.8 Certain Amendments................................................43
15.9 Assumption re Event of Default....................................44
15.10 Limitations of Liability..........................................44
15.11 Indemnification of the Agents.....................................44
15.12 Consultation with Counsel.........................................45
15.13 Resignation.......................................................45
15.14 Representations of Lenders........................................45
15.15 Notification of Event of Default..................................45
15.16 No Agency or Trusteeship if not Syndicated........................45
15.17 Nature of Duties..................................................45
15.18 Delegation of Power...............................................46
16. NOTICES AND DEMANDS.....................................................46
16.1 Notices...........................................................46
17. MISCELLANEOUS...........................................................46
17.1 Time of Essence...................................................46
17.2 Unenforceable, etc., Provisions-Effect............................46
17.3 References........................................................47
17.4 Further Assurances................................................47
17.5 Prior Agreements, Merger..........................................47
17.6 Entire Agreement; Amendments......................................47
17.7 Indemnification...................................................47
17.8 Headings..........................................................48
17.9 WAIVER OF IMMUNITY................................................48
SCHEDULE
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1 The Lenders and the Initial Commitments
2 The Guarantors and Vessels
3 Financial Indebtedness
EXHIBITS
A Form of Note
B Form of Guaranty
C-1 Form of Borrower Account Pledge
C-2 Form of Guarantor Account Pledge
D Form of Mortgage
E Form of Earnings Assignment
F Form of Insurances Assignment
G Form of Assignment and Assumption Agreement
H Form of Compliance Certificate
I Form of Drawdown Notice
J Form of Interest Notice
K Form of Approved Manager's Undertaking
SENIOR SECURED TERM CREDIT FACILITY
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THIS SENIOR SECURED TERM CREDIT FACILITY AGREEMENT (this "Credit Facility
Agreement") is made as of the 7th day of November, 2005, by and among (1) TOP
TANKERS INC., a corporation organized and existing under the laws of the
Republic of the ▇▇▇▇▇▇▇▇ Islands (the "Borrower"), (2) the banks and financial
institutions listed on Schedule 1, as lenders (together with any bank or
financial institution which becomes a Lender pursuant to Section 10, the
"Lenders") and (3) HSH NORDBANK AG, acting through its Hamburg Branch ("HSH"),
as administrative agent for the Lenders (in such capacity, the "Administrative
Agent") and as security trustee for the Lenders (in such capacity, the "Security
Trustee").
WITNESSETH THAT:
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WHEREAS, at the request of the Borrower, the Administrative Agent has agreed to
serve in such capacity under the terms of this Credit Facility Agreement and the
Lenders have agreed to provide to the Borrower a senior secured credit facility
for a term loan to be made available in two tranches in the lesser amount of US$
154,000,000 or 65% of the Fair Market Value of the Vessels, as defined below, to
assist the Guarantors to partly finance the acquisition of the Vessels for a
purchase price of not more than US$ 236,600,000;
NOW, THEREFORE, in consideration of the premises set forth above, the covenants
and agreements hereinafter set forth, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as set forth below:
1. DEFINITIONS
1.1 Specific Definitions. In this Credit Facility Agreement the words and
expressions specified below shall, except where the context otherwise requires,
have the meanings attributed to them below:
"Acceptable Accounting Firm" means Ernst & Young, or such other recognized
international accounting firm as shall be
approved by the Administrative Agent, such
approval not to be unreasonably withheld;
"Account Pledge(s)" means each of the pledge agreements to be
executed by the Guarantors in favor of the
Security Trustee in respect of the Earnings
Accounts and the pledge agreement to be executed
by the Borrower in favor of the Security Trustee
and the Lenders in respect of the Retention
Account, each pursuant to Section 4.1(h), and
substantially in the forms set out in Exhibit C-1
and Exhibit C-2;
"Accounting Period" means each consecutive period of three months
falling during the period (ending on the last day
in March, June, September and December of each
year) for which quarterly accounting information
is required to be provided to the Administrative
Agent hereunder;
"Adjusted Net Worth" means, measured at the end of an Accounting
Period, the amount of Total Assets (as adjusted
to include the aggregate Fair Market Value of
each of the vessels owned by the Borrower and
each of its Subsidiaries) less Consolidated Debt
as stated in then most recent accounting
information delivered to the Administrative Agent
hereunder;
"Administrative Agent" shall have the meaning ascribed thereto in the
preamble;
"Advance(s)" means any amount advanced to the Borrower with
respect to the Facility or (as the context may
require) the aggregate amount of all such
Advances for the time being outstanding, such
term to include all of the Advances A and
Advances B;
"Advance(s) A" means each of the four (4) Advances to be made
available under Tranche A, each Advance not to
exceed 55% of the Fair Market Value of the
relevant Vessel;
"Advance(s) B" means each of the four (4) Advances to be made
available under Tranche B, each Advance not to
exceed 10% of the Fair Market Value of the
relevant Vessel;
"Affiliate" means with respect to any Person, any other
Person directly or indirectly controlled by or
under common control with such Person. For the
purposes of this definition, "control"
(including, with correlative meanings, the terms
"controlled by" and "under common control with")
as applied to any Person means the possession
directly or indirectly of the power to direct or
cause the direction of the management and
policies of that Person whether through ownership
of voting securities or by contract or otherwise;
"Agents" means each of the Administrative Agent and the
Security Trustee;
"Applicable Rate" means any rate of interest applicable to the
Facility from time to time pursuant to Section
6.1;
"Approved Manager" means a direct or indirect wholly-owned
subsidiary of the Borrower or any other company
approved by the Lenders from time to time as the
manager of a Vessel, which approval shall not
unreasonably be withheld;
"Approved Manager's
Undertaking(s)" means each of the undertakings made or to be made
by an Approved Manager in favor of the Lenders in
respect of a Vessel, substantially in the form
set out in Exhibit K;
"Assigned Moneys" means sums assigned to or received by the Agents
pursuant to any Security Document;
"Assignment and Assumption
Agreement(s)" means the Assignment and Assumption Agreement(s)
executed pursuant to Section 10 substantially in
the form set out in Exhibit G;
"Assignment Notices" means:
(i) notices with respect to the Earnings
Assignments substantially in the form set
out in Exhibit 1 thereto; and
(ii) notices with respect to the Insurances
Assignments substantially in the form set
out in Exhibit 3 thereto;
"Assignments" means the Earnings Assignments and the Insurances
Assignments;
"Banking Day(s)" means day(s) on which banks are open for the
transaction of business in London, England, New
York, New York (United States of America),
Piraeus, Greece and Hamburg, Germany;
"Borrower" shall have the meaning ascribed thereto in the
preamble;
"Change of Control" means (a) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act),
other than a member of the immediate family of
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more
than 35% of the total voting power or ownership
interest of the Borrower or (b) the Board of
Directors of the Borrower ceases to consist of a
majority of the directors existing on the date
hereof or directors nominated by at least
two-thirds (2/3) of the then existing directors;
"Charterer(s)" shall mean any bareboat charterer or time
charterer who has entered into a Charter Party
Agreement with any of the Guarantors;
"Charter Party Agreement(s)" shall mean any bareboat charter agreement or any
time charter agreement with any of the
Guarantors, having a duration of longer than
eleven (11) months;
"Classification Society" means Lloyd's Register or any other member of the
International Association of Classification
Societies, as approved by the Administrative
Agent, with whom any of the Vessels are entered
and who conducted periodic physical surveys
and/or inspections of any of the Vessels;
"CLO" shall have the meaning ascribed thereto in
Section 10;
"Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute and regulation
promulgated thereunder;
"Collateral" means all property or other assets, real or
personal, tangible or intangible, whether now
owned or hereafter acquired in which any Agent or
any Lender has been granted a security interest
pursuant to a Security Document;
"Commitment(s)" means in relation to a Lender, the portion of the
Facility set out opposite its name in Schedule 1
or, as the case may be, as reduced by or set out
in any relevant Assignment and Assumption
Agreement, as such amount shall be reduced from
time to time pursuant to Section 5;
"Commitment Fee" shall have the meaning ascribed thereto in
Section 13.1;
"Commitment Termination
Date" shall mean December 31, 2005;
"Compliance Certificate" means a certificate certifying the compliance by
the Borrower and/or each of the Guarantors, as
the case may be, with all of its respective
covenants contained herein and showing the
calculations thereof in reasonable detail,
executed and delivered by the chief financial
officer of the Borrower to the Administrative
Agent from time to time pursuant to Section
9.1(d) in the form set out in Exhibit H, or in
such other form as the Administrative Agent may
agree;
"Consent and Agreement" means the consent and agreement relating to this
Credit Facility Agreement to be executed by each
of the Guarantors in the form attached hereto;
"Consolidated Debt" means, measured at the end of an Accounting
Period for the Borrower and its Subsidiaries on a
consolidated basis, the aggregate amount of Debt
due by the Security Parties as stated in the then
most recent accounting information delivered to
the Administrative Agent hereunder;
"Consolidated Financial
Indebtedness" means, measured at the end of each Accounting
Period, the aggregate amount of Financial
Indebtedness (including current maturities) of
the Borrower and its Subsidiaries on a
consolidated basis as stated in the then most
recent accounting information delivered to the
Administrative Agent hereunder;
"Credit Facility Agreement" means this agreement, as the same shall be
amended, modified or supplemented from time to
time;
"Current Assets" means, measured at the end of each Accounting
Period, the aggregate of the cash and marketable
securities, trade and other receivables of the
Borrower and its Subsidiaries on a consolidated
basis from persons which can be realized within
one year, inventories and prepaid expenses which
are to be charged to income within one year less
any doubtful debts and any discounts or
allowances given as stated in the then most
recent accounting information delivered to the
Administrative Agent hereunder;
"Debt" means, in relation to the Borrower and its
Subsidiaries (the "debtor"): (a) Financial
Indebtedness of the debtor; (b) liability for any
credit to the debtor from a supplier of goods or
services or under any installment purchase or
payment plan or similar arrangement; (c)
contingent liabilities of the debtor (including
without limitation any taxes or other payments
under dispute) which have been or, under GAAP,
should be recorded in the notes to the accounting
information; (d) deferred tax of the debtor; and
(e) liability under a guarantee, indemnity or
similar obligation entered into by the debtor in
respect of a liability of another person who is
not a Security Party which would fall within (a)
to (d) if the references to the debtor referred
to the other Person;
"Default Rate" shall have the meaning ascribed thereto in
Section 6.2;
"Delivery Advance" means with respect to each Tranche, the Advance
to be made to the Borrower in respect of the
delivery of the Vessel to which such Tranche
relates;
"Delivery Date" means with respect to each Vessel the date on
which Vessel is delivered to the respective
Guarantor;
"DOC" means a document of compliance issued to an
Operator in accordance with rule 13 of the ISM
Code;
"Dollars" and the sign "$" means the legal currency, at any relevant time
hereunder, of the United States of America and,
in relation to all payments hereunder, in same
day funds settled through the New York Clearing
House Interbank Payments System (or such other
Dollar funds as may be determined by the
Administrative Agent to be customary for the
settlement in New York City of banking
transactions of the type herein involved);
"Drawdown Date(s)" means the dates, each being a Banking Day, upon
which the Borrower has requested that an Advance
be made available to the Borrower, and such
Advance is made, as provided in Section 3;
provided, that no Drawdown Date shall occur after
the Commitment Termination Date;
"Drawdown Notice" shall have the meaning ascribed thereto in
Section 3.2;
"EBITDA" means, in respect of an Accounting Period, the
aggregate amount of consolidated pre-tax profits
of the Borrower and its Subsidiaries before
extraordinary or exceptional items, depreciation,
interest, rentals under finance leases and
similar charges payable as stated in the then
most recent accounting information;
"Earnings Account" shall have the meaning ascribed thereto in
Section 4.1(h);
"Earnings Assignment(s)" Means the assignments in respect of the earnings
of each Vessel from any and all sources, to be
executed by the relevant Guarantor in favor of
the Security Trustee pursuant to Section 4.2(b),
substantially in the form set out in Exhibit E;
"Environmental Affiliate(s)" means any person or entity, the liability of
which for Environmental Claims any Security Party
or Subsidiary of any Security Party may have
assumed by contract or operation of law;
"Environmental Approval(s)" shall have the meaning ascribed thereto in
Section 2.1(o);
"Environmental Claim(s)" shall have the meaning ascribed thereto in
Section 2.1(o);
"Environmental Law(s)" shall have the meaning ascribed thereto in
Section 2.1(o);
"Event(s) of Default" means any of the events set out in Section 8.1;
"Exchange Act" shall mean the Securities and Exchange Act of
1934, as amended;
"Facility" means the term loan facility to be made available
by the Lenders to the Borrower hereunder in two
Tranches, each comprised of four (4) Advances,
pursuant to Section 3; and being, in the
aggregate, no more than the lesser of (i) One
Hundred Fifty Four Million Dollars ($154,000,000)
or (ii) sixty-five percent (65%) of the Fair
Market Value of the Vessels;
"Fair Market Value" means in relation to a Vessel, her sale value
(determined as the average of two valuations
prior to the Drawdown Date, and thereafter one
valuation with the annual financial statements
and one valuation with the interim financial
statements, each of them not older than six weeks
from any of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇, London,
England or Astrup Fearnley A/S, Oslo, Norway or
AC Shipping, London, England or ▇.▇. ▇▇▇▇▇▇
Shipbrokers A/S, Oslo, Norway or ▇▇▇▇▇▇▇▇▇'▇
Limited, London, England or H. Clarksons & Co.
Ltd., London, England) with or without physical
inspection (as the Lender may require) in United
States Dollars on the basis of the sale of the
Vessel (i) for prompt delivery, (ii) for cash,
(iii) (A) with or without taking into account
charter party for Vessels with charter parties of
less than 12 months remaining duration (whichever
results in a lower value) or (B) at the value of
the relevant Vessel after taking into account the
relevant charter party if such charter party has
a remaining duration of more than 12 months
provided that the charterer is, in the reasonable
discretion of the Lender, of acceptable credit
quality and (iv) at arm's length on normal
commercial terms between a willing seller and a
willing buyer. If the two valuations obtained
prior to the Drawdown Date differ by a margin of
more than fifteen percent (15%) then a third
appraiser from the aforementioned firms selected
by the Administrative Agent shall make an
independent appraisal at the Borrower's expense,
and the Fair Market Value of the Vessel shall be
considered to be the average of all three
valuations obtained;
"Final Tranche A Payment
Date" means, that date which is eight years after the
Delivery Date of the last Vessel delivered to the
Guarantors, but not later than December 31, 2013;
"Final Tranche B Payment
Date" means, that date which is four years after the
Delivery Date of the last Vessel delivered to the
Guarantors, but not later than December 31, 2009;
"Financial Indebtedness" means, in relation to the Borrower and its
Subsidiaries (the "debtor"), a liability of the
debtor: (a) for principal, interest or any other
sum payable in respect of any moneys borrowed or
raised by the debtor; (b) under any loan, stock,
bond, note or other security issued by the
debtor; (c) under any acceptance credit,
guarantee or letter of credit facility made
available to the debtor; (d) under a financial
lease, a deferred purchase consideration
arrangement (in each case, other than in respect
of assets or services obtained on normal
commercial terms in the ordinary course of
business) or any other agreement having the
commercial effect of a borrowing or raising of
money by the debtor; (e) under any foreign
exchange transaction, interest or currency swap
or any other kind of derivative transaction
entered into by the debtor or, if the agreement
under which any such transaction is entered into
requires netting of mutual liabilities, the
liability of the debtor for the net amount; or
(f) under a guarantee, indemnity or similar
obligation entered into by the debtor in respect
of a liability of another person which would fall
within (a) to (e) if the references to the debtor
referred to the other person;
"Fixed Charges" means, measured at the end of an Accounting
Period, the aggregate of Interest Expenses and
the portion of Consolidated Financial
Indebtedness (other than balloon repayments) plus
any payments under bareboat charters in respect
of the Borrower and its Subsidiaries falling due
during that period, as stated in the then most
recent accounting information provided to the
Administrative Agent hereunder;
"GAAP" shall have the meaning ascribed thereto in
Section 1.3;
"Guarantors" means each of the Borrower's wholly-owned
subsidiaries listed on Schedule 2 hereto;
"Guaranty" means the unconditional and irrevocable guaranty
to be executed by each of the Guarantors in
respect of the obligations of the Borrower under
and in connection with this Credit Facility
Agreement and the Note in favor of the Security
Trustee pursuant to Section 4.l(c), substantially
in the set out in form of Exhibit B;
"HSH" shall have the meaning ascribed thereto in the
preamble;
"Hull Cover Ratio" shall mean the ratio, expressed as a percentage,
of the Fair Market Value of the Vessels then
mortgaged hereunder divided by the outstanding
principal amount under Facility;
"Indemnitee" shall have the meaning ascribed thereto in
Section 17.7;
"Initial Advance" means the first Advance to be made under the
Facility;
"Initial Payment Date" means the date which is three (3) months after
the last Delivery Date, but no later than March
31, 2006;
"Insurances Assignment" means the assignments in respect of the
insurances over each of the Vessels to be
executed by the relevant Guarantor in favor of
the Security Trustee pursuant to Section 4.2(b),
substantially in the form set out in Exhibit F;
"Interest Expense" means, measured at the end of an Accounting
Period, the aggregate on a consolidated basis of
all interest incurred by the Borrower and its
Subsidiaries and any net amounts payable under
interest rate hedge agreements, as stated in the
then most recent accounting information provided
to the Administrative Agent hereunder;
"Interest Notice" means a notice from the Borrower to the
Administrative Agent specifying the duration of
any relevant Interest Period, each substantially
in the form set out in Exhibit J;
"Interest Payment Date" means each date on which accrued interest on the
Facility shall be payable pursuant to Section
6.4;
"Interest Period(s)" means period(s) of one (1), three (3), six (6) or
twelve (12) months as selected by the Borrower,
or as otherwise agreed by the Lenders and the
Borrower, provided, however, that the Borrower
may only select the one (1) month option up to
three (3) times per year;
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate
option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other
similar agreement or arrangement entered into
between the Borrower with the Swap Provider,
which is designed to protect the Borrower against
fluctuations in interest rates applicable under
this Agreement, to or under which the Borrower,
the Guarantors or any of the Borrower's
Subsidiaries is a party or a beneficiary on the
date of this Agreement or becomes a party or a
beneficiary hereafter;
"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
Organization 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 Ship and Port Facility
Security Code adopted by the International
Maritime Organization (as the same may be amended
from time to time);
"ISSC" means a valid and current International Ship
Security Certificate issued under the ISPS Code;
"Lender(s)" shall have the meaning ascribed thereto in the
preamble;
"LIBOR" means the rate for deposits of Dollars for a
period equivalent to the relevant Interest Period
at or about 11:00 a.m. (London time) on the
second London Banking Day before the first day of
such period as displayed on Telerate page 3750
(British Bankers' Association Interest Settlement
Rates) (or such other page as may replace such
page 3750 on such system or on any other system
of the information vendor for the time being
designated by the British Bankers' Association to
calculate the BBA Interest Settlement Rate (as
defined in the British Bankers' Association's
Recommended Terms and Conditions ("BBAIRS" terms)
dated August 1985)), provided that if on such
date no such rate is so displayed for the
relevant Interest Period, LIBOR for such period
shall be the rate quoted to the Administrative
Agent by the Reference Bank at the request of the
Administrative Agent as the offered rate for
deposits of Dollars in an amount approximately
equal to the amount in relation to which LIBOR is
to be determined for a period equivalent to the
relevant Interest Period to prime banks 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;
"Liquid Funds" means, measured at the end of an Accounting
Period: (a) cash in hand or held with banks or
other financial institutions of the Borrower
and/or any other Security Party in Dollars or
another currency freely convertible into Dollars,
which is free of any security interest (other
than a permitted security interest and other than
ordinary bankers' liens which have not been
enforced or become capable of being enforced); or
(b) any other short-term financial investments
which is free of any Security Interest (other
than a permitted security interest), as stated in
the then most recent accounting information
delivered to the Administrative Agent hereunder;
"Loan-to-Value Ratio" shall mean the ratio of the aggregate Fair Market
Value of the Vessels over the drawn amounts of
the Facility;
"Majority Lenders" means, at any time, Lenders holding an aggregate
of more than 60% of the Advances then
outstanding;
"Mandatory Costs" means the cost of complying with any applicable
regulatory requirements of any relevant
regulatory authority;
"Margin" shall mean, in respect of:
(a) Tranche A, in the case the Loan-to-Value is:
(1) equal to or below 60%, the Margin for
the next 6-month period shall be 0.80%
per annum;
(2) above 60% but equal or below 70%, the
Margin for the next 6-month period
shall be 0.90% per annum; and
(3) above 70%, the Margin for the next
12-month period shall be 1.10% per
annum;
(b) Tranche B, in case the Loan-to-Value Ratio
is:
(1) equal to or below 65%, the Margin for
the next 6-month period shall be 1.10%
per annum;
(2) above 65% but equal or below 75%, the
Margin for the next 6-month period
shall be 1.35% per annum; and
(3) above 75%, the Margin for the next
12-month period shall be 1.60% per
annum;
"Material Adverse Effect" shall mean a material adverse effect on (i) the
ability of the Borrower to repay the Advances or
perform any of its obligations hereunder or under
the Note, (ii) the ability of any Security Party
to perform its obligations under any Security
Documents or (iii) the business, property,
assets, liabilities, operations, condition
(financial or otherwise) or prospects of the
Security Parties taken as a whole;
"Minimum Liquidity Amount" means Five Million Dollars ($5,000,000.00);
"Mortgage(s)" means each of the first preferred
cross-collateralized ship mortgages on each of
the Vessels, to be executed under the laws of a
Permitted Jurisdiction by the respective
Guarantors as listed in Schedule 2 in favor of
the Security Trustee (as trustee for the Lenders)
pursuant to Section 4.2(b), substantially in the
form set out in Exhibit D;
"MTSA" means the Maritime and Transportation Security
Act, 2002, as amended, inter alia, by Public Law
107-295;
"Note" means the promissory note to be executed by the
Borrower to the order of the Administrative Agent
pursuant to Section 4.1(b), to evidence the
Facility, substantially in the form set out in
Exhibit A;
"Operator" means, in respect of any Vessel, the Person who
is concerned with the operation of such Vessel
and falls within the definition of "Company" set
out in rule 1.1.2 of the ISM Code;
"Payment Dates" means the Initial Payment Date and the dates
falling at three month intervals thereafter, the
last of which is the Final Payment Date;
"Permitted Jurisdiction" means the Republic of the ▇▇▇▇▇▇▇▇ Islands or
such other jurisdiction as may be approved in
writing by the Majority Lenders;
"Person" means any individual, sole proprietorship,
corporation, partnership (general or limited),
limited liability company, business trust, bank,
trust company, joint venture, association, joint
stock company, trust or other unincorporated
organization, whether or not a legal entity, or
any government or agency or political subdivision
thereof;
"Proceeding" shall have the meaning ascribed thereto in
Section 8.1(i);
"Reference Bank" means HSH;
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from
time to time;
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from
time to time;
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from
time to time;
"Required Percentage" means, until the repayment of Tranche B, one
hundred and forty percent (140%), and thereafter,
one hundred and thirty percent (130%) of the
amount of the outstanding Facility and the
notional cost or actual cost (if any) as
determined by the Lender of terminating any
interest rate swap entered into by the Borrower;
"Retention Account" shall have the meaning ascribed thereto in
Section 4.1(h);
"Retention Amount" shall mean an amount equal to one third (1/3) of
the next quarterly principal payment due in
accordance with Section 5 hereof and the relevant
fraction of interest accruing on the Facility
during the next month in accordance with Section
6 hereof;
"Retention Date" shall mean the date one month after the
respective Drawdown Date and at monthly intervals
thereafter;
"Security Document(s)" means the Pledge Agreement, the Guaranty, the
Mortgages, the Assignments and any other
documents that may be executed as security for
the Facility and the Borrower's obligations in
connection therewith;
"Security Party(ies)" means the Borrower and each of the Guarantors;
"Security Trustee" shall have the meaning ascribed thereto in the
preamble;
"SMC" means the safety management certificate issued in
respect of each Vessel in accordance with rule 13
of the ISM code;
"Subsidiary(ies)" means, with respect to any Person, any business
entity of which more than 50% of the outstanding
voting stock or other equity interest is owned
directly or indirectly by such Person and/or one
or more other Subsidiaries of such Person;
"Swap Provider" shall mean HSH;
"Tangible Fixed Assets" means, measured at the end of an Accounting
Period, the value (less depreciation computed in
accordance with GAAP) on a consolidated basis of
all tangible fixed assets of the Security Parties
as stated in the then most recent accounting
information delivered to the Administrative Agent
hereunder;
"Taxes" means any present or future income or other
taxes, levies, duties, charges, fees, deductions
or withholdings of any nature now or hereafter
imposed, levied, collected, withheld or assessed
by any taxing authority whatsoever, except for
taxes on or measured by the overall net income of
each Lender imposed by its jurisdiction of
incorporation or applicable lending office, the
United States of America, the State or City of
New York or any governmental subdivision or
taxing authority of any thereof or by any other
taxing authority having jurisdiction over such
Lender (unless such jurisdiction is asserted by
reason of the activities of any of the Security
Parties);
"Total Assets" means, measured at the end of an Accounting
Period, the aggregate of Current Assets and
Tangible Fixed Assets as stated in the then most
recent financial information delivered to the
Administrative Agent hereunder;
"Total Loss" shall have the meaning ascribed thereto in the
Mortgages;
"Tranche(s)" means any, all or any combination, as the context
requires, of Tranche A and Tranche B;
"Tranche A" means the lesser of One Hundred Thirty Million
Dollars ($130,000,000) and fifty-five percent
(55%) of the Fair Market Value of the Vessels, to
be made available to the Borrower in four (4)
Advances A, one per Vessel;
"Tranche B" means the lesser of Twenty Four Million Dollars
($24,000,000) and ten percent (10%) of the Fair
Market Value of the Vessels, to be made available
to the Borrower in four (4) Advances B, one per
Vessel; and
"Vessel(s)" each of the Vessels listed in Schedule 2,
registered or to be registered in the name of the
relevant Guarantor as set forth in such Schedule,
but excluding any Vessel for which a mandatory
prepayment is made pursuant to Section 5.3.
1.2 Computation of Time Periods; Other Definitional Provisions. In this Credit
Facility Agreement, the Note and the Security Documents, in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding"; words importing either gender include the other gender; references
to "writing" include printing, typing, lithography and other means of
reproducing words in a tangible visible form; the words "including," "includes"
and "include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Credit Facility Agreement, the Note or such
Security Document, as applicable; references to agreements and other contractual
instruments (including this Credit Facility Agreement, the Note and the Security
Documents) shall be deemed to include all subsequent amendments, amendments and
restatements, supplements, extensions, replacements and other modifications to
such instruments (without, however, limiting any prohibition on any such
amendments, extensions and other modifications by the terms of this Credit
Facility Agreement, the Note or any Security Document); references to any matter
that is "approved" or requires "approval" of a party shall mean approval given
in the sole and absolute discretion of such party unless otherwise specified.
1.3 Accounting Terms. Unless otherwise specified herein, all accounting terms
used in this Credit Facility Agreement, the Note and in the Security Documents
shall be interpreted, and all financial statements and certificates and reports
as to financial matters required to be delivered to the Administrative Agent or
to the Lenders under this Credit Facility Agreement shall be prepared, in
accordance with generally accepted accounting principles for the United States
("GAAP") as from time to time in effect.
1.4 Certain Matters Regarding Materiality. To the extent that any
representation, warranty, covenant or other undertaking of the Borrower or any
of the Guarantors in this Credit Facility Agreement is qualified by reference to
those which are not reasonably expected to result in a "Material Adverse Effect"
or language of similar import, no inference shall be drawn therefrom that any
Agent or Lender has knowledge or approves of any noncompliance by the Borrower
or any of the Guarantors with any governmental rule.
1.5 Forms of Documents. Except as otherwise expressly provided in this Credit
Facility Agreement, references to documents or certificates "substantially in
the form" of Exhibits to another document shall mean that such documents or
certificates are duly completed in the form of the related Exhibits with
substantive changes subject to the provisions of Section 17.6 of this Credit
Facility Agreement, as the case may be, or the correlative provisions of the
Security Documents.
2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties. In order to induce the Agents and the
Lenders to enter into this Credit Facility Agreement and to induce the Lenders
to make the Facility available, the Borrower (and each of the Guarantors by
their execution of the Consent and Agreement annexed hereto) hereby represents
and warrants to the Agents and the Lenders (which representations and warranties
shall survive the execution and delivery of this Credit Facility Agreement and
the Note and the drawdown of each Advance hereunder) that:
(a) Due Organization and Power. each Security Party is duly formed and
is validly existing in good standing under the laws of its jurisdiction of
incorporation or formation, has full power to carry on its business as now being
conducted and to enter into and perform its obligations under this Credit
Facility Agreement, the Note and the Security Documents to which it is a party,
and has complied with all statutory, regulatory and other requirements relative
to such business and such agreements;
(b) Authorization and Consents. all necessary corporate action has
been taken to authorize, and all necessary consents and authorities have been
obtained and remain in full force and effect to permit, each Security Party to
enter into and perform its obligations under this Credit Facility Agreement, the
Note and the Security Documents, to which it is a party, and, in the case of the
Borrower, to borrow, service and repay the Advances and, as of the date of this
Credit Facility Agreement, no further consents or authorities are necessary for
the service and repayment of the Advances or any part thereof;
(c) Binding Obligations. this Credit Facility Agreement, the Note and
the Security Documents constitute or will, when executed and delivered,
constitute the legal, valid and binding obligations of each Security Party as is
a party thereto enforceable against such Security Party in accordance with their
respective terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting generally the enforcement of creditors' rights;
(d) No Violation. the execution and delivery of, and the performance
of the provisions of, this Credit Facility Agreement, the Note and those of the
Security Documents to which it is to be a party by each Security Party do not
contravene any applicable law or regulation existing at any date this
representation is given or any contractual restriction binding on such Security
Party or the certificate of incorporation or by-laws (or equivalent instruments)
thereof and that the proceeds of the Advances shall be used by the Borrower
exclusively for its own account or for the account of a Subsidiary or Affiliate
of the Borrower;
(e) Filings; Stamp Taxes. other than the recording of the Mortgages
with the appropriate authorities for the United States, and the filing of UCC
Financing Statements in the District of Columbia in respect of the Assignments,
and the payment and filing or recording fees consequent thereto, it is not
necessary for the legality, validity, enforceability or admissibility into
evidence of this Credit Facility Agreement, the Note or the Security Documents
that any of them or any document relating thereto be registered, filed, recorded
or enrolled with any court or authority in any relevant jurisdiction or that any
stamp, registration or similar Taxes be paid on or in relation to this
Agreement, the Note or any of the Security Documents;
(f) Litigation. except as has been publicly disclosed by the Borrower,
no action, suit or proceeding is pending or threatened against the Borrower or
any Subsidiary before any court, board of arbitration or administrative agency
which is reasonably likely to result in a Material Adverse Effect;
(g) No Default. neither the Borrower, the Guarantors nor any of their
Subsidiaries is in default under any material agreement by which it is bound, or
is in default in respect of any financial commitment or obligation;
(h) Vessels. upon the date of the making of each Advance, each of the
Vessels :
(i) will be in the sole and absolute ownership of the respective
Guarantor as set forth in Schedule 2 and duly registered in
such Guarantor's name under the flag of a Permitted
Jurisdiction, unencumbered, save and except for the Mortgage
recorded against it and as permitted thereby;
(ii) will be classed in the highest classification and rating for
vessels of the same age and type with the respective
Classification Society as set forth in Schedule 2 without
any outstanding recommendations affecting class and without
any qualifications;
(iii) will be operationally seaworthy and in every way fit for
its intended service; and
(iv) will be insured in accordance with the provisions of the
Mortgage recorded against it and the requirements thereof in
respect of such insurances will have been complied with;
(i) Insurance. each of the Security Parties has insured its properties
and assets against such risks and in such amounts as are customary for companies
engaged in similar businesses;
(j) Financial Information. on or prior to the date hereof, all
financial statements, information and other data furnished by the Borrower to
the Administrative Agent are complete and correct, such financial statements
have been prepared in accordance with GAAP and accurately and fairly present the
financial condition of the parties covered thereby as of the respective dates
thereof and the results of the operations thereof for the period or respective
periods covered by such financial statements, and, since the date of the
Borrower's financial statements most recently delivered to the Administrative
Agent, there has been no Material Adverse Effect as to any of such parties and
none thereof has any contingent obligations, liabilities for taxes or other
outstanding financial obligations, except as disclosed in such statements,
information and data;
(k) Tax Returns. the Borrower and each of its Subsidiaries have filed
all tax returns required to be filed by them and have paid all taxes payable by
them which have become due, other than those not yet delinquent and except for
those taxes being contested in good faith and by appropriate proceedings or
other acts and for which adequate reserves shall have been set aside on its
books;
(l) Chief Executive Office. the Borrower's chief executive office and
chief place of business and the office in which the records relating to the
earnings and other receivables of each Subsidiary are kept is located at ▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Center, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇;
(m) Foreign Trade Control Regulations. none of the transactions
contemplated herein will violate the provisions of any statute or regulation
enacted to prohibit or limit economic transactions with foreign Persons
including, without limitation, the Foreign Assets Control Regulations of the
United States of America (Title 31, Code of Federal Regulations, Chapter V, Part
500, as amended), any of the provisions of the Cuban Assets Control Regulations
of the United States of America (Title 31, Code of Federal Regulations, Chapter
V, Part 515, as amended), any of the provisions of the Iranian Transaction
Regulations of the United States of America (Title 31, Code of Federal
Regulations, Chapter V, Part 560, as amended), any of the provisions of the
Iraqi Sanctions Regulations (Title 31, Code of Federal Regulations, Chapter V,
Part 575, as amended) or any of the provisions of the Regulations of the United
States of America Governing Transactions in Foreign Shipping of Merchandise
(Title 31, Code of Federal Regulations, Chapter V, Part 505, as amended);
(n) Equity Ownership. each of the Guarantors is a wholly owned
subsidiary of the Borrower;
(o) Environmental Matters and Claims. (a) except as heretofore
disclosed in writing to the Administrative Agent and the Lenders (i) the
Borrower, each of its Subsidiaries and their Affiliates will be in compliance
with all applicable United States federal and state, local, foreign and
international laws, regulations, conventions and agreements relating to
pollution prevention or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water,
navigable waters, waters of the contiguous zone, ocean waters and international
waters), including, without limitation, laws, regulations, conventions and
agreements relating to (1) emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous materials, oil, hazardous substances, petroleum and petroleum products
and by-products ("Materials of Environmental Concern"), or (2) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern ("Environmental Laws"); (ii) the
Borrower, each of its Subsidiaries and their Affiliates will have all permits,
licenses, approvals, rulings, variances, exemptions, clearances, consents or
other authorizations required under applicable Environmental Laws
("Environmental Approvals") and will, when required, be in compliance with all
Environmental Approvals required to operate their business as then being
conducted; (iii) none of the Borrower, any Subsidiary (including, for the
avoidance of doubt, the Guarantors) nor any Affiliate thereof has received any
notice of any claim, action, cause of action, investigation or demand by any
person, entity, enterprise or government, or any political subdivision,
intergovernmental body or agency, department or instrumentality thereof,
alleging potential liability for, or a requirement to incur, material
investigator costs, cleanup costs, response and/or remedial costs (whether
incurred by a governmental entity or otherwise), natural resources damages,
property damages, personal injuries, attorneys' fees and expenses, or fines or
penalties, in each case arising out of, based on or resulting from (1) the
presence, or release or threat of release into the environment, of any Materials
of Environmental Concern at any location, whether or not owned by such person,
or (2) circumstances forming the basis of any violation, or alleged violation,
of any Environmental Law or Environmental Approval ("Environmental Claim")
(other than Environmental Claims that have been fully and finally adjudicated or
otherwise determined and all fines, penalties and other costs, if any, payable
by the Security Parties in respect thereof have been paid in full or which are
fully covered by insurance (including permitted deductibles)); and (iv) there
are no circumstances that may prevent or interfere with such full compliance in
the future; and (b) except as heretofore disclosed in writing to the
Administrative Agent there is no Environmental Claim pending or threatened
against the Borrower, any Subsidiary or any Affiliate thereof and there are no
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge or
disposal of any Materials of Environmental Concern, that could form the basis of
any Environmental Claim against such persons the adverse disposition of which
may result in a Material Adverse Effect;
(p) Compliance with ISM Code, the ISPS Code and the MTSA. each Vessel
complies and each Operator complies with the requirements of the ISM Code, the
ISPS Code and the MTSA including (but not limited to) the maintenance and
renewal of valid certificates pursuant thereto;
(q) No Threatened Withdrawal of DOC, ISSC or SMC. there is no actual
or, to the best of the Borrower's knowledge, threatened withdrawal of any
Operator's DOC or any Vessel's ISSC or SMC or other certification or
documentation related to the ISM Code or otherwise required for the operation of
such vessels in respect of any of the Vessels;
(r) Liens. other than as permitted hereby, there are no liens of any
kind on any property owned by the Borrower or any Subsidiary of the Borrower
other than liens occurring in the ordinary course of business and paid in a
timely manner;
(s) Financial Indebtedness. , neither the Borrower nor any Guarantor
has, on the date hereof, Financial Indebtedness other than as set out on
Schedule 3 hereto;
(t) No Proceedings to Dissolve. there are no proceedings or actions
pending or contemplated by any Security Party, or, contemplated by any third
party, to dissolve or terminate any Security Party;
(u) Solvency. in the case of each of the Security Parties, (a) the sum
of its assets, at a fair valuation, does and will exceed its liabilities,
including, to the extent they are reportable as such in accordance with GAAP,
contingent liabilities, (b) the present fair market salable value of its assets
is not and shall not be less than the amount that will be required to pay its
probable liability on its then existing debts, including, to the extent they are
reportable as such in accordance with GAAP, contingent liabilities, as they
mature, (c) it does not and will not have unreasonably small working capital
with which to continue its business and (d) it has not incurred, does not intend
to incur and does not believe it will incur, debts beyond its ability to pay
such debts as they mature;
(v) Pari Passu Ranking. each of the Security Parties' obligations
under this Credit Facility Agreement, the Note and the Security Documents rank
at least pari passu with all its other present and future unsecured and
unsubordinated payment obligations, except for obligations mandatorily preferred
by law applying to companies generally;
(w) Taxes on Payments. all amounts payable by each of the Security
Parties to the Administrative Agent under this Facility Agreement and the
Security Documents may be made without any deduction for Taxes;
(x) Jurisdiction/Governing Law. (a) the Borrower's irrevocable
submission under this Credit Facility Agreement to the jurisdiction of the
courts of the State of New York and the United States District Court for the
Southern District of New York, agreement that this Credit Facility is governed
by New York law, and agreement not to claim any immunity to which it or its
assets may be entitled are legal, valid and binding under the laws of its
jurisdiction of incorporation; and (b) any judgment obtained in the courts of
the State of New York and the United States District Court for the Southern
District of New York England will be recognized and enforceable by the courts of
its jurisdiction of incorporation, subject to any statutory or other conditions
of such jurisdiction;
(y) Charters. the Borrower has not received prepayments of hire for a
duration of longer than one month;
(z) Compliance with Laws. each of the Security Parties is in
compliance with all applicable laws except where the failure to comply would not
alone or in the aggregate result in a Material Adverse Effect; and
(aa) Survival. all representations, covenants and warranties made
herein and in any certificate or other document delivered pursuant hereto or in
connection herewith shall survive the making of the Advances and the issuance of
the Note.
3. THE ADVANCES
3.1 (a) Purposes. The Lenders shall make the Advances available to the Borrower
for the purpose of financing the acquisition of the Vessels.
(b) Making of the Advances.
(i) Each of the Lenders, relying upon each of the representations
and warranties set out in Section 2, hereby severally and not jointly agrees
with the Borrower that, subject to and upon the terms of this Credit Facility
Agreement, it will, not later than 11:00 A.M. (New York City time) on the
Drawdown Date of each Advance (except as provided in subsection (ii) of this
Section), make its portion of the relevant Advance, in Federal or other funds
immediately available in New York City, to the Administrative Agent at its
address and to such account as set forth on Schedule 1 or to such account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. Unless the Administrative Agent determines that any applicable
condition specified in Section 4.1, 4.2, 4.3 or 4.4 has not been satisfied, the
Administrative Agent will make the funds so received from the Lenders available
to the Borrower at the aforesaid address, subject to the receipt of the funds by
the Administrative Agent as provided in the immediately preceding sentence, not
later than 10:00A.M. (New York City time) on the date of such Advance, and in
any event as soon as practicable after receipt. All Advances, subject to the
other terms and conditions hereof, shall be in a minimum amount of One Million
Dollars ($1,000,000) and in multiples of Two Hundred Fifty Thousand Dollars
($250,000). The Facility shall be repayable as provided in Section 5. The
Lenders' obligation to make any Advance hereunder shall terminate if the Vessels
are not delivered to the Guarantors by the Commitment Termination Date.
(ii) Unless the Administrative Agent shall have received notice
from a Lender prior to the Drawdown Date of any Advance that such Lender will
not make available to the Administrative Agent such Lender's share of such
Advance, the Administrative Agent may assume that such Lender has made such
share available to the Administrative Agent on the date of such Advance in
accordance with this Section 3.1 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such share available to the Administrative Agent, such Lender and the
Borrower (but without duplication and not if such Lender is an affiliate of the
Administrative Agent) severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, a rate per annum equal to the higher of (y) the LIBOR rate for
overnight or weekend deposits plus the Margin and (z) the interest rate
applicable thereto pursuant to Section 6.1 and (ii) in the case of such Lender,
the LIBOR rate for overnight or weekend deposits. If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Advance included in such Advance for purposes of this
Credit Facility Agreement as of the date such Advance was made. Nothing in this
subsection (b)(ii) shall be deemed to relieve any Lender of its obligation to
make Advances to the extent provided in this Credit Facility Agreement. In the
event that the Borrower is required to repay an Advance to the Administrative
Agent pursuant to this Section 3.1(b)(ii), as between the Borrower and the
defaulting Lender, the liability for any breakfunding costs as described in
Section 4.5 shall be borne by the defaulting Lender. If the defaulting Lender
has not paid any such breakage costs upon demand by the Administrative Agent
therefor, the Borrower shall pay such breakage costs upon demand by the
Administrative Agent and the Borrower shall be entitled to recover any such
payment for breakfunding costs made by the Borrower from the defaulting Lender.
3.2 Drawdown Notice. The Borrower shall, at least three (3) Banking Days before
a Drawdown Date, serve a notice (a "Drawdown Notice"), substantially in the form
of Exhibit I, on the Administrative Agent, which notice shall (a) be in writing
addressed to the Administrative Agent, (b) be effective on receipt by the
Administrative Agent, (c) specify the amount of such Advance to be drawn, (d)
specify the Banking Day on which such Advance is to be drawn and, subject to the
terms of Section 6.3 hereof, the Interest Period, (e) specify the disbursement
instructions and (f) be irrevocable. The Administrative Agent shall deliver the
Drawdown Notice to Lenders as soon as practicable after its receipt thereof.
3.3 Effect of Drawdown Notice. Such Drawdown Notice shall be deemed to
constitute a warranty by the Borrower (a) that the representations and
warranties stated in Section 2 (updated mutatis mutandis) are true and correct
on and as of the date of such Drawdown Notice and will be true and correct on
and as of the relevant Drawdown Date as if made on such date, and (b) that no
Event of Default nor any event which with the giving of notice or lapse of time
or both would constitute an Event of Default has occurred and is continuing.
3.4 Notation of Advances. Each Advance made by the Lenders to the Borrower may
be evidenced by a notation of the same made by the Administrative Agent on the
grid attached to the Note, which notation, absent manifest error, shall be prima
facie evidence of the amount of the relevant Advance.
4. CONDITIONS
4.1 Conditions Precedent to the Initial Advance. The obligation of the Lenders
to make the Initial Advance available to the Borrower under this Credit Facility
Agreement shall be expressly subject to the following conditions precedent:
(a) Corporate Authority. the Administrative Agent shall have received
the following documents in form and substance satisfactory to the Administrative
Agent:
(i) copies, certified as true and complete by an officer of
Borrower, of the resolutions of the board of directors of
the Borrower evidencing approval of this Credit Facility
Agreement and the Note and authorizing an appropriate
officer or officers or attorney-in-fact or attorneys-in-fact
to execute the same on its behalf, or other evidence of such
approvals and authorizations;
(ii) copies, certified as true and complete by an officer of each
of the Guarantors, of the resolutions of the board of
directors evidencing approval of this Credit Facility, the
Guaranty and those Security Documents to which it is to be a
party and authorizing an appropriate officer or officers or
attorney-in-fact or attorneys-in-fact to execute the same on
its behalf, or other evidence of such approvals and
authorizations;
(iii) copies, certified as true and complete by an officer of the
Borrower, of all documents evidencing any other necessary
action (including actions by such parties thereto other than
the Borrower as may be required by the Administrative
Agent), approvals or consents with respect to this Credit
Facility Agreement, the Note and the Security Documents;
(iv) copies, certified as true and complete by an officer of the
respective Security Party, of the certificate of
incorporation and by-laws, certificate of formation and
operating agreement, or equivalent instruments thereof;
(v) certificate of an authorized officer of the Borrower
certifying that it legally and beneficially owns, directly
or indirectly, all of the issued and outstanding capital
stock, or limited liability company membership interests, as
the case may be, of each of the Guarantors and that such
capital stock or membership interests are free and clear of
any liens, claims, pledges or other encumbrances whatsoever
and have been paid in full; and
(vi) certificates of the jurisdiction of incorporation or
formation, as the case may be, of each Security Party as to
the good standing thereof;
(b) The Credit Facility Agreement and the Note. the Borrower shall
have duly executed and delivered to the Administrative Agent this Credit
Facility Agreement, the Note and its Account Pledge;
(c) Guarantor Documents. each of the Guarantors shall have duly
executed and delivered the Guaranty, the Consent and Agreement hereto and its
respective Account Pledge.
(d) Guarantor Solvency. the Administrative Agent shall have received a
certificate of an officer of each of the Guarantors confirming the
representations and warranties with respect to solvency set forth in the
Guaranty and containing conclusions as to the solvency of such Guarantor;
(e) Approved Manager Documents. each Approved Manager shall have duly
executed and delivered the Approved Managers' Undertaking relating to the
Vessels to the Administrative Agent;
(f) Environmental Claims. the Administrative Agent shall be satisfied
that neither the Borrower nor any of its Subsidiaries or their Affiliates is
subject to any Environmental Claim;
(g) Fees. the Administrative Agent shall have received payment in full
of all fees and expenses then due to the Agents and/or the Lenders under Section
13;
(h) Accounts. (i) each of the Guarantors shall have established an
earnings account into which the Guarantors shall have agreed (by their Consent
and Agreement hereto) that Assigned Moneys are to be paid (the "Earnings
Account") with the Administrative Agent and each of the Guarantors shall have
pledged its interest in such account to the Security Trustee and the Lenders
pursuant to an Account Pledge, and the Guarantors shall have agreed that all
Assigned Moneys be paid into the Earnings Account(s), and (ii) the Borrower
shall have established (a) a retention account with the Administrative Agent
which, on each Retention Date, amounts equal to the Retention Amount shall be
transferred each month from the Earnings Account or other accounts of the
Borrower (the "Retention Account); the Borrower shall have pledged its interest
in each of the Retention Account to the Security Trustee and the Lenders
pursuant to an Account Pledge;
(i) Compliance Certificate. the Administrative Agent having received a
Compliance Certificate with respect to the most recently ended fiscal quarter;
(j) Vessel Appraisal and Inspection. the Administrative Agent having
received (i) two (three if the first two received differ by more than fifteen
percent) recent (not older than six weeks) independently appraised valuations
evidencing the Fair Market Value of the relevant Vessel(s), to be provided at
the expense of the Borrower, and (ii) inspection reports acceptable to the
Administrative Agent by a surveyor appointed by the Administrative Agent at the
Borrower's expense, of the physical inspection of each of the Vessels, provided,
however, that the Administrative Agent may waive this requirement and reserve
the right to have the relevant Vessel(s) inspected after the relevant Advance,
if the Borrower delivers to the Administrative Agent, prior to the relevant
Advance, its in-house survey report of the relevant Vessel(s) in form and
substance satisfactory to the Administrative Agent, however, all surveys must be
done without undue interference with the operation of the Vessel(s);
(k) Money Laundering Due Diligence. the Administrative Agent having
received such documentation and other evidence as is reasonably requested by the
Administrative Agent in order for each of the Lenders to carry out and be
satisfied with the results of all necessary "know your client" or other checks
which is required to carry out in relation to the transactions contemplated by
this Credit Facility Agreement, the Notes and the Security Documents;
(l) Legal Opinions. the Administrative Agent, on behalf of the Agents
and the Lenders, shall have received legal opinions addressed to the
Administrative Agent from (i) ▇.▇. ▇▇▇▇▇▇▇▇ & Associates, counsel for the
Security Parties in respect of, inter alia, no material litigation or breach of
contract by the Security Parties and (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special United
States, New York and ▇▇▇▇▇▇▇▇ Islands counsel to the Agents and Lenders in
respect of inter alia, the corporate authority of the Security Parties and the
enforceability of this Agreement, the Notes and the relevant Security Documents,
in each case in such form as the Administrative Agent may require, as well as
such other legal opinions as the Administrative Agent shall have required as to
all or any matters under the laws of the United States of America, the State of
New York, the Republic of Greece and the Republic of the ▇▇▇▇▇▇▇▇ Islands or any
other relevant Permitted Jurisdiction covering the representations and
conditions which are the subjects of Section 2 and this Section 4.
4.2 Conditions Precedent re Delivery Advances. The obligation of the Lenders to
make each Advance available to the Borrower under this Agreement shall be
expressly and separately subject to the following further conditions precedent
on the relevant Drawdown Date:
(a) The Vessels. the Administrative Agent shall have received evidence
satisfactory to it that the relevant Vessel:
(i) has been delivered to the relevant Guarantor and that the
relevant Guarantor has paid its equity portion of the
purchase price of the Vessel to the sellers of the Vessel;
(ii) is in the sole and absolute ownership of the relevant
Guarantor and duly registered in such Guarantor's name under
the flag of a Permitted Jurisdiction, respectively,
unencumbered, save and except for the Mortgage, recorded
against it and as otherwise permitted thereby;
(iii) is classed in the highest classification and rating for
vessels of the same age and type with the respective
Classification Society as set forth in Schedule 2 without
any material outstanding recommendations;
(iv) is operationally seaworthy and in every way fit for its
intended service;
(v) is insured in accordance with the provisions of the Mortgage
recorded against it and the requirements thereof in respect
of such insurance have been complied with;
(b) Vessel Documents. Upon the delivery of its respective Vessel, each
Guarantor shall have duly executed and delivered to the Administrative Agent:
(i) the Mortgage over its Vessel;
(ii) an Insurances Assignment with respect to its Vessel;
(iii) an Earnings Assignment with respect to its Vessel;
(iv) the Assignment Notices with respect to the above-indicated
Insurances Assignments and Earnings Assignments;
(v) Uniform Commercial Code Financing Statements for filing with
the District of Columbia and in such other jurisdictions as
the Administrative Agent may reasonably require;
(c) Additional Documents. Upon the delivery of its respective Vessel,
each Guarantor shall, where applicable, deliver each of the following documents
to the Administrative Agent:
(i) a management agreement with an Approved Manager;
(ii) any Charter Party Agreement entered into in respect of the
Vessel;
(iii) the memorandum of agreement entered into in respect of the
Vessel;
(iv) a copy of the ▇▇▇▇ of sale for the Vessel;
(v) a copy of the protocol of delivery for the Vessel;
(vi) a transcript of registry and a certificate of ownership and
encumbrance indicating the Vessel's registration in the name
of such Guarantor free and clear of all registered
encumbrances other than the Mortgage thereon;
(d) Vessel Liens. the Administrative Agent shall have received
evidence satisfactory to it and to its legal advisor that, save for the liens
created by the Mortgage and the Assignments relating to each Vessel, there are
no liens, charges or encumbrances of any kind whatsoever on such Vessel or on
its earnings except as permitted hereby or by any of the Security Documents;
(e) ISM DOC. the Administrative Agent shall have received a copy of
the DOC for the Vessel to which such Delivery Advance relates;
(f) Process Agent. the Administrative Agent shall have received
evidence that each of the Security Parties have appointed CT Corporation System,
having an address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as its true and
lawful attorney-in-fact and duly authorized agent for the limited purpose of
accepting service of legal process and that each Security Party has agreed that
service of process upon such party shall constitute personal service of such
process upon such Security Party. Each of the Security Parties shall have agreed
that such appointment shall be maintained for the duration of this Credit
Facility Agreement and that if such agent shall cease to act, the Security
Parties shall immediately designate and appoint another such agent satisfactory
to the Administrative Agent evidence in writing of such other agent's acceptance
of such appointment;
(g) Legal Opinions. the Administrative Agent, on behalf of the Agents
and the Lenders, shall have received legal opinions addressed to the
Administrative Agent from (i) ▇.▇. ▇▇▇▇▇▇▇▇ & Associates, counsel for the
Security Parties in respect of, inter alia, no material litigation or breach of
contract by the Security Parties, and (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special United
States, New York and ▇▇▇▇▇▇▇▇ Islands counsel to the Agents and Lenders in
respect of, inter alia, the corporate authority of the relevant Guarantor and
the enforceability of the relevant Security Documents, in each case in such form
as the Administrative Agent may require, as well as such other legal opinions as
the Administrative Agent shall have required as to all or any matters under the
laws of the United States of America, the Republic of Greece, the State of New
York and the Republic of the ▇▇▇▇▇▇▇▇ Islands or any other relevant Permitted
Jurisdiction covering the representations and conditions which are the subjects
of Sections 2 and this Section 4.2.
4.3 Further Conditions Precedent. The obligation of the Lenders to make any
Advance available to the Borrower under this Credit Facility Agreement shall be
expressly and separately subject to the following further conditions precedent
on the relevant Drawdown Date:
(a) Drawdown Notice. the Administrative Agent having received a
Drawdown Notice in accordance with the terms of Section 3.2;
(b) Representations and Warranties. the representations stated in
Section 2 (updated mutatis mutandis to such date) being true and correct as if
made on and as of that date;
(c) No Event of Default. no Event of Default having occurred and being
continuing and no event having occurred and being continuing which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default;
(d) No Change in Laws. the Administrative Agent being satisfied that
no change in any applicable laws, regulations, rules or in the interpretation
thereof shall have occurred which make it unlawful for any Security Party to
make any payment as required under the terms of this Credit Facility Agreement,
the Note, the Security Documents or any of them; and
(e) No Material Adverse Effect. there having been no Material Adverse
Effect since the date hereof.
4.4 Breakfunding Costs. In the event that, on the date specified for the making
of an Advance in any Drawdown Notice, the Lenders shall not be obliged under
this Credit Facility Agreement to make such Advance available, the Borrower
shall indemnify and hold the Lenders fully harmless against any losses which the
Lenders (or any thereof) may sustain as a result of borrowing or agreeing to
borrow funds to meet the drawdown requirement of such Drawdown Notice and the
certificate of the relevant Lender or Lenders shall, absent manifest error, be
conclusive and binding on the Borrower as to the extent of any such losses.
4.5 Satisfaction after Drawdown. Without prejudice to any of the other terms and
conditions of this Credit Facility Agreement, in the event the Lenders, in their
sole discretion, make any Advance prior to the satisfaction of all or any of the
conditions referred to in Sections 4.1, 4.2 or 4.3, the Borrower hereby
covenants and undertakes to satisfy or procure the satisfaction of such
condition or conditions within fourteen (14) days after the relevant Drawdown
Date (or such longer period as the Lenders, in their sole discretion, may
agree).
5. REPAYMENT AND PREPAYMENT
5.1 Repayment. Subject to the provisions of this Section 5 regarding prepayments
and the application thereof, the Borrower shall, on the Payment Dates, repay the
principal amount of that portion of the Facility attributable to:
(a) Tranche A in thirty-two (32) consecutive installments payable
quarterly in arrears commencing on the date occurring three (3) months after the
last Delivery Date, but no later than March 31, 2006; the amount of each
installment shall be (reduced pro rata in the event less than the maximum amount
of Tranche A is drawn down) Two Million Seven Hundred Fifty Thousand Dollars
($2,750,000), and a balloon installment of Forty Two Million Dollars
($42,000,000) payable together with the thirty-second installment; and
(b) Tranche B in sixteen (16) consecutive installments payable
quarterly in arrears commencing on the date occurring three (3) months after the
last Delivery Date, but no later than March 31, 2006; the amount of each
installment shall be (reduced pro rata in the event less than the maximum amount
of Tranche B is drawn down) One Million Five Hundred Thousand Dollars
($1,500,000).
5.2 Voluntary Prepayment; No Re-Borrowing. The Borrower may prepay, upon fifteen
(15) Banking Days written notice, any outstanding Advance or any portion
thereof, without penalty, provided that if such prepayment is made on a day
other than the last day of the Interest Period of such Advance such prepayment
shall be made together with the costs and expenses provided for in Section 5.4.
Any prepayment under this Section 5.2 in an amount less than the amount of the
outstanding Facility shall be applied first to Tranche B and then to Tranche A,
pro rata to the repayment installments. Each prepayment shall be in a minimum
amount equal to the next due installment. Prepayments shall be applied to the
remaining payments on a pro-rata basis and will not be available for
re-borrowing.
5.3 Mandatory Prepayment: Sale or Loss of Vessel . On (i) any sale of a Vessel
or (ii) the earlier of (x) one hundred eighty (180) days after the Total Loss of
a Vessel or (y) the date on which the insurance proceeds in respect of such loss
are received by the Guarantors or the Administrative Agent as assignee thereof
or (iii) any of the Guarantors is released from its obligations hereunder, the
Borrower shall prepay the Facility and/or any commitment of the Lenders under
the Facility will be reduced in an amount equal to the amount of the Facility,
multiplied by the Fair Market Value of the Vessel, divided by the aggregate Fair
Market Value of all mortgaged Vessels, together with any amounts necessary to
ensure that the Hull Cover Ratio following the sale or Total Loss of a Vessel be
equal to the higher of (a) 135% until repayment of Tranche B and 130%
thereafter, and (b) the Hull Cover Ratio prior to the sale or Total Loss of such
Vessel, up to but not exceeding 145%. Any prepayment under this Section 5.3
shall be applied first to Tranche B and then to Tranche A, pro rata to the
repayment installments.
5.4 Interest and Costs with Prepayments/Application of Prepayments. Any
prepayment of the Advances made hereunder (including, without limitation, those
made pursuant to Sections 5 and 9.4) shall be subject to the condition that on
the date of prepayment all accrued interest to the date of such prepayment shall
be paid in full with respect to the Advances or portions thereof being prepaid,
together with any and all costs or expenses incurred by any Lender in connection
with any breaking of funding (as certified by such Lender, which certification
shall, absent any manifest error, be conclusive and binding on the Borrower).
6. INTEREST AND RATE
6.1 Applicable Rate. Each Advance shall bear interest at the Applicable Rate,
which shall be defined as the rate per annum which is equal to the aggregate of
(a) LIBOR for the relevant Interest Period, plus (b) Mandatory Costs, plus (c)
the Margin. The Applicable Rate shall be determined by the Administrative Agent
two (2) Banking Days prior to the first (1st) day of the relevant Interest
Period and the Administrative Agent shall promptly notify the Borrower in
writing of the Applicable Rate as and when determined. Each such determination,
absent manifest error, shall be conclusive and binding upon the Borrower.
6.2 Default Rate. Any amounts due under this Credit Facility Agreement, not paid
when due, whether by acceleration or otherwise, shall bear interest thereafter
from the due date thereof until the date of payment at a rate per annum equal to
(i) the Applicable Rate, plus two percent (2%) per annum (the "Default Rate").
In addition, following the occurrence of any Event of Default and until such
Event of Default is cured to the satisfaction of the Majority Lenders, the
Facility shall bear interest at the Default Rate.
6.3 Interest Periods. The Borrower shall give the Administrative Agent an
Interest Notice specifying the Interest Period selected for the next subsequent
Interest Period at least three (3) Banking Days prior to the end of any then
existing Interest Period, which notice the Administrative Agent agrees to
forward on to all Lenders on a same day basis or as soon as practicable. If at
the end of any then existing Interest Period the Borrower fails to give an
Interest Notice, the relevant Interest Period shall be three (3) months. The
Borrower's right to select an Interest Period shall be subject to the
restriction that no selection of an Interest Period shall be effective unless
each Lender is satisfied that the necessary funds will be available to such
Lender for such period and that no Event of Default or event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default
shall have occurred and be continuing, in which case the Interest Period shall
be determined by the Administrative Agent in its sole discretion. Interest
Periods for each Tranche hereunder shall be consolidated as soon as practicable,
but in no event later than thirty (30) days after the delivery of the Vessel to
which such Tranche relates. The Borrower shall reimburse the Lenders for any and
all costs or expenses incurred by the Lenders in connection with any breaking of
funding (as certified by each Lender, which certification, absent manifest
error, shall be conclusive and binding on the Borrower) as a consequence of such
consolidation.
6.4 Interest Payments. Accrued interest on the Facility shall be payable in
arrears on the last day of each Interest Period, except that if the Borrower
shall select an Interest Period in excess of three (3) months, accrued interest
shall be payable during such Interest Period on each three (3) month anniversary
of the commencement of such Interest Period and upon the end of such Interest
Period.
7. PAYMENTS
7.1 Place of Payments, No Set Off. All payments to be made hereunder by the
Borrower shall be made to the Administrative Agent, not later than 10 a.m. New
York time (any payment received after 10 a.m. New York time shall be deemed to
have been paid on the next Banking Day) on the due date of such payment, at its
office located at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, or to
such other office of the Administrative Agent as the Administrative Agent may
direct, without set-off or counterclaim and free from, clear of, and without
deduction or withholding for, any Taxes, provided, however, that if the Borrower
shall at any time be compelled by law to withhold or deduct any Taxes from any
amounts payable to the Lenders hereunder, then the Borrower shall pay such
additional amounts in Dollars as may be necessary in order that the net amounts
received after withholding or deduction shall equal the amounts which would have
been received if such withholding or deduction were not required and, in the
event any withholding or deduction is made, whether for Taxes or otherwise, the
Borrower shall promptly send to the Administrative Agent such documentary
evidence with respect to such withholding or deduction as may be required from
time to time by the Lenders, including evidence that the Borrower has duly paid
the withholding or deductions as required.
7.2 Tax Credits. If any Lender obtains the benefit of a credit against the
liability thereof for federal income taxes imposed by any taxing authority for
all or part of the Taxes as to which the Borrower has paid additional amounts as
aforesaid in Section 7.1, then such Lender shall pay an amount to the Borrower
which that Lender determines will leave it (after such payment) in the same
position as it would have been had the Tax payment not been made by the
Borrower.
7.3 Sharing of Setoffs. Each Lender agrees that if it shall, through the
exercise of a right of banker's lien, setoff or counterclaim or pursuant to a
secured claim under Section 506 of the Federal Bankruptcy Code or other security
or interest arising from, or in lieu of, such secured claim, exercised or
received by such Lender under any applicable bankruptcy, insolvency or other
similar law or otherwise, or by any other means, obtain payment (voluntary or
involuntary) in respect of any Advance or Advances as a result of which its
funded Commitment shall be proportionately less than the funded Commitment of
any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the funded Commitment of such other
Lender so that the aggregate funded Commitment of each Lender shall be in the
same proportion to the aggregate funded Commitments then outstanding as its
funded Commitment prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all funded
Commitments outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section 7.3 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. Any Lender
holding a participation in a funded Commitment deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing to such Lender by reason thereof as fully as
if such Lender had made an Advance in the amount of such participation. The
Borrower expressly consents to the foregoing arrangement.
7.4 Computations; Banking Days. (a) (a) All computations of interest and fees
shall be made by the Administrative Agent or the Lenders, as the case may be, on
the basis of a 360-day year, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which interest or fees are payable. Each determination by the Administrative
Agent or the Lenders of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error;
(b) Whenever any payment hereunder or under the Note shall be stated
to be due on a day other than a Banking Day, such payment shall be due and
payable on the next succeeding Banking day unless the next succeeding Banking
Day falls in the following calendar month, in which case it shall be payable on
the immediately preceding Banking Day.
8. EVENTS OF DEFAULT
8.1 Events of Default. The occurrence of any of the following events shall be an
Event of Default:
(a) Non-Payment of Principal. any payment of principal is not paid
when due; or
(b) Non-Payment of Interest or Other Amounts. any interest or any
other amount becoming payable to the Administrative Agent or any Lender under
this Credit Facility Agreement, under the Note or under any of the Security
Documents is not paid within three (3) Banking Days of the due date or date of
demand (as the case may be); or
(c) Representations. any representation, warranty or other statement
made by the Borrower in this Credit Facility Agreement or by any Security Party
in any of the Security Documents or in any other instrument, document or other
agreement delivered in connection herewith or therewith proves to have been
untrue or misleading in any material respect as at the date as of which made or
confirmed; or
(d) Impossibility; Illegality. it becomes impossible or unlawful for
the Borrower or any of the Guarantors to fulfill any of its covenants or
obligations hereunder, under the Note or under any of the Security Documents or
for any of the Lenders to exercise any of the rights vested in any of them
hereunder, under the Note or under any of the Security Documents; or
(e) Mortgage. there is an event of default under any Mortgage; or
(f) Covenants. any Security Party (i) defaults in the due and punctual
observance or performance of Sections 9.1(c), 9.1(h), 9.1(j), 9.1(k), 9.1(m),
9.1(n), 9.2(h) or 9.2(k) and such default continued unremedied for a period of
sixty (60) days or (ii) defaults under any other term, covenant or agreement
contained in this Credit Facility Agreement, in the Note, in any of the Security
Documents or in any other instrument, document or other agreement delivered in
connection herewith or therewith, or there occurs any other event which
constitutes a default under this Credit Facility Agreement, under the Note or
under any of the Security Documents, in each case other than an Event of Default
referred to elsewhere in this Section 8.1; or
(g) Debt. any Security Party shall default in the payment when due of
any Debt or of any other debt, in either case, in the outstanding principal
amount equal to or exceeding Five Hundred Thousand Dollars ($500,000) or such
debt or debt is, or by reason of such default is subject to being, accelerated
or any party becomes entitled to enforce the security for any such Debt or debt
and such party shall take steps to enforce the same, unless such default or
enforcement is being contested in good faith and by appropriate proceedings or
other acts and the Security Party, Subsidiary or Affiliate of the Borrower, as
the case may be, shall set aside on its books adequate reserves with respect
thereto; or
(h) Ownership of Guarantors. the Borrower shall cease to own directly
or indirectly, one hundred percent (100%) of any of the Guarantors; or
(i) Bankruptcy. the Borrower, any Security Party, any Subsidiary or
any Affiliate of the Borrower commences any proceeding under any reorganization,
arrangement or readjustment of debt, dissolution, winding up, adjustment,
composition, bankruptcy or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect (a "Proceeding"), or there is commenced
against any thereof any Proceeding and such Proceeding remains undismissed or
unstayed for a period of thirty (30) days or any receiver, trustee, liquidator
or sequestrator of, or for, any thereof or any substantial portion of the
property of any thereof is appointed and is not discharged within a period of
thirty (30) days or any thereof by any act indicates consent to or approval of
or acquiescence in any Proceeding or the appointment of any receiver, trustee,
liquidator or sequestrator of, or for, itself or of, or for, any substantial
portion of its property; or
(j) Termination of Operations; Sale of Assets. except as expressly
permitted under this Credit Facility Agreement, any Security Party ceases its
operations or sells or otherwise disposes of all or substantially all of its
assets or all or substantially all of the assets of any Security Party are
seized or otherwise appropriated; or
(k) Judgments. any judgment or order is made, the effect whereof would
be to render ineffective or invalid this Credit Facility Agreement, the Note or
any of the Security Documents or any material provision thereof, or the Borrower
or any Security Party asserts that any such agreement or provision thereof is
invalid; or
(l) Inability to Pay Debts. the Borrower, any Security Party, any
Subsidiary or any Affiliate of the Borrower is unable to pay or admits its
inability to pay its debts as they fall due or a moratorium shall be declared in
respect of any material indebtedness of the Borrower or any Affiliate of the
Borrower; or
(m) Change in Financial Position. any change in the financial position
of the Borrower or any Affiliate of the Borrower which, in the opinion of the
Majority Lenders, shall have a Material Adverse Effect; or
(n) Change in Control. a Change of Control shall occur with respect to
the Borrower; or
(o) Cross-Default. the Borrower, any Security Party, any Subsidiary or
any Affiliate of the Borrower defaults under any material contract or material
agreement to which it is a party or by which it is bound.
Upon and during the continuance of any Event of Default, the Lenders' obligation
to make any Advance available shall cease and the Administrative Agent may, and
on the instructions of the Majority Lenders shall, by notice to the Borrower,
declare the entire unpaid balance of the then outstanding Advances, accrued
interest and any other sums payable by the Borrower hereunder or under the Note
due and payable, whereupon the same shall forthwith be due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; provided that upon the happening of an event specified in
subsections (i) or (l) of this Section 8.1 with respect to the Borrower, the
Note shall be immediately due and payable without declaration or other notice to
the Borrower. In such event, the Lenders may proceed to protect and enforce
their rights by action at law, suit in equity or in admiralty or other
appropriate proceeding, whether for specific performance of any covenant
contained in this Credit Facility Agreement, in the Note or in any Security
Document, or in aid of the exercise of any power granted herein or therein, or
the Lenders may proceed to enforce the payment of the Note or to enforce any
other legal or equitable right of the Lenders, or proceed to take any action
authorized or permitted under the terms of any Security Document or by
applicable law for the collection of all sums due, or so declared due, on the
Note. Without limiting the foregoing, the Borrower agrees that during the
continuance of any Event of Default each of the Lenders shall have the right to
appropriate and hold or apply (directly, by way of set-off or otherwise) to the
payment of the obligations of the Borrower to the Lenders hereunder and/or under
the Note (whether or not then due) all moneys and other amounts of the Borrower
then or thereafter in possession of any Lender, the balance of any deposit
account (demand or time, mature or unmatured) of the Borrower then or thereafter
with any Lender and every other claim of the Borrower then or thereafter against
any of the Lenders.
8.2 Indemnification. The Borrower agrees to, and shall, indemnify and hold the
Agents and the Lenders harmless against any loss, as well as against any costs
or expenses (including legal fees and expenses), which any of the Agents or the
Lenders sustains or incurs as a consequence of any default in payment of the
principal amount of the Facility, interest accrued thereon or any other amount
payable hereunder, under the Note or under any Security Documents, including,
but not limited to, all actual losses incurred in liquidating or re-employing
fixed deposits made by third parties or funds acquired to effect or maintain the
Facility or any portion thereof. Any Lenders' certification of such costs and
expenses shall, absent any manifest error, be conclusive and binding on the
Borrower.
8.3 Application of Moneys. Except as otherwise provided in any Security
Document, all moneys received by the Agents or the Lenders under or pursuant to
this Credit Facility Agreement, the Note or any of the Security Documents after
the happening of any Event of Default (unless cured to the satisfaction of the
Majority Lenders) shall be applied by the Administrative Agent in the following
manner:
(a) first, in or towards the payment or reimbursement of any expenses
or liabilities incurred by the Agents, or the Lenders in connection with the
ascertainment, protection or enforcement of their rights and remedies hereunder,
under the Note and under any of the Security Documents,
(b) secondly, in or towards payment of any interest owing in respect
of Tranche A,
(c) thirdly, in or towards repayment of principal of Tranche A,
(d) fourthly, in or towards payment of any interest owing in respect
of Tranche B,
(e) fifthly, in or towards repayment of principal of Tranche B,
(f) sixthly, in or towards payment of all other sums which may be
owing to the Agents, or any of them, or the Lenders under this Credit Facility
Agreement, under the Note or under any of the Security Documents,
(g) seventhly, in or towards payments of any amounts then owed under
any Interest Rate Agreement, including, but not limited to, any costs associated
with unwinding any Interest Rate Agreement, on a pari passu basis, and
(h) eighthly, the surplus (if any) shall be paid to the Borrower or to
whosoever else may be entitled thereto.
9. COVENANTS
9.1 Affirmative Covenants. The Borrower hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal, interest or
other moneys are owing in respect of this Credit Facility Agreement, under the
Note or under any of the Security Documents, the Borrower will:
(a) Performance of Agreements. duly perform and observe, and procure
the observance and performance by all other parties thereto (other than the
Agents and the Lenders) of, the terms of this Credit Facility Agreement, the
Note and the Security Documents;
(b) Notice of Default, etc. promptly upon, and in any event no later
than three (3) Banking Days after, obtaining knowledge thereof, inform the
Administrative Agent of the occurrence of (a) any Event of Default or of any
event which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default, (b) any litigation or governmental proceeding
pending or threatened against it or against any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect, including but not
limited to, in respect of any Environmental Claim, (c) the withdrawal of any
Vessel's rating by its Classification Society or the issuance by the
Classification Society of any material recommendation or notation affecting
class and (d) any other event or condition which is reasonably likely to have a
Material Adverse Effect;
(c) Obtain Consents. without prejudice to Section 2.1 and this Section
9.1, obtain and maintain every consent and do all other acts and things which
may from time to time be necessary or advisable for the continued due
performance of all its and the other Security Parties' respective obligations
under this Credit Facility Agreement, under the Note and under the Security
Documents;
(d) Financial Information. deliver to each Lender:
(i) as soon as available but not later than one hundred twenty
(120) days after the end of each fiscal year of the
Borrower, complete copies of the consolidated financial
reports of the Borrower and its Subsidiaries (together with
a Compliance Certificate and a detailed reconciliation of
all of the differences between GAAP as at December 31, 2005
and as at the time of delivery), all in reasonable detail,
which shall include at least the consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such
year and the related consolidated statements of income and
sources and uses of funds for such year, which shall be
audited reports prepared by an Acceptable Accounting Firm,
and the Borrower shall use reasonable efforts to provide to
each Lender as soon as available but not later than one
hundred eighty (180) days after the end of each fiscal year
of each of the Guarantors and any Charterers, complete
copies of the consolidated financial reports of each of the
Guarantors and any Charterers, if such information is
readily obtainable;
(ii) as soon as available but not later than forty-five (45) days
after the end of each of the first three quarters of each
fiscal year of the Borrower, a quarterly interim
consolidated balance sheet of the Borrower and its
Subsidiaries and the related consolidated profit and loss
statements and sources and uses of funds (together with a
Compliance Certificate and a detailed reconciliation of all
of the differences between GAAP as at December 31, 2005 and
as at the time of delivery), all in reasonable detail,
unaudited, but certified to be true and complete by the
chief financial officer of the Borrower;
(iii) within ten (10) days of the filing thereof at the email
addresses set forth in Schedule 1, electronic copies of all
registration statements and reports on Forms 10-K, 10-Q and
8-K (or their equivalents) and other material filings which
the Borrower shall have filed with the Securities and
Exchange Commission or any similar governmental authority;
(iv) promptly upon the mailing thereof to the shareholders of the
Borrower, copies of all financial statements, reports, proxy
statements and other communications provided to the
Borrower's shareholders;
(v) within ten (10) days of the Borrower's receipt thereof,
copies of all audit letters or other correspondence from any
external auditors including material financial information
in respect of the Borrower;
(vi) such other statements (including, without limitation,
monthly consolidated statements of operating revenues and
expenses), lists of assets and accounts, budgets, forecasts,
reports and other financial information with respect to its
business as the Administrative Agent may from time to time
request, certified to be true and complete by the chief
financial officer of each of the Borrower;
(e) Vessel Valuations. reimburse the Administrative Agent for the cost
of appraisals of the Fair Market Value of the Vessels. The Administrative Agent
shall be entitled to obtain such valuations from one ship broker approved by the
Lenders two times in each calendar year, one appraisal to be delivered
simultaneously with the delivery of the annual financial statements pursuant to
Section 9.1(d)(i), and one appraisal to be delivered simultaneously with the
delivery of the semi-annual financial statements pursuant to Section 9.1(d)(ii),
and upon the occurrence of an Event of Default;
(f) Corporate Existence. do or cause to be done, and procure that each
Subsidiary of the Borrower shall do or cause to be done, all things necessary to
preserve and keep in full force and effect its corporate existence, or limited
liability company existence, as the case may be, and all licenses, franchises,
permits and assets necessary to the conduct of its business;
(g) Books and Records. at all times keep, and cause each Subsidiary of
the Borrower to keep, proper books of record and account into which full and
correct entries shall be made in accordance with GAAP;
(h) Taxes and Assessments. pay and discharge, and cause each
Subsidiary of the Borrower to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or property
prior to the date upon which penalties attach thereto; provided, however, that
it shall not be required to pay and discharge, or cause to be paid and
discharged, any such tax, assessment, charge or levy so long as the legality
thereof shall be contested in good faith and by appropriate proceedings or other
acts and it shall set aside on its books adequate reserves with respect thereto;
(i) Inspection. allow, and cause each Subsidiary to allow, upon ten
(10) Banking Days notice from the Administrative Agent, any representative or
representatives designated by the Administrative Agent, subject to applicable
laws and regulations, to visit and inspect any of its properties, and, on
request, to examine its books of account, records, reports, agreements and other
papers and to discuss its affairs, finances and accounts with its officers, all
at such times and as often as the Administrative Agent requests;
(j) Inspection and Survey Reports. if the Lenders shall so request,
the Borrower shall permit the Lenders to inspect the Vessels and shall provide
the Lenders with copies of all internally generated inspection or survey reports
on the Vessels, provided, however, that if the Vessels are found in satisfactory
condition, the cost of such inspections shall be borne by the Borrower not more
than once a year;
(k) Compliance with Statutes, Agreements, etc. do or cause to be done,
and cause each Subsidiary to do and cause to be done, all things necessary to
comply with all contracts or agreements to which it, or any Subsidiary is a
party, and all laws, and the rules and regulations thereunder, applicable to the
Borrower or such Subsidiary, including, without limitation, those laws, rules
and regulations relating to employee benefit plans and environmental matters;
(l) Environmental Matters. promptly upon the occurrence of any of the
following conditions, provide to the Administrative Agent a certificate of an
executive officer thereof, specifying in detail the nature of such condition and
its proposed response or the response of its Environmental Affiliates: (a) its
receipt or the receipt by any other Security Party or any Environmental
Affiliates of the Borrower or any other Security Party of any written
communication whatsoever that alleges that such person is not in compliance with
any applicable Environmental Law or Environmental Approval, if such
noncompliance could reasonably be expected to have a Material Adverse Effect,
(b) knowledge by it, or by any other Security Party or any Environmental
Affiliates of the Borrower or any other Security Party that there exists any
Environmental Claim pending or threatened against any such person, which could
reasonably be expected to have a Material Adverse Effect, or (c) any release,
emission, discharge or disposal of any material that could form the basis of any
Environmental Claim against it, any other Security Party or against any
Environmental Affiliates of the Borrower or any other Security Party, if such
Environmental Claim could reasonably be expected to have a Material Adverse
Effect. Upon the written request by the Administrative Agent, it will submit to
the Administrative Agent at reasonable intervals, a report providing an update
of the status of any issue or claim identified in any notice or certificate
required pursuant to this subsection;
(m) Vessel Management. cause each of the Vessels to be managed
commercially by the Top Tanker Management Inc., a wholly-owned subsidiary of the
Borrower, which may subcontract the technical management of the Vessels to V.
Ships or Hanseatic or any other management company acceptable to the Majority
Lenders;
(n) ISM Code, ISPS Code and MTSA Matters. (i) procure that the
Operator will comply with and ensure each of the Vessels will comply with the
requirements of the ISM Code, ISPS Code and MTSA in accordance with the
implementation schedule thereof, including (but not limited to) the maintenance
and renewal of valid certificates and when required, security plans, pursuant
thereto; and (ii) will procure that the Operator will immediately inform the
Administrative Agent if there is any threatened or actual withdrawal of its DOC,
SMC or the ISSC in respect of any Vessel; and upon the request of the
Administrative Agent (iii) will procure that the Operator will promptly inform
the Administrative Agent upon the issuance to the Borrower or Operator of a DOC
and the issuance to any Vessel of an SMC or ISSC;
(o) Brokerage Commissions, etc. indemnify and hold each of the Agents
and the Lenders harmless from any claim for any brokerage commission, fee, or
compensation from any broker or third party resulting from the transactions
contemplated hereby;
(p) Deposit Accounts; Assignment. shall maintain a Retention Account
and (ii) a Minimum Liquidity Account and cause each Guarantor to maintain an
Earnings Account, shall cause the Guarantors to transfer the Retention Amount
each month to the Retention Account and shall procure that the Guarantors
maintain an aggregate amount in the Earnings Account of no less than the Minimum
Liquidity Amount at all times throughout the tenor of this Facility;
(q) Insurance. maintain, and cause each other Security Party to
maintain, with financially sound and reputable insurance companies satisfactory
to the Administrative Agent, insurance on all their respective properties and
against all such risks and in at least such amounts as are usually insured
against by companies of established reputation engaged in the same or similar
business from time to time, including, but not limited to (i) hull and machinery
insurance (fire, marine and other risks, including excess risks and war risks)
in an amount of not less than 120% of the Facility of the Fair Market Value of
the Vessels, whichever is higher, (ii) protection and indemnity insurance at the
highest possible cover available (as of the date of this Credit Facility
Agreement, $1,000,000,000) and with a P&I club satisfactory to the
Administrative Agent, and (iii) mortgagee's interest insurance ("MII") in an
amount of not less than 120% and mortgagee's additional perils pollution
insurance ("MAP") in an amount of not less than 110% of the Facility; and
(r) Interest Rate Agreements. The Swap Provider shall be entitled to
provide the Borrower with a quote for any interest rate derivatives product to
be entered into by the Borrower in connection with the Facility and the Borrower
agrees to grant the Swap Provider a right of first refusal in respect thereof.
The Borrower further undertakes with the Swap Provider to hedge at least 55% of
the Facility Amount not later than the Commitment Termination Date for the first
five (5) years of the Facility (the "Hedging"), and the Borrower shall deliver
to the Administrative Agent an interest rate hedging strategy for the Hedging,
with the assistance of the Administrative Agent in the definition of that
strategy.
9.2 Negative Covenants. The Borrower hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal, interest or
other moneys are owing in respect of this Credit Facility Agreement, under the
Note or under any of the Security Documents, the Borrower will not, and will
procure that no Guarantor, to the extent applicable, will, without the prior
written consent of the Majority Lenders (or all of the Lenders if required by
Section 15.8):
(a) Liens. create, assume or permit to exist, any mortgage, pledge,
lien, charge, encumbrance or any security interest whatsoever upon any
Collateral or other property except:
(i) the Mortgages, the Assignments and other liens in favor of
the Security Trustee; and
(ii) liens, charges and encumbrances against their respective
Vessels permitted to exist under the terms of the Mortgages;
(b) Debt. permit (i) any Guarantor to incur any Debt, excluding Debt
to the Agents or any of the Lenders hereunder, other than in the ordinary course
of business, (ii) any Subsidiary to incur any Debt that would cause the Borrower
to be in default under any provision of Section 9.3 or (iii) any Guarantor to
make advances or extend credit to, or become obligated, contingently or
otherwise, in respect of any Debt of, a Subsidiary that is not a Guarantor;
(c) Change of Flag, Class, Management or Ownership. change the flag of
any Vessel other than a Permitted Jurisdiction, their Classification Society
other than to another member of the International Association of Classification
Societies designated by the Borrower and approved by the Administrative Agent,
the technical management of any Vessel other than to one or more technical
management companies acceptable to the Majority Lenders or the immediate or
ultimate ownership of any Vessel;
(d) Chartering. enter into any bareboat charter with any party other
than the Borrower or a Subsidiary or an Affiliate thereof, with respect to any
of the Vessels having a duration of, including any options to extend such
charter, more than twelve (12) months without the prior consent of the
Administrative Agent (acting on behalf of the Majority Lenders);
(e) Change in Business. materially change the nature of its business
or commence any business materially different from its current business;
(f) Sale or Pledge of Shares. sell, assign, transfer, pledge or
otherwise convey or dispose of any of the shares (including by way of spin-off,
installment sale or otherwise) of the capital stock, or limited liability
company interests, as the case may be, of any Guarantor other than as may be
allowed in accordance with the Pledge Agreement;
(g) Sale of Assets. sell, or otherwise dispose of, any Vessel (unless
otherwise in accordance with this Credit Facility Agreement) or, with respect to
any Guarantor, any other asset (including by way of spin-off, installment sale
or otherwise) which is substantial in relation to its assets taken as a whole,
other than such sales by the one Guarantor to another;
(h) Changes in Offices. change the location of the chief executive
office of any Security Party, the office of the chief place of business of any
such parties or the office of the Security Parties in which the records relating
to the earnings or insurances of any Vessel are kept unless the Lenders shall
have received thirty (30) days prior written notice of such change;
(i) Consolidation and Merger. consolidate with, or merge into, any
corporation or other entity, or merge any corporation or other entity into it;
(j) Change Fiscal Year. change its fiscal year;
(k) Limitations on Ability to Make Distributions. create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Guarantor to (i) pay dividends or make any
other distributions on its capital stock or limited liability company interests,
as the case may be, to the Borrower or any Guarantor or pay any Debt owed to the
Borrower, (ii) make any loans or advances to the Borrower, or (iii) transfer any
of its property or assets to the Borrower;
(l) Use of Corporate Funds. permit any Guarantor to pay out any funds
to any company or person except (i) in the ordinary course of business in
connection with the management of the business of the Borrower and its
Subsidiaries, including the operation and/or repair of any of the Vessels and
other vessels owned or operated by such parties and (ii) the servicing of the
Debt permitted hereunder;
(m) Issuance of Shares. permit any Guarantor to issue or dispose of
any shares of its own capital stock or limited liability company interests, as
the case may be, to any person other than the Borrower;
(n) No Money Laundering. in connection with this Credit Facility
Agreement or any of the Security Documents, contravene or permit any Guarantor
or any other Subsidiary to contravene, any law, official requirement or other
regulatory measure or procedure implemented to combat "money laundering" (as
defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities) and comparable United States Federal and state laws. In
addition, the Borrower confirm that they are the beneficiary (within the meaning
of Section 8 of the German Money Laundering Act (Geldwaschegesetz)) for each
Advance made or to be made available to it. The Borrower will promptly inform
the Lenders (by written notice to the Administrative Agent) if the Borrower are
not or ceases to be the beneficiary and will provide in writing the name and
address of the beneficiary;
(o) Accounts. will not establish any operating accounts or earnings
accounts in respect of the Assigned Moneys with any Lender or with any other
financial institution other than the Administrative Agent;
(p) Use of Proceeds. will not use the proceeds of Advances in
violation of Regulation T, U or X; and
(q) Borrowers Chief Executive Officer. will not appoint a Chief
Executive Officer other than ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, without the Lenders' prior
consent.
9.3 Financial Covenants. The Borrower hereby covenants and undertakes with the
Lenders that, from the date hereof and so long as any principal or interest are
outstanding or other moneys are owing in respect of this Credit Facility
Agreement, under the Note or under any of the Security Documents, the Borrower
will:
(a) Adjusted Net Worth. maintain at all times an Adjusted Net Worth of
not less than Two Hundred Fifty Million Dollars ($250,000,000) and such Adjusted
Net Worth shall not be less than Thirty Five Percent (35%) of the Total Assets;
(b) EBITDA to Fixed Charges. ensure that EBITDA shall at all times
exceed 120% of the aggregate amount of Fixed Charges; and
(c) Minimum Liquidity. at all times maintain Liquid Funds in the
greater of Ten Million Dollars ($10,000,000), or Five Hundred Thousand Dollars
($500,000) per vessel directly or indirectly owned or bareboat chartered-in by
the Borrower.
9.4 Asset Maintenance. If at any time during the term of the Credit Facility
Agreement, the Fair Market Value of Vessels is less than the Required
Percentage, the Borrower shall, within a period of thirty (30) days following
receipt by the Borrower of written notice from the Administrative Agent
notifying the Borrower of such shortfall and specifying the amount thereof
(which amount shall, in the absence of manifest error, be deemed to be
conclusive and binding on the Borrower), either (i) deliver to the Security
Trustee such additional collateral as may be satisfactory to the Lenders in
their sole discretion of sufficient value to make the aggregate Fair Market
Value of said Vessel plus the additional collateral, equal to the Required
Percentage of the outstanding amount of the Tranche relating to that Vessel or
(ii) the Borrower shall prepay such amount of the Facility (together with
interest thereon and any other monies payable in respect of such prepayment
pursuant to Section 5.4) as shall result in the Fair Market Value of that
Vessels being not less than the Required Percentage.
10. ASSIGNMENT
This Credit Facility Agreement shall be binding upon, and inure to the benefit
of, the Borrower and the Lenders, the Agents and their respective successors and
assigns, except that the Borrower may not assign any of its rights or
obligations hereunder. Each Lender shall be entitled to assign its rights and
obligations under this Credit Facility Agreement or grant participation(s) in
the Facility to any subsidiary, holding company or other affiliate of such
Lender, to any subsidiary or other affiliate company of any thereof or to any
other bank or financial institution or collateralized loan obligation trust or
fund (a "CLO") without the consent of the Borrower. Each Lender may transfer all
or any part of its rights, benefits and its obligations under this Credit
Facility Agreement and any of the other Security Documents to any subsidiary or
other affiliate company of any thereof or to any other bank or financial
institution or CLO (the "Transferee") if the Transferee, by delivery of such
undertaking, becomes bound by the terms of this Credit Facility Agreement and
agrees to perform all or, as the case may be, part of such Lender's obligations
under this Credit Facility Agreement. Each Lender may disclose to a prospective
assignee, transferee or to any other person who may propose entering into
contractual relations with such Lender in relation to the Credit Facility
Agreement and such information about each if the Borrower and the Guarantors as
such Lender shall consider appropriate. The Borrower will take all actions
requested by the Agents or any Lender to effect such assignment, including,
without limitation, the execution of a written consent to any Assignment and
Assumption Agreement.
11. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
11.1 Illegality. In the event that by reason of any change in any applicable
law, regulation or regulatory requirement or in the interpretation thereof, a
Lender has a basis to conclude that it has become unlawful for any Lender to
maintain or give effect to its obligations as contemplated by this Credit
Facility Agreement, such Lender shall inform the Administrative Agent and the
Borrower to that effect, whereafter the liability of such Lender to make its
Commitment available shall forthwith cease and the Borrower shall be required
either to repay to such Lender that portion of the Facility advanced by such
Lender immediately or, if such Lender so agrees, to repay such portion of the
Facility to such Lender on the last day of any then current Interest Period in
accordance with and subject to the provisions of Section 11.5. In any such
event, but without prejudice to the aforesaid obligations of the Borrower to
repay such portion of the Facility, the Borrower and the relevant Lender shall
negotiate in good faith with a view to agreeing on terms for making such portion
of the Facility available from another jurisdiction or otherwise restructuring
such portion of the Facility on a basis which is not unlawful.
11.2 Increased Costs. If as a result of the implementation of the International
Convergence of Capital Measurement and Capital Standards: A Revised Framework
(Basel II) or any other change in applicable law, regulation or regulatory
requirement (including any applicable law, regulation or regulatory requirement
which relates to capital adequacy or liquidity controls or which affects the
manner in which any Lender allocates capital resources under this Credit
Facility Agreement), or in the interpretation or application thereof by any
governmental or other authority, shall:
(i) subject any Lender to any Taxes with respect to its income
from the Facility, or any part thereof; or
(ii) change the basis of taxation to any Lender of payments of
principal or interest or any other payment due or to become
due pursuant to this Credit Facility Agreement (other than a
change in the basis effected by the jurisdiction of
organization of such Lender, the jurisdiction of the
principal place of business of such Lender, the United
States of America, the State or City of New York or any
governmental subdivision or other taxing authority having
jurisdiction over such Lender (unless such jurisdiction is
asserted by reason of the activities of the Borrower or any
of the other Security Parties) or such other jurisdiction
where the Facility may be payable); or
(iii) impose, modify or deem applicable any reserve requirements
or require the making of any special deposits against or in
respect of any assets or liabilities of, deposits with or
for the account of, or loans by, a Lender; or
(iv) impose on any Lender any other condition affecting the
Facility or any part thereof;
and the result of the foregoing is either to increase the cost to such Lender of
making available or maintaining its Commitment or any part thereof or to reduce
the amount of any payment received by such Lender, then and, in any such case,
if such increase or reduction, in the opinion of such Lender, materially affects
the interests of such Lender under or in connection with this Credit Facility
Agreement:
(i) the Lender shall notify the Administrative Agent and the Borrower of
the happening of such event, and
(ii) the Borrower agrees forthwith upon demand to pay to such Lender such
amount as such Lender certifies to be necessary to compensate such
Lender for such additional cost or such reduction.
11.3 Nonavailability of Funds. If the Administrative Agent shall determine that,
by reason of circumstances affecting the London Interbank Market generally,
adequate and reasonable means do not or will not exist for ascertaining the
Applicable Rate for the Facility for any Interest Period, the Administrative
Agent shall give notice of such determination to the Borrower. The Majority
Lenders shall then determine the interest rate and/or Interest Period to be
substituted for those which would otherwise have applied under this Credit
Facility Agreement. If the Majority Lenders are unable to agree upon such a
substituted interest rate and/or Interest Period within thirty (30) days of the
giving of such determination notice, the Administrative Agent shall set an
interest rate and Interest Period to take effect from the expiration of the
Interest Period in effect at the date of determination, which rate shall be
equal to the Margin plus the cost to the Lenders (as certified by each Lender)
of funding the Facility. In the event the state of affairs referred to in this
Section 11.3 shall extend beyond the end of the Interest Period, the foregoing
procedure shall continue to apply until circumstances are such that the
Applicable Rate may be determined pursuant to Section 6.
11.4 Lender's Certificate Conclusive. A certificate or determination notice of
any Lender as to any of the matters referred to in this Section 11 shall, absent
manifest error, be conclusive and binding on the Borrower.
11.5 Compensation for Losses. Where the Facility or any portion thereof is to be
repaid by the Borrower pursuant to this Section 11, the Borrower agrees
simultaneously with such repayment to pay to the relevant Lender all accrued
interest to the date of actual payment on the amount repaid and all other sums
then payable by the Borrower to the relevant Lender pursuant to this Credit
Facility Agreement, together with such amounts as may be certified by the
relevant Lender to be necessary to compensate such Lender for any actual loss,
premium or penalties incurred or to be incurred thereby on account of funds
borrowed to make, fund or maintain its Commitment or such portion thereof for
the remainder (if any) of the then current Interest Period or Interest Periods,
if any, but otherwise without penalty or premium.
12. CURRENCY INDEMNITY
12.1 Currency Conversion. If, for the purpose of obtaining or enforcing a
judgment in any court in any country, it becomes necessary to convert into any
other currency (the "judgment currency") an amount due in Dollars under this
Credit Facility Agreement, the Note or any of the Security Documents, then the
conversion shall be made, in the discretion of the Administrative Agent, at the
rate of exchange prevailing either on the date of default or on the day before
the day on which the judgment is given or the order for enforcement is made, as
the case may be (the "conversion date"), provided that the Administrative Agent
shall not be entitled to recover under this section any amount in the judgment
currency which exceeds at the conversion date the amount in Dollars due under
this Credit Facility Agreement, the Note, the Guaranty and/or any of the
Security Documents.
12.2 Change in Exchange Rate. If there is a change in the rate of exchange
prevailing between the conversion date and the date of actual payment of the
amount due, the Borrower shall pay such additional amounts (if any, but, in any
event, not a lesser amount) as may be necessary to ensure that the amount paid
in the judgment currency, when converted at the rate of exchange prevailing on
the date of payment, will produce the amount then due under this Credit Facility
Agreement, the Note and/or any of the Security Documents in Dollars; any excess
over the amount due received or collected by the Lenders shall be remitted to
the Borrower.
12.3 Additional Debt Due. Any amount due from the Borrower under this Section 12
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 Credit Facility
Agreement, the Note and/or any of the Security Documents.
12.4 Rate of Exchange. The term "rate of exchange" in this Section 12 means the
rate at which the Administrative Agent in accordance with its normal practices
is able on the relevant date to purchase Dollars with the judgment currency and
includes any premium and costs of exchange payable in connection with such
purchase.
13. FEES AND EXPENSES
13.1 Fees. During the period beginning on the date of this Credit Facility
Agreement and ending on the Commitment Termination Date, the Borrower shall pay,
quarterly in arrears, with the final payment to be made on the Commitment
Termination Date, from the date of this Credit Facility Agreement, to the
Administrative Agent (for the account of the Lenders), a commitment fee (the
"Commitment Fee") of twenty-five hundredths of one percent (.25%) per annum
payable on the average undrawn amount of the Facility.
13.2 Expenses. The Borrower agrees, whether or not the transactions hereby
contemplated are consummated, on demand to pay, or reimburse the Agents for
their payment of, the expenses of the Agents and (after the occurrence and
during the continuance of an Event of Default) the Lenders incident to said
transactions (and in connection with any supplements, amendments, waivers or
consents relating thereto or incurred in connection with the enforcement or
defense of any of the Agents' and the Lenders' rights or remedies with respect
thereto or in the preservation of the Agent's and the Lenders' priorities under
the documentation executed and delivered in connection therewith), including,
without limitation, all costs and expenses of preparation, negotiation,
execution and administration of this Credit Facility Agreement and the documents
referred to herein (including, but not limited to, Value Added Tax imposed on
any Lender related to those expenses), the fees and disbursements of the Agents'
and Lenders' counsel in connection therewith, as well as the fees and expenses
of any independent appraisers, surveyors, engineers, inspectors and other
consultants retained by the Agents in connection with this Agreement and the
transactions contemplated hereby and under the Security Documents, all costs and
expenses, if any, in connection with the enforcement of this Credit Facility
Agreement, the Note and the Security Documents and stamp and other similar
taxes, if any, incident to the execution and delivery of the documents
(including, without limitation, the Note) herein contemplated and to hold the
Agents and the Lenders free and harmless in connection with any liability
arising from the nonpayment of any such stamp or other similar taxes. Such taxes
and, if any, interest and penalties related thereto as may become payable after
the date hereof shall be paid immediately by the Borrower to the Agents or the
Lenders, as the case may be, when liability therefor is no longer contested by
such party or parties or reimbursed immediately by the Borrower to such party or
parties after payment thereof (if the Agents or the Lenders, at their sole
discretion, chooses to make such payment).
14. APPLICABLE LAW, JURISDICTION AND WAIVER
14.1 Applicable Law. This Credit Facility Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
14.2 Jurisdiction. The Borrower hereby irrevocably submits to the jurisdiction
of the courts of the State of New York and of the United States District Court
for the Southern District of New York in any action or proceeding brought
against the Borrower by any of the Lenders or the Agents under this Credit
Facility Agreement or under any document delivered hereunder and hereby
irrevocably agrees that valid service of summons or other legal process on it
may be effected by serving a copy of the summons and other legal process in any
such action or proceeding on the Borrower, or its agent as designated in Section
4.2(f), by mailing or delivering the same by hand to the Borrower at the address
indicated for notices in Section 16.1 or to its agent at the address indicated
in Section 4.2(f). The service, as herein provided, of such summons or other
legal process in any such action or proceeding shall be deemed personal service
and accepted by the Borrower as such, and shall be legal and binding upon the
Borrower for all the purposes of any such action or proceeding. Final judgment
(a certified or exemplified copy of which shall be conclusive evidence of the
fact and of the amount of any indebtedness of the Borrower to the Lenders or the
Administrative Agent) against the Borrower in any such legal action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment. The Borrower will advise the Administrative Agent promptly
of any change of address for the purpose of service of process. Notwithstanding
anything herein to the contrary, the Lenders may bring any legal action or
proceeding in any other appropriate jurisdiction.
14.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE
OTHER SECURITY PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS THAT EACH OF
THEM HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE NOTE
OR THE SECURITY DOCUMENTS.
15. THE AGENTS
15.1 Appointment of Agents. Each of the Lenders irrevocably appoints and
authorizes the Agents severally each to take such action as agent on its behalf
and to exercise such powers under this Credit Facility Agreement, the Note and
the Security Documents as are delegated to such Agent by the terms hereof and
thereof. No Agent nor any of their respective directors, officers, employees or
agents shall be liable for any action taken or omitted to be taken by it or them
under this Credit Facility Agreement, the Note or the Security Documents or in
connection therewith, except for its or their own gross negligence or willful
misconduct.
15.2 Security Trustee as Trustee. Each of the Lenders irrevocably appoints the
Security Trustee as trustee on its behalf with regard to (i) the security,
powers, rights, titles, benefits and interests (both present and future)
constituted by and conferred on the Lenders or any of them or for the benefit
thereof under or pursuant to this Credit Facility Agreement, the Note or any of
the Security Documents (including, without limitation, the benefit of all
covenants, undertakings, representations, warranties and obligations given, made
or undertaken to any Lender in the Agreement, the Note or any Security
Document), (ii) all moneys, property and other assets paid or transferred to or
vested in any Lender or any agent of any Lender or received or recovered by any
Lender or any agent of any Lender pursuant to, or in connection with, this
Credit Facility Agreement, the Note or the Security Documents whether from any
Security Party or any other person and (iii) all money, investments, property
and other assets at any time representing or deriving from any of the foregoing,
including all interest, income and other sums at any time received or receivable
by any Lender or any agent of any Lender in respect of the same (or any part
thereof). The Security Trustee hereby accepts such appointment.
15.3 Distribution of Payments. Whenever any payment is received by the
Administrative Agent from the Borrower or any other Security Party for the
account of the Lenders, or any of them, whether of principal or interest on the
Note, commissions, fees under Section 13 or otherwise, it will thereafter cause
to be distributed on the same day if received before 3 p.m. Hamburg time, or on
the next day if received thereafter, like funds relating to such payment ratably
to the Lenders according to their respective Commitments, in each case to be
applied according to the terms of this Credit Facility Agreement.
15.4 Holder of Interest in Note. The Agents may treat each Lender as the holder
of all of the interest of such Lender in the Note.
15.5 No Duty to Examine, Etc. The Agents shall not be under a duty to examine or
pass upon the validity, enforceability, sufficiency, effectiveness or
genuineness of any of this Credit Facility Agreement, the Note, the Security
Documents or any instrument, document or communication furnished pursuant to
this Credit Facility Agreement or in connection therewith or in connection with
the Note or any Security Document, and the Agents shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be.
15.6 Agents as Lenders. With respect to that portion of the Facility made
available by it, each Agent shall have the same rights and powers hereunder as
any other Lender and may exercise the same as though it were not an Agent, and
the term "Lender" or "Lenders" shall include each Agent in its capacity as a
Lender. Each Agent and its affiliates may accept deposits from, lend money to
and generally engage in any kind of business with, the Borrower and the other
Security Parties, as if it was not an Agent.
15.7 Acts of the Agents. Each Agent shall have duties and reasonable discretion,
and shall act as follows:
(a) Obligations of the Agents. The obligations of each Agent under
this Credit Facility Agreement, under the Note and under the Security Documents
are only those expressly set forth herein and therein.
(b) No Duty to Investigate. No Agent shall at any time be under any
duty to investigate whether an Event of Default, or an event which, with the
giving of notice or lapse of time, or both, would constitute an Event of
Default, has occurred or to investigate the performance of this Credit Facility
Agreement, the Note or any Security Document by any Security Party.
(c) Discretion of the Agents. Each Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Credit Facility Agreement, the Note and the Security Documents, unless
the Administrative Agent shall have been instructed by the Majority Lenders to
exercise such rights or to take or refrain from taking such action; provided,
however, that no Agent shall be required to take any action which exposes such
Agent to personal liability or which is contrary to this Credit Facility
Agreement or applicable law.
(d) Instructions of Majority Lenders. Each Agent shall in all cases be
fully protected in acting or refraining from acting under this Credit Facility
Agreement, under the Note, or under any Security Document in accordance with the
instructions of the Majority Lenders, and any action taken, or failure to act
pursuant to such instructions, shall be binding on all of the Lenders.
15.8 Certain Amendments. Neither this Credit Facility Agreement, the Note nor
any of the Security Documents nor any terms hereof or thereof may be amended
unless such amendment is approved by the Borrower and the Majority Lenders,
provided that no such amendment shall, without the written consent of each
Lender affected thereby, (i) reduce the interest rate or extend the time of a
scheduled payment of principal or interest or fees on the Facility, or reduce
the principal amount of the Facility or any fees hereunder, (ii) increase or
decrease the Commitment of any Lender or subject any Lender to any additional
obligation (it being understood that a waiver of any Event of Default, other
than a payment default, or any mandatory repayment of Facility shall not
constitute a change in the terms of any Commitment of any Lender), (iii) amend,
modify or waive any provision of this Section 15.8, (iv) amend the definition of
Majority Lenders or any other definition referred to in this Section 15.8, (v)
consent to the assignment or transfer by the Borrower of any of their rights and
obligations under this Credit Facility Agreement, (vi) accept payment for the
obligations of the Security Parties under this Credit Facility Agreement in any
currency other than Dollars, (vii) waive the requirements regarding the delivery
of audited financial statements under Section 9.1(d), (viii) release any
Security Party from any of its obligations under any Security Document except as
expressly provided herein or in such Security Document or (vii) amend any
provision relating to the maintenance of collateral under Section 9.4; provided,
further, that approval by all Lenders shall be required for any amendment or
waivers with respect to Section 5.3 of this Credit Facility Agreement. All
amendments approved by the Majority Lenders under this Section 15.8 must be in
writing and signed by the Borrower, each of the Lenders comprising the Majority
Lenders and, if applicable, each Lender affected thereby and any such amendment
shall be binding on all the Lenders; provided, however, that any amendments or
waivers with respect to Section 5.3 of this Credit Facility Agreement must be in
writing and signed by the Borrower and all of the Lenders.
15.9 Assumption re Event of Default. Except as otherwise provided in Section
15.15, the Administrative Agent shall be entitled to assume that no Event of
Default, or event which with the giving of notice or lapse of time, or both,
would constitute an Event of Default, has occurred and is continuing, unless the
Administrative Agent has been notified by any Security Party of such fact, or
has been notified by a Lender that such Lender considers that an Event of
Default or such an event (specifying in detail the nature thereof) has occurred
and is continuing. In the event that the Administrative Agent shall have been
notified, in the manner set forth in the preceding sentence, by any Security
Party or any Lender of any Event of Default or of an event which with the giving
of notice or lapse of time, or both, would constitute an Event of Default, the
Administrative Agent shall notify the Lenders and shall take action and assert
such rights under this Credit Facility Agreement, under the Note and under
Security Documents as the Majority Lenders shall request in writing.
15.10 Limitations of Liability. Neither any Agent nor any of the Lenders shall
be under any liability or responsibility whatsoever:
(a) to any Security Party or any other person or entity as a
consequence of any failure or delay in performance by, or any breach by, any
other Lenders or any other person of any of its or their obligations under this
Credit Facility Agreement or under any Security Document;
(b) to any Lender or Lenders as a consequence of any failure or delay
in performance by, or any breach by, any Security Party of any of its respective
obligations under this Credit Facility Agreement, under the Note or under the
Security Documents; or
(c) to any Lender or Lenders for any statements, representations or
warranties contained in this Credit Facility Agreement, in any Security Document
or in any document or instrument delivered in connection with the transaction
hereby contemplated; or for the validity, effectiveness, enforceability or
sufficiency of this Credit Facility Agreement, the Note, any Security Document
or any document or instrument delivered in connection with the transactions
hereby contemplated.
15.11 Indemnification of the Agents. The Lenders agree to indemnify each Agent
(to the extent not reimbursed by the Security Parties or any thereof), pro rata
according to the respective amounts of their Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including legal fees and expenses incurred in investigating claims
and defending itself against such liabilities) which may be imposed on, incurred
by or asserted against, such Agent in any way relating to or arising out of this
Credit Facility Agreement, the Note or any Security Document, any action taken
or omitted by such Agent thereunder or the preparation, administration,
amendment or enforcement of, or waiver of any provision of, this Credit Facility
Agreement, the Note or any Security Document, except that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Agent's gross negligence or willful misconduct.
15.12 Consultation with Counsel. Each of the Agents may consult with legal
counsel reasonably selected by such Agent and shall not be liable for any action
taken, permitted or omitted by it in good faith in accordance with the advice or
opinion of such counsel.
15.13 Resignation. Any Agent may resign at any time by giving thirty (30) days'
written notice thereof to the other Agents, the Lenders and the Borrower. Upon
any such resignation, the Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving notice of resignation, then the retiring Agent may, on behalf of
the Lenders, appoint a successor Agent which shall be a bank or trust company of
recognized standing. Any resignation by an Agent pursuant to this Section 15.13
shall be effective only upon the appointment of a successor Agent. After any
retiring Agent's resignation as Agent hereunder, the provisions of this Section
15 shall continue in effect for its benefit with respect to any actions taken or
omitted by it while acting as Agent.
15.14 Representations of Lenders. Each Lender represents and warrants to each
other Lender and each Agent that:
(a) in making its decision to enter into this Credit Facility
Agreement and to make its Commitment available hereunder, it has independently
taken whatever steps it considers necessary to evaluate the financial condition
and affairs of the Security Parties, that it has made an independent credit
judgment and that it has not relied upon any statement, representation or
warranty by any other Lender or any Agent; and
(b) so long as any portion of its Commitment remains outstanding, it
will continue to make its own independent evaluation of the financial condition
and affairs of the Security Parties.
15.15 Notification of Event of Default. The Administrative Agent hereby
undertakes to promptly notify the Lenders, and the Lenders hereby promptly
undertake to notify the Administrative Agent and the other Lenders, of the
existence of any Event of Default, which shall have occurred and be continuing,
of which the Administrative Agent or Lender has actual knowledge which, for
purposes of this Section 15.15, shall mean the actual knowledge of an officer
having responsibility for the transactions contemplated by this Credit Facility
Agreement.
15.16 No Agency or Trusteeship if not Syndicated. Unless and until the Loan is
syndicated or at any other time HSH is the only Lender, all references to the
terms "Agent" and "Security Trustee" shall be deemed to be references to HSH as
Lender and not as agent or security trustee.
15.17 Nature of Duties. The Agents shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Security Documents.
Neither the Agents nor any of their respective officers, directors, agents,
employees or affiliates shall be liable for any action taken or omitted by it or
them hereunder or under any of the Security Documents or in connection herewith
or therewith, unless caused by such Person's gross negligence or willful
misconduct (any such liability limited to the applicable Agent to whom such
Person relates). The duties of each of the Agents shall be mechanical and
administrative in nature; neither of the Agents shall have by reason of this
Credit Facility Agreement or any of the Security Documents, any fiduciary
relationship in respect of any Lender or the holder or any Note; and nothing in
this Credit Facility Agreement or any of the Security Documents, expressed or
implied, is intended to or shall be construed as to impose upon either of the
Agents any obligations in respect of this Credit Facility Agreement or any of
the Security Documents except as expressly set forth herein or therein.
15.18 Delegation of Power. The Agents shall be entitled at any time and as often
as may be expedient to delegate all or any of the powers and discretions vested
in it by this Credit Facility Agreement and each of the Security Documents in
such manner and upon such terms and to such persons as the Agents in their
absolute discretion may deem advisable.
16. NOTICES AND DEMANDS
16.1 Notices. All notices, requests, demands and other communications to any
party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and shall be given to the Borrower at
the address or facsimile number set forth below and to the Lenders and the
Agents at their address and facsimile numbers set forth in Schedule 1 or at such
other address or facsimile numbers as such party may hereafter specify for the
purpose by notice to each other party hereto. Each such notice, request or other
communication shall be effective (i) if given by facsimile, within two (2) hours
of the dispatch of notice (provided that if the date of dispatch of notice is
not a Banking Day in the country of the party receiving the notice, or the time
of dispatch of notice is after the close of business in the country of the party
receiving the notice, it shall be effective at the opening of business on the
next business day), or (ii) if given by mail, prepaid overnight courier or any
other means, when received at the address specified in this Section or when
delivery at such address is refused.
If to the Borrower:
c/o Top Tanker Management Inc.
109-111 Messogion Avenue
Polita Centre, ▇▇▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
17. MISCELLANEOUS
17.1 Time of Essence. Time is of the essence with respect to this Credit
Facility Agreement but no failure or delay on the part of any Lender or any
Agent to exercise any power or right under this Credit Facility Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise by any
Lender or any Agent of any power or right hereunder preclude any other or
further exercise thereof or the exercise of any other power or right. The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law.
17.2 Unenforceable, etc., Provisions-Effect. In case any one or more of the
provisions contained in this Credit Facility Agreement, the Note or in any
Security Document would, if given effect, be invalid, illegal or unenforceable
in any respect under any law applicable in any relevant jurisdiction, said
provision shall not be enforceable against the relevant Security Party, but the
validity, legality and enforceability of the remaining provisions herein or
therein contained shall not in any way be affected or impaired thereby.
17.3 References. References herein to Sections, Exhibits and Schedules are to be
construed as references to sections of, exhibits to, and schedules to, this
Credit Facility Agreement, unless the context otherwise requires.
17.4 Further Assurances. The Borrower agrees that if this Credit Facility
Agreement or any Security Document shall, in the reasonable opinion of the
Lenders, at any time be deemed by the Lenders for any reason insufficient in
whole or in part to carry out the true intent and spirit hereof or thereof, it
will execute or cause to be executed such other and further assurances and
documents as in the opinion of the Lenders may be required in order to more
effectively accomplish the purposes of this Credit Facility Agreement, the Note
or any Security Document.
17.5 Prior Agreements, Merger. Any and all prior understandings and agreements
heretofore entered into between the Security Parties on the one part, and the
Agents or the Lenders, on the other part, whether written or oral, other than
the Fee Letter, are superseded by and merged into this Credit Facility Agreement
and the other agreements (the forms of which are exhibited hereto) to be
executed and delivered in connection herewith to which the Security Parties, the
Agents and/or the Lenders are parties, which alone fully and completely express
the agreements between the Security Parties, the Agents and the Lenders.
17.6 Entire Agreement; Amendments. This Credit Facility Agreement constitutes
the entire agreement of the parties hereto, including all parties added hereto
pursuant to an Assignment and Assumption Agreement. Subject to Section 15.8, any
provision of this Credit Facility Agreement, the Note or any Security Document
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed by the Borrower, the Agents and the Majority Lenders. This Credit
Facility Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all such counterparts together shall constitute
one and the same instrument.
17.7 Indemnification. The Borrower and, by its execution and delivery of the
Consent and Agreement set forth below, each of the other Security Parties
jointly and severally agree to indemnify each Lender and each Agent, their
respective successors and assigns, and their respective officers, directors,
employees, representatives and agents (each an "Indemnitee") from, and hold each
of them harmless against, any and all losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitee in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) that may at
any time (including, without limitation, at any time following the payment of
the obligations of the Borrower hereunder) be imposed on, asserted against or
incurred by, any Indemnitee as a result of, or arising out of or in any way
related to or by reason of, (a) any violation by any Security Party (or any
charterer or other operator of any Vessel) of any applicable Environmental Law,
(b) any Environmental Claim arising out of the management, use, control,
ownership or operation of property or assets by any Security Party (or, after
foreclosure, by any Lender or any Agent or any of their respective successors or
assigns), (c) the breach of any representation, warranty or covenant set forth
in Sections 2.1 (p) or 9.1(l), (d) the Facility (including the use of the
proceeds of the Facility and any claim made for any brokerage commission, fee or
compensation from any Person), or (e) the execution, delivery, performance or
non-performance of this Credit Facility Agreement, the Note, any Security
Document, or any of the documents referred to herein or contemplated hereby
(whether or not the Indemnitee is a party thereto). If and to the extent that
the obligations of the Security Parties under this Section are unenforceable for
any reason, the Borrower and, by its execution and delivery of the Consent and
Agreement set forth below, each of the other Security Parties jointly and
severally agree to make the maximum contribution to the payment and satisfaction
of such obligations which is permissible under applicable law. The obligations
of the Security Parties under this Section 17.7 shall survive the termination of
this Credit Facility Agreement and the repayment to the Lenders of all amounts
owing thereto under or in connection herewith.
17.8 Headings. In this Credit Facility Agreement, section headings are inserted
for convenience of reference only and shall not be taken into account in the
interpretation of this Credit Facility Agreement.
17.9 WAIVER OF IMMUNITY. TO THE EXTENT THAT ANY SECURITY PARTY HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL
PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR REMEDY)
WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH SECURITY PARTY HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS CREDIT FACILITY
AGREEMENT AND THE OTHER SECURITY DOCUMENTS.
IN WITNESS whereof, the parties hereto have caused this Credit Facility
Agreement to be duly executed by their duly authorized representatives as of the
day and year first above written.
TOP TANKERS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
HSH NORDBANK AG
acting through its Hamburg Branch,
as Arranger, Underwriter, Administrative
Agent and Security Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-in-Fact
The Lenders:
HSH NORDBANK AG
acting through its Hamburg Branch
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Attorney-in-Fact
CONSENT AND AGREEMENT
---------------------
Each of the undersigned, referred to in the foregoing Credit Facility Agreement
as the "Guarantors", hereby consents and agrees to said Credit Facility
Agreement and to the documents contemplated thereby and to the provisions
contained therein relating to conditions to be fulfilled and obligations to be
performed by the undersigned pursuant to or in connection with said Credit
Facility Agreement and agrees particularly to be bound by the representations,
warranties and covenants relating to the undersigned contained in Sections 2 and
9 of said Credit Facility Agreement to the same extent as if the undersigned
were a party to said Credit Facility Agreement, and expressly agrees to the
grant of a security interest in favor of the Security Trustee pursuant to
Section 9.1(q) of said Credit Facility Agreement.
NEDAS SHIPPING COMPANY LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
ARDAS SHIPPING COMPANY LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
KIFISOS SHIPPING COMPANY LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
SPERHIOS SHIPPING COMPANY LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
Schedule 1
Lenders Commitment
HSH Nordbank AG [$154,000,000]
Hamburg Office
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▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attn: Shipping, Greek clients
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
Agents
HSH Nordbank AG
Hamburg Office
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▇-▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attn: Shipping, Greek clients
Fax: ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
Schedule 2
The Vessels
Official Vessel
Name Flag Built Number Type Owner
---- ---- ----- ------ ---- -----
M/T STORMLESS Marshal 1993 2475 Suezmax Nedas Shipping
(ex ▇▇▇▇▇▇▇ SYMPHONY) Islands Tanker Company Limited
M/T ERRORLESS Marshal 1993 2497 Suezmax Ardas Shipping
(ex KNOCK ▇▇▇▇▇) Islands Tanker Company Limited
M/T EDGELESS Marshal 1994 2496 Suezmax Kifisos Shipping
(ex KNOCK DUN) Islands Tanker Company Limited
M/T ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1996 2495 Suezmax Sperhios Shipping
(ex KNOCK ▇▇▇▇) Islands Tanker Company Limited
16279.0006 #612109v4