Exhibit 4.4
Date 31 March 2006
DRYSHIPS INC.
as Borrower
- and -
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Part A of Schedule 1
as Lenders
- and -
HSH NORDBANK AG
as Agent and as Security Trustee
- and -
HSH NORDBANK AG
as Lead Arranger and Lead Bookrunner
- and -
THE GOVERNOR AND COMPANY
OF THE BANK OF SCOTLAND
as Joint Bookrunner
- and -
HSH NORDBANK AG and
THE GOVERNOR AND COMPANY
OF THE BANK OF SCOTLAND
as Joint Underwriters
- and -
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Part B of Schedule 1
as Swap Banks
------------------------
LOAN AGREEMENT
------------------------
relating to a term loan and short-term credit facilities of up to US$518,750,000
in aggregate to refinance certain existing indebtedness, to provide working
capital and to finance part of the purchase price of certain additional vessels
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Piraeus
INDEX
Clause Page
1 INTERPRETATION 2
2 FACILITY 24
3 POSITION OF THE LENDERS, THE SWAP BANKS
AND THE MAJORITY LENDERS 25
4 DRAWDOWN 26
5 INTEREST 27
6 INTEREST PERIODS 30
7 DEFAULT INTEREST 30
8 REPAYMENT AND PREPAYMENT 32
9 CONDITIONS PRECEDENT 35
10 REPRESENTATIONS AND WARRANTIES 36
11 GENERAL UNDERTAKINGS 38
12 CORPORATE UNDERTAKINGS 42
13 INSURANCE 44
14 SHIP COVENANTS 50
15 SECURITY COVER 54
16 PAYMENTS AND CALCULATIONS 56
17 APPLICATION OF RECEIPTS 58
18 APPLICATION OF EARNINGS 59
19 EVENTS OF DEFAULT 60
20 FEES AND EXPENSES 65
21 INDEMNITIES 66
22 NO SET-OFF OR TAX DEDUCTION 68
23 ILLEGALITY, ETC 69
24 INCREASED COSTS 70
25 SET-OFF 71
26 TRANSFERS AND CHANGES IN LENDING OFFICES 72
27 VARIATIONS AND WAIVERS 75
28 NOTICES 76
29 SUPPLEMENTAL 78
30 LAW AND JURISDICTION 78
SCHEDULE I PART A 80
LENDERS AND COMMITMENTS 80
PART B 80
SWAP BANKS 80
SCHEDULE 2 DETAILS OF SHIPS AND OWNERS 82
PART A DETAILS OF EXISTING SHIPS AND OWNERS 82
SCHEDULE 3 DRAWDOWN NOTICE 90
SCHEDULE 4 REPAYMENT OF TERM LOAN 91
SCHEDULE 5 CONDITION PRECEDENT DOCUMENTS 92
SCHEDULE 6 TRANSFER CERTIFICATE 98
SCHEDULE 7 DESIGNATION NOTICE 102
SCHEDULE 8 FORM OF COMPLIANCE CERTIFICATE 103
SCHEDULE 9 MANDATORY COST FORMULA 104
EXECUTION PAGES 106
THIS LOAN AGREEMENT is made on 31 March 2006
BETWEEN:
(1) DRYSHIPS INC. a corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ as Borrower;
(2) THE BANKS AND FINANCIAL INSTITUTIONS listed in Part A of Schedule 1, as
Lenders;
(3) HSH NORDBANK AG acting through its office at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇,
▇-▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as Agent;
(4) HSH NORDBANK AG acting through its office at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇,
▇-▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, as Security Trustee;
(5) HSH NORDBANK AG acting through its office at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇,
▇-▇▇▇▇▇, ▇▇▇▇▇▇▇, as Lead Arranger and as Lead Bookrunner;
(6) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND acting through its office
at New Uberior House, 11 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
as Joint Bookrunner;
(7) HSH NORDBANK AG acting through its office at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇,
▇-▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and THE GOVERNOR AND COMPANY OF THE BANK OF
SCOTLAND acting through its office at New Uberior House, 11 ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, as Joint Underwriters; and
(8) THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1, as
Swap Banks.
WHEREAS
(A) The Lenders have agreed to make available to the Borrower term loan and
short-term credit facilities of up to US$518,750,000 in aggregate as
follows:
(i) as to an amount of up to the lesser of (a) US$460,000,000 and (b) 63
percent of the aggregate Market Values of the Existing Ships and
the Identified Ship to refinance certain existing indebtedness
secured on the Existing Ships, to finance part of the purchase price
of the Identified Ship and to provide the Borrower with working
capital for its general corporate purposes; and
(ii) as to an amount of up to the lesser of (a) US$58,750,000 and (b) 63
percent of the aggregate Market Values of the Additional Ships to
finance part of the purchase price of the Additional Ships.
(B) The Swap Banks have agreed to enter into interest rate swap transactions
with the Borrower from time to time to hedge the Borrower's exposure under
this Agreement to interest rate fluctuations.
(C) The Lenders and the Swap Banks have agreed to share pari passu in the
security to be granted to the Security Trustee pursuant to this Agreement.
IT IS AGREED as follows:
1 INTERPRETATION
1.2 Definitions. Subject to Clause 1.5, in this Agreement:
"Additional Advance" means each Advance which is to be used in financing
on delivery part of the purchase price of an Additional Ship and which is
to be made available in accordance with and pursuant to Clauses 2.3 and
4.2(f);
"Additional Ship" means any ship which is, or is to be, purchased by an
Additional Ship Owner, each of which (unless all of the Lenders acting in
their absolute discretion agree otherwise) must satisfy all the Additional
Ship Requirements;
"Additional Ship Requirements" means, in relation to any ship which is, or
is to be, purchased by an Additional Ship Owner, a ship which satisfies
the following requirements:
(a) it has been approved by all of the Lenders acting in their absolute
discretion;
(b) it is a Capesize, Panamax or Handymax bulk carrier;
(c) it is built in or after 1993;
(d) following its purchase by the relevant Additional Ship Owner, the
average age of the Additional Ships at that time subject to a
Mortgage shall not exceed 10 years;
(e) it maintains the highest class with a classification society which
is acceptable to all of the Lenders free of any overdue
recommendations and conditions;
(f) it is to be registered on an Approved Flag;
(g) at least 25 percent of the purchase price of the Additional Ship
shall be contributed by the Additional Ship Owner either (i) by way
of a shareholder's loan which is advanced to the Borrower and
on-lent to the Additional Ship Owner or (ii) through the proceeds of
a secondary offering of the share capital of the Borrower which are
then advanced (either wholly or partially (as the case maybe)) to
the Additional Ship Owner;
"Additional Ship Earnings Account Pledge" means, in relation to each
Earnings Account of an Additional Ship, a pledge agreement creating
security in favour of the Creditor Parties in respect of that Earnings
Account in such form as the Lenders may approve or require and, in the
plural means all of them;
"Additional Ship MOA" means, in relation to an Additional Ship, a
memorandum of agreement or a shipbuilding contract to be made between the
Additional Ship Seller of that Additional Ship and the Additional Ship
Owner which is the buyer thereof on terms and conditions acceptable to the
Lenders (such approval not to be unreasonably withheld if the Additional
Ship satisfies all the Additional Ship Requirements) and, in the plural,
means all of them;
"Additional Ship Seller" means, in relation to an Additional Ship, the
seller of such Additional Ship and, in the plural, means all of them;
"Additional Ship Owner" means a company which is a direct or indirect
wholly-owned subsidiary of the Borrower incorporated in a jurisdiction
acceptable to the Lenders (in their absolute discretion) which shall be
the owner of an Additional Ship and, in the plural, means all of them;
"Adjusted Equity" means, as of any Compliance Date, the value of the
stockholders' equity of the Group determined on a consolidated basis in
accordance with GAAP and as shown in the consolidated balance sheets for
the Group in the Applicable Accounts, adjusted by adding or subtracting
(depending on whether the same is positive or negative) any difference
between:
(a) the value of Total Assets determined on a consolidated basis in
accordance with GAAP and as shown in such consolidated balance
sheets; and
(b) the Market Value Adjusted Total Assets;
"Advance" means the principal amount of each borrowing by the Borrower
under this Agreement;
"Affected Lender" has the meaning given in Clause 5.6;
"Agency and Trust Deed" means the agency and trust deed executed or to be
executed between the Borrower, the Lenders, the Swap Banks, the Junior
Swap Banks, the Agent, BOS and the Security Trustee in such form as the
Lenders may approve or require;
"Agent" means HSH Nordbank AG and any of its successors including, without
limitation, any successor appointed under clause 5 of the Agency and Trust
Deed;
"Applicable Accounts" means, in relation to a Compliance Date or an
accounting period, the consolidated balance sheets and related
consolidated statements of stockholders' equity, income and cash flows of
the Group set out in the annual financial statements or interim financial
statements of the Group prepared as of the Compliance Date or, as the case
may be, the last day of the accounting period in question (and which the
Borrower is obliged to deliver to the Agent pursuant to Clause 11.6);
"Approved Broker" means each of Braemar Seascope Shipbrokers Ltd., ▇.
▇▇▇▇▇▇▇▇ & Company Limited, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇.▇. ▇▇▇▇▇▇
Shipbrokers A.S., ▇.▇. ▇▇▇▇▇▇ AS, Arrow Sale & Purchase (UK) Ltd., ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇, Fearnley AS and Maersk Shipbrokers;
"Approved Flag" means the Maltese flag, the Cyprus flag, the Bahamas flag,
the Panamanian flag, the Liberian flag, the ▇▇▇▇▇▇▇▇ Islands flag or such
other flag as the Agent may, acting upon the instructions of all the
Lenders, approve as the flag on which an Additional Ship shall be
registered;
"Approved Flag State" means Malta, Cyprus, Bahamas, Panama, Liberia, the
▇▇▇▇▇▇▇▇ Islands or any other country in which the Agent may, acting upon
the instructions of all the Lenders, approve that an Additional Ship be
registered;
"Approved Manager" means, in relation to:
(a) each Ship (other than the Identified Ship during the ▇▇▇▇▇
Oldendorff Charter Period), Cardiff Marine Inc., a corporation
incorporated in the Republic of Liberia and maintaining a ship
management office at Omega Building, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇, ▇▇▇▇▇▇;
(b) the Identified Ship at all times during the ▇▇▇▇▇ Oldendorff Charter
Period, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, a company incorporated in Germany and
maintaining a ship management office at ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇; and
(c) or any other company which the Agent may, with the authorisation of
the Majority Lenders, approve from time to time as the technical
and/or commercial agent of a Ship;
"Availability Period" means the period commencing on the date of this
Agreement and ending on:
(a) in the case of:
(i) the Refinancing Advance, 5 April 2006;
(ii) the Identified Ship Advance, 15 April 2006;
(iii) an Additional Advance (subject to Clause 4.8), the date
falling 364 days after the date of this Agreement (or, in
respect of any of the Advances referred to in this paragraph
(a) such later date as the Agent may, with the authorisation
of all the Lenders, agree with the Borrower); or
(b) if earlier, the date on which the Total Commitments are fully
borrowed, cancelled or terminated;
"Balloon Instalment" means, in relation to:
(a) the Term Loan (subject to the proviso to Clause 8.1(a)(i)), an
amount of $81,273,542.60; and
(b) an Additional Advance, the balloon instalment in respect of that
Advance as specified in the repayment schedule for that Advance
referred to in Clause 8.1(a)(ii) and calculated in accordance with
Clause 8.1(b);
"Bank Guarantee" means the guarantee of the obligations of the Borrower
under the Master Agreement to be entered into between the Borrower and
HBOSTS, executed or to be executed by BOS in favour of HBOSTS;
"Bookrunner" means each of the Lead Bookrunner and the Joint Bookrunner
and, in the plural, means both of them;
"Borrower" means Dryships Inc., a corporation incorporated in the ▇▇▇▇▇▇▇▇
Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇;
"Borrower's Accounts Pledge" means a pledge agreement creating security in
favour of the Creditor Parties in respect of the Debt Service Reserve
Account and the Retention Account in such form as the Lenders may approve
or require;
"BOS" means the Governor and Company of the Bank of Scotland, acting
through its office at New Uberior House, 11 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇;
"Business Day" means a day on which banks are open in London, Edinburgh,
Athens and Hamburg and, in respect of a day on which a payment is required
to be made under a Finance Document, also in New York City;
"Charterparty Assignment" means, in relation to each Ship, an assignment
of the rights of the Owner of that Ship under any time charterparty or
contract of afreightment in respect of such Ship of at least 11
consecutive months in duration or under any bareboat charter and any
guarantee of such charter or other contract of employment in respect of
such Ship executed or to be executed by the relevant Owner in favour of
the Security Trustee, in each case, in such form as the Lenders may
approve or require and, in the plural, means all of them;
"Commitment" means, in relation to a Lender, the aggregate of the Term
Loan Commitment and the Credit Facility Commitment of that Lender;
"Compliance Date" means 30 June and 31 December in each calendar year (or
such other dates as of which the Borrower prepares the consolidated
financial statements which it is required to deliver pursuant to Clause
11.6);
"Confirmation" and "Early Termination Date", in relation to any continuing
Designated Transaction, have the meanings given in each Master Agreement;
"Contractual Currency" has the meaning given in Clause 21.5;
"Contribution" means, in relation to a Lender, the part of the Loan which
is owing to that Lender;
"Counter Indemnity" means the counter indemnity executed or to be executed
by the Borrower in favour of BOS, indemnifying BOS in respect of any
amounts it may be obliged to pay under the Bank Guarantee;
"Credit Facility" means an amount of up to $58,750,000 (representing the
maximum aggregate principal amount of the Additional Advances) or the
aggregate principal amount of the Additional Advances for the time being
outstanding under this Agreement;
"Credit Facility Commitment" means, in relation to a Lender, the amount
set opposite its name in the fourth column of Schedule 1, Part A or, as
the case may require, the amount specified in the relevant Transfer
Certificate, as that amount may be reduced, cancelled or terminated in
accordance with this Agreement (and "Total Credit Facility Commitments"
means the aggregate of the Credit Facility Commitments of all the
Lenders);
"Creditor Party" means the Agent, the Security Trustee, each Swap Bank or
any Lender, whether as at the date of this Agreement or at any later time;
"Debt Service Reserve Account" means an account in the name of the
Borrower with the Agent in Hamburg designated "Dryships Inc. - Debt
Service Reserve Account" or any other account (with that or another office
of the Agent) which is designated by the Agent as the Debt Service Reserve
Account for the purposes of this Agreement;
"Deed of Covenant" means:
(a) in relation to each Existing Ship and the Identified Ship, a deed of
covenant collateral to the Mortgage on that Ship; and
(b) in relation to each Additional Ship, if a deed of covenant is
appropriate given the Mortgage on that Additional Ship, a deed of
covenant collateral to the Mortgage on that Additional Ship,
each in such form as the Lenders may approve or require and, in the plural
means all of them;
"Designated Transaction" means a Transaction which fulfils the following
requirements:
(a) it is entered into by the Borrower pursuant to a Master Agreement
with a Swap Bank which, at the time the Transaction is entered into,
is also a Lender;
(b) its purpose is the hedging of the Borrower's exposure under this
Agreement to fluctuations in LIBOR arising from the funding of the
Loan (or any part thereof) for a period expiring no later than the
final Repayment Date; and
(c) it is designated by the Borrower, by delivery by the Borrower to the
Agent of a notice of designation in the form set out in Schedule 7,
as a Designated Transaction for the purposes of the Finance
Documents;
"Dollars" and "$" means the lawful currency for the time being of the
United States of America;
"Drawdown Date" means, in relation to an Advance, the date requested by
the Borrower for the Advance to be made, or (as the context requires) the
date on which the Advance is actually made;
"Drawdown Notice" means a notice in the form set out in Schedule 3 (or in
any other form which the Agent approves or reasonably requires);
"Earnings" means, in relations to each Ship, all moneys whatsoever which
are now, or later become, payable (actually or contingently) to the Owner
thereof or the Security Trustee and which arise out of the use or
operation of that Ship, including (but not limited to):
(a) all freight, hire and passage moneys, compensation payable to the
relevant Owner or the Security Trustee in the event of requisition
of that Ship for hire, remuneration for salvage and towage services,
demurrage and detention moneys and damages for breach (or payments
for variation or termination) of any charterparty or other contract
for the employment of the Ship;
(b) all moneys which are at any time payable under Insurances in respect
of loss of earnings; and
(c) if and whenever the Ship is employed on terms whereby any moneys
falling within paragraphs (a) or (b) above are pooled or shared with
any other person, that proportion of the net receipts of the
relevant pooling or sharing arrangement which is attributable to the
Ship;
"Earnings Account" means, in relation to each Ship, an account in the name
of the Owner of that Ship, with the Agent in Hamburg designated "[name of
Ship] - Earnings Account", or any other account (with that or another
office of the Agent) which is designated by the Agent as the Earnings
Account for that Ship for the purposes of this Agreement and, in the
plural means all of them;
"EBITDA" means, for any accounting period, the consolidated net income of
the Group for that accounting period:
(a) plus, to the extent deducted in computing consolidated net income of
the Group for that accounting period, the sum, without duplication,
of:
(i) all federal, state, local and foreign taxes and tax
distributions;
(ii) Net Interest Expenses; and
(iii) depreciation, depletion, amortisation of intangibles and other
non-cash charges or non-cash losses (including non-cash
transaction expenses and the amortisation of debt discounts)
and any extraordinary losses not incurred in the ordinary
course of business;
(b) minus, to the extent added in computing consolidated net income of
the Group for that accounting period, any non-cash income or
non-cash gains and any extraordinary gains not incurred in the
ordinary course of business;
all determined on a consolidated basis in accordance with GAAP and as
shown in the consolidated statements of income for the Group in the
Applicable Accounts;
"Environmental Claim" means:
(a) any claim by any governmental, judicial or regulatory authority
which arises out of an Environmental Incident or an alleged
Environmental Incident or which relates to any Environmental Law; or
(b) any claim by any other person which relates to an Environmental
Incident or to an alleged Environmental Incident,
and "claim" means a claim for damages, compensation, fines, penalties or
any other payment of any kind whether or not similar to the foregoing; an
order or direction to take, or not to take, certain action or to desist
from or suspend certain action; and any form of enforcement or regulatory
action, including the arrest or attachment of any asset;
"Environmental Incident" means, in relation to each Ship:
(a) any release of Environmentally Sensitive Material from that Ship; or
(b) any incident in which Environmentally Sensitive Material is released
from a vessel other than the Ship and which involves a collision
between the Ship and such other vessel or some other incident of
navigation or operation, in either case, in connection with which
the Ship is actually or potentially liable to be arrested, attached,
detained or injuncted and/or the Ship or the Owner thereof and/or
any operator or manager is at fault or allegedly at fault or
otherwise liable to any legal or administrative action; or
(c) any other incident in which Environmentally Sensitive Material is
released otherwise than from the Ship and in connection with which
the Ship is actually or potentially liable to be arrested and/or
where the Owner thereof and/or any operator or manager of the Ship
is at fault or allegedly at fault or otherwise liable to any legal
or administrative action;
"Environmental Law" means any law relating to pollution or protection of
the environment, to the carriage of Environmentally Sensitive Material or
to actual or threatened releases of Environmentally Sensitive Material;
"Environmentally Sensitive Material" means oil, oil products and any other
substance (including any chemical, gas or other hazardous or noxious
substance) which is (or is capable of being or becoming) polluting, toxic
or hazardous;
"Event of Default" means any of the events or circumstances described in
Clause 19.1;
"Existing Indebtedness" means, at any relevant time, the aggregate
Financial Indebtedness of the Borrower or its wholly-owned subsidiaries
under the Existing Loan Agreements;
"Existing Loan Agreements" means, together:
(a) the loan agreement dated 6 December 2004 made between (i) Annapolis
Shipping Company Limited and certain other companies (each of which
is an indirect wholly-owned subsidiary of the Borrower) as joint and
several borrowers, (ii) the banks and financial institutions
referred to therein as lenders and (iii) Commerzbank AG as agent and
security trustee in respect of a loan facility of (originally)
$185,000,000 (of which an amount of $136,667,000 is outstanding by
way of principal on the date of this Agreement);
(b) the loan agreement dated 18 March 2005 made between (i) the
Borrower, (ii) the banks and financial institutions referred to
therein as lenders and (iii) Commerzbank AG as agent and security
trustee in respect of a loan facility of (originally) $200,000,000
(of which an amount of $163,378,000 is outstanding by way of
principal on the date of this Agreement);
(c) the loan agreement dated 15 March 2005 made between (i) the indirect
wholly-owned subsidiaries of the Borrower, Arleta Shipping Company
Limited, Malvina Shipping Company Limited and ▇▇▇▇▇▇ Shipping
Company Limited, as joint and several borrowers and (ii)
Norddeutsche Landesbank Girozentrale as lender in respect of a loan
facility of (originally) $120,645,000 (of which an amount of
$108,662,000 is outstanding by way of principal on the date of this
Agreement);
(d) the loan agreement dated 23 March 2005 made between (i) the indirect
wholly-owned subsidiary of the Borrower, Selma Shipping Company
Limited, as borrower and (ii) The Royal Bank of Scotland plc as
lender in respect of a loan facility of (originally) $92,940,000 (of
which an amount of $72,778,000 is outstanding by way of principal on
the date of this Agreement); and
(e) the loan agreement dated 29 March 2005 made between (i) the indirect
wholly-subsidiary of the Borrower, Iguana Shipping Company Limited,
as borrower and (ii) Deutsche Schiffsbank Aktiengesellschaft as
lender in respect of a loan facility of (originally) $19,000,000 of
which an amount (of which an amount of $14,000,000 is outstanding by
way or principal on the date of this Agreement),
and, in the singular, means any of them;
"Existing Ships" means, together, the Ships referred to in Schedule 2,
Part A and, in the singular means any of them and when referred to by name
means that Ship;
"Existing Ships Earnings Accounts Pledge" means a pledge agreement
creating security in favour of the Creditor Parties in respect of the
Earnings Accounts of all the Existing Ships in such form as the Lenders
may approve or require;
"Final Maturity Date" means 31 May 2016;
"Finance Documents" means:
(a) this Agreement;
(b) the Master Agreements;
(c) the Agency and Trust Deed;
(d) the Guarantees;
(e) the Wealth Guarantee;
(f) the Master Agreement Assignments;
(g) the Mortgages;
(h) the General Assignments;
(i) the Deeds of Covenant;
(j) the Borrower's Accounts Pledge;
(k) the Existing Ships Earnings Accounts Pledge; the
(l) Identified Ship Earnings Account Pledge;
(m) the Additional Ship Earnings Account Pledges;
(n) the Wealth Account Pledge;
(o) any Charterparty Assignment;
(p) the ▇▇▇▇▇ Oldendorff Tripartite Agreement;
(q) the Management Agreement Assignments;
(r) the Manager's Undertakings;
(s) the Counter Indemnity; and
(t) any other document (whether creating a Security Interest or not)
which is executed at any time by the Borrower, any Owner or any
other person as security for, or to establish any form of
subordination or priorities arrangement in relation to, any amount
payable to the Lenders and/or the Swap Banks under this Agreement or
any of the documents referred to in this definition;
"Financial Indebtedness" means, in relation to a person (the "debtor"), a
liability of the debtor:
(a) for principal, interest or any other sum payable in respect of any
moneys borrowed or raised by the debtor;
(b) under any loan stock, bond, note or other security issued by the
debtor;
(c) under any acceptance credit, guarantee or letter of credit facility
made available to the debtor;
(d) under a financial lease, a deferred purchase consideration
arrangement or any other agreement having the commercial effect of a
borrowing or raising of money by the debtor;
(e) under any 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;
"Financial Year" means in relation to the Group, each period of 1 year
commencing on 1 January in respect of which its consolidated accounts are
or ought to be prepared;
"Fleet Vessels" means together all of the vessels (including, but not
limited to, the Ships) from time to time owned by members of the Group;
"GAAP" means generally accepted accounting principles as from time to time
in effect in the United States of America;
"General Assignment" means, in relation to each Ship, a general assignment
of the Earnings, the Insurances and any Requisition Compensation of that
Ship in such form as the Lenders may approve or require and, in plural
means all of them;
"Goodwill" means Goodwill Shipping Company Limited, a company incorporated
in Malta having its registered office at ▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇;
"Group" means the Borrower and its subsidiaries (whether direct or
indirect and including, but not limited to, the Owners) from time to time
during the Security Period and "member of the Group" shall be construed
accordingly;
"Guarantee" means a guarantee of the Borrower's obligations under (inter
alia) this Agreement, the Master Agreements and the Junior Loan Agreement
executed or to be executed by each Owner in favour of the Security Trustee
in such form as the Lenders shall approve or require and, in the plural,
means all of them;
"HBOSTS" means HBOS Treasury Services plc of ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ and includes its successors in title, assignees and
transferees;
"Hedge Strategy Letter" means a letter issued or to be issued by no later
than 30 April 2006 by the Borrower to the Agent setting out a strategy for
hedging the Borrower's exposure under this Agreement to fluctuations of
LIBOR arising from the funding at least 60 percent of the Loan for a
consecutive period of at least 5 years during the Security Period;
"▇▇▇▇▇ Oldendorff Charterparty" means a bareboat charterparty dated 29
August 2005 in respect of "▇▇▇▇▇ OLDENDORFF" made between Goodwill as
original owner and Oldendorff Carriers GmbH & Co. KG ("Oldendorff') as
original charterer (as the same has been novated to the ▇▇▇▇▇ Oldendorff
Charterer by an addendum no. 1 thereto dated 6 October 2005 and as the
same shall be novated to Seaventure by an addendum no. 2 thereto to be
made between Goodwill, Seaventure, the ▇▇▇▇▇ Oldendorff Charter and the
▇▇▇▇▇ Oldendorff Charter Guarantor);
"▇▇▇▇▇ Oldendorff Charterer" means Catania Shipping Inc., a Liberian
corporation whose registered office is at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇;
"▇▇▇▇▇ Oldendorff Charter Guarantee" means the guarantee by the ▇▇▇▇▇
Oldendorff Charter Guarantor of the obligations of the ▇▇▇▇▇ Oldendorff
Charterer under the ▇▇▇▇▇ Oldendorff Charterparty as evidenced in Addendum
No. 1 thereto dated 6 October 2005;
"▇▇▇▇▇ Oldendorff Charter Guarantor" means Oldendorff Carriers GmbH & Co.
KG, a German company acting through its office at ▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇▇▇ ▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
"▇▇▇▇▇ Oldendorff Charter Period" means the period commencing on the date
of delivery of "▇▇▇▇▇ OLDENDORFF" under the ▇▇▇▇▇ Oldendorff Charterparty
and ending on the date on which the ▇▇▇▇▇ Oldendorff Charterparty expires
by effluxion of time or (if earlier) on the date on which the ▇▇▇▇▇
Oldendorff Charterparty is otherwise terminated or frustrated or "▇▇▇▇▇
OLDENDORFF" is withdrawn from hire under the ▇▇▇▇▇ Oldendorff
Charterparty;
"▇▇▇▇▇ Oldendorff MOA" means, a memorandum of agreement in respect of
"▇▇▇▇▇ OLDENDORFF" dated 24 March 2006 made between Goodwill as seller and
Seaventure as buyer;
"▇▇▇▇▇ Oldendorff Seller's Credit Agreement" means an agreement made or to
be made between Seaventure and Goodwill whereby Goodwill shall agree to
defer the payment of $3,250,000 of the purchase price payable by
Seaventure pursuant to the ▇▇▇▇▇ Oldendorff MOA with such deferred amount
being payable, subject to Clause 11.22, in one amount no earlier than 9
months after the Drawdown Date in respect of the Identified Ship Advance
and no later than 12 months after the Drawdown Date in respect of the
Identified Ship Advance, such agreement to be in a form acceptable to the
Majority Lenders;
"▇▇▇▇▇ Oldendorff Tripartite Agreement" means, in relation to "▇▇▇▇▇
OLDENDORFF", an agreement made between the ▇▇▇▇▇ Oldendorff Charterer,
Seaventure and the Security Trustee in such form as the Lenders may
approve or require;
"IACS" means the International Association of Classification Societies;
"Identified Ship" means "▇▇▇▇▇ OLDENDORFF" being the Ship referred to in
Schedule 2, Part B and when referred to by name means that Ship;
"Identified Ship Advance" means an amount of up to the lesser of (a)
$22,691,000 and (b) 63 percent of the Market Value of the Identified
Ship (determined in accordance with the valuation referred to in paragraph
10 of Schedule 5, Part C) which is to be made available in accordance with
and pursuant to Clauses 2.3 and 4.2(d);
"Identified Ship Earnings Account Pledge" means a pledge agreement
creating security in favour of the Creditor Parties in respect of the
Earnings Account of the Identified Ship in such form as the Lenders may
approve or require;
"Insurances" means, in relation to each Ship:
(a) all policies and contracts of insurance, including entries of that
Ship in any protection and indemnity or war risks association, which
are effected in respect of the Ship, her Earnings or otherwise in
relation to her; and
(b) all rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a premium;
"Interest Coverage Ratio" means, in relation to a Compliance Date or an
accounting period, the ratio of (a) EBITDA for the most recent financial
period of the Group ending on the Compliance Date to (b) the Net Interest
Expenses for that financial period (calculated on a trailing 12-months
basis);
"Interest Period" means a period determined in accordance with Clause 6;
"ISM Code" means:
(a) the International Management Code for the Safe Operation of Ships
and for Pollution Prevention', currently known or referred to as the
'ISM Code', adopted by the Assembly of the International Maritime
Organisation by Resolution A.741(18) on 4 November 1993 and
incorporated on 19 May 1994 into chapter IX of the International
Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
(b) all further resolutions, circulars, codes, guidelines, regulations
and recommendations which are now or in the future issued by or on
behalf of the International Maritime Organisation or any other
entity with responsibility for implementing the ISM Code, including
without limitation, the 'Guidelines on implementation or
administering of the International Safety Management (ISM) Code by
Administrations' produced by the International Maritime
Organisations pursuant to Resolution A.788(19) adopted on 25
November 1995,
as the same may be amended, supplemented or replaced from time to time;
"ISM Code Documentation" includes, in relation to each Ship:
(a) the document of compliance (DOC) and safety management certificate
(SMC) issued pursuant to the ISM Code in relation to that Ship
within the periods specified by the ISM Code; and
(b) all other documents and data which are relevant to the ISM SMS and
its implementation and verification which the Agent may require; and
(c) any other documents which are prepared or which are otherwise
relevant to establish and maintain the Ship's or the compliance of
its Owner with the ISM Code which the Agent may require;
"ISM SMS" means, in relation to each Ship, the safety management system
for that Ship which is required to be developed, implemented and
maintained under the ISM Code;
"ISPS Code" means the International Ship and Port Facility Security Code
constituted pursuant to resolution A.924(22) of the International Maritime
Organisation ("IMO") now set out in Chapter XI-2 of the Safety of Life at
Sea Convention (SOLAS) 1974 (as amended) and the mandatory ISPS Code as
adopted by a Diplomatic Conference of the IMO on Maritime Security in
December 2002 and includes any amendments or extensions to it and any
regulation issued pursuant to it but shall only apply insofar as it is
applicable law in the relevant Ship's flag state and any jurisdiction on
which such Ship is operated;
"ISPS Code Documentation" includes:
(a) the International Ship Security Certificate issued pursuant to the
ISPS Code in relation to each Ship within the period specified in
the ISPS Code; and
(b) all other documents and data which are relevant to the ISPS Code and
its implementation and verification which the Agent may require;
"Junior Designated Transaction" has the meaning given to the term
"Designated Transaction" in the Junior Loan Agreement;
"Junior Lenders" means, subject to clause 26.6 of the Junior Loan
Agreement:
(a) a bank or financial institution listed in schedule 1 to the Junior
Loan Agreement and acting through its branch indicated in schedule 1
to the Junior Loan Agreement (or through another branch notified to
the Borrower under clause 26.14 of the Junior Loan Agreement) unless
it has delivered a Junior Loan Transfer Certificate or Certificates
covering the entire amounts of its Commitment (as such term is
defined in the Junior Loan Agreement) and its Contribution (as such
term is defined in the Junior Loan Agreement); and
(b) the holder for the time being of a Junior Loan Transfer Certificate;
"Junior Loan" means the principal amount for the time being outstanding
under the Junior Loan Agreement;
"Junior Loan Agreement" means the Loan Agreement to be made between the
Borrower as borrower, the Junior Lenders, the Agent, the Security Trustee
and the Junior Swap Banks in respect of term loan and short-term credit
facilities of up to $110,000,000 in aggregate;
"Junior Loan Transfer Certificate" has the meaning given in clause 26.2 of
the Junior Loan Agreement;
"Junior Master Agreement" has the meaning given to the term "Master
Agreement" in the Junior Loan Agreement;
"Junior Swap Bank" has the meaning given to the terms "Swap Bank" in the
Junior Loan Agreement;
"Lender" means, subject to Clause 26.6:
(a) a bank or financial institution listed in Part A of Schedule 1 and
acting through its branch indicated in Part A of Schedule 1 (or
through another branch notified to the Borrower under Clause 26.14)
unless it has delivered a Transfer Certificate or Certificates
covering the entire amounts of its Commitment and its Contribution;
and
(b) the holder for the time being of a Transfer Certificate;
"LIBOR" means, for an Interest Period:
(a) the rate per annum equal to the offered quotation for deposits in
Dollars for a period equal to, or as near as possible equal to, the
relevant Interest Period which appears on REUTERS BBA Page LIBOR 01
at or about 11.00 a.m. (London time) on the second Business Day
prior to the commencement of that Interest Period (and, for the
purposes of this Agreement, "REUTERS BBA Page LIBOR 01" means the
display designated as "REUTERS BBA Page LIBOR 01" on the Reuters
Money News Service or such other page as may replace REUTERS BBA
Page LIBOR 01 on that service for the purpose of displaying rates
comparable to that rate or on such other service as may be nominated
by the British Bankers' Association for the purpose of displaying
British Bankers' Association Interest Settlement Rates for Dollars);
or
(b) if no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per
annum determined by the Agent to be the arithmetic mean of the rates
per annum notified to the Agent by each Reference Bank to be the
rate per annum at which deposits in Dollars are offered to that
Reference Bank by leading banks in the London Interbank Market at or
about 11.00 a.m. (London time) on the second Business Day prior to
the commencement of that Interest Period for a period equal to that
Interest Period and for delivery on the first Business Day of it; or
(c) in relation to any Interest Period of 12 months or more, the average
of the actual costs to the Lenders of funding their participation in
the Loan;
"Loan" means the principal amount for the time being outstanding under
this Agreement;
"Major Casualty" means, in relation to each Ship, any casualty to that
Ship in respect of which the claim or the aggregate of the claims against
all insurers, before adjustment for any relevant franchise or deductible,
exceeds $500,000 or the equivalent in any other currency;
"Majority Lenders" means Lenders whose Commitments total at least 60
percent of the Total Commitments;
"Manager's Undertaking" means, in relation to each Ship, a letter of
undertaking executed or to be executed by the Approved Manager in favour
of the Security Trustee in such form as the Lenders may approve or require
agreeing certain matters in relation to the management of that Ship and
subordinating the rights of the Approved Manager against the Ship and the
Owner thereof to the rights of the Creditor Parties under the Finance
Documents and, in the plural, means all of them;
"Management Agreement" means, in relation to each Ship, an agreement made
or to be made between (i) the Owner of that Ship, (ii) the Borrower and
(iii) the Approved Manager in respect of the commercial and technical
management of the Ship and, in the plural, means all of them;
"Management Agreement Assignment" means, in relation to each Management
Agreement, the assignment of the rights and interests of the Borrower and
the relevant Owner under that Management Agreement in such form as the
Lenders may approve or require and, in the plural, means all of them;
"Mandatory Cost" means the percentage rate per annum calculated by the
Agent in accordance with Schedule 9;
"Margin" means:
(a) at any time when the Security Cover Percentage is equal to, or less
than, 67.5 percent, 1 percent per annum; and
(b) at all other times, 1.1 percent per annum;
"Market Adjusted Equity Ratio" means, in relation to a Compliance Date,
the ratio of (a) the Adjusted Equity for the most recent financial period
of the Group ending on the Compliance Date to (b) the aggregate of (i)
Total Interest Bearing Liabilities and (ii) Adjusted Equity for that
financial period;
"Market Value" means, in relation to each Ship and each Fleet Vessel, the
market value thereof calculated in accordance with Clause 15.4;
"Market Value Adjusted Net Worth" means Paid-Up Capital plus General
Reserves plus Retained Earnings adjusted to reflect the difference between
the book values of the Fleet Values and the Market Values of all Fleet
Vessels at any relevant time;
"Market Value Adjusted Total Assets" means, at any time, Total Assets
adjusted to reflect the Market Value of all Fleet Vessels;
"Master Agreement" means each master agreement (on the 1992 or, as the
case may be, 2002 ISDA (Multicurrency - Crossborder) form) made between
the Borrower and a Swap Bank and includes all Designated Transactions from
time to time entered into and Confirmations from time to time exchanged
under the master agreement and, in the plural, means both of them;
"Master Agreement Assignment" means, in relation to each Master Agreement,
the assignment of that Master Agreement in such form as the Lenders may
approve or require and, in the plural, means both of them;
"Mortgage" means:
(a) in relation to each Existing Ship and the Identified Ship, a first
priority Maltese statutory mortgage on such Ship; and
(b) in relation to each Additional Ship, a first priority or preferred
mortgage on such Ship under the relevant Approved Flag,
each in such form as the Lenders may approve or require and, in plural,
means all of them;
"Negotiation Period" has the meaning given in Clause 5.9;
"Net Income" means, in relation to each Financial Year of the Borrower,
the aggregate income of the Group appearing in the Applicable Accounts for
that Financial Year less the aggregate of:
(a) the amounts incurred by the Group during that Financial Year as
expenses of its business;
(b) depreciation, amortisation and all interest in respect of all
Financial Indebtedness of the Group paid by all members of the Group
during that Financial Year;
(c) Net Interest Expenses;
(d) taxes; and
(e) other items charged to the Borrower's consolidated profit and loss
account for the relevant Financial Year;
"Net Interest Expenses" means, as of any Compliance Date, the aggregate of
all interest, commitment and other fees, commissions, discounts and other
costs, charges or expenses accruing due from all the members the Group
during that accounting period less interest income received, determined on
a consolidated basis in accordance with GAAP and as shown in the
consolidated statements of income for the Group in the Applicable
Accounts;
"Notifying Lender" has the meaning given in Clause 23.1 or Clause 24.1 as
the context requires;
"Owner" means in relation to:
(a) each Existing Ship, the corporation which is specified in Schedule
2, Part A as the owner thereof, being a company incorporated in
Malta having its registered office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇;
(b) the Identified Ship, Seaventure; and
(c) an Additional Ship, the Additional Ship Owner of that Ship,
(h) each being a company which is a direct or indirect wholly-owned
subsidiary of the Borrower and in the plural means all of them;
"Paid-Up Capital", "General Reserves" and "Retained Earnings" have the
meanings ascribed to them in the Applicable Accounts;
"Payment Currency" has the meaning given in Clause 21.5;
"Permitted Security Interests" means:
(a) Security Interests created by the Finance Documents;
(b) Security Interest created pursuant to, or in connection with, the
Existing Loan Agreements;
(c) liens for unpaid crew's wages in accordance with usual maritime
practice;
(d) liens for salvage;
(e) liens arising by operation of law for not more than 2 months'
prepaid hire under any charter in relation to a Ship not prohibited
by this Agreement;
(f) liens for master's disbursements incurred in the ordinary course of
trading and any other lien arising by operation of law or otherwise
in the ordinary course of the operation, repair or maintenance of a
Ship, provided such liens do not secure amounts more than 30 days
overdue (unless the overdue amount is being contested by the
relevant Owner in good faith by appropriate steps) and subject, in
the case of liens for repair or maintenance, to Clause 14.13(h);
(g) any Security Interest created in favour of a plaintiff or defendant
in any action of the court or tribunal before whom such action is
brought as security for costs and expenses where the relevant Owner
is prosecuting or defending such action in good faith by appropriate
steps; and
(h) Security Interests arising by operation of law in respect of taxes
which are not overdue for payment other than taxes being contested
in good faith by appropriate steps and in respect of which
appropriate reserves have been made;
"Pertinent Jurisdiction", in relation to a company, means:
(a) England and Wales;
(b) the country under the laws of which the company is incorporated or
formed;
(c) a country in which the company's central management and control is
or has recently been exercised;
(d) a country in which the overall net income of the company is subject
to corporation tax, income tax or any similar tax;
(e) a country in which assets of the company (other than securities
issued by, or loans to, related companies) having a substantial
value are situated, in which the company maintains a permanent place
of business, or in which a Security Interest created by the company
must or should be registered in order to ensure its validity or
priority; and
(f) a country the courts of which have jurisdiction to make a winding
up, administration or similar order in relation to the company or
which would have such jurisdiction if their assistance were
requested by the courts of a country referred to in paragraphs (b)
or (c) above;
"Potential Event of Default" means an event or circumstance which, with
the giving of any notice, the lapse of time, a determination of the
Majority Lenders and/or the satisfaction of any other condition, would
constitute an Event of Default;
"Reference Banks" means, subject to Clause 26.16, together, HSH Nordbank
AG and BOS and any of their respective successors and in the singular
means any of them;
"Refinancing Advance" means an amount of up to $437,309,000 which is to be
used (a) in refinancing part of the Existing Indebtedness and (b) to
provide the Borrower with working capital for its general corporate
purposes and which is to be made available in accordance with and pursuant
to Clauses 2.3 and 4.2(c);
"Relevant Person" has the meaning given in Clause 19.9;
"Repayment Date" means a date on which a repayment is required to be made
under Clause 8;
"Repayment Instalment" means, in relation to:
(a) the Term Loan, each of the 40 repayment instalments listed in
Schedule 4; and
(b) an Additional Advance, each repayment instalment in respect of that
Additional Advance specified in the repayment schedule for that
Additional Advance referred to in Clause 8.1(a)(ii) and calculated
in accordance with Clause 8.1(b);
"Requisition Compensation" includes all compensation or other moneys
payable by reason of any act or event such as is referred to in paragraph
(b) of the definition of "Total Loss";
"Retention Account" means an account in the name of the Borrower with the
Agent in Hamburg designated "Dryships Inc. - Retention Account", or any
other account (with that or another office of the Agent) which is
designated by the Agent as the Retention Account for the purposes of this
Agreement;
"Seaventure" means Seaventure Shipping Limited, a corporation incorporated
in the ▇▇▇▇▇▇▇▇ Islands and having its registered office at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇;
"Secured Liabilities" means all liabilities which the Borrower, the
Security Parties or any of them have, at the date of this Agreement or at
any later time or times, under or by virtue of the Finance Documents or
any judgment relating to the Finance Documents; and for this purpose,
there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other
procedure under the insolvency laws of any country;
"Security Cover Percentage" means, at any relevant time, the Loan
expressed as a percentage of the aggregate of the amounts referred to in
paragraphs (a) and (b) of Clause 15.I;
"Security Interest" means:
(a) a mortgage, charge (whether fixed or floating) or pledge, any
maritime or other lien or any other security interest of any kind;
(b) the rights of the plaintiff under an action in rem in which the
vessel concerned has been arrested or a writ has been issued or
similar step taken; and
(c) any arrangement entered into by a person (A) the effect of which is
to place another person (B) in a position which is similar, in
economic terms, to the position in which B would have been had he
held a security interest over an asset of A; but (c) does not apply
to a right of set off or combination of accounts conferred by the
standard terms of business of a bank or financial institution;
"Security Party" means each Owner, Wealth and any other person (except a
Creditor Party) who, as a surety or mortgagor, as a party to any
subordination or priorities arrangement, or in any similar capacity,
executes a document falling within the final paragraph of the definition
of "Finance Documents";
"Security Period" means the period commencing on the date of this
Agreement and ending on the date on which the Agent notifies the Borrower,
the Security Parties and the Lenders that:
(a) all amounts which have become due for payment by the Borrower or any
Security Party under the Finance Documents have been paid;
(b) no amount is owing or has accrued (without yet having become due for
payment) under any Finance Document;
(c) neither the Borrower nor any Security Party has any future or
contingent liability under Clause 20, 21 or 22 below or any other
provision of this Agreement or another Finance Document; and
(d) the Agent, the Security Trustee and the Majority Lenders do not
consider that there is a significant risk that any payment or
transaction under a Finance Document would be set aside, or would
have to be reversed or adjusted, in any present or possible future
bankruptcy of the Borrower or a Security Party or in any present or
possible future proceeding relating to a Finance Document or any
asset covered (or previously covered) by a Security Interest created
by a Finance Document;
"Security Trustee" means HSH Nordbank AG and any of its successors
including, without limitation, any successor appointed under clause 5 of
the Agency and Trust Deed;
"Ships" means, together, the Existing Ships, the Identified Ships and the
Additional Ships and, in the singular, means any of them;
"Swap Bank" means each of the banks listed in Part B of Schedule 1 acting
through its branch or office indicated in Part B of Schedule 1 and any
other Lender which enters into a Master Agreement with the Borrower for
the purpose of entering into a Designated Transaction and, in the plural,
means all of them;
"Swap Exposure" means, as at any relevant date, the amount certified by
the Swap Banks to the Agent to be the aggregate net amount in Dollars
which would be payable by the Borrower to the Swap Banks under (and
calculated in accordance with) section 6(e) (Payments on Early
Termination) of each Master Agreement if an Early Termination Date had
occurred on the relevant date in relation to all continuing Designated
Transactions entered into between the Borrower and the Swap Banks;
"Term Loan" means an amount of up to $460,000,000 (representing the
maximum aggregate principal amount of the Refinancing Advance and the
Identified Ship Advance) or the aggregate principal amount of the
Refinancing Advance and the Identified Ship Advance for the time being
outstanding under this Agreement;
"Term Loan Commitment" means, in relation to a Lender, the amount set
opposite its name in the third column of Schedule 1, Part A, or, as the
case may require, the amount specified in the relevant Transfer
Certificate, as that amount may be reduced, cancelled or terminated in
accordance with this Agreement (and "Total Term Loan Commitments" means
the aggregate of the Term Loan Commitments of all the Lenders);
"Total Assets" means, as of any Compliance Date, the aggregate value of
all trade debtors and the value of all stock (valued in accordance with
GAAP) and all other investments and other tangible and intangible assets
of the Group properly included in the Applicable Accounts as "fixed
assets" in accordance with GAAP but excluding any assets held on trust;
"Total Commitments" means the aggregate of the Total Term Loan Commitments
and the Total Credit Facility Commitments;
"Total Interest Bearing Liabilities" means, as of any Compliance Date, the
consolidated total amount of the interest bearing Financial Indebtedness
of the Group;
"Total Liabilities" means, as of any Compliance Date, the aggregate
Financial Indebtedness of the Group;
"Total Loss" means in relation to each Ship:
(a) actual, constructive, compromised, agreed or arranged total loss of
that Ship;
(b) any expropriation, confiscation, requisition or acquisition of the
Ship, whether for full consideration, a consideration less than her
proper value, a nominal consideration or without any consideration,
which is effected by any government or official authority or by any
person or persons claiming to be or to represent a government or
official authority, excluding a requisition for hire for a fixed
period not exceeding one year without any right to an extension;
(c) any condemnation of the Ship by any tribunal or by any person or
person claiming to be a tribunal;
(d) any arrest, capture, seizure or detention of the Ship (including any
hijacking or theft) unless she is within 30 days redelivered to the
full control the relevant Owner;
"Total Loss Date" means:
(a) in the case of an actual loss of a Ship, the date on which it
occurred or, if that is unknown, the date when that Ship was last
heard of,
(b) in the case of a constructive, compromised, agreed or arranged total
loss of a Ship, the earliest of:
(i) the date on which a notice of abandonment is given to the
insurers; and
(ii) the date of any compromise, arrangement or agreement made by
or on behalf of the relevant Owner, with the Ship's insurers
in which the insurers agree to treat the Ship as a total loss;
and
(c) in the case of any other type of total loss, on the date (or the
most likely date) on which it appears to the Agent that the event
constituting the total loss occurred;
"Transaction" has the meaning given in each Master Agreement;
"Transfer Certificate" has the meaning given in Clause 26.2;
"Trust Property" has the meaning given in clause 3.1 of the Agency and
Trust Dee;
"Wealth" means Wealth Management Inc., a corporation incorporated in the
▇▇▇▇▇▇▇▇ Islands and having its registered office at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇;
"Wealth Account" means an account in the name of Wealth with the Agent in
Hamburg designated "Wealth Management Inc. - Cash Management Account" or
any other account (with that or another office of the Agent) which is
designated by the Agent as the Wealth Account for the purposes of this
Agreement;
"Wealth Account Pledge" means a pledge agreement creating security in
favour of the Creditor Parties in respect of the Wealth Account in such
form as the Lenders may approve or require; and
"Wealth Guarantee" means a guarantee of the Borrower's obligations under
(inter alia) this Agreement, the Master Agreements and the Junior Loan
Agreement executed or to be executed by Wealth in favour of the Security
Trustee in such form as the Lenders shall approve or require and, in the
plural, means all of them.
1.3 Construction of certain terms. In this Agreement:
"approved" means, for the purposes of Clause 13, approved in writing by
the Agent;
"asset" includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or other
payment;
"company" includes any partnership, joint venture and unincorporated
association;
"consent" includes an authorisation, consent, approval, resolution,
licence, exemption, filing, registration, notarisation and legalisation;
"contingent liability" means a liability which is not certain to arise
and/or the amount of which remains unascertained;
"document" includes a deed; also a letter, fax or telex;
"excess risks" means the proportion of claims for general average, salvage
and salvage charges not recoverable under the hull and machinery policies
in respect of any Ship in consequence of her insured value being less than
the value at which that Ship is assessed for the purpose of such claims;
"expense" means any kind of cost, charge or expense (including all legal
costs, charges and expenses) and any applicable value added or other tax;
"law" includes any form of delegated legislation, any order or decree, any
treaty or international convention and any regulation or resolution of the
Council of the European Union, the European Commission, the United Nations
or its Security Council;
"legal or administrative action" means any legal proceeding or arbitration
and any administrative or regulatory action or investigation;
"liability" includes every kind of debt or liability (present or future,
certain or contingent), whether incurred as principal or surety or
otherwise;
"months" shall be construed in accordance with Clause 1.3;
"obligatory insurances" means all insurances effected, or which the
Borrower is obliged to effect, under Clause 13 below or any other
provision of this Agreement or another Finance Document;
"parent company" has the meaning given in Clause 1.4;
"person" includes any company; any state, political sub-division of a
state and local or municipal authority; and any international
organisation;
"policy", in relation to any insurance, includes a slip, cover note,
certificate of entry or other document evidencing the contract of
insurance or its terms;
"protection and indemnity risks" means the usual risks covered by a
protection and indemnity association managed in London, including
pollution risks and the proportion (if any) of any sums payable to any
other person or persons in case of collision which are not recoverable
under the hull and machinery policies by reason of the incorporation
therein of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or
clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the
Institute Amended Running Down Clause (1110171) or any equivalent
provision;
"regulation" includes any regulation, rule, official directive, request or
guideline (either having the force of law or compliance with which is
reasonable in the ordinary course of business of the party concerned) of
any governmental, intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or
organisation;
"subsidiary" has the meaning given in Clause 1.4;
"successor" includes any person who is entitled (by assignment, novation,
merger or otherwise) to any other person's rights under this Agreement or
any other Finance Document (or any interest in those rights) or who, as
administrator, liquidator or otherwise, is entitled to exercise those
rights; and in particular references to a successor include a person to
whom those rights (or any interest in those rights) are transferred or
pass as a result of a merger, division, reconstruction or other
reorganisation of it or any other person;
"tax" includes any present or fixture tax, duty, impost, levy or charge of
any kind which is imposed by any state, any political sub-division of a
state or any local or municipal authority (including any such imposed in
connection with exchange controls), and any connected penalty, interest or
fine; and
"war risks" means the risks according to Institute War and Strike Clauses
(Hull Time) (1/10/83) or (1/11/95), or equivalent conditions, including,
but not limited to risk of mines, blocking and trapping, missing vessel,
confiscation, vandalism, sabotage and malicious mischief and all risks
excluded from the standard form of English or other marine policy.
1.4 Meaning of "month". A period of one or more "months" ends on the day in
the relevant calendar month numerically corresponding to the day of the
calendar month on which the period started ("the numerically corresponding
day"), but:
(a) on the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there is no
later Business Day in the same calendar month, on the Business Day
preceding the numerically corresponding day; or
(b) on the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding day;
and "month" and "monthly" shall be construed accordingly.
1.5 Meaning of "subsidiary". A company (S) is a subsidiary of another company
(P) if:
(a) a majority of the issued shares in S (or a majority of the issued shares
in S which carry unlimited rights to capital and income distributions) are
directly owned by P or are indirectly attributable to P; or
(b) P has direct or indirect control over a majority of the voting rights
attached to the issued shares of S; or
(c) P has the direct or indirect power to appoint or remove a majority of the
directors of S; or
(d) P otherwise has the direct or indirect power to ensure that the affairs of
S are conducted in accordance with the wishes of P;
and any company of which S is a subsidiary is a parent company of S.
1.6 General Interpretation.
(a) In this Agreement:
(i) references to, or to a provision of, a Finance Document or any other
document are references to it as amended or supplemented, whether
before the date of this Agreement or otherwise;
(ii) references to, or to a provision of, any law include any amendment,
extension, re-enactment or replacement, whether made before the date
of this Agreement or otherwise; and
(iii) words denoting the singular number shall include the plural and vice
versa.
(b) Clauses 1.1 to 1.4 and paragraph (a) of this Clause 1.5 apply unless the
contrary intention appears.
(c) References in Clause 1.1 to a document being in the form of a particular
Appendix include references to that form with any modifications to that
form which the Agent (with the authorisation of the Majority Lenders in
the case of substantial modifications) approves or reasonably requires.
(d) The clause headings shall not affect the interpretation of this Agreement.
2 FACILITY
2.1 Amount of facility. Subject to the other provisions of this Agreement, the
Lenders shall make available to the Borrower term loan and credit
facilities not exceeding $518,750,000 in aggregate at any time.
2.2 Lenders' participations in Loan. Subject to the other provisions of this
Agreement, each Lender shall participate in:
(a) each of the Refinancing Advance and the Identified Ship Advance in the
proportion which, as at the relevant Drawdown Date, its Term Loan
Commitment bears to the Total Term Loan Commitments; and
(b) each Additional Advance in the proportion which, as at the relevant
Drawdown Date, its Credit Facility Commitment bears to the Total Credit
Facility Commitments.
2.3 Purpose of Loan. The Borrower undertakes with each Creditor Party to use
each Advance only for the purpose stated in the preamble to this
Agreement.
3 POSITION OF THE LENDERS, THE SWAP BANKS AND THE MAJORITY LENDERS
3.1 Interests of Lenders and Swap Bank several. The rights of the Lenders and
the Swap Banks under this Agreement and each Master Agreement are several;
accordingly:
(a) each Lender shall be entitled to ▇▇▇ for any amount which has become due
and payable by the Borrower to it under this Agreement; and
(b) each Swap Bank shall be entitled to ▇▇▇ for any amount which has become
due and payable by the Borrower to it under the Master Agreement to which
that Swap Bank is a party,
without joining the Agent, the Security Trustee, any other Lender or any
Swap Bank as additional parties in the proceedings.
3.2 Proceedings by individual Lender or Swap Bank. However, without the prior
consent of the Majority Lenders, no Lender and neither Swap Bank may bring
proceedings in respect of:
(a) any other liability or obligation of the Borrower or a Security Party
under or connected with a Finance Document or a Master Agreement; or
(b) any misrepresentation or breach of warranty by the Borrower or a Security
Party in or connected with a Finance Document or a Master Agreement.
3.3 Obligations several. The obligations of the Lenders under this Agreement
and of the Swap Banks under the Master Agreements are several; and a
failure of a Lender to perform its obligations under this Agreement or of
a Swap Bank to perform its obligations under the Master Agreement to which
it is a party shall not result in:
(a) the obligations of the other Lenders being increased; nor
(b) the Borrower, any Security Party or any other Creditor Party being
discharged (in whole or in part) from its obligations under any Finance
Document;
and in no circumstances shall a Lender or a Swap Bank have any
responsibility for a failure of another Lender or Swap Bank to perform its
obligations under this Agreement or any Master Agreement.
3.4 Parties bound by certain actions of Majority Lenders. Every Lender, each
Swap Bank, the Borrower and each Security Party shall be bound by:
(a) any determination made, or action taken, by the Majority Lenders under any
provision of a Finance Document;
(b) any instruction or authorisation given by the Majority Lenders to the
Agent or the Security Trustee under or in connection with any Finance
Document;
(c) any action taken (or in good faith purportedly taken) by the Agent or the
Security Trustee in accordance with such an instruction or authorisation.
3.5 Reliance on action of Agent. However, the Borrower and each Security
Party:
(a) shall be entitled to assume that the Majority Lenders have duly given any
instruction or authorisation which, under any provision of a Finance
Document, is required in relation to any action which the Agent has taken
or is about to take; and
(b) shall not be entitled to require any evidence that such an instruction or
authorisation has been given.
3.6 Construction. In Clauses 3.4 and 3.5 references to action taken include
(without limitation) the granting of any waiver or consent, an approval of
any document and an agreement to any matter.
4 DRAWDOWN
4.1 Request for Advance. Subject to the following conditions, the Borrower may
request an Advance to be made by ensuring that the Agent receives a
completed Drawdown Notice not later than 11.00 a.m. (Hamburg time) 3
Business Days prior to the intended Drawdown Date.
4.2 Availability. The conditions referred to in Clause 4.1 are that:
(a) a Drawdown Date has to be a Business Day during the Availability Period;
(b) (subject to paragraph (g) of this Clause 4.2) each Advance shall be made
available in a single amount;
(c) the Refinancing Advance shall not exceed lesser of (i) $437,309,000 and
(ii) 63 percent of the aggregate Market Values of the Existing Ships (as
determined in accordance with the valuations referred to in paragraph 12
of Schedule 5, Part A) and shall be applied in refinancing part of the
Existing Indebtedness and as to any balance to provide the Borrower with
working capital for its general corporate purposes;
(d) the Identified Ship Advance shall not exceed the lesser of (i) $22,691,000
and (ii) 63 percent of the Market Value of "▇▇▇▇▇ OLDENDORFF" (as
determined by the valuation referred to in paragraph 9 of Schedule 5,
Party B) and shall be applied in financing part of the purchase price of
"▇▇▇▇▇ OLDENDORFF" payable pursuant to the ▇▇▇▇▇ Oldendorff MOA;
(e) the Refinancing Advance and the Identified Ship Advance shall not in
aggregate exceed 63 percent of the aggregate Market Values of the
Existing Ships and the Identified Ship (determined in accordance with the
valuations referred to respectively in paragraph 12 of Schedule 5, Part A
(in the case of the Existing Ships) and paragraph 9 of Schedule 5, Part B
(in the case of the Identified Ship));
(f) (subject to Clause 2.4) each Additional Advance shall not exceed 63
percent of the Market Value of the Additional Ship whose purchase price is
to be part-financed by that Additional Advance (as determined in
accordance with the valuations referred to in paragraph 10 of Schedule 5,
Part C);
(g) any amount undrawn in respect of an Advance may be borrowed at a later
date subject to the satisfaction of the other conditions of this Clause
4.2 save and except that the Agent (acting upon the instructions of the
Majority Lenders) may rely on the valuations of the Ships previously
provided to it pursuant to Clause 9.1 without seeking new valuations for
the purpose of determining the Borrower's satisfaction of the conditions
of this Clause 4.2 at the time of drawdown of any undrawn amount of an
Advance; and
(h) the aggregate of the Advances shall not exceed the Total Commitments.
4.3 Notification to Lenders of receipt of a Drawdown Notice. The Agent shall
promptly notify the Lenders that it has received a Drawdown Notice and
shall inform each Lender of:
(a) the amount of the Advance and the Drawdown Date;
(b) the amount of that Lender's participation in the Advance; and
(c) the duration of the first Interest Period applicable to that Advance.
4.4 Drawdown Notice irrevocable. A Drawdown Notice must be signed by a
director or a duly authorised signatory of the Borrower; and once served,
a Drawdown Notice cannot be revoked without the prior consent of the
Agent, acting on the authority of the Majority Lenders.
4.5 Lenders to make available Contributions. Subject to the provisions of this
Agreement, each Lender shall, on and with value on each Drawdown Date,
make available to the Agent for the account of the Borrower the amount due
from that Lender on that Drawdown Date under Clause 2.2.
4.6 Disbursement of Advance. Subject to the provisions of this Agreement, the
Agent shall on each Drawdown Date pay to the Borrower the amounts which
the Agent receives from the Lenders under Clause 4.5; and that payment to
the Borrower shall be made:
(a) to the account which the Borrower specifies in the relevant Drawdown
Notice; and
(b) in the like funds as the Agent received the payments from the Lenders.
4.7 Disbursement of Advance to third party. The payment by the Agent under
Clause 4.6 to a third party specified in the relevant Drawdown Notice
shall constitute the making of the Advance and the Borrower shall
thereupon become indebted, as principal and direct obligor, to each Lender
in an amount equal to that Lender's Contribution.
4.8 Review of Availability Period for Credit Facility. The Lenders may, in
their sole and absolute discretion (without any obligation to do so),
agree to extend the original Availability Period which applies to the
Credit Facility (being a period ending on the date falling 364 days after
the date of this Agreement) if at the end of such period the Total Credit
Facility Commitments have not been fully drawn. If all the Lenders agree
to extend the applicable Availability Period in accordance with this
Clause 4.8 the Agent shall send to the Borrower a notice in writing
advising it of the period by which the Availability Period will be
extended.
5 INTEREST
5.1 Payment of normal interest. Subject to the provisions of this Agreement,
interest on each Advance and the Loan and each part thereof in respect of
each Interest Period shall be paid by the Borrower on the last day of that
Interest Period.
5.2 Normal rate of interest. Subject to the provisions of this Agreement, the
rate of interest on each Advance and the Loan and each part thereof in
respect of an Interest Period shall, subject to Clause 6.4, be the
aggregate of (i) the applicable Margin, (ii) the Mandatory Cost (if any)
and (iii) LIBOR.
5.3 Payment of accrued interest. In the case of an Interest Period longer than
3 months, accrued interest shall be paid every 3 months (or, in the case
of Interest Periods of 12 months or longer, every 6 months) during that
Interest Period and on the last day of that Interest Period.
5.4 Notification of Interest Periods and rates of normal interest. The Agent
shall notify the Borrower and each Lender of:
(a) each rate of interest; and
(b) the duration of each Interest Period;
as soon as reasonably practicable after each is determined.
5.5 Obligation of Reference Banks to quote. Each Reference Bank shall use all
reasonable efforts to supply the quotation required of it for the purposes
of fixing a rate of interest under this Agreement.
5.6 Market disruption. The following provisions of this Clause 5 apply if:
(a) no rate is quoted on Reuters BBA Page LIBOR 01 and neither Reference Bank,
before 1.00 p.m. (Hamburg time) on the second Business Day before the
commencement of an Interest Period, provides a quotation to the Agent in
order to fix LIBOR; or
(b) at least one Business Day before the start of an Interest Period, Lenders
having Contributions together amounting to more than 30 percent of the
Loan (or, if an Advance has not been made, Commitments amounting to more
than 30 percent of the Total Commitments) notify the Agent that LIBOR
fixed by the Agent would not accurately reflect the cost to those Lenders
of funding their respective Contributions (or any part of them) during the
Interest Period in the London Interbank Dollar Market at or about 11.00
a.m. (London time) on the second Business Day before the commencement of
the Interest Period; or
(c) at least one Business Day before the start of an Interest Period, the
Agent is notified by a Lender (the "Affected Lender") that for any reason
it is unable to obtain Dollars in the London Interbank Market in order to
fund its Contribution (or any part of it) during the Interest Period.
5.7 Notification of market disruption. The Agent shall promptly notify the
Borrower and each of the Lenders stating the circumstances falling within
Clause 5.6 which have caused its notice to be given.
5.8 Suspension of drawdown. If the Agent's notice under Clause 5.7 is served
before an Advance is made:
(a) in a case falling within paragraphs (a) or (b) of Clause 5.6, the Lenders'
obligations to make the Advance;
(b) in a case falling within paragraph (c) of Clause 5.6, the Affected
Lender's obligation to participate in the Advance;
shall be suspended while the circumstances referred to in the Agent's
notice continue.
5.9 Negotiation of alternative rate of interest. If the Agent's notice under
Clause 5.7 is served after an Advance is made, the Borrower, the Agent and
the Lenders or (as the case may be) the Affected Lender shall use
reasonable endeavours to agree, within the 30 days after the date on which
the Agent serves its notice under Clause 5.7 (the "Negotiation Period"),
an alternative interest rate or (as the case may be) an alternative basis
for the Lenders or (as the case may be) the Affected Lender to fund or
continue to fund their or its Contribution to the relevant Advance or
Advances during the Interest Period concerned.
5.10 Application of agreed alternative rate of interest. Any alternative
interest rate or an alternative basis which is agreed during the
Negotiation Period shall take effect in accordance with the terms agreed.
5.11 Alternative rate of interest in absence of agreement. If an alternative
interest rate or alternative basis is not agreed within the Negotiation
Period, and the relevant circumstances are continuing at the end of the
Negotiation Period, then the Agent shall, with the agreement of each
Lender or (as the case may be) the Affected Lender, set an interest period
and interest rate representing the cost of funding of the Lenders or (as
the case may be) the Affected Lender in Dollars or in any available
currency of their or its Contribution to the relevant Advance or Advances
plus the Mandatory Cost (if any) and the applicable Margin; and the
procedure provided for by this Clause 5.11 shall be repeated if the
relevant circumstances are continuing at the end of the interest period so
set by the Agent.
5.12 Notice of prepayment. If the Borrower does not agree with an interest rate
set by the Agent under Clause 5.11, the Borrower may give the Agent not
less than 15 Business Days' notice of its intention to prepay the relevant
Advance or Advances at the end of the interest period set by the Agent.
5.13 Prepayment; termination of Commitments. A notice under Clause 5.12 shall
be irrevocable; the Agent shall promptly notify the Lenders or (as the
case may require) the Affected Lender of the Borrower's notice of intended
prepayment; and:
(a) on the date on which the Agent serves that notice, the Total Commitments
or (as the case may require) the Commitment of the Affected Lender shall
be cancelled; and
(b) on the last Business Day of the interest period set by the Agent, the
Borrower shall prepay (without premium or penalty) the Loan or, as the
case may be, the Affected Lender's Contribution, together with accrued
interest thereon at the applicable rate plus the applicable Margin and the
Mandatory Cost (if any).
5.14 Application of prepayment. The provisions of Clause 8 shall apply in
relation to the prepayment.
5.15 Calculation of Security Cover Percentage. The Agent shall calculate the
Security Cover Percentage on the first Drawdown Date, on 30 September 2006
and every 6 months thereafter (each a "Margin Calculation Date") for the
purposes of calculating the Margin and shall advise the Borrower and the
Lenders in writing, within 10 Business Days of each Margin Calculation
Date, of the Margin which will apply for the 6-month period commencing on
the relevant Margin Calculation Date Provided that in respect of each
Margin Calculation Date other than the first Margin Calculation Date, the
Agent shall only be obliged to advise the Borrowers and the Lenders of the
Margin which will apply for the 6-month period commencing on the relevant
Margin Calculation Date if that Margin will be different to the Margin
which applies immediately prior to the relevant Margin Calculation Date.
For the purposes of calculating the Security Cover Percentage pursuant to
this Clause 5.15, the Market Value of the Ships shall be determined no
more than 15 days prior to the relevant Margin Calculation Date.
6 INTEREST PERIODS
6.1 Commencement of Interest Periods. The first Interest Period applicable to
an Advance shall commence on the Drawdown Date relative to that Advance
and each subsequent Interest Period shall commence on the expiry of the
preceding Interest Period.
6.2 Duration of normal Interest Periods. Subject to Clauses 6.3 and 6.4, each
Interest Period in respect of each Advance shall be:
(a) 1, 3, 6 or 12 months as notified by the Borrower to the Agent not later
than 11.00 a.m. (Hamburg time) 3 Business Days before the commencement of
the Interest Period Provided that there may be no more than 3 Interest
Periods having a duration of 1 month in any calendar year; or
(b) in the case of the first Interest Period applicable to the second and any
subsequent Advance, a period ending on the last day of the then current
Interest Period whereupon all of the Advances shall be consolidated and
treated as a single Advance Provided that should the Agent, in its sole
discretion, permit the Borrower to select more than one Interest Period at
any time, then under no circumstances shall the Borrower be allowed to
select more than 5 separate Interest Periods at any time;
(c) 3 months, if the Borrower fails to notify the Agent by the time specified
in paragraph (a) above; or
(d) such other period as the Agent may, with the Majority Lenders' authority,
agree with the Borrower.
6.3 Duration of Interest Periods for repayment instalments. In respect of an
amount due to be repaid under Clause 8 on a particular Repayment Date, an
Interest Period shall end on that Repayment Date.
6.4 Interest Periods longer than 12 months. If, after the Borrower has
selected an Interest Period longer than I2 months, and the Lenders have,
in their absolute discretion, agreed to such selection, then the rate of
interest for that Interest Period shall be the aggregate of the applicable
Margin, the Mandatory Cost and the Lenders' cost of funding the Loan (or
the applicable part thereof) for such period, as agreed between the
Lenders and notified to the Agent.
7 DEFAULT INTEREST
7.1 Payment of default interest on overdue amounts. The Borrower shall pay
interest in accordance with the following provisions of this Clause 7 on
any amount payable by the Borrower under any Finance Document which the
Agent, the Security Trustee or the other designated payee does not receive
on or before the relevant date, that is:
(a) the date on which the Finance Documents provide that such amount is due
for payment; or
(b) if a Finance Document provides that such amount is payable on demand, the
date on which the demand is served; or
(c) if such amount has become immediately due and payable under Clause 19.4,
the date on which it became immediately due and payable.
7.2 Default rate of interest. Interest shall accrue on an overdue amount from
(and including) the relevant date until the date of actual payment (as
well after as before judgment) at the rate per annum determined by the
Agent to be 2 percent above:
(a) in the case of an overdue amount of principal, the higher of the rates set
out at paragraphs (a) and (b) of Clause 7.3; or
(b) in the case of any other overdue amount, the rate set out at paragraph (b)
of Clause 7.3.
7.3 Calculation of default rate of interest. The rates referred to in Clause
7.2 are:
(a) the rate applicable to the overdue principal amount immediately prior to
the relevant date (but only for any unexpired part of any then current
Interest Period);
(b) the aggregate of the Mandatory Cost (if any) and the applicable Margin
plus, in respect of successive periods of any duration (including at call)
up to 3 months which the Agent may select from time to time:
(i) LIBOR; or
(ii) if the Agent (after consultation with the Reference Banks)
determines that Dollar deposits for any such period are not being
made available to any Reference Bank by leading banks in the London
Interbank Market in the ordinary course of business, a rate from
time to time determined by the Agent by reference to the cost of
funds to the Reference Banks from such other sources as the Agent
(after consultation with the Reference Banks) may from time to time
determine.
7.4 Notification of interest periods and default rates. The Agent shall
promptly notify the Lenders and the Borrower of each interest rate
determined by the Agent under Clause 7.3 and of each period selected by
the Agent for the purposes of paragraph (b) of that Clause; but this shall
not be taken to imply that the Borrower is liable to pay such interest
only with effect from the date of the Agent's notification.
7.5 Payment of accrued default interest. Subject to the other provisions of
this Agreement, any interest due under this Clause shall be paid on the
last day of the period by reference to which it was determined; and the
payment shall be made to the Agent for the account of the Creditor Party
to which the overdue amount is due.
7.6 Compounding of default interest. Any such interest which is not paid at
the end of the period by reference to which it was determined shall
thereupon be compounded.
7.7 Application to Master Agreements. For the avoidance of doubt, this Clause
7 does not apply to any amount payable under a Master Agreement in respect
of any continuing Designated Transaction as to which section 2(e) (Default
Interest; Other Amounts) of that Master Agreement shall apply.
8 REPAYMENT AND PREPAYMENT
8.1 Amount of Repayment Instalments.
(a) The Borrower shall repay:
(i) the Term Loan by 40 consecutive three-monthly Repayment Instalments
and a Balloon Instalment (payable together with the fortieth such
instalment) in the amounts referred to in Schedule 4 Provided that
if the amount of the Term Loan drawn down under this Agreement is
less than $460,000,000, the Balloon Instalment shall be reduced by
an amount equal to the undrawn amount of the Term Loan; and
(ii) each Additional Advance by the Repayment Instalments (calculated in
accordance with Clause 8.1(b)) set out in a repayment schedule
applicable to that Additional Advance to be provided to the Borrower
by the Agent before the Drawdown Date relative to the relevant
Additional Advance which shall provide for the repayment of that
Advance over the Relevant Repayment Period by equal consecutive
three-monthly Repayment Instalments (other than the first such
Repayment Instalment which shall be paid on the first Repayment Date
in respect of the Term Loan falling after the Drawdown Date of the
relevant Additional Advance) and, if applicable, a Balloon
Instalment (payable together with the last such Repayment
Instalment).
In this Clause 8.1 "Relevant Repayment Period" means in the case of
an Additional Advance which has been used to part-finance the
acquisition of an Additional Ship built:
(A) between 1993 and 1996, the lesser of (A) 84 months and (B) the
number of months between the Drawdown Date of the relevant
Additional Advance and the Final Maturity Date; and
(B) on or after 1997, the number of months between the Drawdown
Date of the relevant Additional Advance and the Final Maturity
Date; and
(b) the Repayment Instalment for each Additional Advance shall be "D" and the
Balloon Instalment for each Additional Advance shall be "G" where:
"A" means the amount of the relevant Additional Advance;
"B" means, in the case of an Additional Ship built:
(i) between 1993 and 1996, 7;
(ii) between 1997 and 2000, 11;
(iii) between 2001 and 2003, 15; and
(iv) on or after 2004, 18;
"C" means A divided by B;
"D" means C divided by 4;
"E" means the number of months in the Relevant Repayment Period (or if the
number of months in the Relevant Repayment Period is not fully divisible
by 3, the nearest number of months (rounded downwards) which is fully
divisible by 3) divided by 12;
"F" means the product of (i) D, (ii) 4 and (iii) E; and
"G" means A minus F.
8.2 Repayment Dates. Repayment Instalments shall be paid as follows:
(a) each Repayment Instalment in respect of the Term Loan shall be repaid on
the Repayment Date applicable to that Repayment Instalment as outlined in
Schedule 4;
(b) the first Repayment Instalment in respect of each Additional Advance shall
be repaid on the first Repayment Date in respect of the Term Loan falling
after the Drawdown Date of that Additional Advance, each subsequent
Repayment Instalment shall be paid at 3-monthly intervals thereafter and
the last Repayment Instalment together with the relevant Balloon
Instalment shall be paid on the date referred to in the repayment schedule
to be provided by the Agent to the Borrower pursuant to Clause 8.1(b).
8.3 Consolidation of Additional Advances with Term Loan, On the Drawdown Date
in respect of each Additional Advance (following the making of that
Advance to the Borrower), the relevant Additional Advance shall be
consolidated into the Term Loan and the Term Loan and the relevant
Additional Advance shall thereafter be repaid on the same dates. The Agent
shall following the consolidation of each Additional Advance with the Term
Loan referred to in this Clause 8.3 send to all the Creditor Parties and
the Borrower a schedule specifying the aggregate repayments of the
consolidated Advances on each subsequent Repayment Date and this schedule
shall thereafter be substituted for, and replace, the repayment schedule
set out in Schedule 4 which shall cease to have effect.
8.4 Final Maturity Date. On the Final Maturity Date, the Borrower shall
additionally pay to the Agent for the account of the Creditor Parties all
other sums then accrued or owing under any Finance Document.
8.5 Voluntary prepayment. Subject to the following conditions, the Borrower
may prepay the whole or any part of the Loan and the Junior Loan on the
last day of an Interest Period in respect thereof.
8.6 Conditions for voluntary prepayment. The conditions referred to in Clause
8.5 are that:
(a) the Borrower shall make a simultaneous prepayment of a proportion of the
Junior Loan equal to the proportion of the Loan being prepaid hereunder at
that time;
(b) any partial prepayment to be applied against the Loan and the Junior Loan
shall be $5,000,000 in aggregate or a higher multiple thereof;
(c) the Agent has received from the Borrower at least 15 days' prior written
notice specifying the amount to be prepaid and the date on which the
prepayment is to be made (such date shall be the last day of an Interest
Period); and
(d) the Borrower has provided evidence satisfactory to the Agent that any
consent required by the Borrower or any Security Party in connection with
the prepayment has been obtained and remains in force, and that any
requirement relevant to this Agreement which affects the Borrower or any
Security Party has been complied with.
8.7 Effect of notice of prepayment. A prepayment notice may not be withdrawn
or amended without the consent of the Agent, given with the authority of
the Majority Lenders, and the amount specified in the prepayment notice
shall become due and payable by the Borrower on the date for prepayment
specified in the prepayment notice.
8.8 Notification of notice of prepayment. The Agent shall notify the Lenders
promptly upon receiving a prepayment notice, and shall provide any Lender
which so requests with a copy of any document delivered by the Borrower
under Clause 8.6(d).
8.9 Mandatory prepayment. The Borrower shall be obliged to prepay the Relevant
Amount of the Loan:
(i) if a Ship is sold, on or before the date on which the sale is
completed by delivery of the Ship to the buyer; or
(ii) if a Ship becomes a Total Loss, on the earlier of the date falling
120 days after the relevant Total Loss Date and the date of receipt
by the Security Trustee of the proceeds of insurance relating to
such Total Loss.
In this Clause 8.9, "Relevant Amount" means 115 percent of the Relevant
Proportion of the Loan and "Relevant Proportion" means the amount which
results from multiplying (a) the Loan with (b) the Market Value of the
relevant Ship immediately prior to its sale or Total Loss divided by the
aggregate Market Values immediately prior to such sale or Total Loss of
all of the Ships as are then subject to a Mortgage.
8.10 Amounts payable on prepayment. A prepayment shall be made together with
accrued interest (and any other amount payable under Clause 21 below or
otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period together with any sums payable
under Clause 21.1(b) but without premium or penalty.
8.11 Application of partial prepayment. Any sum received by the Agent pursuant
to Clauses 8.4 and 8.9 shall be applied in prepayment of the Term Loan,
the Credit Facility and the Junior Loan pro rata by reference to the
outstanding amount of each of the Term Loan, the Credit Facility and the
Junior Loan as at the date of such prepayment, and the amount to be
applied in prepayment of each of the Loan and the Junior Loan shall be
applied to proportionately reduce the Balloon Instalment and the then
outstanding Repayment Instalments.
8.12 Reborrowing. No amount prepaid in respect of the Loan may be reborrowed.
8.13 Unwinding of Designated Transactions. On or prior to any repayment or
prepayment of the Loan under this Clause 8 or any other provision of this
Agreement, the Borrower shall wholly or partially reverse, offset, unwind
or otherwise terminate one or more of the continuing Designated
Transactions to the extent necessary to ensure that the notional principal
amount of the continuing Designated Transactions thereafter remaining does
not and will not in the future (taking into account the scheduled
amortisation) exceed the amount of the Loan as reducing from time to time
thereafter pursuant to Clause 8.1.
8.14 Prepayment of Swap Benefit. If a Designated Transaction is terminated in
circumstances where a Swap Bank would be obliged to pay an amount to the
Borrower under the Master Agreement to which that Swap Bank is a party,
the Borrower hereby agrees that such payment shall be applied in
prepayment of the Loan and authorises the Swap Bank to pay such amount to
the Agent for such purpose.
9 CONDITIONS PRECEDENT
9.1 Documents, fees and no default. Each Lender's obligation to contribute to
an Advance is subject to the following conditions precedent:
(a) that, on or before the Drawdown Date relative to the Refinancing Advance,
the Agent receives the documents described in Part A of Schedule 5 in form
and substance satisfactory to the Agent and its lawyers;
(b) that, on or before the Drawdown Date relative to the Identified Ship
Advance, the Agent receives the documents described in Part B of Schedule
5 in form and substance satisfactory to the Agent and its lawyers;
(c) that, on or before the Drawdown Date relative to each Additional Advance,
the Agent receives the documents described in Part C of Schedule 5 in form
and substance satisfactory to the Agent and its lawyers;
(d) that, on or before the service of the first Drawdown Notice, the Agent
receives all accrued commitment fee and all other fees referred to in
Clause 20.1 which are payable at that time and has received payment of the
expenses referred to in Clause 20.2;
(e) that both at the date of each Drawdown Notice and at each Drawdown Date:
(i) no Event of Default or Potential Event of Default has occurred and
is continuing or would result from the borrowing of the Loan;
(ii) the representations and warranties in Clause 10 and those of the
Borrower or any Security Party which are set out in the other
Finance Documents would be true and not misleading if repeated on
each of those dates with reference to the circumstances then
existing; and
(iii) none of the circumstances contemplated by Clause 5.6 has occurred
and is continuing; and
(f) that at each Drawdown Date, the Borrower will draw down the advance of the
Junior Loan which shall be used to finance or refinance the same Ship or
Ships which are to be financed or refinanced by the Advance being drawn
down on the relevant Drawdown Date under this Agreement;
(g) that, if the ratio set out in Clause 15.1 were applied immediately
following the making of the Advance, the Borrower would not be obliged to
provide additional security or prepay part of the Loan under that Clause;
(h) that at each Drawdown Date the Agent has received, and found to be
acceptable to it, any further opinions, consents, agreements and documents
in connection with the Finance Documents which the Agent may, with the
authorisation of the Majority Lenders, request by notice to the Borrower
prior to the relevant Drawdown Date.
9.2 Waiver of conditions precedent. If the Majority Lenders, at their
discretion, permit an Advance to be borrowed before certain of the
conditions referred to in Clause 9.1 are satisfied, the Borrower shall
ensure that those conditions are satisfied within 5 Business Days after
the Drawdown Date relative to that Advance (or such longer period as the
Agent may, with the authority of the Majority Lenders, specify).
10 REPRESENTATIONS AND WARRANTIES
10.1 General. The Borrower represents and warrants to each Creditor Party as
follows.
10.2 Status. The Borrower is duly incorporated and validly existing and in good
standing under the laws of the ▇▇▇▇▇▇▇▇ Islands.
10.3 Share capital and ownership. The Borrower has an authorised share capital
divided into 75,000,000 registered shares of $0.01 each, 30,350,000 of
which shares have been issued each fully paid.
10.4 Corporate power. The Borrower has the corporate capacity, and has taken
all corporate action and obtained all consents necessary for it:
(a) to execute the Finance Documents to which it is a party; and
(b) to borrow under this Agreement, to enter into Designated Transactions
under each Master Agreement and to make all the payments contemplated by,
and to comply with, those Finance Documents to which the Borrower is a
party.
10.5 Consents in force. All the consents referred to in Clause 10.4 remain in
force and nothing has occurred which makes any of them liable to
revocation.
10.6 Legal validity; effective Security Interests. The Finance Documents to
which the Borrower is a party, do now or, as the case may be, will, upon
execution and delivery (and, where applicable, registration as provided
for in the Finance Documents):
(a) constitute the Borrower's legal, valid and binding obligations enforceable
against the Borrower in accordance with their respective terms; and
(b) create legal, valid and binding Security Interests enforceable in
accordance with their respective terms over all the assets to which they,
by their terms, relate subject to any relevant insolvency laws affecting
creditors' rights generally.
10.7 No third party Security Interests. Without limiting the generality of
Clause 10.6, at the time of the execution and delivery of each Finance
Document:
(a) the Borrower will have the right to create all the Security Interests
which that Finance Document purports to create; and
(b) no third party will have any Security Interest (except for Permitted
Security Interests) or any other interest, right or claim over, in or in
relation to any asset to which any such Security Interest, by its terms,
relates.
10.8 No conflicts. The execution by the Borrower of each Finance Document to
which it is a party, and the borrowing by the Borrower of the Loan, and
its compliance with each Finance Document to which it is a party will not
involve or lead to a contravention of:
(a) any law or regulation; or
(b) the constitutional documents of the Borrower; or
(c) any contractual or other obligation or restriction which is binding on the
Borrower or any of its assets.
10.9 No withholding taxes. All payments which the Borrower is liable to make
under the Finance Documents may be made without deduction or withholding
for or on account of any tax payable under any law of any Pertinent
Jurisdiction.
10.10 No default. No Event of Default or Potential Event of Default has occurred
and is continuing.
10.11 Information. All information which has been provided in writing by or on
behalf of the Borrower or any Security Party to any Creditor Party in
connection with any Finance Document satisfied the requirements of Clause
11.5; all audited and unaudited accounts which have been so provided
satisfied the requirements of Clause 11.7; and there has been no material
adverse change in the financial position or state of affairs of the
Borrower from that disclosed in the latest of those accounts.
10.12 No litigation. No legal or administrative action involving the Borrower
has been commenced or taken or, to the Borrower's knowledge, is likely to
be commenced or taken which can be considered material in the context of
this Agreement or any other Finance Document.
10.13 No rebates etc. There is no agreement or understanding to allow or pay any
rebate, premium, commission, discount or other benefit or payment
(howsoever described) to Seaventure, the ▇▇▇▇▇ Oldendorff Charterer or a
third party in connection with the purchase by Seaventure and the bareboat
chartering of the Identified Ship, other than as disclosed to the Lenders
in writing on or prior to the date of this Agreement.
10.14 Compliance with certain undertakings. At the date of this Agreement, the
Borrower is in compliance with Clauses 11.2, 11.4, 11.9 and 11.13.
10.15 Taxes paid. The Borrower has paid all taxes applicable to, or imposed on
or in relation to the Borrower or its business.
10.16 ISM Code compliance. The Borrower will procure that the Owners and the
Approved Manager obtain all necessary ISM Code Documentation and ISPS Code
Documentation in connection with the Ships and comply with the ISM Code
and the ISPS Code.
10.17 No money laundering. Without prejudice to the generality of Clause 2.3, in
relation to the borrowing by the Borrower of the Loan, the performance and
discharge of its obligations and liabilities under the Finance Documents,
and the transactions and other arrangements effected or contemplated by
the Finance Documents to which the Borrower is a party, the Borrower
confirms that it is acting for its own account and that the foregoing will
not involve or lead to contravention of 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).
11 GENERAL UNDERTAKINGS
11.1 General. The Borrower undertakes with each Creditor Party to comply with
the following provisions of this Clause 11 at all times during the
Security Period except as the Agent may, with the authority of the
Majority Lenders, otherwise permit.
11.2 Title; negative pledge and pari passu ranking. The Borrower will:
(a) own (directly or indirectly) the entire beneficial interest in each Owner
free from all Security Interests and other interests and rights of every
kind, except for those created by the Finance Documents;
(b) not create or permit to arise any Security Interest (except for Permitted
Security Interests) over any other asset, present or future (including,
but not limited to the Borrower's rights against a Swap Bank under a
Master Agreement or a Junior Master Agreement or all or any part of the
Borrower's interest in any amount payable to the Borrower by a Swap Bank
under a Master Agreement or a Junior Master Agreement); and
(c) procure that its liabilities under the Finance Documents to which it is a
party do and will rank at least pari passu with all its other present and
future unsecured liabilities, except for liabilities which are mandatorily
preferred by law.
11.3 No disposal of assets. The Borrower will not transfer, lease or otherwise
dispose of:
(a) all or a substantial part of its assets, whether by one transaction or a
number of transactions, whether related or not; or
(b) any debt payable to it or any other right (present, future or contingent
right) to receive a payment, including any right to damages or
compensation.
11.4 Restriction on other liabilities or obligations to be incurred. The
Borrower will not incur, and will procure that none of the Owners will,
incur, any liability or obligation except liabilities and obligations:
(a) under the Finance Documents, the Junior Loan Agreement and the Existing
Loan Agreements to which each is a party;
(b) under the Master Agreements and the Junior Master Agreement (but in such
case, only in connection with Designated Transactions and Junior
Designated Transactions); and
(c) (in the case of each Owner) incurred in the normal course of its business
of operating its Ship.
11.5 Information provided to be accurate. All financial and other information
which is provided in writing by or on behalf of the Borrower under or in
connection with any Finance Document will be true and not misleading and
will not omit any material fact or consideration.
11.6 Provision of financial statements. The Borrower will send to the Agent:
(a) as soon as possible, but in no event later than 150 days after the end of
each Financial Year of the Borrower (commencing with the Financial Year
ended 31 December 2005), the audited consolidated accounts of the Group
for that Financial Year;
(b) as soon as possible, but in no event later than 90 days after the end of
each quarterly period in each Financial Year of the Borrower (commencing
with the financial quarter ending on 31 March 2006), the unaudited
consolidated accounts of the Group for that financial quarter and
additionally, in the case of each of the second, third and fourth
financial quarters, the unaudited consolidated accounts of the Group for
the period 1 January up to the end of the relevant financial quarter
certified in each case as to their correctness by the chief financial
officer of the Borrower; and
(c) together with the quarterly financial statements referred to in paragraph
(b) above for each of the second and fourth financial quarters in each
Financial Year of the Borrower, two valuations of each Fleet Vessel each
prepared by an Approved Broker (at the cost of the Borrower) in accordance
with Clause 15.4, which valuations shall be used in determining the
security cover ratio in accordance with Clause 15.1, the Margin in
accordance with Clause 5.15 and (subject to the final paragraph of Clause
12.5) the financial covenants referred to in Clause 12.4.
11.7 Form of financial statements. All accounts (audited and unaudited)
delivered under Clause 11.6 will:
(a) be prepared in accordance with all applicable laws and GAAP;
(b) give a true and fair view of the state of affairs of the Group at the date
of those accounts and of its profit for the period to which those accounts
relate; and
(c) fully disclose or provide for all significant liabilities of the Group.
11.8 Shareholder and creditor notices. The Borrower will send the Agent, at the
same time as they are despatched, copies of all communications which are
despatched to all of the Borrower's shareholders or creditors or any class
of them.
11.9 Consents. The Borrower will maintain in force and promptly obtain or
renew, and will promptly send certified copies to the Agent of, all
consents required:
(a) for the Borrower to perform its obligations under any Finance Document;
(b) for the validity or enforceability of any Finance Document;
(c) for each Owner to continue to own and operate the Ship owned by it,
and the Borrower will comply (or procure compliance) with the terms of all
such consents.
11.10 Maintenance of Security Interests. The Borrower will:
(a) at its own cost, do all that it reasonably can to ensure that any Finance
Document validly creates the obligations and the Security Interests which
it purports to create; and
(b) without limiting the generality of paragraph (a) above, at its own cost,
promptly register, file, record or enrol any Finance Document with any
court or authority in all Pertinent Jurisdictions, pay any stamp,
registration or similar tax in all Pertinent Jurisdictions in respect of
any Finance Document, give any notice or take any other step which, in the
opinion of the Majority Lenders, is or has become necessary or desirable
for any Finance Document to be valid, enforceable or admissible in
evidence or to ensure or protect the priority of any Security Interest
which it creates.
11.11 Notification of litigation. The Borrower will provide the Agent with
details of any legal or administrative action involving the Borrower, any
Security Party, the Approved Manager, any Ship or the Earnings or the
Insurances of any Ship as soon as such action is instituted or it becomes
apparent to the Borrower that it is likely to be instituted, unless it is
clear that the legal or administrative action cannot be considered
material in the context of any Finance Document.
11.12 No amendment to Master Agreements; Transactions. The Borrower will not:
(a) agree to any amendment or supplement to, or waive or fail to enforce,
either Master Agreement or any of its provisions; or
(b) enter into any Transaction pursuant to a Master Agreement except
Designated Transactions.
11.13 Principal place of business. The Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated in Clause 28.2(a); and the Borrower will not establish, or do
anything as a result of which it would be deemed to have, a place of
business in any country other than the ▇▇▇▇▇▇▇▇ Islands, Malta and Greece.
11.14 Confirmation of no default. The Borrower will, within 2 Business Days
after service by the Agent of a written request, serve on the Agent a
notice which is signed by 2 directors of the Borrower and which:
(a) states that no Event of Default or Potential Event of Default has
occurred; or
(b) states that no Event of Default or Potential Event of Default has
occurred, except for a specified event or matter, of which all material
details are given.
The Agent may serve requests under this Clause 11.14 from time to time but
only if asked to do so by a Lender or Lenders having Contributions
exceeding 10 percent of the Loan or (if no Advance has been made)
Commitments exceeding 10 percent of the Total Commitments; and this
Clause 11.14 does not affect the Borrower's obligations under Clause
11.I5.
11.15 Notification of default. The Borrower will notify the Agent as soon as the
Borrower becomes aware of:
(a) the occurrence of an Event of Default or a Potential Event of Default; or
(b) any matter which indicates that an Event of Default or a Potential Event
of Default may have occurred;
and will thereafter keep the Agent fully up-to-date with all developments.
11.16 Provision of further information. The Borrower will, as soon as
practicable after receiving the request, provide the Agent with any
additional financial or other information relating:
(a) to the Borrower, any Owner, Wealth, any Ship, the Approved Manager or any
other Security Party, the Insurances or the Earnings; or
(b) to any other matter relevant to, or to any provision of, a Finance
Document which may be requested by the Agent, the Security Trustee or any
Lender at any time.
11.17 Provision of copies and translation of documents. The Borrower will supply
the Agent with a sufficient number of copies of the documents referred to
above to provide 1 copy for each Creditor Party; and if the Agent so
requires in respect of any of those documents, the Borrower will provide a
certified English translation prepared by a translator approved by the
Agent.
11.18 Hedging of interest rate risks. The Borrower shall deliver to the Agent by
no later than 30 April 2006 the duly signed Hedge Strategy Letter (in a
form and on terms acceptable to the Agent which letter shall be prepared
in consultation with, and with the assistance of, the Agent), and shall
from time to time, enter into such Designated Transactions with a Swap
Bank in order to implement the hedging strategy outlined in the Hedge
Strategy Letter whereby for a period of at least 5 years from the Drawdown
Date of the relevant Advance it will hedge all or the major part of the
interest rate risk under this Agreement and the Junior Loan Agreement (but
in any event not less than 60 percent of the interest rate risk under
this Agreement and the Junior Loan Agreement outstanding at any time
during the aforesaid 5-year period).
11.19 Ownership. The Borrower shall ensure that (a) it shall remain the direct
or indirect owner of the whole of the issued share capital of each Owner
and Wealth and (b) there shall be no change in the legal and beneficial
ownership of the shares in each Owner or Wealth.
11.20 Debt Service Reserve Account. The Borrower shall ensure that there is
standing to the credit of the Debt Service Reserve Account at all times an
amount of at least $5,000,000 and any balance on the Debt Service Reserve
Account may only be used to discharge the Borrower's payment liabilities
under this Agreement, the Junior Loan Agreement, the Master Agreements and
the Junior Master Agreements.
11.21 General and administrative costs. The Borrower shall ensure that the
payment of all the general and administrative costs of the Borrower and
the Owners in connection with the ownership and operation of the Ships
(including, without limitation, the payment of the management fees
pursuant to the Management Agreements) shall be fully subordinated to the
payment obligations of the Borrower and the Owners under this Agreement
and the other Finance Documents throughout the Security Period.
11.22 ▇▇▇▇▇ Oldendorff Seller's Credit. The Borrower shall ensure that any
payment to be made by Seaventure to Goodwill under the ▇▇▇▇▇ Oldendorff
Seller's Credit Agreement may only be made (a) in accordance with the
terms of that agreement and (b) if at the relevant time there is available
to the Borrower and all the other members of the Group an aggregate amount
of not less than $25,000,000 (including, without limitation, any amount
standing to the credit of the Debt Service Reserve Account) in immediately
freely available and unencumbered bank or cash balances.
11.23 Know your customer. The Borrower will provide to (or procure that there is
sent to) the Agent such documents and evidence as any Creditor Party shall
require in relation to the Borrower or any Security Party, based on
applicable laws and regulations and each Creditor Party's own internal
guidelines relating to the verification of the identity and knowledge of
its customers.
12 CORPORATE UNDERTAKINGS
12.1 General. The Borrower also undertakes with each Creditor Party to comply
with the following provisions of this Clause 12 at all times during the
Security Period except as the Agent may, with the authority of the
Majority Lenders, otherwise permit.
12.2 Maintenance of status. The Borrower will maintain its separate corporate
existence and remain in good standing under the laws of the ▇▇▇▇▇▇▇▇
Islands.
12.3 Negative undertakings. The Borrower will not:
(a) change the nature of its business; or
(b) declare or pay any dividend or effect any other form of distribution in
excess of:
(i) in the Financial Year ending 31 December 2006, $18,000,000 in
aggregate; and
(ii) in all subsequent Financial Years, 50 percent of its Net Income
for the relevant Financial Year;
(c) effect any form of redemption, purchase or return of share capital; or
(d) provide any form of credit or financial assistance to:
(i) a person who is directly or indirectly interested in the Borrower's
share or loan capital; or
(ii) any company in or with which such a person is directly or indirectly
interested or connected;
or enter into any transaction with or involving such a person or company
on terms which are, in any respect, less favourable to the Borrower than
those which it could obtain in a bargain made at arms' length Provided
that this shall not prevent or restrict the Borrower from on-lending the
Loan to the Owners or granting credit or financial assistance to its
wholly-owned direct or indirect subsidiaries;
(e) issue, allot or grant any person a right to any shares in its capital or
repurchase or reduce its issued share capital;
(f) acquire any shares or other securities other than US or UK Treasury bills
and certificates of deposit issued by major North American or European
banks, or enter into any transaction in a derivative other than Designated
Transactions;
(g) enter into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
12.4 Financial Covenants. The Borrower shall ensure that:
(a) the Market Adjusted Equity Ratio shall not be less than:
(i) in each of the Financial Years ending respectively 31 December 2006
and 31 December 2007, 0.2:1;
(ii) in the Financial Year ending 31 December 2008, 0.25: 1; and
(iii) in each subsequent Financial Year, 0.3:1;
(b) the Interest Coverage Ratio shall not be less than 3:1;
(c) the Market Value Adjusted Net Worth of the Group shall not be less than:
(i) in each of the Financial Years ending respectively 31 December 2006
and 31 December 2007, $125,000,000;
(ii) in the Financial Year ending 31 December 2008, $180,000,000; and
(iii) in each subsequent Financial Year, $225,000,000; and
(d) at all times there is available to the Borrower and all the other members
of the Group an aggregate amount of not less than $20,000,000 (including,
without limitation, any amount standing to the credit of the Debt Service
Reserve Account) in immediately freely available and unencumbered bank or
cash balances, of which amount not less than $15,000,000 in aggregate
shall be held in the Earnings Accounts and the Wealth Account.
12.5 Compliance Check. Compliance with the undertakings contained in Clause
12.4 shall be determined in each Financial Year:
(a) at the time the Agent receives the audited consolidated accounts of the
Group and the unaudited consolidated accounts of the Group for the second
financial quarter of the Group in each Financial Year (pursuant to Clauses
11.6(a) and 11.6(b) respectively), by reference to the unaudited
consolidated accounts in the case of the first 6-month period in each
Financial Year of the Borrower and the audited consolidated accounts in
the case of the second 6-month period in each Financial Year of the
Borrower;
(b) at any other time as the Agent may reasonably request by reference to such
evidence as the Lenders may require to determine and calculate the
financial covenants referred to in Clause 12.3.
At the same time as it delivers the consolidated accounts referred to in
this Clause 12.5, the Borrower shall deliver to the Agent a certificate in
the form set out in Schedule 8 demonstrating its compliance (or not, as
the case may be) with the provisions of Clause 12.4 signed by the chief
financial officer of the Borrower.
The Agent (acting with the authorisation of the Majority Lenders) reserves
the right, when determining the compliance of the Borrower with the
undertakings contained in Clause 12.4 on the basis of the annual
consolidated accounts of the Group for each Financial Year, not to rely on
the valuations of the Fleet Vessels submitted by the Borrower together
with the unaudited consolidated accounts of the Group for the fourth
financial quarter of the relevant Financial Year in accordance with Clause
11.6(c) and instead to obtain (at the cost of the Borrower) two further
valuations of each Fleet Vessel, each prepared by an Approved Broker in
accordance with Clause 15.4.
12.6 Change in accounting expressions and policies. If, by reason of change in
format or GAAP or other relevant accounting policies, the expressions
appearing in any accounts and financial statements referred to in Clause
11.6 alter from those in the accounts and financial statements for the
Borrower for the year ended 31 December 2005, the relevant definitions
contained in Clause 1.1 and the provisions of Clause 12.4 shall be deemed
modified in such manner as the Agent, acting with the authorisation of the
Majority Lenders, shall require to take account of such different
expressions but otherwise to maintain in all respects the substance of
those provisions.
12.7 Subordination of rights of Borrower. All rights which the Borrower at any
time has (whether in respect of the Loan or any other transaction) against
any Owner or its assets shall be fully subordinated to the rights of the
Creditor Parties under the Finance Documents; and in particular, the
Borrower shall not during the Security Period:
(a) claim, or in a bankruptcy of any Owner or prove for any amount payable to
the Borrower by an Owner, whether in respect of the Loan or any other
transaction;
(b) take or enforce any Security Interest for any such amount; or
(c) claim to set-off any such amount against any amount payable by the
Borrower to any Owner.
12.8 Free Syndication market. The Borrower (in order to ensure an orderly and
effective syndication of the Loan) shall not, and shall ensure that no
Owner, no member of the Group and no affiliate of the Borrower or any
other member of the Group shall, until the finalisation of the syndication
of the Loan (as determined by the Joint Underwriters):
(a) syndicate or issue or attempt to syndicate or issue; or
(b) announce or authorise the announcement of the syndication or issuance of;
or
(c) engage in discussions concerning the syndication or issuance of,
any Financial Indebtedness with any banks or financial institutions in the
commercial banking market Provided that this shall not restrict the
Borrower from issuing commercial instruments or making any further equity
offerings.
13 INSURANCE
13.1 General. The Borrower also undertakes with each Creditor Party to procure
that each Owner will comply with the following provisions of this Clause
13 at all times during the Security Period except as the Agent may, with
the authority of the Majority Lenders, otherwise permit.
13.2 Maintenance of obligatory insurances. The Borrower shall procure that each
Owner keep the Ship owned by it insured at the expense of that Owner
against:
(a) fire and usual marine risks (including hull and machinery and excess
risks);
(b) war risks (including protection and indemnity war risks);
(c) in the case of protection and indemnity war risks, in an amount equal to
the amount for which the war risks under the hull policies are effected;
and
(d) any other risks against which the Majority Lenders consider, having regard
to practices and other circumstances prevailing at the relevant time, it
would in the opinion of the Majority Lenders be reasonable for the
relevant Owner to insure and which are specified by the Security Trustee
by notice to the relevant Owner.
13.3 Terms of obligatory insurances. The Borrower shall procure that each Owner
shall effect such insurances:
(a) in Dollars;
(b) in the case of fire and usual marine risks and war risks, in an amount on
an agreed value basis at least the greater of (i) an amount, which when
aggregated with the insured value of the other Ships at the relevant time
subject to a Mortgage, is equal to 120 percent, of the Loan and (ii) the
Market Value of the Ship owned by it; and
(c) in the case of oil pollution liability risks, for an aggregate amount
equal to the highest level of cover from time to time available under
basic protection and indemnity club entry (with the international group of
protection and indemnity clubs) and the international marine insurance
market (currently $1,000,000,000);
(d) in relation to protection and indemnity risks, in respect of the full
value and tonnage of the Ship owned by it;
(e) on approved terms; and
(f) through approved brokers and with approved insurance companies and/or
underwriters or, in the case of war risks and protection and indemnity
risks, in approved war risks and protection and indemnity risks
associations.
13.4 Further protections for the Creditor Parties. In addition to the terms set
out in Clause 13.3, the Borrower shall procure that the obligatory
insurances shall:
(a) (except in relation to risks referred to in Clauses 13.2(c) and (d)) name
(or be amended to name) the Security Trustee as additional named assured
for its rights and interests, warranted no operational interest and with
full waiver of rights of subrogation against the Security Trustee, but
without the Security Trustee thereby being liable to pay (but having the
right to pay) premiums, calls or other assessments in respect of such
insurance;
(b) name the Security Trustee as sole loss payee with such directions for
payment as the Security Trustee may specify;
(c) provide that all payments by or on behalf of the insurers under the
obligatory insurances to the Security Trustee shall be made without
set-off, counterclaim or deductions or condition whatsoever;
(d) provide that the insurers shall waive, to the fullest extent permitted by
English law, their entitlement (if any) (whether by statute, common law,
equity, or otherwise) to be subrogated to the rights and remedies of the
Security Trustee in respect of any rights or interests (secured or not)
held by or available to the Security Trustee in respect of the Secured
Liabilities, until the Secured Liabilities shall have been fully repaid
and discharged, except that the insurers shall not be restricted by the
terms of this paragraph (d) from making personal claims against persons
(other than the relevant Owner or any Creditor Party) in circumstances
where the insurers have fully discharged their liabilities and obligations
under the relevant obligatory insurances;
(e) provide that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the Security
Trustee;
(f) provide that the Security Trustee may make proof of loss if the relevant
Owner fails to do so; and
(g) provide that if any obligatory insurance is cancelled, or if any
substantial change is made in the coverage which adversely affects the
interest of the Security Trustee, or if any obligatory insurance is
allowed to lapse for non-payment of premium, such cancellation, charge or
lapse shall not be effective with respect to the Security Trustee for 30
days (or 7 days in the case of war risks) after receipt by the Security
Trustee of prior written notice from the insurers of such cancellation,
change or lapse.
13.5 Renewal of obligatory insurances. The Borrower shall procure that each
Owner shall:
(a) at least 21 days before the expiry of any obligatory insurance:
(i) notify the Security Trustee of the brokers (or other insurers) and
any protection and indemnity or war risks association through or
with whom that Owner proposes to renew that insurance and of the
proposed terms of renewal; and
(ii) in case of any substantial change in insurance cover, obtain the
Security Trustee's approval to the matters referred to in paragraph
(i) above;
(b) at least 14 days before the expiry of any obligatory insurance, renew the
insurance in accordance with the Security Trustee's approval pursuant to
paragraph (a); and
(c) procure that the approved brokers and/or the war risks and protection and
indemnity associations with which such a renewal is effected shall
promptly after the renewal notify the Security Trustee in writing of the
terms and conditions of the renewal.
13.6 Copies of policies; letters of undertaking. The Borrower shall procure
that each Owner shall ensure that all approved brokers provide the
Security Trustee with copies of all policies relating to the obligatory
insurances which they effect or renew and of a letter or letters of
undertaking in a form required by the Majority Lenders and including
undertakings by the approved brokers that:
(a) they will have endorsed on each policy, immediately upon issue, a loss
payable clause and a notice of assignment complying with the provisions of
Clause 13.4;
(b) they will hold such policies, and the benefit of such insurances, to the
order of the Security Trustee in accordance with the said loss payable
clause;
(c) they will advise the Security Trustee immediately of any material change
to the terms of the obligatory insurances;
(d) they will notify the Security Trustee, not less than 14 days before the
expiry of the obligatory insurances, in the event of their not having
received notice of renewal instructions from that Owner or its agents and,
in the event of their receiving instructions to renew, they will promptly
notify the Security Trustee of the terms of the instructions; and
(e) they will not set off against any sum recoverable in respect of a claim
relating to the Ship owned by the relevant Owner under such obligatory
insurances any premiums or other amounts due to them or any other person
whether in respect of that Ship or otherwise, they waive any lien on the
policies or, any sums received under them, which they might have in
respect of such premiums or other amounts, and they will not cancel such
obligatory insurances by reason of non-payment of such premiums or other
amounts, and will arrange for a separate policy to be issued in respect of
the Ship forthwith upon being so requested by the Security Trustee.
13.7 Copies of certificates of entry. The Borrower shall procure that each
Owner shall ensure that any protection and indemnity and/or war risks
associations in which the Ship owned by that Owner is entered provides the
Security Trustee with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be required by the
Majority Lenders; and
(c) where required to be issued under the terms of insurance/indemnity
provided by the Borrower's protection and indemnity association, a
certified copy of each United States of America voyage quarterly
declaration (or other similar document or documents) made by that Owner in
accordance with the requirements of such protection and indemnity
association; and
(d) a certified copy of each certificate of financial responsibility for
pollution by oil or other Environmentally Sensitive Material issued by the
relevant certifying authority.
13.8 Deposit of original policies. The Borrower shall procure that each Owner
shall ensure that all policies relating to obligatory insurances are
deposited with the approved brokers through which the insurances are
effected or renewed.
13.9 Payment of premiums. The Borrower shall procure that each Owner shall
punctually pay all premiums or other sums payable in respect of the
obligatory insurances and produce all relevant receipts when so required
by the Security Trustee.
13.10 Guarantees. The Borrower shall procure that each Owner shall ensure that
any guarantees required by a protection and indemnity or war risks
association are promptly issued and remain in full force and effect.
13.11 Restrictions on employment. The Borrower shall procure that no Owner
employ the Ship owned by it, nor permit her to be employed, outside the
cover provided by any obligatory insurances.
13.12 Compliance with terms of insurances. The Borrower shall procure that no
Owner shall do or omit to do (or permit to be done or not to be done) any
act or thing which would or might render any obligatory insurance invalid,
void, voidable or unenforceable or render any sum payable thereunder
repayable in whole or in part; and, in particular:
(a) each Owner shall take all necessary action and comply with all
requirements which may from time to time be applicable to the obligatory
insurances, and (without limiting the obligation contained in Clause
13.7(c) above) ensure that the obligatory insurances are not made subject
to any exclusions or qualifications to which the Security Trustee has not
given its prior approval;
(b) no Owner shall make any changes relating to the classification or
classification society or manager or operator of the Ship owned by it
unless approved by the underwriters of the obligatory insurances;
(c) each Owner shall make all quarterly or other voyage declarations which may
be required by the protection and indemnity risks association in which the
Ship owned by it is entered to maintain cover for trading to the United
States of America and Exclusive Economic Zone (as defined in the United
States Oil Pollution Act 1990 or any other applicable legislation); and
(d) no Owner shall employ the Ship owned by it, nor allow it to be employed,
otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the insurers
and complying with any requirements (as to extra premium or otherwise)
which the insurers specify.
13.13 Alteration to terms of insurances. The Borrower shall procure that no
Owner shall either make or agree to any alteration to the terms of any
obligatory insurance or waive any right relating to any obligatory
insurance without the prior written consent of the Security Trustee.
13.14 Settlement of claims. The Borrower shall procure that no Owner shall
settle, compromise or abandon any claim under any obligatory insurance for
Total Loss or for a Major Casualty, and shall do all things necessary and
provide all documents, evidence and information to enable the Security
Trustee to collect or recover any moneys which at any time become payable
in respect of the obligatory insurances.
13.15 Provision of copies of communications. The Borrower shall procure that
each Owner shall provide the Security Trustee, at the time of each such
communication, copies of all written communications between that Owner
and:
(a) the approved brokers; and
(b) the approved protection and indemnity and/or war risks associations; and
(c) the approved insurance companies and/or underwriters, which relate
directly or indirectly to:
(i) that Owner's obligations relating to the obligatory insurances
including, without limitation, all requisite declarations and
payments of additional premiums or calls; and
(ii) any credit arrangements made between that Owner and any of the
persons referred to in paragraphs (a) or (b) above relating wholly
or partly to the effecting or maintenance of the obligatory
insurances.
13.16 Provision of information. In addition, the Borrower shall procure that
each Owner shall promptly provide the Security Trustee (or any persons
which it may designate) with any information which the Security Trustee
(or any such designated person) requests for the purpose of:
(a) obtaining or preparing any report from an independent marine insurance
broker as to the adequacy of the obligatory insurances effected or
proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are referred to
in Clause 13.17 below or dealing with or considering any matters relating
to any such insurances
and the Borrower shall, forthwith upon demand, indemnify the Security
Trustee in respect of all fees and other expenses incurred by or for the
account of the Security Trustee in connection with any such report as is
referred to in paragraph (a) above.
13.17 Mortgagee's interest and additional peril insurances. The Security Trustee
shall be entitled from time to time to effect, maintain and renew all or
any of the following insurances in such amounts, on such terms, through
such insurers and generally in such manner as the Majority Lenders may
from time to time consider appropriate:
(a) a mortgagee's interest marine insurance in an amount equal to 120 percent
of the Loan, providing for the indemnification of the Security Trustee for
any losses under or in connection with any Finance Document which directly
or indirectly result from loss of or damage to any Ship or a liability of
any Ship or of any Owner, being a loss or damage which is prima facie
covered by an obligatory insurance but in respect of which there is a
non-payment (or reduced payment) by the underwriters by reason of, or on
the basis of an allegation concerning:
(i) any act or omission on the part of any Owner, of any operator,
charterer, manager or sub-manager of any Ship or of any officer,
employee or agent of any Owner or of any such person, including any
breach of warranty or condition or any non-disclosure relating to
such obligatory insurance;
(ii) any act or omission, whether deliberate, negligent or accidental, or
any knowledge or privity of any Owner, any other person referred to
in paragraph (i) above, or of any officer, employee or agent of any
Owner or of such a person, including the casting away or damaging of
any Ship and/or any Ship being unseaworthy; and/or
(iii) any other matter capable of being insured against under a
mortgagee's interest marine insurance policy whether or not similar
to the foregoing;
(b) a mortgagee's interest additional perils policy in an amount not less than
110 percent of the Loan, providing for the indemnification of the
Security Trustee against, among other things, any possible losses or other
consequences of any Environmental Claim, including the risk of
expropriation, arrest or any form of detention of any Ship, the imposition
of any Security Interest over any Ship and/or any other matter capable of
being insured against under a mortgagee's interest additional perils
policy whether or not similar to the foregoing
and the Borrower shall upon demand fully indemnify the Security Trustee in
respect of all premiums and other expenses which are incurred in
connection with or with a view to effecting, maintaining or renewing any
such insurance or dealing with, or considering, any matter arising out of
any such insurance.
13.18 Review of insurance requirements. The Majority Lenders shall be entitled
to review the requirements of this Clause 13 from time to time in order to
take account of any changes in circumstances after the date of this
Agreement which are, in the opinion of the Majority Lenders, significant
and capable of affecting the Owners or the Ships and their insurance
(including, without limitation, changes in the availability or the cost of
insurance coverage or the risks to which the Owners may be subject), and
may appoint insurance consultants in relation to this review at the cost
of the Borrower.
13.19 Modification of insurance requirements. The Security Trustee shall notify
the Borrower of any proposed modification under Clause 13.18 to the
requirements of this Clause 13 which the Majority Lenders consider
appropriate in the circumstances, and such modification shall take effect
on and from the date it is notified in writing to the Borrower as an
amendment to this Clause 13 and shall bind the Borrower accordingly.
13.20 Compliance with mortgagee's instructions. The Security Trustee shall be
entitled (without prejudice to or limitation of any other rights which it
may have or acquire under any Finance Document) to require any Ship to
remain at any safe port or to proceed to and remain at any safe port
designated by the Security Trustee until the Owner of that Ship implements
any amendments to the terms of the obligatory insurances and any
operational changes required as a result of a notice served under Clause
13.19.
14 SHIP COVENANTS
14.1 General. The Borrower also undertakes with each Creditor Party to procure
that each Owner shall comply with the following provisions of this Clause
14 at all times during the Security Period except as the Agent, with the
authority of the Majority Lenders, may otherwise permit.
14.2 Ship's name and registration. The Borrower shall procure that each Owner
shall keep the Ship owned by it registered in its ownership under Maltese
Flag (in the case of each Existing Ship and the Identified Ship) and an
Approved Flag (in the case of each Additional Ship); shall not do or allow
to be done anything as a result of which such registration might be
cancelled or imperilled; and shall not change the name or port of registry
of any Ship.
14.3 Repair and classification. The Borrower shall procure that each Owner
shall keep the Ship owned by it in a good and safe condition and state of
repair:
(a) consistent with first-class ship ownership and management practice;
(b) so as to maintain the highest class at Lloyd's Register of Ships (or such
other first-class classification society which is a member of IACS
acceptable to the Agent) free of overdue recommendations and conditions of
such classification society; and
(c) so as to comply with all laws and regulations applicable to vessels
registered at ports in Malta (in the case of each Existing Ship and the
Identified Ship) or the relevant Approved Flag State (in the case of each
Additional Ship) or to vessels trading to any jurisdiction to which the
Ship may trade from time to time, including but not limited to the ISM
Code, the ISPS Code, the ISM Code Documentation and the ISPS Code
Documentation.
14.4 Classification society undertaking. The Borrower shall procure that each
Owner shall instruct the classification society referred to in Clause 14.3
(and procure that the classification society undertakes with the Security
Trustee):
(a) to send to the Security Trustee, following receipt of a written request
from the Security Trustee, certified true copies of all original class
records held by the classification society in relation to the Ship owned
by that Owner;
(b) to allow the Security Trustee (or its agents), at any time and from time
to time, to inspect the original class and related records of that Owner
and its Ship at the offices of the classification society and to take
copies of them;
(c) to notify the Security Trustee immediately in writing if the
classification society:
(i) receives notification from the Owner or any person that the Ship's
classification society is to be changed; or
(ii) becomes aware of any facts or matters which may result in or have
resulted in a change, suspension, discontinuance, withdrawal or
expiry of the Ship's class under the rules or terms and conditions
of the Owner's or the Ship's membership of the classification
society;
(d) following receipt of a written request from the Security Trustee:
(i) to confirm that the Owner is not in default of any of its
contractual obligations or liabilities to the classification society
and, without limiting the foregoing, that it has paid in full all
fees or other charges due and payable to the classification society;
or
(ii) if the Owner is in default of any of its contractual obligations or
liabilities to the classification society, to specify to the
Security Trustee in reasonable detail the facts and circumstances of
such default, the consequences thereof, and any remedy period agreed
or allowed by the classification society.
14.5 Modification. The Borrower shall procure that no Owner shall make any
modification or repairs to, or replacement of, the Ship owned by it or
equipment installed on her which would or might materially alter the
structure, type or performance characteristics of the Ship or materially
reduce her value.
14.6 Removal of parts. The Borrower shall procure that no Owner shall remove
any material part of the Ship owned by it, or any item of equipment
installed on, the Ship unless the part or item so removed is forthwith
replaced by a suitable part or item which is in the same condition as or
better condition than the part or item removed, is free from any Security
Interest or any right in favour of any person other than the Security
Trustee and becomes on installation on the Ship the property of the Owner
and subject to the security constituted by the Mortgage and if applicable,
the Deed of Covenant, relative to the Ship Provided that the Owner may
install equipment owned by a third party if the equipment can be removed
without any risk of damage to the Ship.
14.7 Surveys. The Borrower shall procure that each Owner shall submit the Ship
owned by it regularly to all periodical or other surveys which may be
required for classification purposes and, if so required by the Majority
Lenders, provide the Security Trustee (at the expense of the Borrower)
with copies of all survey reports.
14.8 Inspection. The Borrower shall procure that each Owner shall permit the
Security Trustee (by surveyors or other persons appointed by it for that
purpose) to board the Ship owned by it at all reasonable times to inspect
her condition or to satisfy themselves about proposed or executed repairs
and shall afford all proper facilities for such inspections Provided that
so long as no Event of Default has occurred and is continuing at the
relevant time and a Ship is found to be in a satisfactory condition (in
the opinion of the Security Trustee) the Borrower shall be obliged to pay
the fees and expenses of one inspection of that Ship in any calendar year.
14.9 Prevention of and release from arrest. The Borrower shall procure that
each Owner shall promptly discharge:
(a) all liabilities which give or may give rise to maritime or possessory
liens on or claims enforceable against the Ship owned by it, her Earnings
or her Insurances;
(b) all taxes, dues and other amounts charged in respect of the Ship, her
Earnings or her Insurances; and
(c) all other outgoings whatsoever in respect of the Ship, her Earnings or her
Insurances
and, forthwith upon receiving notice of the arrest of the Ship, or of her
detention in exercise or purported exercise of any lien or claim, the
relevant Owner shall within 10 Business Days procure her release by
providing bail or otherwise as the circumstances may require.
14.10 Compliance with laws etc. The Borrower shall procure that each Owner and
each Approved Manager shall:
(a) comply, or procure compliance with the ISM Code, the ISPS Code, all
Environmental Laws and all other laws or regulations relating to the Ship
owned by the relevant Owner, its ownership, operation and management or to
the business of that Owner;
(b) not employ the Ship nor allow her employment in any manner contrary to any
law or regulation in any relevant jurisdiction including but not limited
to the ISM Code and the ISPS Code; and
(c) in the event of hostilities in any part of the world (whether war is
declared or not), not cause or permit the Ship to enter or trade to any
zone which is declared a war zone by any government or by the Ship's war
risks insurers unless the prior written consent of the Majority Lenders
has been given and the Owner has (at its expense) effected any special,
additional or modified insurance cover which the Majority Lenders may
require.
14.11 Provision of information. The Borrower shall procure that each Owner shall
promptly provide the Security Trustee with any information which the
Majority Lenders request regarding:
(a) the Ship owned by it, her employment, position and engagements;
(b) the Earnings and payments and amounts due to the master and crew of the
Ship owned by it;
(c) any expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship and any payments made in
respect of the Ship;
(d) any towages and salvages;
(e) its compliance or the compliance of the Ship with the ISM Code and the
ISPS Code,
and, upon the Security Trustee's request, provide copies of any current
charter relating to the Ship and of any current charter guarantee, and
copies of the ISM Code Documentation and the ISPS Code Documentation.
14.12 Notification of certain events. The Borrower shall procure that each Owner
shall immediately notify the Security Trustee by letter of:
(a) any casualty which is or is likely to be or to become a Major Casualty;
(b) any occurrence as a result of which the Ship owned by it has become or is,
by the passing of time or otherwise, likely to become a Total Loss;
(c) any requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
(d) any arrest or detention of the Ship, any exercise or purported exercise of
any lien on the Ship or her Earnings or any requisition of the Ship for
hire;
(e) any intended dry docking of the Ship;
(f) any Environmental Claim made against that Owner or in connection with the
Ship, or any Environmental Incident;
(g) any claim for breach of the ISM Code or the ISPS Code being made against
the Owner, the Approved Manager or otherwise in connection with the Ship;
or
(h) any other matter, event or incident, actual or threatened, the effect of
which will or could lead to the ISM Code or the ISPS Code not being
complied with
and the Borrower shall keep the Security Trustee advised in writing on a
regular basis and in such detail as the Security Trustee shall require of
the Owner's, the Approved Manager's or any other person's response to any
of those events or matters.
14.13 Restrictions on chartering, appointment of managers etc. The Borrower
shall procure that no Owner shall:
(a) (other than pursuant to the ▇▇▇▇▇ Oldendorff Charterparty in the case of
the Identified Ship), let the Ship owned by it on demise charter for any
period;
(b) enter into any time or consecutive voyage charter in respect of the Ship
for a term which exceeds, or which by virtue of any optional extensions
may exceed, 11 months;
(c) change the terms on which the Ship is employed or the identity of the
person by whom the Ship is employed;
(d) enter into any charter in relation to the Ship under which more than 2
months' hire (or the equivalent) is payable in advance;
(e) charter the Ship otherwise than on bona fide arm's length terms at the
time when the Ship is fixed;
(f) appoint a manager of the Ship other than the Approved Manager or agree to
any alteration to the terms of the Approved Manager's appointment;
(g) de-activate or lay up the Ship; or
(h) put the Ship into the possession of any person for the purpose of work
being done upon her in an amount exceeding or likely to exceed $500,000
(or the equivalent in any other currency) unless that person has first
given to the Security Trustee and in terms satisfactory to it a written
undertaking not to exercise any lien on the Ship or her Earnings for the
cost of such work or otherwise.
14.14 Notice of Mortgage. The Borrower shall procure that each Owner shall keep
the Mortgage applicable to the Ship owned by it registered against that
Ship as a valid first priority or preferred mortgage, carry on board the
Ship a certified copy of the Mortgage and place and maintain in a
conspicuous place in the navigation room and the Master's cabin of the
Ship a framed printed notice stating that the Ship is mortgaged by the
Owner to the Security Trustee.
14.15 Sharing of Earnings. The Borrower shall procure that no Owner shall:
(a) enter into any agreement or arrangement for the sharing of any Earnings;
(b) enter into any agreement or arrangement for the postponement of any date
on which any Earnings are due; the reduction of the amount of any Earnings
or otherwise for the release or adverse alteration of any right of that
Owner to any Earnings; or
(c) enter into any agreement or arrangement for the release of, or adverse
alteration to, any guarantee or Security Interest relating to any
Earnings.
14.16 Time Charter Assignment. If any Owner enters into any charter in respect
of its Ship which is of 11 months or more in duration, or is capable of
exceeding 11 months in duration that Owner shall, at the request of the
Agent, execute, or, as the case may be, procure the execution in favour of
the Security Trustee a Charterparty Assignment in respect of that charter,
and shall deliver to the Agent such other documents equivalent to those
referred to at paragraphs 3,4 and 5 of Schedule 5, Part A as the Agent may
require.
15 SECURITY COVER
15.1 Provision of additional security cover; prepayment of Loan. The Borrower
undertakes with each Creditor Party that if the Agent notifies the
Borrower that:
(a) the aggregate Market Values of the Ships; plus
(b) the net realisable value of any additional security previously provided
under this Clause 15;
is below 133 percent of the Loan or 120 percent of the aggregate of
the Loan and the Junior Loan, the Borrower will, within 14 days after the
date on which the Agent's notice is served, either:
(i) provide, or ensure that a third party provides, additional security
which, in the opinion of the Majority Lenders, has a net realisable
value at least equal to the shortfall and which, if it consists of
or includes a Security Interest, covers such asset or assets and is
documented in such terms as the Agent may, with authorisation from
the Majority Lenders, approve or require; or
(ii) prepay in accordance with Clause 8 such part (at least) of the Loan
as will eliminate the shortfall.
15.2 Meaning of additional security. In Clause 15.1 "security" means a Security
Interest over an asset or assets (including, without limitation a vessel
(other than a Ship)) (whether securing the Borrower's liabilities under
the Finance Documents or a guarantee in respect of those liabilities), or
a guarantee, letter of credit, cash deposit or other security in respect
of the Borrower's liabilities under the Finance Documents.
15.3 Requirement for additional documents. The Borrower shall not be deemed to
have complied with Clause 15.1 (i) above until the Agent has received in
connection with the additional security certified copies of documents of
the kinds referred to in paragraphs 3, 4 and 5 of Schedule 5, Part A and
such legal opinions in terms acceptable to the Majority Lenders from such
lawyers as they may select.
15.4 Valuation of Ship. The market value of a Ship at any date is that shown by
taking the arithmetic mean of two valuations each prepared:
(a) as at a date not more than 15 days previously;
(b) by an Approved Broker appointed by the Agent with the valuations being
addressed to the Agent;
(c) with or without physical inspection of the Ship (as the Agent may
require);
(d) on the basis of a sale for prompt delivery for cash on normal arm's length
commercial terms as between a willing seller and a willing buyer, free of
any existing charter or other contract of employment; and
(e) after deducting the estimated amount of the usual and reasonable expenses
which would be incurred in connection with the sale
Provided that if such two valuations differ by more than 15 percent then
the Agent will obtain a third valuation from an Approved Broker to be
prepared in accordance with paragraphs (a) to (e) of this Clause 15.4 and
the Market Value of a Ship will be the arithmetic mean of such 3
valuations.
15.5 Value of additional security. The net realisable value of any additional
security which is provided under Clause 15.1 and which consists of a
Security Interest over a vessel shall be that shown by a valuation
complying with the requirements of Clause 15.4.
15.6 Valuations binding. Any valuation under Clause 15.1(i), 15.4 or 15.5 shall
be binding and conclusive as regards the Borrower, as shall be any
valuation which the Majority Lenders make of a security which does not
consist of or include a Security Interest.
15.7 Provision of information. The Borrower shall promptly provide the Agent
and any Approved Broker or expert acting under Clause 15.4 or 15.5 with
any information which the Agent or the Approved Broker or expert may
request for the purposes of the valuation; and, if the Borrower fails to
provide the information by the date specified in the request, the
valuation may be made on any basis and assumptions which the Approved
Broker or the Majority Lenders (or the expert appointed by them) consider
prudent.
15.8 Payment of valuation expenses. Without prejudice to the generality of the
Borrower's obligations under Clauses 20.2, 20.3 and 21.3, the Borrower
shall, on demand, pay the Agent the amount of the fees and expenses of any
Approved Broker instructed by the Agent under this Clause Provided that
until an Event of Default has occurred and is continuing the Borrower
shall be liable to pay to the Agent the fees and expenses of up to two
sets of valuations of each Ship on up to two (or, if the Agent exercises
the right referred to in the final paragraph of Clause 12.5, three)
occasions in any calendar year.
16 PAYMENTS AND CALCULATIONS
16.1 Currency and method of payments. All payments to be made:
(a) by the Lenders to the Agent; or
(a) by the Borrower to the Agent, the Security Trustee or any Lender
under a Finance Document shall be made to the Agent or to the Security
Trustee, in the case of an amount payable to it:
(i) by not later than 11.00 a.m. (New York City time) on the due date;
(ii) in same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or
settled in such other manner as the Agent shall specify as being
customary at the time for the settlement of international
transactions of the type contemplated by this Agreement);
(iii) to the account of the Agent at JPMorgan Chase Bank, New York
(Account No ▇▇▇-▇-▇▇▇▇▇▇ SWIFT Code: CHASUS 33 under reference
"Dryships Inc. - US$628.75m facility"), or to such other account
with such other bank as the Agent may from time to time notify to
the Borrower and the other Creditor Parties; and
(iv) in the case of an amount payable to the Security Trustee, to such
account as it may from time to time notify to the Borrower and the
other Creditor Parties.
16.2 Payment on non-Business Day. If any payment by the Borrower under a
Finance Document would otherwise fall due on a day which is not a Business
Day:
(a) the due date shall be extended to the next succeeding Business Day; or
(b) if the next succeeding Business Day falls in the next calendar month, the
due date shall be brought forward to the immediately preceding Business
Day
and interest shall be payable during any extension under paragraph (a) at
the rate payable on the original due date.
16.3 Basis for calculation of periodic payments. All interest and commitment
fee and any other payments under any Finance Document which are of an
annual or periodic nature shall accrue from day to day and shall be
calculated on the basis of the actual number of days elapsed and a 360 day
year.
16.4 Distribution of payments to Creditor Parties. Subject to Clauses 16.5,
16.6 and 16.7:
(a) any amount received by the Agent under a Finance Document for distribution
or remittance to a Lender, a Swap Bank or the Security Trustee shall be
made available by the Agent to that Lender or, as the case may be, that
Swap Bank or the Security Trustee by payment, with funds having the same
value as the funds received, to such account as the Lender, the Swap Bank
or the Security Trustee may have notified to the Agent not less than 5
Business Days previously; and
(b) amounts to be applied in satisfying amounts of a particular category which
are due to the Lenders or the Swap Bank generally shall be distributed by
the Agent to each Lender or the Swap Bank pro rata to the amount in that
category which is due to it.
16.5 Permitted deductions by Agent. Notwithstanding any other provision of this
Agreement or any other Finance Document, the Agent may, before making an
amount available to a Lender or a Swap Bank, deduct and withhold from that
amount any sum which is then due and payable to the Agent from that Lender
or that Swap Bank under any Finance Document or any sum which the Agent is
then entitled under any Finance Document to require that Lender or any
Swap Bank to pay on demand.
16.6 Agent only obliged to pay when monies received. Notwithstanding any other
provision of this Agreement or any other Finance Document, the Agent shall
not be obliged to make available to the Borrower or any Lender or any Swap
Bank any sum which the Agent is expecting to receive for remittance or
distribution to the Borrower or that Lender or that Swap Bank until the
Agent has satisfied itself that it has received that sum.
16.7 Refund to Agent of monies not received. If and to the extent that the
Agent makes available a sum to the Borrower or a Lender or a Swap Bank,
without first having received that sum, the Borrower or (as the case may
be) the Lender or the Swap Bank concerned shall, on demand:
(a) refund the sum in full to the Agent; and
(b) pay to the Agent the amount (as certified by the Agent) which will
indemnify the Agent against any funding or other loss, liability or
expense incurred by the Agent as a result of making the sum available
before receiving it.
16.8 Agent may assume receipt. Clause 16.7 shall not affect any claim which the
Agent has under the law of restitution, and applies irrespective of
whether the Agent had any form of notice that it had not received the sum
which it made available.
16.9 Creditor Party accounts. Each Creditor Party shall maintain accounts
showing the amounts owing to it by the Borrower and each Security Party
under the Finance Documents and all payments in respect of those amounts
made by the Borrower and any Security Party.
16.10 Agent's memorandum account. The Agent shall maintain a memorandum account
showing the amounts advanced by the Lenders and all other sums owing to
the Agent, the Security Trustee and each Lender from the Borrower and each
Security Party under the Finance Documents and all payments in respect of
those amounts made by the Borrower and any Security Party.
16.11 Accounts prima facie evidence. If any accounts maintained under Clauses
16.9 and 16.10 show an amount to be owing by the Borrower or a Security
Party to a Creditor Party, those accounts shall, absent manifest error, be
prima facie evidence that that amount is owing to that Creditor Party.
17 APPLICATION OF RECEIPTS
17.1 Normal order of application. Except as any Finance Document may otherwise
provide, any sums which are received or recovered by any Creditor Party
under or by virtue of any Finance Document shall be applied:
(a) FIRST: in or towards satisfaction of any amounts then due and payable
under the Finance Documents and each Master Agreement in the following
order and proportions:
(i) first, in or towards satisfaction pro rata of all amounts then due
and payable to the Creditor Parties under the Finance Documents
other than those amounts referred to at paragraphs (ii) and (iii)
(including, but without limitation, all amounts payable by the
Borrower under Clauses 20, 21 and 22 of this Agreement or by the
Borrower or any Security Party under any corresponding or similar
provision in any other Finance Document or in either Master
Agreement);
(ii) secondly, in or towards satisfaction pro rata of any and all amounts
of interest or default interest payable to the Creditor Parties
under the Finance Documents and the Master Agreements (and, for this
purpose, the expression "interest" shall include any net amount
which the Borrower shall have become liable to pay or deliver under
section 2(e) (Obligations) of either Master Agreement but shall have
failed to pay or deliver to the relevant Swap Bank at the time of
application or distribution under this Clause 17); and
(iii) thirdly, in or towards satisfaction pro rata of the Loan and the
Swap Exposure of each Swap Bank (in the case of the latter,
calculated as at the actual Early Termination Date applying to each
particular Designated Transaction, or if no such Early Termination
Date shall have occurred, calculated as if an Early Termination Date
occurred on the date of application or distribution hereunder);
(b) SECONDLY: in retention of an amount equal to any amount not then due and
payable under any Finance Document or any Master Agreement but which the
Agent, by notice to the Borrower, the Security Parties and the other
Creditor Parties, states in its opinion will or may become due and payable
in the future and, upon those amounts becoming due and payable, in or
towards satisfaction of them in accordance with the provisions of Clause
17.1(a); and
(c) THIRDLY: any surplus shall be paid to the Agent for application in
accordance with Clause 17.1 of the Junior Loan Agreement or, if all sums
due thereunder have been paid, to the Borrower or to any other person
appearing to be entitled to it.
17.2 Variation of order of application. The Agent may, with the authorisation
of the Majority Lenders and the Swap Banks by notice to the Borrower, the
Security Parties and the other Creditor Parties provide for a different
manner of application from that set out in Clause 17.1 either as regards a
specified sum or sums or as regards sums in a specified category or
categories.
17.3 Notice of variation of order of application. The Agent may give notices
under Clause 17.2 from time to time; and such a notice may be stated to
apply not only to sums which may be received or recovered in the future,
but also to any sum which has been received or recovered on or after the
third Business Day before the date on which the notice is served.
17.4 Appropriation rights overriden. This Clause 17 and any notice which the
Agent gives under Clause 17.3 shall override any right of appropriation
possessed, and any appropriation made, by the Borrower or any Security
Party.
18 APPLICATION OF EARNINGS
18.1 Payment of Earnings. The Borrower undertakes with each Creditor Party to
ensure that throughout the Security Period:
(a) (subject only to provisions of the relevant General Assignment), all the
Earnings of each Ship are paid to the Earnings Account for that Ship; and
(b) all payments by a Swap Bank to a Borrower under a Designated Transaction
are paid to the Retention Account.
18.2 Monthly retentions. The Borrower undertakes with each Creditor Party to
ensure that, in each calendar month of the Security Period commencing on
the date falling 1 month after the first Drawdown Date and on the same day
in each subsequent month, there is transferred to the Retention Account
out of the aggregate Earnings received in the Earnings Accounts during the
preceding calendar month:
(a) one-third (or, in the case of the period between the first Drawdown Date
and the first Repayment Date, one-fifth) of the amount of the Repayment
Instalment falling due under Clause 8 on the next Repayment Date; and
(b) the relevant fraction of the aggregate amount of interest on (i) the Term
Loan and (ii) the Credit Facility which is payable on the next due date
for payment of interest for each of the Term Loan and the Credit Facility
under this Agreement.
The "relevant fraction", in respect of each Advance, is a fraction of
which the numerator is 1 and the denominator the number of months
comprised in the then current Interest Period applicable to such Advance
(or, if the current Interest Period ends after the next date for payment
of interest under this Agreement, the number of months from the later of
the commencement of the current Interest Period or the last due date for
payment of interest to the next date for payment of interest under this
Agreement).
18.3 Shortfall in Earnings. If the aggregate Earnings received are insufficient
in any month for the required amount to be transferred to the Retention
Account under Clause 18.2, the Borrower shall make up the amount of the
insufficiency on demand from the Agent; but, without thereby prejudicing
the Agent's right to make such demand at any time, the Agent may, if so
authorised by the Majority Lenders, permit the Borrower to make up all or
part of the insufficiency by increasing the amount of any transfer under
Clause 18.2 from the Earnings received in the next or subsequent months.
18.4 Application of retentions. Until an Event of Default occurs, the Agent
shall on each Repayment Date and on each due date for the payment of
interest under this Agreement distribute to the Lenders in accordance with
Clause 16.4 so much of the then balance on the Retention Account as
equals:
(a) the Repayment Instalment due on that Repayment Date; and
(b) the amount of interest payable on that interest payment date
in discharge of the Borrower's liability for that Repayment Instalment or
that interest.
18.5 Interest accrued on Retention Account. Any credit balance on the Retention
Account shall bear interest at the rate from time to time offered by the
Agent to its customers for Dollar deposits of similar amounts and for
periods similar to those for which such balances appear to the Agent
likely to remain on the Retention Account.
18.6 Release of accrued interest. Interest accruing under Clause 18.5 shall be
released to the Borrower on each Repayment Date unless an Event of Default
or a Potential Event of Default has occurred or the then credit balance on
the Retention Account is less than what would have been the balance had
the full amount required by Clause 18.2 (and Clause 18.3, if applicable)
been transferred in that and each previous month.
18.7 Location of accounts. The Borrower shall promptly:
(a) comply, and ensure that the Owners and Wealth comply, with any requirement
of the Agent as to the location or re-location of any Earnings Account,
the Debt Service Reserve Account, the Retention Account or the Wealth
Account;
(b) execute, and ensure that the Owners and Wealth execute, any documents
which the Agent specifies to create or maintain in favour of the Security
Trustee a Security Interest over (and/or rights of set-off, consolidation
or other rights in relation to) the Earnings Accounts (or any of them),
the Debt Service Reserve Account, the Retention Account and the Wealth
Account.
18.8 Debits for expenses etc. The Agent shall be authorised by the Borrower
(but not obliged) from time to time to debit the Earnings Account without
prior notice in order to discharge any amount due and payable under Clause
20 or 21 to a Creditor Party or payment of which any Creditor Party has
become entitled to demand under Clause 20 or 21.
18.9 Borrower's obligations unaffected. The provisions of this Clause 18 do not
affect:
(a) the liability of the Borrower to make payments of principal and interest
on the due dates; or
(b) any other liability or obligation of the Borrower or any Security Party
under any Finance Document.
18.10 Wealth Account. The Owners may from time to time transfer credit balances
on the Earnings Accounts to the Wealth Account subject to the Borrower
being in compliance with its obligations under this Agreement (including,
without limitation, Clause 18.2).
19 EVENTS OF DEFAULT
19.1 Events of Default. An Event of Default occurs if:
(a) the Borrower or any Security Party fails to pay when due or (if so
payable) on demand any sum payable under a Finance Document or under any
document relating to a Finance Document; or
(b) any breach occurs of Clause 9.2, 11.2, 11.3, 11.19, 11.20, 12.2, 12.3,
12.4, 13.2, 15.1 or 18.1; or
(c) any breach by the Borrower or any Security Party occurs of any provision
of a Finance Document (other than a breach covered by paragraphs (a) or
(b) above) if, in the opinion of the Majority Lenders, such default is
capable of remedy, and such default continues unremedied 10 days after
written notice from the Agent requesting action to remedy the same; or
(d) (subject to any applicable grace period specified in the Finance Document)
any breach by the Borrower or any Security Party occurs of any provision
of a Finance Document (other than a breach covered by paragraphs (a), (b)
or (c) above); or
(e) any representation, warranty or statement made by, or by an officer of,
the Borrower or a Security Party in a Finance Document or in a Drawdown
Notice or any other notice or document relating to a Finance Document is
untrue or misleading when it is made; or
(f) any of the following occurs in relation to any Financial Indebtedness of a
Relevant Person exceeding $1,000,000 (or the equivalent in any other
currency) in aggregate:
(i) any Financial Indebtedness of a Relevant Person is not paid when due
or, if so payable, on demand; or
(ii) any Financial Indebtedness of a Relevant Person becomes due and
payable or capable of being declared due and payable prior to its
stated maturity date as a consequence of any event of default; or
(iii) a lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or
owner or becomes capable of being terminated as a consequence of any
termination event; or
(iv) any overdraft, loan, note issuance, acceptance credit, letter of
credit, guarantee, foreign exchange or other facility, or any swap
or other derivative contract or transaction, relating to any
Financial Indebtedness of a Relevant Person ceases to be available
or becomes capable of being terminated as a result of any event of
default, or cash cover is required, or becomes capable of being
required, in respect of such a facility as a result of any event of
default; or
(v) any Security Interest securing any Financial Indebtedness of a
Relevant Person becomes enforceable; or
(g) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person becomes, in the opinion of the Majority Lenders,
unable to pay its debts as they fall due; or
(ii) any assets of a Relevant Person are subject to any form of
execution, attachment, arrest, sequestration or distress in respect
of a sum of, or sums aggregating, $100,000 or more or the equivalent
in another currency; or
(iii) any administrative or other receiver is appointed over any asset of
a Relevant Person; or
(iv) a Relevant Person makes any formal declaration of bankruptcy or any
formal statement to the effect that it is insolvent or likely to
become insolvent, or a winding up or administration order is made in
relation to a Relevant Person, or the members or directors of a
Relevant Person pass a resolution to the effect that it should be
wound up, placed in administration or cease to carry on business,
save that this paragraph does not apply to a fully solvent winding
up of a Relevant Person other than the Borrower which is, or is to
be, effected for the purposes of an amalgamation or reconstruction
previously approved by the Majority Lenders and effected not later
than 3 months after the commencement of the winding up; or
(v) a petition is presented in any Pertinent Jurisdiction for the
winding up or administration, or the appointment of a provisional
liquidator, of a Relevant Person unless the petition is being
contested in good faith and on substantial grounds and is dismissed
or withdrawn within 30 days of the presentation of the petition; or
(vi) a Relevant Person petitions a court, or presents any proposal for,
any form of judicial or non judicial suspension or deferral of
payments, reorganisation of its debt (or certain of its debt) or
arrangement with all or a substantial proportion (by number or
value) of its creditors or of any class of them or any such
suspension or deferral of payments, reorganisation or arrangement is
effected by court order, contract or otherwise; or
(vii) any meeting of the members or directors of a Relevant Person is
summoned for the purpose of considering a resolution or proposal to
authorise or take any action of a type described in paragraphs
(iii), (iv), (v) or (vi) above; or
(viii) in a Pertinent Jurisdiction other than England, any event occurs or
any procedure is commenced which, in the opinion of the Majority
Lenders, is similar to any of the foregoing; or
(h) the Borrower or any Security Party ceases or suspends carrying on or
changes the nature of its business or a part of its business which, in the
opinion of the Majority Lenders, is material in the context of this
Agreement; or
(i) it becomes unlawful in any Pertinent Jurisdiction or impossible:
(i) for the Borrower or any Security Party to discharge any liability
under a Finance Document or to comply with any other obligation
which the Majority Lenders consider material under a Finance
Document; or
(ii) for the Agent, the Security Trustee, the Lenders or the Swap Banks
to exercise or enforce any right under, or to enforce any Security
Interest created by, a Finance Document; or
(j) any consent necessary to enable any Owner to own, operate or charter a
Ship or to enable the Borrower or any Security Party to comply with any
provision which the Majority Lenders consider material of a Finance
Document is not granted, expires without being renewed, is revoked or
becomes liable to revocation or any condition of such a consent is not
fulfilled; or
(k) it appears to the Majority Lenders that, without their prior written
consent, a change has occurred or probably has occurred after the date of
this Agreement in the ultimate beneficial ownership of any of the shares
in any Owner, Wealth or the Approved Manager or in the ultimate control of
the voting rights attaching to any of those shares; or
(l) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ceases to be the Chief Executive Officer of the Borrower
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or members of his immediate family (either directly
and/or through companies beneficially owned by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or
members of his immediate family and/or trusts or foundations of which
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or members of his immediate family are beneficiaries) own
and control less than 33.33 percent of the issued share capital of the
Borrower;
(m) any provision which the Majority Lenders consider material of a Finance
Document proves to have been or becomes invalid or unenforceable, or a
Security Interest created by a Finance Document proves to have been or
becomes invalid or unenforceable or such a Security Interest proves to
have ranked after, or loses its priority to, another Security Interest or
any other third party claim or interest; or
(n) the security constituted by a Finance Document is in any way imperilled or
in jeopardy; or
(o) a Master Agreement is terminated, cancelled, suspended, rescinded or
revoked or otherwise ceases to remain in full force and effect for any
reason except with the consent of the Agent, acting with the authorisation
of the Majority Lenders; or
(p) any other event occurs or any other circumstances arise or develop
including, without limitation:
(i) a change in the financial position, state of affairs or prospects of
any Security Party; or
(ii) any accident or other event involving any Ship or another vessel
owned, chartered or operated by a Relevant Person;
in the light of which the Majority Lenders consider that there is a
significant risk that the Borrower or any Security Party is, or will later
become, unable to discharge its liabilities under the Finance Documents as
they fall due; or
(q) there shall occur an Event of Default (howsoever therein described) under
the Junior Loan Agreement.
19.2 Actions following an Event of Default. On, or at any time after, the
occurrence of an Event of Default:
(a) the Agent may, and if so instructed by the Majority Lenders, the Agent
shall:
(i) serve on the Borrower a notice stating that the Commitments and all
other obligations of each Lender to the Borrower under this
Agreement are terminated; and/or
(ii) serve on the Borrower a notice stating that the Loan, all accrued
interest and all other amounts accrued or owing under this Agreement
are immediately due and payable or are due and payable on demand;
and/or
(iii) take any other action which, as a result of the Event of Default or
any notice served under paragraph (i) or (ii) above, the Agent
and/or the Lenders are entitled to take under any Finance Document
or any applicable law; and/or
(b) the Security Trustee may, and if so instructed by the Agent, acting with
the authorisation of the Majority Lenders, the Security Trustee shall take
any action which, as a result of the Event of Default or any notice served
under paragraph (a) (i) or (ii) above, the Security Trustee, the Agent
and/or the Lenders and/or the Swap Banks are entitled to take under any
Finance Document or any applicable law.
19.3 Termination of Commitments. On the service of a notice under paragraph
(a)(i) of Clause 19.2, the Commitments and all other obligations of each
Lender to the Borrower under this Agreement shall terminate.
19.4 Acceleration of Loan. On the service of a notice under paragraph (a)(ii)
of Clause 19.2, the Loan, all accrued interest and all other amounts
accrued or owing from the Borrower or any Security Party under this
Agreement and every other Finance Document shall become immediately due
and payable or, as the case may be, payable on demand.
19.5 Multiple notices; action without notice. The Agent may serve notices under
paragraphs (a) (i) and (ii) of Clause 19.2 simultaneously or on different
dates and it and/or the Security Trustee may take any action referred to
in that Clause if no such notice is served or simultaneously with or at
any time after the service of both or either of such notices.
19.6 Notification of Creditor Parties and Security Parties. The Agent shall
send to each Lender, the Security Trustee and each Security Party a copy
of the text of any notice which the Agent serves on the Borrower under
Clause 19.2; but the notice shall become effective when it is served on
the Borrower, and no failure or delay by the Agent to send a copy of the
text of the notice to any other person shall invalidate the notice or
provide the Borrower or any Security Party with any form of claim or
defence.
19.7 Lender's rights unimpaired. Nothing in this Clause shall be taken to
impair or restrict the exercise of any right given to individual Lenders
under a Finance Document or the general law; and, in particular, this
Clause is without prejudice to Clause 3.1.
19.8 Exclusion of Creditor Party Liability. No Creditor Party, and no receiver
or manager appointed by the Security Trustee, shall have any liability to
the Borrower or a Security Party:
(a) for any loss caused by an exercise of rights under, or enforcement of a
Security Interest created by, a Finance Document or by any failure or
delay to exercise such a right or to enforce such a Security Interest; or
(b) as mortgagee in possession or otherwise, for any income or principal
amount which might have been produced by or realised from any asset
comprised in such a Security Interest or for any reduction (however
caused) in the value of such an asset;
except that this does not exempt a Creditor Party or a receiver or manager
from liability for losses shown to have been caused by the gross
negligence or the wilful misconduct of such Creditor Party's own officers
and employees or (as the case may be) such receiver's or manager's own
partners or employees.
19.9 Relevant Persons. In this Clause 19 "a Relevant Person" means the
Borrower, a Security Party and any other member of the Group; but
excluding any company which is dormant and the value of whose gross assets
is $50,000 or less,
19.10 Position of Swap Banks. Neither the Agent nor the Security Trustee shall
be obliged, in connection with any action taken or proposed to be taken
under or pursuant to the foregoing provisions of this Clause 19, to have
any regard to the requirements of the Swap Banks except to the extent that
the Swap Banks are also Lenders.
19.11 Interpretation. In Clause 19.1(f) references to an event of default or a
termination event include any event, howsoever described, which is similar
to an event of default in a facility agreement or a termination event in a
finance lease; and in Clause 19.1(g) "petition" includes an application.
20 FEES AND EXPENSES
20.1 Facility, drawdown and commitment fees. The Borrower shall pay to the
Agent:
(a) certain facility fees set out in the letter addressed by the Agent to the
Borrower and dated the same date as this Agreement;
(b) in relation to each Additional Advance, a drawdown fee of 0.075 percent
of that Additional Advance, such fee to be payable on the Drawdown Date of
the Additional Advance and to be distributed among the Lenders pro rata to
their Credit Facility Commitments;
(c) a commitment fee:
(i) in the case of the Term Loan, at the rate of 0.40 percent per
annum on the undrawn amount of the Term Loan Commitments from (and
including) 21 February 2006 up to and including the earlier of (A)
the Drawdown Date in respect of the Identified Ship Advance and (B)
the last day of the Availability Period for the Identified Ship
Advance; and
(ii) in the case of the Credit Facility, at the rate of 0.25 percent
per annum on the undrawn amount of the Credit Facility Commitments
from (and including) 21 February 2006 up to and including the
earlier of (A) the Drawdown Date on which the Credit Facility
Commitments are fully drawn and (B) the last day of the Availability
Period for the Additional Advances,
such fee to be paid quarterly in arrears and on the last day of each such
period referred to in sub-paragraphs (i) and (ii) above and, in the case
of sub-paragraph (i) above, to be distributed among the Lenders pro rata
to their Term Loan Commitments and, in the case of sub-paragraph (ii)
above, to be distributed among the Lenders pro rata to their Credit
Facility Commitments.
20.2 Costs of negotiation, preparation etc. The Borrower shall pay to the Agent
on its demand the amount of all reasonable expenses incurred by the Agent
or the Security Trustee in connection with the negotiation, preparation,
execution or registration of any Finance Document or any related document
or with any transaction contemplated by a Finance Document or a related
document (including, without limitation, any legal fees or expenses).
20.3 Costs of variations, amendments, enforcement etc. The Borrower shall pay
to the Agent, on the Agent's demand, the amount of all expenses
(including, without limitation, any legal fees or expenses) incurred by a
Lender or a Swap Bank in connection with:
(a) any amendment or supplement to a Finance Document, or any proposal for
such an amendment to be made;
(b) any consent or waiver by the Lenders, the Majority Lenders or the Lender
concerned under or in connection with a Finance Document, or any request
for such a consent or waiver;
(c) the valuation of any security provided or offered under Clause 15 or any
other matter relating to such security;
(d) such circumstances where the Agent, in its absolute opinion, considers
that there has been a material change to the insurances in respect of a
Ship, the review of the insurances of that Ship pursuant to Clause 13.18;
(e) any step taken by the Lender concerned or the Swap Bank concerned with a
view to the protection, exercise or enforcement of any right or Security
Interest created by a Finance Document or for any similar purpose.
There shall be recoverable under paragraph (e) the full amount of all
legal expenses, whether or not such as would be allowed under rules of
court or any taxation or other procedure carried out under such rules.
20.4 Documentary taxes. The Borrower shall promptly pay any tax payable on or
by reference to any Finance Document, and shall, on the Agent's demand,
fully indemnify each Creditor Party against any liabilities and expenses
resulting from any failure or delay by the Borrower to pay such a tax.
20.5 Certification of amounts. A notice which is signed by two officers of a
Creditor Party, which states that a specified amount, or aggregate amount,
is due to that Creditor Party under this Clause 20 and which indicates
(without necessarily specifying a detailed breakdown) the matters in
respect of which the amount, or aggregate amount, is due shall be prima
facie evidence that the amount, or aggregate amount, is due.
21 INDEMNITIES
21.1 Indemnities regarding borrowing and repayment of Loan. The Borrower shall
fully indemnify the Agent and each Lender on the Agent's demand and the
Security Trustee on its demand in respect of all expenses, liabilities and
losses which are incurred by that Creditor Party, or which that Creditor
Party reasonably and with due diligence estimates that it will incur, as a
result of or in connection with:
(a) an Advance not being borrowed on the date specified in the Drawdown Notice
for that Advance for any reason other than a default by the Lender
claiming the indemnity;
(b) the receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant
period;
(c) any failure (for whatever reason) by the Borrower to make payment of any
amount due under a Finance Document on the due date or, if so payable, on
demand (after giving credit for any default interest paid by the Borrower
on the amount concerned under Clause 7);
(d) the occurrence and/or continuance of an Event of Default or a Potential
Event of Default and/or the acceleration of repayment of the Loan under
Clause 19;
and in respect of any tax (other than tax on its overall net income) for
which a Creditor Party is liable in connection with any amount paid or
payable to that Creditor Party (whether for its own account or otherwise)
under any Finance Document.
21.2 Breakage costs. Without limiting its generality, Clause 21.1 covers any
liability, expense or loss, including a loss of a prospective profit,
incurred by a Lender:
(a) in liquidating or employing deposits from third parties acquired or
arranged to fund or maintain all or any part of its Contribution and/or
any overdue amount (or an aggregate amount which includes its Contribution
or any overdue amount); and
(b) in terminating, or otherwise in connection with, any interest and/or
currency swap or any other transaction entered into (whether with another
legal entity or with another office or department of the Lender concerned)
to hedge any exposure arising under this Agreement or that part which the
Lender concerned determines is fairly attributable to this Agreement of
the amount of the liabilities, expenses or losses (including losses of
prospective profits) incurred by it in terminating, or otherwise in
connection with, a number of transactions of which this Agreement is one.
21.3 Miscellaneous indemnities. The Borrower shall fully indemnify each
Creditor Party severally on their respective demands in respect of all
claims, demands, proceedings, liabilities, taxes, losses and expenses of
every kind ("liability items") which may be made or brought against, or
incurred by, the relevant Creditor Party, in any country, in relation to:
(a) any action taken, or omitted or neglected to be taken, under or in
connection with any Finance Document by the Agent, the Security Trustee or
any other Creditor Party or by any receiver appointed under a Finance
Document;
(b) any other event, matter or question which occurs or arises at any time
during the Security Period and which has any connection with, or any
bearing on, any Finance Document, any payment or other transaction
relating to a Finance Document or any asset covered (or previously
covered) by a Security Interest created (or intended to be created) by a
Finance Document;
other than liability items which are shown to have been caused by the
gross negligence or the wilful misconduct of the relevant Creditor Party's
own officers or employees.
21.4 Extension of indemnities; environmental indemnity. Without prejudice to
its generality, Clause 21.3 covers:
(a) any matter which would be covered by Clause 21.3 if any of the references
in that Clause to a Lender were a reference to the Agent or (as the case
may be) to the Security Trustee; and
(b) any liability items which arise, or are asserted, under or in connection
with any law relating to safety at sea, pollution or the protection of the
environment.
21.5 Currency indemnity. If any sum due from the Borrower or any Security Party
to a Creditor Party under a Finance Document or under any order or
judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid
(the "Contractual Currency") into another currency (the "Payment
Currency") for the purpose of:
(a) making or lodging any claim or proof against the Borrower or any Security
Party, whether in its liquidation, any arrangement involving it or
otherwise; or
(b) obtaining an order or judgment from any court or other tribunal; or
(c) enforcing any such order or judgment;
the Borrower shall indemnify the Creditor Party concerned against the loss
arising when the amount of the payment actually received by that Creditor
Party is converted at the available rate of exchange into the Contractual
Currency.
In this Clause 21.5, the "available rate of exchange" means the rate at
which the Creditor Party concerned is able at the opening of business
(Hamburg time) on the Business Day after it receives the sum concerned to
purchase the Contractual Currency with the Payment Currency.
This Clause 21.5 creates a separate liability of the Borrower which is
distinct from its other liabilities under the Finance Documents and which
shall not be merged in any judgment or order relating to those other
liabilities.
21.6 Application to Master Agreements. For the avoidance of doubt, Clause 21.5
does not apply in respect of sums due from the Borrower to a Swap Bank
under or in connection with the Master Agreement to which that Swap Bank
is a party as to which sums the provisions of section 8 (Contractual
Currency) of that Master Agreement shall apply.
21.7 Certification of amounts. A notice which is signed by 2 officers of a
Creditor Party, which states that a specified amount, or aggregate amount,
is due to that Creditor Party under this Clause 21 and which indicates
(without necessarily specifying a detailed breakdown) the matters in
respect of which the amount, or aggregate amount, is due shall be prima
facie evidence that the amount, or aggregate amount, is due.
21.8 Sums deemed due to a Lender. For the purposes of this Clause 21, a sum
payable by the Borrower to the Agent or the Security Trustee for
distribution to a Lender shall be treated as a sum due to that Lender.
22 NO SET-OFF OR TAX DEDUCTION
22.1 No deductions. All amounts due from the Borrower under a Finance Document
shall be paid:
(a) without any form of set-off, cross-claim or condition; and
(b) free and clear of any tax deduction except a tax deduction which the
Borrower is required by law to make.
22.2 Grossing-up for taxes. If the Borrower is required by law to make a tax
deduction from any payment:
(a) the Borrower shall notify the Agent as soon as it becomes aware of the
requirement;
(b) the Borrower shall pay the tax deducted to the appropriate taxation
authority promptly, and in any event before any fine or penalty arises;
(c) the amount due in respect of the payment shall be increased by the amount
necessary to ensure that each Creditor Party receives and retains (free
from any liability relating to the tax deduction) a net amount which,
after the tax deduction, is equal to the full amount which it would
otherwise have received.
22.3 Evidence of payment of taxes. Within 1 month after making any tax
deduction, the Borrower concerned shall deliver to the Agent documentary
evidence satisfactory to the Agent that the tax had been paid to the
appropriate taxation authority.
22.4 Exclusion of tax on overall net income. In this Clause 22 "tax deduction"
means any deduction or withholding for or on account of any present or
future tax except tax on a Creditor Party's overall net income.
22.5 Application to the Master Agreements. For the avoidance of doubt, Clause
22 does not apply in respect of sums due from the Borrower to a Swap Bank
under or in connection with the Master Agreement to which that Swap Bank
is a party as to which sums the provisions of section 2(d) (Deduction or
Withholding for Tax) of that Master Agreement shall apply.
23 ILLEGALITY, ETC
23.1 Illegality. This Clause 23 applies if a Lender (the "Notifying Lender")
notifies the Agent that it has become, or will with effect from a
specified date, become:
(a) unlawful or prohibited as a result of the introduction of a new law, an
amendment to an existing law or a change in the manner in which an
existing law is or will be interpreted or applied; or
(b) contrary to, or inconsistent with, any regulation,
for the Notifying Lender to maintain or give effect to any of its
obligations under this Agreement in the manner contemplated by this
Agreement.
23.2 Notification of illegality. The Agent shall promptly notify the Borrower,
the Security Parties, the Security Trustee and the other Lenders of the
notice under Clause 23.1 which the Agent receives from the Notifying
Lender.
23.3 Prepayment; termination of Commitment. On the Agent notifying the Borrower
under Clause 23.2, the Notifying Lender's Commitment shall terminate; and
thereupon or, if later, on the date specified in the Notifying Lender's
notice under Clause 23.1 as the date on which the notified event would
become effective the Borrower shall prepay the Notifying Lender's
Contribution in accordance with Clause 8.
23.4 Mitigation. If circumstances arise which would result in a notification
under Clause 23.1 then, without in any way limiting the rights of the
Notifying Lender under Clause 23.3, the Notifying Lender shall use
reasonable endeavours to transfer its obligations, liabilities and rights
under this Agreement and the Finance Documents to another office or
financial institution not affected by the circumstances but the Notifying
Lender shall not be under any obligation to take any such action if, in
its opinion, to do would or might:
(a) have an adverse effect on its business, operations or financial condition;
or
(b) involve it in any activity which is unlawful or prohibited or any activity
that is contrary to, or inconsistent with, any regulation; or
(c) involve it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.
24 INCREASED COSTS
24.1 Increased costs. This Clause 24 applies if a Lender (the "Notifying
Lender") notifies the Agent that the Notifying Lender considers that as a
result of:
(a) the introduction or alteration after the date of this Agreement of a law
or regulation or an alteration after the date of this Agreement in the
manner in which a law or regulation is interpreted or applied
(disregarding any effect which relates to the application to payments
under this Agreement of a tax on the Notifying Lender's overall net
income); or
(b) the effect of complying with any law or regulation (including any which
relates to capital adequacy or liquidity controls or which affects the
manner in which the Notifying Lender allocates capital resources to its
obligations under this Agreement (including, without limitation, any laws
or regulations which shall replace, amend and/or supplement those set out
in the statement of the Basle Committee on Banking Regulations and
Supervisory Practices dated July 1988 and entitled "International
Convergence of Capital Management and Capital Structures")) which is
introduced, or altered, or the interpretation or application of which is
altered, after the date of this Agreement,
is that the Notifying Lender (or a parent company of it) has incurred or
will incur an "increased cost", that is to say:
(i) an additional or increased cost incurred as a result of, or in
connection with, the Notifying Lender having entered into, or being
a party to, this Agreement or a Transfer Certificate, of funding or
maintaining its Commitment or Contribution or performing its
obligations under this Agreement, or of having outstanding all or
any part of its Contribution or other unpaid sums; or
(ii) a reduction in the amount of any payment to the Notifying Lender
under this Agreement or in the effective return which such a payment
represents to the Notifying Lender or on its capital;
(iii) an additional or increased cost of funding all or maintaining all or
any of the advances comprised in a class of advances formed by or
including the Notifying Lender's Contribution or (as the case may
require) the proportion of that cost attributable to the
Contribution; or
(iv) a liability to make a payment, or a return foregone, which is
calculated by reference to any amounts received or receivable by the
Notifying Lender under this Agreement;
but not an item attributable to a change in the rate of tax on the overall
net income of the Notifying Lender (or a parent company of it) or an item
covered by the indemnity for tax in Clause 21.1 or by Clause 22.
For the purposes of this Clause 24.1 the Notifying Lender may in good
faith allocate or spread costs and/or losses among its assets and
liabilities (or any class thereof) on such basis as it considers
appropriate.
24.2 Notification to Borrower of claim for increased costs. The Agent shall
promptly notify the Borrower and the Security Parties of the notice which
the Agent received from the Notifying Lender under Clause 24.1.
24.3 Payment of increased costs. The Borrower shall pay to the Agent, at the
end of any Interest Period during which the Agent makes demand, for the
account of the Notifying Lender, the amounts which the Agent from time to
time notifies the Borrower that the Notifying Lender has specified to be
necessary to compensate the Notifying Lender for the increased cost.
24.4 Notice of prepayment. If the Borrower is not willing to continue to
compensate the Notifying Lender for the increased cost under Clause 24.3,
the Borrower may give the Agent not less than 14 days' notice of its
intention to prepay the Notifying Lender's Contribution at the end of an
Interest Period.
24.5 Prepayment; termination of Commitment. A notice under Clause 24.4 shall be
irrevocable; the Agent shall promptly notify the Notifying Lender of the
Borrower's notice of intended prepayment; and:
(a) on the date on which the Agent serves that notice, the Commitment of the
Notifying Lender shall be cancelled; and
(b) on the date specified in its notice of intended prepayment, the Borrower
shall prepay (without premium or penalty) the Notifying Lender's
Contribution, together with accrued interest thereon at the applicable
rate plus the applicable Margin and the Mandatory Cost (if any).
24.6 Application of prepayment. Clause 8 shall apply in relation to the
prepayment.
25 SET-OFF
25.1 Application of credit balances. Each Creditor Party may without prior
notice:
(a) apply any balance (whether or not then due) which at any time stands to
the credit of any account in the name of the Borrower at any office in any
country of that Creditor Party in or towards satisfaction of any sum then
due from the Borrower to that Creditor Party under any of the Finance
Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a deposit of the
Borrower;
(ii) convert or translate all or any part of a deposit or other credit
balance into Dollars;
(iii) enter into any other transaction or make any entry with regard to
the credit balance which the Creditor Party concerned considers
appropriate.
25.2 Existing rights unaffected. No Creditor Party shall be obliged to exercise
any of its rights under Clause 25.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which a Creditor Party
is entitled (whether under the general law or any document).
25.3 Sums deemed due to a Lender. For the purposes of this Clause 25, a sum
payable by the Borrower to the Agent or the Security Trustee for
distribution to, or for the account of, a Lender shall be treated as a sum
due to that Lender; and each Lender's proportion of a sum so payable for
distribution to, or for the account of, the Lenders shall be treated as a
sum due to such Lender.
26 TRANSFERS AND CHANGES IN LENDING OFFICES
26.1 Transfer by Borrower. The Borrower may not, without the consent of the
Agent, given on the instructions of all the Lenders:
(a) transfer any of its rights or obligations under any Finance Document; or
(b) enter into any merger, de-merger or other reorganisation, or carry out any
other act, as a result of which any of its rights or liabilities would
vest in, or pass to, another person.
26.2 Transfer by a Lender. Subject to Clause 26.5, a Lender (the "Transferor
Lender") may at any time, after consultation with the Borrower, the Lead
Bookrunner and the Joint Bookrunner, cause:
(a) its rights in respect of all or part of its Contribution; or
(b) its obligations in respect of all or part of its Commitment; or
(c) a combination of (a) and (b)
to be (in the case of its rights) transferred to, or (in the case of its
obligations) assumed by, another bank or financial institution which is
experienced in ship financing (a "Transferee Lender") by delivering to the
Agent a completed certificate in the form set out in Schedule 4 with any
modifications approved or required by the Agent (a "Transfer Certificate")
executed by the Transferor Lender and the Transferee Lender.
However any rights and obligations of the Transferor Lender in its
capacity as Agent or Security Trustee will have to be dealt with
separately in accordance with the Agency and Trust Deed.
26.3 Transfer Certificate, delivery and notification. As soon as reasonably
practicable after a Transfer Certificate is delivered to the Agent, it
shall (unless it has reason to believe that the Transfer Certificate may
be defective):
(a) sign the Transfer Certificate on behalf of itself, the Borrower, the
Security Parties, the Security Trustee and each of the Lenders;
(b) on behalf of the Transferee Lender, send to the Borrower and each Security
Party letters or faxes notifying them of the Transfer Certificate and
attaching a copy of it;
(c) send to the Transferee Lender copies of the letters or faxes sent under
paragraph (b) above.
26.4 Effective Date of Transfer Certificate. A Transfer Certificate becomes
effective on the date, if any, specified in the Transfer Certificate as
its effective date Provided that it is signed by the Agent under Clause
26.3 on or before that date.
26.5 No transfer without Transfer Certificate. No assignment or transfer of any
right or obligation of a Lender under any Finance Document is binding on,
or effective in relation to, the Borrower, any Security Party, the Agent
or the Security Trustee unless it is effected, evidenced or perfected by a
Transfer Certificate.
26.6 Lender re-organisation; waiver of Transfer Certificate. However, if a
Lender enters into any merger, de-merger or other reorganisation as a
result of which all its rights or obligations vest in another person (the
"successor"), the successor shall automatically and without any further
act being necessary become a Lender with the same Commitment and
Contribution as were held by the predecessor Lender.
26.7 Effect of Transfer Certificate. A Transfer Certificate takes effect in
accordance with English law as follows:
(a) to the extent specified in the Transfer Certificate, all rights and
interests (present, future or contingent) which the Transferor Lender has
under or by virtue of the Finance Documents are assigned to the Transferee
Lender absolutely, free of any defects in the Transferor Lender's title
and of any rights or equities which the Borrower or any Security Party had
against the Transferor Lender;
(b) the Transferor Lender's Commitment is discharged to the extent specified
in the Transfer Certificate;
(c) the Transferee Lender becomes a Lender with the Contribution previously
held by the Transferor Lender (or the part thereof specified in the
Transfer Certificate) and a Commitment of an amount specified in the
Transfer Certificate;
(d) the Transferee Lender becomes bound by all the provisions of the Finance
Documents which are applicable to the Lenders generally, including those
about pro-rata sharing and the exclusion of liability on the part of, and
the indemnification of, the Agent and the Security Trustee and, to the
extent that the Transferee Lender becomes bound by those provisions (other
than those relating to exclusion of liability), the Transferor Lender
ceases to be bound by them;
(e) any part of the Loan which the Transferee Lender advances after the
Transfer Certificate's effective date ranks in point of priority and
security in the same way as it would have ranked had it been advanced by
the transferor, assuming that any defects in the transferor's title and
any rights or equities of the Borrower or any Security Party against the
Transferor Lender had not existed;
(f) the Transferee Lender becomes entitled to all the rights under the Finance
Documents which are applicable to the Lenders generally, including but not
limited to those relating to the Majority Lenders and those under Clause
5.7 and Clause 20, and to the extent that the Transferee Lender becomes
entitled to such rights, the Transferor Lender ceases to be entitled to
them; and
(g) in respect of any breach of a warranty, undertaking, condition or other
provision of a Finance Document or any misrepesentation made in or in
connection with a Finance Document, the Transferee Lender shall be
entitled to recover damages by reference to the loss incurred by it as a
result of the breach or misrepresentation, irrespective of whether the
original Lender would have incurred a loss of that kind or amount.
The rights and equities of the Borrower or any Security Party referred to
above include, but are not limited to, any right of set of and any other
kind of cross-claim.
26.8 Maintenance of register of Lenders. During the Security Period the Agent
shall maintain a register in which it shall record the name, Commitment,
Contribution and administrative details (including the lending office)
from time to time of each Lender holding a Transfer Certificate and the
effective date (in accordance with Clause 26.4) of the Transfer
Certificate; and the Agent shall make the register available for
inspection by any Lender, the Security Trustee and the Borrower during
normal banking hours, subject to receiving at least 5 Business Days prior
notice.
26.9 Reliance on register of Lenders. The entries on that register shall, in
the absence of manifest error, be conclusive in determining the identities
of the Lenders and the amounts of their Commitments and Contributions and
the effective dates of Transfer Certificates and may be relied upon by the
Agent and the other parties to the Finance Documents for all purposes
relating to the Finance Documents.
26.10 Authorisation of Agent to sign Transfer Certificates. The Borrower, the
Security Trustee and each Lender irrevocably authorise the Agent to sign
Transfer Certificates on its behalf.
26.11 Registration fee. In respect of any Transfer Certificate, the Agent shall
be entitled to recover a registration fee of $2,000 from the Transferor
Lender or (at the Agent's option) the Transferee Lender.
26.12 Sub-participation; subrogation assignment. A Lender may sub-participate
all or any part of its rights and/or obligations under or in connection
with the Finance Documents without the consent of, or any notice to, the
Borrower, any Security Party, the Agent or the Security Trustee; and the
Lenders may assign, in any manner and terms agreed by the Majority
Lenders, the Agent and the Security Trustee, all or any part of those
rights to an insurer or surety who has become subrogated to them.
26.13 Disclosure of information. A Lender may disclose to a potential Transferee
Lender or sub-participant any information which the Lender has received in
relation to the Borrower, any Security Party or their affairs under or in
connection with any Finance Document, unless the information is clearly of
a confidential nature.
26.14 Change of lending office. A Lender may change its lending office by giving
notice to the Agent and the change shall become effective on the later of:
(a) the date on which the Agent receives the notice; and
(b) the date, if any, specified in the notice as the date on which the change
will come into effect.
26.15 Notification. On receiving such a notice, the Agent shall notify the
Borrower and the Security Trustee; and, until the Agent receives such a
notice, it shall be entitled to assume that a Lender is acting through the
lending office of which the Agent last had notice.
26.16 Replacement of Reference Bank. If a Reference Bank ceases to be a Lender
or is unable on a continuing basis to supply quotations for the purposes
of Clause 5 above then, unless the Borrower, the Agent and the Majority
Lenders otherwise agree, the Agent, acting on the instructions of the
Majority Lenders, and after consulting the Borrower, shall appoint another
bank (whether or not a Lender) to be a replacement Reference Bank; and,
when that appointment comes into effect, the first-mentioned Reference
Bank's appointment shall cease to be effective.
27 VARIATIONS AND WAIVERS
27.1 Variations, waivers etc. by Majority Lenders. Subject to Clause 27.2, a
document shall be effective to vary, waive, suspend or limit any provision
of a Finance Document, or any Creditor Party's rights or remedies under
such a provision or the general law, only if the document is signed, or
specifically agreed to by fax, by the Borrower, by the Agent on behalf of
the Majority Lenders, by the Agent and the Security Trustee in their own
rights, and, if the document relates to a Finance Document to which a
Security Party is party, by that Security Party.
27.2 Variations, waivers etc. requiring agreement of all Lenders. However, as
regards the following, Clause 27.1 applies as if the words "by the Agent
on behalf of the Majority Lenders" were replaced by the words "by or on
behalf of every Lender and the Swap Bank":
(a) a change in the Margin or in the definition of LIBOR;
(b) a change to the date for, or the amount of, any payment of principal,
interest, fees, or other sum payable under this Agreement;
(c) a change to any Lender's Commitment;
(d) an extension of the Availability Period;
(e) a change to the definition of "Majority Lenders" or "Finance Documents";
(f) a change to the preamble or to Clause 2, 3, 4, 5.1, 8.1, 8.2, 17, 18, 19
or 30;
(g) a change to this Clause 27;
(h) any release of, or material variation to, a Security Interest, guarantee,
indemnity or subordination arrangement set out in a Finance Document; and
(i) any other change or matter as regards which this Agreement or another
Finance Document expressly provides that each Lender's consent is
required.
27.3 Exclusion of other or implied variations. Except for a document which
satisfies the requirements of Clauses 27.1 and 27.2, no document, and no
act, course of conduct, failure or neglect to act, delay or acquiescence
on the part of the Creditor Parties or any of them (or any person acting
on behalf of any of them) shall result in the Creditor Parties or any of
them (or any person acting on behalf of any of them) being taken to have
varied, waived, suspended or limited, or being precluded (permanently or
temporarily) from enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by the Borrower or a Security Party of an obligation under a
Finance Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by the general
law;
and there shall not be implied into any Finance Document any term or
condition requiring any such provision to be enforced, or such right or
remedy to be exercised, within a certain or reasonable time.
28 NOTICES
28.1 General. Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by registered letter
or fax; and references in the Finance Documents to written notices,
notices in writing and notices signed by particular persons shall be
construed accordingly.
28.2 Addresses for communications. A notice shall be sent:
(a) to the Borrower: Omega ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇
Fax No: ▇(▇▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Attn: the Chief Financial Officer
(b) to a Lender: At the address opposite its
name in Part A of Schedule 1
or (as the case may require)
in the relevant Transfer
Certificate,
(c) to a Swap Bank: At the address opposite its name
in Part B of Schedule 1
(d) to the Agent and the HSH Nordbank
AG Security Trustee: ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Fax No: ▇(▇▇) ▇▇ ▇▇ ▇▇ ▇▇ ▇▇▇
Attn: Shipping, Greek Clients
or to such other address as the relevant party may notify the Agent or, if
the relevant party is the Agent or the Security Trustee, the Borrower, the
Lenders, the Swap Banks and the Security Parties.
28.3 Effective date of notices. Subject to Clauses 28.4 and 28.5:
(a) a notice which is delivered personally shall be deemed to be served, and
shall take effect, at the time when it is delivered;
(b) a notice which is delivered by registered letter shall be deemed to be
served, and shall take effect, 5 Business Days after being deposited in
the post postage prepaid in an envelope addressed to it at the relevant
address; and
(c) a notice which is sent by fax shall be deemed to be served, and shall take
effect, 2 hours after its transmission is completed.
28.4 Service outside business hours. However, if under Clause 28.3 a notice
would be deemed to be served:
(a) on a day which is not a business day in the place of receipt; or
(b) on such a business day, but after 5 p.m. local time;
the notice shall (subject to Clause 28.5) be deemed to be served, and
shall take effect, at 9 am. on the next day which is such a business day.
28.5 Illegible notices. Clauses 28.3 and 28.4 do not apply if the recipient of
a notice notifies the sender within one hour after the time at which the
notice would otherwise be deemed to be served that the notice has been
received in a form which is illegible in a material respect.
28.6 Valid notices. A notice under or in connection with a Finance Document
shall not be invalid by reason that its contents or the manner of serving
it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served if:
(a) the failure to serve it in accordance with the requirements of this
Agreement or other Finance Document, as the case may be, has not caused
any party to suffer any significant loss or prejudice; or
(b) in the case of incorrect and/or incomplete contents, it should have been
reasonably clear to the party on which the notice was served what the
correct or missing particulars should have been.
28.7 English language. Any notice under or in connection with a Finance
Document shall be in English.
28.8 Meaning of "notice". In this Clause "notice" includes any demand, consent,
authorisation, approval, instruction, waiver or other communication.
28.9 Electronic communication
(a) Any communication to be made between the Agent or the Security Trustee and
a Lender or a Swap Bank under or in connection with the Finance Documents
may be made by electronic mail or other electronic means, if the Agent,
the Security Trustee and the relevant Lender or, as the case may be, the
relevant Swap Bank:
(i) agree that, unless and until notified to the contrary, this is to be
an accepted form of communication;
(ii) notify each other in writing of their electronic mail address and/or
any other information required to enable the sending and receipt of
information by that means; and
(iii) notify each other of any change to their address or any other such
information supplied by them.
(b) Any electronic communication made between the Agent and a Lender or the
Swap Bank or the Security Trustee will be effective only when actually
received in readable form and in the case of any electronic communication
made by a Lender or the Swap Bank to the Agent or the Security Trustee
only if it is addressed in such a manner as the Agent or Security Trustee
shall specify for this purpose.
29 SUPPLEMENTAL
29.1 Rights cumulative, non-exclusive. The rights and remedies which the
Finance Documents give to each Creditor Party are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
(c) shall not, unless a Finance Document explicitly and specifically states
so, be taken to exclude or limit any right or remedy conferred by any law.
29.2 Severability of provisions. If any provision of a Finance Document is or
subsequently becomes void, unenforceable or illegal, that shall not affect
the validity, enforceability or legality of the other provisions of that
Finance Document or of the provisions of any other Finance Document.
29.3 Third party rights. A person who is not a party to this Agreement has no
right under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce or
to enjoy the benefit of any term of this Agreement.
29.4 Counterparts. A Finance Document may be executed in any number of
counterparts.
30 LAW AND JURISDICTION
30.1 English law. This Agreement shall be governed by, and construed in
accordance with, English law.
30.2 Exclusive English jurisdiction. Subject to Clause 30.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this Agreement.
30.3 Choice of forum for the exclusive benefit of the Creditor Parties. Clause
30.2 is for the exclusive benefit of the Creditor Parties, each of which
reserves the right:
(a) to commence proceedings in relation to any matter which arises out of or
in connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter; and
(b) to commence such proceedings in the courts of any such country or
countries concurrently with or in addition to proceedings in England or
without commencing proceedings in England.
The Borrower shall not commence any proceedings in any country other than
England in relation to a matter which arises out of or in connection with
this Agreement.
30.4 Process agent. The Borrower irrevocably appoints Ince & Co. at their
office for the time being, presently at International House, ▇ ▇▇.
▇▇▇▇▇▇▇▇▇'▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇ W IUN, England, to act as its agent to receive
and accept on its behalf any process or other document relating to any
proceedings in the English courts which are connected with this Agreement.
30.5 Creditor Party rights unaffected. Nothing in this Clause 30 shall exclude
or limit any right which any Creditor Party may have (whether under the
law of any country, an international convention or otherwise) with regard
to the bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
30.6 Meaning of "proceedings". In this Clause 30, "proceedings" means
proceedings of any kind, including an application for a provisional or
protective measure.
AS WITNESS the hands of the duly authorised officers or attorneys of the parties
the day and year first before written.
SCHEDULE 1
PART A
LENDERS AND COMMITMENTS
Lender Lending Office Term Loan Credit
Commitment Facility
(US Dollars) Commitment
(US Dollars)
HSH Nordbank ▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ [ ] [ ]
50 ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Germany
The Governor and Company ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ [ ] [ ]
of the Bank of Scotland ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇
Alliance & Leicester ▇▇▇▇▇▇▇ ▇▇▇▇ [ ] [ ]
Commercial Finance plc ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Bayerische Hypo-und Alter Wall 22 [ ] [ ]
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Commerzbank Ness 7-9 [ ] [ ]
Aktiengesellschaft ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Germany
Natexis Banques ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ [ ] [ ]
Populaires ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Sumitomo Mitsui Banking ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ [ ] [ ]
Corporation, Brussels ▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
PART B
SWAP BANKS
HSH Nordbank ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
HBOS Treasury ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 1 HZ
England
Commerzbank Ness 7-9
Aktiengesellschaft ▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
Germany
SCHEDULE 2
DETAILS OF SHIPS AND OWNERS
PART A
DETAILS OF EXISTING SHIPS AND OWNERS
1. Name of Ship: "STRIGGLA"
Flag: Malta
Official Number: 5809
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Helium Shipping Company Limited
2. Name of Ship: "MOSTOLES"
Flag: Malta
Official Number: 5886
Class Society and notation: Det Norske Veritas: ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇, ▇▇-▇ EO
Owner: Hydrogen Shipping Company Limited
3. Name of Ship: "FLECHA"
Flag: Malta
Official Number: 6835
Class Society and notation: Bureau Veritas: I + HULL + MACH,
Bulk Carrier ESP, Ore Carrier ESP,
Unrestricted Navigation
Owner: Silicon Shipping Company Limited
4. Name of Ship: "SHIBUMI"
Flag: Malta
Official Number: 7028
Class Society and notation: Bureau Veritas: I + HULL + MACH,
Bulk Carrier ESP, Unrestricted
Navigation, + AUT-UMS
Owner: Oxygen Shipping Company Limited
5. Name of Ship: "LACERTA"
Flag: Malta
Official Number: 7121
Class Society and notation: Bureau Veritas: I + HULL + MACH,
Bulk Carrier ESP Heavy Cargo,
Nonhomload (Holds 2, 4, 6 may be
empty), Unrestricted Navigation
Owner: Annapolis Shipping Company Limited
6. Name of Ship: "PANORMOS"
Flag: Malta
Official Number: 8491
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Blueberry Shipping Company Limited
7. Name of Ship: "MATIRA"
Flag: Malta
Official Number: 8966
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2 & 4 Holds may be
empty) (ESP) MNS*
Owner: Lancat Shipping Company Limited
8. Name of Ship: "TONGA"
Flag: Malta
Official Number: 8251
Class Society and notation: ABS: +Al, Bulk Carrier, E, +AMS
Owner: ▇▇▇▇▇ Shipping Company Limited
9. Name of Ship: "CORONADO"
Flag: Malta
Official Number: 8703
Class Society and notation: Bureau Veritas: I + HULL + MACH,
Bulk Carrier ESP, Nonhomload
(Holds 2-4-6 may be empty),
Unrestricted Navigation,
MON-SHAFT, + AUT UMS
Owner: Malvina Shipping Company Limited
10. Name of Ship: "XANADU"
Flag: Malta
Official Number: 9479
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Arleta Navigation Company Limited
11. Name of Ship: "LA JOLLA"
Flag: Malta
Official Number: 9503
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Selma Shipping Company Limited
12. Name of Ship: "NETADOLA"
Flag: Malta
Official Number: 9537
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4, 6 & 8 Holds
may be empty) (ESP) MNS*
Owner: Royerton Shipping Company Limited
13. Name of Ship: "OCEAN CRYSTAL"
Flag: Malta
Official Number: 9092
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Samsara Shipping Company Limited
14. Name of Ship: "PARAGON"
Flag: Malta
Official Number: 9093
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Lansat Shipping Company Limited
15. Name of Ship: "TORO"
Flag: Malta
Official Number: 9131
Class Society and notation: Lloyd's Register: +100A1, Bulk
Carrier, Strengthened for heavy
cargoes, Nos. 2, 4 & 6 holds may
be empty, ESP, *IWS, ▇▇▇-▇▇▇▇ ▇,
▇▇▇▇, UMS
Owner: Farat Shipping Company Limited
16. Name of Ship: "ALONA"
Flag: Malta
Official Number: 7706
Class Society and notation: Det Norske Veritas: +1A1, Bulk
Carrier, ESP, HC-E EO DK(+) HA(+)
IB(+), Holds (2, 4 or 3) may be
empty
Owner: Madras Shipping Company Limited
17. Name of Ship: "IGUANA"
Flag: Malta
Official Number: 9062
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Iguana Shipping Company Limited
18. Name of Ship: "CATALINA"
Flag: Malta
Official Number: 9544
Class Society and notation: ABS: +A1, Bulk Carrier, E, +AMS,
+ACCU, SH, HCS, SHCM
Owner: Borsari Shipping Company Limited
19. Name of Ship: "▇▇▇▇▇▇▇▇"
Flag: Malta
Official Number: 9560
Class Society and notation: Germanischer ▇▇▇▇▇: Hull: +100A5,
ESP IW C 1 D 11, Bulk Carrier -
Machinery: +MC AUT
Owner: Onil Shipping Company Limited
20. Name of Ship: "WAIKIKI"
Flag: Malta
Official Number: 4936
Class Society and notation: Bureau Veritas: I + HULL + MACH,
Bulk Carrier ESP, Nonhomload
(Holds 2-4-6 may be empty)
Heavycargo, Unrestricted
Navigation, + AUTUMS; MON-SHAFT;
INWATERSURVEY; GRABLOADING
Owner: Zatac Shipping Company Limited
21. Name of Ship: "ALAMEDA"
Flag: Malta
Official Number: 9549
Class Society and notation: Lloyd's Register: +100A1, Bulk
Carrier, Strengthened for heavy
cargoes, Nos. 2, 4, 6 & 8 holds
may be empty, ESP, *IWS, LI, ESN,
ShipRight (SDA, FDA, CM), +LMC,
UMS
Owner: Fabiana Navigation Company Limited
22. Name of Ship: "LANIKAI"
Flag: Malta
Official Number: 9480
Class Society and notation: Det Norske Veritas: ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇, ▇▇-▇ EO
Owner: ▇▇▇▇ Shipping Company Limited
23. Name of Ship: "▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇"
Flag: Malta
Official Number: 9489
Class Society and notation: Lloyd's Register: 100A1, Bulk
Carrier, Strengthened for heavy
cargoes, Nos. 2, 4, 6 or No. 4
holds may be empty, ESP, LI,
ESN-Hold 1, LMC, UMS
Owner: ▇▇▇▇▇▇▇ Navigation Company Limited
24. Name of Ship: "DAYTONA"
Flag: Malta
Official Number: 6534
Class Society and notation: Bureau Veritas: I + HULL + MACH,
Bulk Carrier ESP -heavycargo,
-nonhomload, Unrestricted
Navigation, + AUT-UMS
Owner: Platan Shipping Company Limited
25. Name of Ship: "SONOMA"
Flag: Malta
Official Number: 9576
Class Society and notation: China Classification Society: *CSA
Bulk Carrier, CCSS, Strengthened
for Heavy Cargoes Holds, Nos. 2, 4
& 6 may be empty, Hold No.4 may be
Ballast Hold, ESP, Loading
Computer S.I.G - *CSM AUT-O, CMS
Owner: ▇▇▇▇▇▇ Shipping Company Limited
26. Name of Ship: "MANASOTA"
Flag: Malta
Official Number: 9546
Class Society and notation: Det Norske Veritas: +1A1, Bulk
Carrier, ESP ES (S) HC-E, Grain-U
EO LCS -SI IB (+), Holds (2, 4, 6,
8) may be empty, Nauticus
(Newbuilding)
Owner: ▇▇▇▇▇▇ Shipping Company Limited
27. Name of Ship: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇"
Flag: Malta
Official Number: 9744
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2, 4 & 6 Holds may
be empty) (ESP) MNS*
Owner: Celine Shipping Company Limited
PART B
DETAILS OF IDENTIFIED SHIP AND OWNER
28. Name of Ship: "▇▇▇▇▇ OLDENDORFF"
Flag: Malta/Liberian Bareboat Charter
Registry
Official Number: 9833 (Malta)
Class Society and notation: Nippon Kaiji Kyokai: NS* (Bulk
Carrier, Strengthened for Heavy
Cargoes, Nos. 2 & 4 Holds may be
empty) (ESP) MNS*
Owner: Seaventure Shipping Limited
Bareboat Charterer: Catania Shipping Inc.
Charter Date: 29 August 2005 (as supplemented
and amended)
SCHEDULE 3
DRAWDOWN NOTICE
To: HSH Nordbank ▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attention: Loans Administration [________] 2006
DRAWDOWN NOTICE
1 We refer to the loan agreement (the "Loan Agreement") dated 31 March 2006
and made between ourselves as Borrower, the Lenders referred to therein,
yourselves as Agent and as Security Trustee, yourselves as Lead Arranger
and Lead Bookrunner, The Governor and Company of the Bank of Scotland as
Joint Bookrunner, yourselves and The Governor and Company of the Bank of
Scotland as Joint Underwriters and the Swap Banks referred to therein in
connection with term loan and credit facilities of up to US$518,750,000 in
aggregate. Terms defined in the Loan Agreement have their defined meanings
when used in this Drawdown Notice.
2 We request to borrow an Advance under the [Term Loan] [Credit Facility] as
follows:
(a) Amount of [Advance]: $[________];
(b) Drawdown Date: [________];
(c) Duration of the first Interest Period shall be [________] months;
(d) Payment instructions : account of [________________] and numbered
[________] with [________] of [________].
3 We represent and warrant that:
(a) the representations and warranties in Clause 10 of the Loan Agreement
would remain true and not misleading if repeated on the date of this
notice with reference to the circumstances now existing;
(b) no Event of Default or Potential Event of Default has occurred or will
result from the borrowing of the Loan.
4 This notice cannot be revoked without the prior consent of the Majority
Lenders.
5 [We authorise you to deduct all accrued commitment fee and the drawdown
fee applicable to the Advance referred to in Clause 20.1 from the amount
of the Advance].
[Name of Signatory]
________________________
Attorney-in-Fact
for and on behalf of
DRYSHIPS INC.
SCHEDULE 4
REPAYMENT OF TERM LOAN
--------------------------------------------------------------------------------
Amount of Maximum Outstanding
Repayment Amount of Term Loan
Repayment Date Instalment ($) following repayment
--------------------------------------------------------------------------------
1 31 August 2006 14,852,017.94 445,147,982.06
2 30 November 2006 14,852,017.94 430,295,964.13
3 28 February 2007 12,789,237.67 417,506,726.46
4 31 May 2007 12,789,237.67 404,717,488.79
5 31 August 2007 10,107,623.32 394,609,865.47
6 30 November 2007 10,107,623.32 384,502,242.15
7 29 February 2008 10,107,623.32 374,394,618.83
8 31 May 2008 10,107,623.32 364,286,995.52
9 31 August 2008 10,107,623.32 354,179,372.20
10 30 November 2008 10,107,623.32 344,071,748.88
11 28 February 2009 10,107,623.32 333,964,125.56
12 31 May 2009 10,107,623.32 323,856,502.24
13 31 August 2009 8,663,677.13 315,192,825.11
14 30 November 2009 8,663,677.13 306,529,147.98
15 28 February 2010 8,663,677.13 297,865,470.85
16 31 May 2010 8,663,677.13 289,201,793.72
17 31 August 2010 8,663,677.13 280,538,116.59
18 30 November 2010 8,663,677.13 271,874,439.46
19 28 February 2011 8,663,677.13 263,210,762.33
20 31 May 2011 8,663,677.13 254,547,085.20
21 31 August 2011 8,663,677.13 245,883,408.07
22 30 November 2011 8,663,677.13 237,219,730.94
23 29 February 2012 8,663,677.13 228,556,053.81
24 31 May 2012 8,663,677.13 219,892,376.68
25 31 August 2012 8,663,677.13 211,228,699.55
26 30 November 2012 8,663,677.13 202,565,022.42
27 28 February 2013 8,663,677.13 193,901,345.29
28 31 May 2013 8,663,677.13 185,237,668.16
29 31 August 2013 8,663,677.13 176,573,991.03
30 30 November 2013 8,663,677.13 167,910,313.90
31 28 February 2014 8,663,677.I3 159,246,636.77
32 31 May 2014 8,663,677.13 150,582,959.64
33 31 August 2014 8,663,677.13 141,919,282.51
34 30 November 2014 8,663,677.13 133,255,605.38
35 28 February 2015 8,663,677.13 124,591,928.25
36 31 May 2015 8,663,677.13 115,928,251.12
37 31 August 2015 8,663,677.13 107,264,573.99
38 30 November 2015 8,663,677.13 98,600,896.86
39 29 February 2016 8,663,677.13 89,937,219.73
40 31 May 2016 8,663,677.13 81,273,542.60
--------------------------------------------------------------------------------
Balloon
Instalment 31 May 2016 81,273,542.60 0
--------------------------------------------------------------------------------
SCHEDULE 5
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents referred to in Clause 9.1(a).
1 A duly executed original of each of:
(a) this Agreement;
(b) the Agency and Trust Deed;
(c) the Master Agreements;
(d) the Master Agreement Assignments;
(e) the Guarantees;
(f) the Wealth Guarantee;
(g) the Mortgages, the Deeds of Covenant and the General Assignments relative
to the Existing Ships;
(h) the Borrower's Accounts Pledge;
(i) the Existing Ships Earnings Account Pledge;
(j) the Wealth Account Pledge;
(k) the Junior Loan Agreement; and
(l) the Management Agreement Assignments relative to the Existing Ships.
2 Copies of the certificate of incorporation and constitutional documents of
the Borrower and each Owner of an Existing Ship, the Owner of the
Identified Ship and Wealth.
3 Copies of resolutions of the directors of the Borrower and the directors
and shareholders of each Owner of an Existing Ship, the Owner of the
Identified Ship and Wealth authorising the execution of each of the
Finance Documents to which the Borrower, that Owner or Wealth is a party
and, in the case of (a) the Borrower, authorising named officers to give
the Drawdown Notices and other notices under this Agreement and (b)
Seaventure, ratifying the execution of the ▇▇▇▇▇ Oldendorff Charterparty
and the ▇▇▇▇▇ Oldendorff MOA.
4 The original of any power of attorney under which any Finance Document is
executed on behalf of the Borrower, an Owner of an Existing Ship, the
Owner of the Identified Ship or Wealth.
5 Copies of all consents which the Borrower, any Owner of an Existing Ship,
the Owner of the Identified Ship or Wealth requires to enter into, or make
any payment under, any Finance Document.
6 The originals of any mandates or other documents required in connection
with the opening or operation of the Debt Service Reserve Account, each
Earnings Account, the Retention Account and the Wealth Account.
7 Evidence that an amount of not less than $5,000,000 is standing to the
credit of the Debt Service Reserve Account.
8 Evidence satisfactory to the Agent that each Owner of an Existing Ship,
the Owner of the Identified Ship and Wealth is a direct or indirect
wholly-owned subsidiary of the Borrower.
9 Documentary evidence that:
(a) each Existing Ship is definitively and permanently registered in the name
of its Owner under the Maltese flag;
(b) each Existing Ship is in the absolute and unencumbered ownership of its
Owner save as contemplated by the Finance Documents to which that Owner is
a party;
(c) each Existing Ship maintains the highest available class with Lloyd's
Register of Ships (or such other first-class classification society which
is a member of IACS as the Agent may approve) free of all overdue
recommendations and conditions of such classification society;
(d) each Mortgage relative to an Existing Ship has been duly registered
against that Existing Ship as a valid first priority statutory mortgage in
accordance with the laws of Malta; and
(e) each Existing Ship is insured in accordance with the provisions of this
Agreement and all requirements therein in respect of such insurances have
been complied with.
10 A copy of the Management Agreement and a duly executed original of the
Manager's Undertaking in relation to each Existing Ship.
11 Copies of:
(a) the document of compliance (DOC) and safety management certificate (SMC)
referred to in paragraph (a) of the definition of the ISM Code
Documentation in respect of each Existing Ship and the applicable Approved
Manager certified as true and in effect by the Owner of such Existing
Ship; and
(b) the ISPS Code Documentation in respect of each Existing Ship and the Owner
thereof certified as true and in effect by that Owner.
12 Two valuations (at the cost of the Borrower) of each Existing Ship
addressed to the Agent, stated to be for the purpose of this Agreement and
dated not earlier than 15 days before the Drawdown Date for the
Refinancing Advance, each from an Approved Broker.
13 All documentation required by each Creditor Party in relation to the
Borrower and any Security Party pursuant to that Creditor Party's "know
your customer" requirements.
14 A compliance certificate (in the form set out in Schedule 8) demonstrating
the compliance by the Borrower (or not, as the case may be) with the
provisions of Clause 12.4 (such compliance to be determined by reference
to the audited annual consolidated accounts of the Group for the Financial
Year ended 31 December 2005) signed by the chief financial officer of the
Borrower.
15 Documentary evidence that the agent for service of process named in Clause
30 has accepted its appointment.
16 Favourable legal opinions from lawyers appointed by the Agent on such
matters concerning the laws of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ and such other relevant jurisdictions as the Agent may require.
17 A favourable opinion from an independent insurance consultant acceptable
to the Agent on such matters relating to the insurances of the Existing
Ships as the Agent may require.
18 If the Agent so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Agent.
PART B
The following are the documents referred to in Clause 9.1(b).
1 A copy of (a) the ▇▇▇▇▇ Oldendorff MOA and (b) the ▇▇▇▇▇ Oldendorff
Seller's Credit Agreement and of all documents signed or issued by the
parties thereto under or in connection with the ▇▇▇▇▇ Oldendorff MOA and
the ▇▇▇▇▇ Oldendorff Seller's Credit Agreement.
2 Such documentary evidence as the Lender and its legal advisers may require
in relation to the due authorisation and execution by Goodwill of the
▇▇▇▇▇ Oldendorff MOA and of all documents to be executed by Goodwill under
the ▇▇▇▇▇ Oldendorff MOA, and by the ▇▇▇▇▇ Oldendorff Charterer of the
▇▇▇▇▇ Oldendorff Charterparty and of all documents to be executed by the
▇▇▇▇▇ Oldendorff Charterer thereunder.
3 A copy of each of the ▇▇▇▇▇ Oldendorff Charterparty and the ▇▇▇▇▇
Oldendorff Charter Guarantee and of all documents signed or issued by
Seaventure, Goodwill or the ▇▇▇▇▇ Oldendorff Charterer (or any of them)
under or in connection with the ▇▇▇▇▇ Oldendorff Charterparty and the
▇▇▇▇▇ Oldendorff Charter Guarantee.
4 Copies of the constitutional documents of the ▇▇▇▇▇ Oldendorff Charterer,
together with copies of resolutions of the directors of the ▇▇▇▇▇
Oldendorff Charterer authorising the execution of the ▇▇▇▇▇ Oldendorff
Tripartite Agreement and ratifying its entry into the ▇▇▇▇▇ Oldendorff
Charterparty.
5 A duly executed original of:
(a) the Mortgage, the Deed of Covenant and the General Assignment relating to
the Identified Ship (and of each document to be delivered under each of
them);
(b) the ▇▇▇▇▇ Oldendorff Tripartite Agreement (and of each document to be
delivered under the Tripartite Agreement);
(c) the Identified Ship Earnings Account Pledge; and
(d) the Management Agreement Assignment relating to the Identified Ship.
6 Documentary evidence that:
(a) the Identified Ship has been unconditionally delivered by Goodwill to and
accepted by, Seaventure under the ▇▇▇▇▇ Oldendorff MOA and the full
purchase price payable under that MOA (in addition to the part to be
financed by the Identified Ship Advance) has been duly paid, together with
a copy of the ▇▇▇▇ of sale and the other documents delivered by Goodwill
thereunder;
(b) the Identified Ship is definitively and permanently registered in the name
of Seaventure under Maltese flag at the port of Valletta;
(c) the Ship is in the absolute and unencumbered ownership of Seaventure, save
as contemplated by the Finance Documents relative to the Identified Ship;
(d) the Identified Ship maintains the highest available class with Lloyd's
Register of Shipping (or such other first-class classification society
which is a member of IACS as the Agent may approve) free of all overdue
recommendations and conditions of such classification society;
(e) the Mortgage relating to the Identified Ship has been duly registered
against that Ship as a valid first priority Maltese statutory ship
mortgage in accordance with the laws of Malta and has been noted on the
Liberian Bareboat Charter Registry;
(f) the Identified Ship is insured in accordance with the provisions of this
Agreement and all requirements therein in respect of insurances have been
complied with; and
(g) the Identified Ship has been delivered and accepted by the ▇▇▇▇▇
Oldendorff Charterer for service under the ▇▇▇▇▇ Oldendorff Charterparty
without qualifications and has been registered in the name of the ▇▇▇▇▇
Oldendorff Charterer under the Liberian Bareboat Charter Registry.
7 A copy of the Management Agreement and a duly executed original of the
Manager's Undertaking in relation to the Identified Ship.
8 Copies of:
(a) the document of compliance (DOC) and safety management certificate (SMC)
referred to in paragraph (a) of the definition of the ISM Code
Documentation in respect of the Identified Ship and the applicable
Approved Manager certified as true and in effect by Seaventure; and
(b) the ISPS Code Documentation in respect of the Identified Ship and
Seaventure certified as true and in effect by Seaventure.
9 Two valuations (at the cost of the Borrower) of the Identified Ship,
addressed to the Agent, stated to be for the purpose of this Agreement and
dated not earlier than 15 days before the Drawdown Date for the Identified
Ship Advance, each from an Approved Broker.
10 Favourable legal opinions from lawyers appointed by the Agent on such
matters concerning the laws of Malta, Liberia and such other relevant
jurisdictions as the Agent may require.
11 A favourable opinion from an independent insurance consultant acceptable
to the Agent on such matters relating to the insurances of the Identified
Ships as the Agent may require.
PART C
The following are the documents referred to in Clause 9.1(c). "Relevant Ship"
means, in relation to an Additional Advance, the Additional Ship which is to be
part-financed by that Advance.
1 Copies of resolutions of the directors of the relevant Additional Ship
Owner authorising the execution of each of the Finance Documents in
relation to the Relevant Ship and ratifying the execution of the
Additional Ship MOA in relation to that Relevant Ship.
2 The original of any power of attorney under which any Finance Document in
relation to the Relevant Ship is executed on behalf of the relevant
Additional Ship Owner.
3 The originals of any mandates or other documents required in connection
with the opening or operation of the Earnings Account for the Relevant
Ship.
4 A copy of the Additional Ship MOA for the Relevant Ship and all documents
signed or issued by the parties thereto (or any of them) under or in
connection with it.
5 Such documentary evidence as the Agent and its legal advisers may require
in relation to the due authorisation and execution of the Additional Ship
MOA in relation to the Relevant Ship and all documents to be executed by
the parties thereto under that Additional Ship MOA.
6 A duly executed original of the Mortgage, the Deed of Covenant (if
applicable), the General Assignment, the Additional Ship Earnings Account
Pledge and the Management Assignment for the Relevant Ship (and of each
document to be delivered under each of them).
7 Documentary evidence that:
(a) the Relevant Ship has been unconditionally delivered to, and accepted by,
the relevant Additional Ship Owner under the relevant Additional Ship MOA
and the full purchase price payable under that Additional Ship MOA (in
addition to the part financed by the relevant Advance) has been duly paid;
(b) the Relevant Ship is definitively and permanently registered in the name
of the relevant Additional Ship Owner under an Approved Flag;
(c) the Relevant Ship is in the absolute and unencumbered ownership of the
relevant Additional Ship Owner save as contemplated by the Finance
Documents;
(d) the Relevant Ship maintains the highest available class with Lloyd's
Register of Shipping (or such other first-class classification society
which is a member of IACS as the Agent may approve) free of all overdue
recommendations and conditions of such classification society;
(e) the Mortgage relative to the Relevant Ship has been duly registered or
recorded (as the case may be) against the Relevant Ship as a valid first
priority or preferred ship mortgage in accordance with the laws of the
relevant Approved Flag State; and
(f) the Relevant Ship is insured in accordance with the provisions of this
Agreement and all requirements therein in respect of insurances have been
complied with.
8 A copy of the Management Agreement and a duly executed original of the
Manager's Undertaking in relation to the Relevant Ship.
9 Copies of:
(a) the document of compliance (DOC) and safety management certificate (SMC)
referred to in paragraph (a) of the definition of the ISM Code
Documentation in respect of the Relevant Ship and the applicable Approved
Manager certified as true and in effect by the Owner of the Relevant Ship;
and
(b) the ISPS Code Documentation in respect of the Relevant Ship and the Owner
thereof certified as true and in effect by the relevant Owner.
10 Two valuations (at the cost of the Borrower) of the Relevant Ship,
addressed to the Agent, stated to be for the purpose of this Agreement and
dated not earlier than 15 days before the relevant Drawdown Date, each
from an Approved Broker.
11 Evidence satisfactory to the Agent that the Owner of the Relevant Ship is
a direct or indirect wholly-owned subsidiary of the Borrower.
12 A favourable legal opinion from lawyers appointed by the Agent on such
matters concerning the laws of the Approved Flag State where the Relevant
Ship is registered and such other relevant jurisdictions as the Agent may
require.
13 A favourable opinion from an independent insurance consultant acceptable
to the Agent on such matters relating to the insurances for the Relevant
Ship as the Agent may require.
14 If the Agent so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Agent.
Every other copy document delivered under this Schedule shall be certified
as a true and up to date copy by a director or the secretary (or
equivalent officer) of the Borrower or any other person acceptable to the
Agent in its sole discretion.
SCHEDULE 6
TRANSFER CERTIFICATE
The Transferor and the Transferee accept exclusive responsibility for ensuring
that this Certificate and the transaction to which it relates comply with all
legal and regulatory requirements applicable to them respectively.
To: HSH Nordbank AG for itself and for and on behalf of the Borrower, each
Security Party, the Security Trustee, the Swap Banks and each Lender, as
defined in the Loan Agreement referred to below.
[_________]
1 This Certificate relates to a Loan Agreement (the "Loan Agreement") dated
31 March 2006 and made between (1) Dryships Inc. as borrower (the
"Borrower"), (2) the banks and financial institutions named therein as
Lenders, (3) HSH Nordbank AG as Agent and as Security Trustee, (4) HSH
Nordbank AG as Lead Arranger and Lead Bookrunner, (5) The Governor and
Company of the Bank of Scotland as Joint Bookrunner, (6) HSH Nordbank AG
and The Governor and Company of the Bank of Scotland as Joint Underwriters
and (7) HSH Nordbank AG and HBOS Treasury Services plc as Swap Banks, in
respect of term loan and short-term credit facilities of up to
US$518,750,000 in aggregate.
2 In this Certificate:
"the Relevant Parties" means the Agent, the Borrower, each Security Party,
the Security Trustee, each Swap Bank and each Lender;
"the Transferor" means [full name] of [lending office];
"the Transferee" means [full name] of [lending office].
Terms defined in the Loan Agreement shall, unless the contrary intention
appears, have the same meanings when used in this Certificate.
3 The effective date of this Certificate is 2006 Provided that this
Certificate shall not come into effect unless it is signed by the Agent on
or before that date.
4 The Transferor assigns to the Transferee absolutely all rights and
interests (present, future or contingent) which the Transferor has as
Lender under or by virtue of the Loan Agreement and every other Finance
Document in relation to [ ] percent of the Contribution outstanding to
the Transferor (or its predecessors in title) which is set out below:
Contribution Amount transferred
5 By virtue of this Transfer Certificate and Clause 26 of the Loan
Agreement, the Transferor is discharged [entirely from its Commitment
which amounts to $[__________]] [from [__________] percent of its
Commitment, which percentage represents $[__________]] and the Transferee
acquires a Commitment of $[__________].
6 The Transferee undertakes with the Transferor and each of the Relevant
Parties that the Transferee will observe and perform all the obligations
under the Finance Documents which Clause 26 of the Loan Agreement provides
will become binding on it upon this Certificate taking effect.
7 The Agent, at the request of the Transferee (which request is hereby made)
accepts, for the Agent itself and for and on behalf of every other
Relevant Party, this Certificate as a Transfer Certificate taking effect
in accordance with Clause 26 of the Loan Agreement.
8 The Transferor:
(a) warrants to the Transferee and each Relevant Party:
(i) that the Transferor has full capacity to enter into this transaction
and has taken all corporate action and obtained all consents which
are in connection with this transaction; and
(ii) that this Certificate is valid and binding as regards the
Transferor;
(b) warrants to the Transferee that the Transferor is absolutely entitled,
free of encumbrances, to all the rights and interests covered by the
assignment in paragraph 4 above;
(c) undertakes with the Transferee that the Transferor will, at its own
expense, execute any documents which the Transferee reasonably requests
for perfecting in any relevant jurisdiction the Transferee's title under
this Certificate or for a similar purpose.
9 The Transferee:
(d) confirms that it has received a copy of the Loan Agreement and each other
Finance Document;
(e) agrees that it will have no rights of recourse on any ground against
either the Transferor, the Agent, the Security Trustee, any Swap Bank or
any Lender in the event that:
(i) the Finance Documents prove to be invalid or ineffective,
(ii) the Borrower or any Security Party fails to observe or perform its
obligations, or to discharge its liabilities, under the Finance
Documents;
(iii) it proves impossible to realise any asset covered by a Security
Interest created by a Finance Document, or the proceeds of such
assets are insufficient to discharge the liabilities of the Borrower
or any Security Party under the Finance Documents;
(f) agrees that it will have no rights of recourse on any ground against the
Agent, the Security Trustee, any Swap Bank or any Lender in the event that
this Certificate proves to be invalid or ineffective;
(g) warrants to the Transferor and each Relevant Party (i) that it has fu11
capacity to enter into this transaction and has taken all corporate action
and obtained all official consents which it needs to take or obtain in
connection with this transaction; and (ii) that this Certificate is valid
and binding as regards the Transferee; and
(h) confirms the accuracy of the administrative details set out below
regarding the Transferee.
10 The Transferor and the Transferee each undertake with the Agent and the
Security Trustee severally, on demand, fully to indemnify the Agent and/or
the Security Trustee in respect of any claim, proceeding, liability or
expense (including all legal expenses) which they or either of them may
incur in connection with this Certificate or any matter arising out of it,
except such as are shown to have been mainly and directly caused by the
gross and culpable negligence or dishonesty of the Agent's or the Security
Trustee's own officers or employees.
11 The Transferee shall repay to the Transferor on demand so much of any sum
paid by the Transferor under paragraph 10 above as exceeds one-half of the
amount demanded by the Agent or the Security Trustee in respect of a
claim, proceeding, liability or expense which was not reasonably
foreseeable at the date of this Certificate; but nothing in this paragraph
shall affect the liability of each of the Transferor and the Transferee to
the Agent or the Security Trustee for the full amount demanded by it.
[Name of Transferor] [Name of Transferee]
By: By:
Date: Date:
Agent
Signed for itself and for and on
behalf of itself as Agent and for
every other Relevant Party
HSH NORDBANK AG
By:
Date:
Administrative Details of Transferee
Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Telex:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Telex:
Fax:
Account for payments:
Note: This Transfer Certificate alone may not be sufficient to transfer a
proportionate share of the Transferor's interest in the security
constituted by the Finance Documents in the Transferor's or Transferee's
jurisdiction. It is the responsibility of each Lender to ascertain whether
any other documents are required for this purpose.
SCHEDULE 7
DESIGNATION NOTICE
To: HSH Nordbank ▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
[o]
Dear Sirs
Loan Agreement dated 31 March 2006 made between (inter alia) (i) ourselves as
Borrower, (ii) the Lenders, (iii) yourselves as Agent and Security Trustee and
(iv) yourselves and The Governor and Company of the Bank of Scotland as swap
banks in respect of term loan and short-term credit facilities of up to
US$518,750,000 in aggregate (the "Loan Agreement")
We refer to:
1 the Loan Agreement;
2 the Master Agreement dated [o] made between ourselves and [o]; and
3 a Confirmation delivered pursuant to the said Master Agreement dated [o]
and addressed by [o] to us.
In accordance with the terms of the Loan Agreement, we hereby give you notice of
the said Confirmation and hereby confirm that the Transaction evidenced by it
will be designated as a "Designated Transaction" for the purposes of the Loan
Agreement and the Finance Documents.
Yours faithfully,
_______________________________
for and on behalf of
DRYSHIPS INC.
SCHEDULE 8
FORM OF COMPLIANCE CERTIFICATE
To: HSH Nordbank ▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
[o]200[o]
Dear Sirs,
We refer to a loan agreement dated 31 March 2006 (the "Loan Agreement") made
between (amongst others) yourselves and ourselves in relation to term loan and
short-term credit facilities of up to $518,750,000 in aggregate.
Words and expressions defined in the Loan Agreement shall have the same meaning
when used in this compliance certificate.
We enclose with this certificate a copy of the [audited]/[unaudited]
consolidated accounts for the Group for the [Financial Year] [3-month period]
ended [o]. The accounts (i) have been prepared in accordance with all applicable
laws and GAAP all consistently applied, (ii) give a true and fair view of the
state of affairs of the Group at the date of the accounts and of its profit for
the period to which the accounts relate and (iii) fully disclose or provide for
all significant liabilities of the Group.
We also enclose copies of the valuations of all the Fleet Vessels which were
used in calculating the Market Value Adjusted Total Assets of the Group as at
[o].
The Borrower represents that no Event of Default or Potential Event of Default
has occurred as at the date of this certificate [except for the following matter
or event [set out all material details of matter or event]]. In addition as of
[o], the Borrower confirms compliance with the financial covenants set out in
Clause 12.4 of the Loan Agreement for the 6 months ending as of the date to
which the enclosed accounts are prepared.
We now certify that, as at [o]:
(a) the Market Adjusted Equity Ratio is [o]:[o];
(b) the Interest Coverage Ratio of the Group is [o]:[o];
(c) the Market Value Adjusted Net Worth of the Group is $[o]; and
(d) the aggregate freely available and unencumbered bank or cash balances of
the Group are $[o] in aggregate of which $[o] in aggregate is standing to
the credit of the Earnings Accounts and the Wealth Account.
This certificate shall be governed by, and construed in accordance with, English
law.
___________________________
[o]
Chief Financial Officer of
Dryships Inc.
SCHEDULE 9 MANDATORY COST FORMULA
1 The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with (a) the requirements of the
Financial Services Authority (or any other authority which replaces all or
any of its functions) or (b) the requirements of the European Central
Bank.
2 On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the
"Additional Cost Rate") for each Lender, in accordance with the paragraphs
set out below, The Mandatory Cost will be calculated by the Agent as a
weighted average of the Lenders' Additional Cost Rates (weighted in
proportion to the percentage participation of each Lender in the Loan) and
will be expressed as a percentage rate per annum.
3 The Additional Cost Rate for any Lender lending from a lending office in a
Participating Member State will be the percentage notified by that Lender
to the Agent. This percentage will be certified by that Lender in its
notice to the Agent to be its reasonable determination of the cost
(expressed as a percentage of that Lender's participation in the Loan) of
complying with the minimum reserve requirements of the European Central
Bank in respect of loans made from that lending office.
4 The Additional Cost Rate for any Lender lending from a lending office in
the United Kingdom will be calculated by the Agent as follows:
Ex 0.01
------- percent per annum
300
Where:
E is designed to compensate Lenders for amounts payable under the Fees
Rules and is calculated by the Agent as being the average of the
most recent rates of charge supplied by the Lenders to the Agent
pursuant to paragraph 6 below and expressed in pounds per
(pound)1,000,000.
5 For the purposes of this Schedule:
(a) "Special Deposits" has the meaning given to it from time to time under or
pursuant to the Bank of England Act 1998 or (as may be appropriate) by the
Bank of England;
(b) "Fees Rules" means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from
time to time in respect of the payment of fees for the acceptance of
deposits;
(c) "Fee Tariffs" means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero
rated fee required pursuant to the Fees Rules but taking into account any
applicable discount rate);
(d) "Participating Member State" means any member state of the European Union
that adopts or has adopted the euro as its lawful currency in accordance
with legislation of the European Union relating to European Monetary
Union; and
(e) "Tariff Base" has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.
6 If requested by the Agent, each Lender lending from a lending office in
the United Kingdom shall, as soon as practicable after publication by the
Financial Services Authority, supply to the Agent, the rate of charge
payable by that Lender to the Financial Services Authority pursuant to the
Fees Rules in respect of the relevant financial year of the Financial
Services Authority (calculated for this purpose by that Lender as being
the average of the Fee Tariffs applicable to that Lender for that
financial year) and expressed in pounds per (pound) 1,000,000 of the
Tariff Base of that Lender.
7 Each Lender shall supply any information required by the Agent for the
purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information in
writing on or prior to the date on which it becomes a Lender:
(a) the jurisdiction of its lending office; and
(b) any other information that the Agent may reasonably require for such
purpose.
Each Lender shall promptly notify the Agent in writing of any change to
the information provided by it pursuant to this paragraph.
8 The rates of charge of each Lender lending from a lending office in the
United Kingdom for the purpose of calculating shall be determined by the
Agent based upon the information supplied to it pursuant to paragraph 6
above and on the assumption that, unless a Lender notifies the Agent to
the contrary, each Lender's obligations in relation to cash ratio deposits
and Special Deposits are the same as those of a typical bank from its
jurisdiction of incorporation with a lending office in the same
jurisdiction as its lending office.
9 The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any
Lender and shall be entitled to assume that the information provided by
any Lender pursuant to paragraphs 3, 6 and 7 above is true and correct in
all respects.
10 The Agent shall distribute the additional amounts received as a result of
the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate
for each Lender based on the information provided by each Lender pursuant
to paragraphs 3, 6 and 7 above.
11 Any determination by the Agent pursuant to this Schedule in relation to a
formula, the Mandatory Cost, an Additional Cost Rate or any amount payable
to a Lender shall, in the absence of manifest error, be conclusive and
binding on all parties.
The Agent may from time to time, after consultation with the Borrower and the
Lenders, determine and notify to all parties any amendments which are required
to be made to this Schedule in order to comply with any change in law,
regulation or any requirements from time to time imposed by the Financial
Services Authority or the European Central Bank (or, in any case, any other
authority which replaces all or any of its functions) and any such determination
shall, in the absence of manifest error, be conclusive and binding on all
parties.
EXECUTION PAGES
BORROWER
SIGNED by ▇▇▇▇▇▇▇ PAPAPONTIROO ) /s/ ▇▇▇▇▇▇▇ PAPAPONTIROO
for and on behalf of )
DRYSHIPS INC. )
LENDERS
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
HSH NORDBANK AG )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
THE GOVERNOR AND COMPANY OF )
THE BANK OF SCOTLAND )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
ALLIANCE & LEICESTER )
COMMERCIAL FINANCE PLC )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
BAYERISCHE HYPO-UND )
VEREINSBANK AG )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
COMMERZBANK )
AKTIENGESELLSCHAFT )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
NAXTEXIS BANQUES POPULAIRES )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
SUMITOMO MITSUI BANKING )
CORPORATION )
AGENT
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
HSH NORDBANK AG )
SECURITY TRUSTEE
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
HSH NORDBANK AG )
LEAD ARRANGER/LEAD BOOKRUNNER
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
HSH NORDBANK AG )
JOINT BOOKRUNNNER
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
THE GOVERNOR AND COMPANY )
OF THE BANK OF SCOTLAND )
JOINT UNDERWRITERS
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
HSH NORDBANK AG )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
THE GOVERNOR AND COMPANY OF )
THE BANK OF SCOTLAND )
SWAP BANKS
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
HSH NORDBANK AG )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
HBOS TREASURY SERVICES PLC )
SIGNED by ▇▇▇▇▇▇ PALEOURASSAS ) /s/ ▇▇▇▇▇▇ PALEOURASSAS
for and on behalf of )
COMMERZBANK )
AKTIENGESELLSCHAFT )
Witness to all the )
above signatures )
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Address: ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇ - ▇▇▇▇▇▇