DATED 24th AUGUST 2007 BREMER LANDESBANK KREDITANSTALT OLDENBURG - GIROZENTRALE -
EXHIBIT
4.11
DATED 24th AUGUST
2007
▇▇▇▇▇▇
LANDESBANK KREDITANSTALT ▇▇▇▇▇▇▇▇▇ - GIROZENTRALE -
as
Lender
-
a n d -
NEDERLAND
NAVIGATION INC.
LAKEVIEW
NAVIGATION INC.
as
joint and several Borrowers
____________________________________________
for
a Secured Loan Facility of up to
$
55,250,000.00
____________________________________________
Law
Offices
▇.
▇. ▇▇▇▇▇▇▇▇▇▇▇ & PARTNERS
▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
I N D E
X
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CONTENTS
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PAGE
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1
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PURPOSE
AND DEFINITIONS
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4
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2.
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THE
LOAN
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13
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3.
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INTEREST
AND INTEREST PERIODS
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16
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4.
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ALTERNATIVE
INTEREST RATES
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17
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5.
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REPAYMENT,
PREPAYMENT, AND APPLICATION OF FUNDS
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18
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6.
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PAYMENTS
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21
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7.
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FEES
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22
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8.
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REPRESENTATIONS
AND WARRANTIES
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22
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9.
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CONDITIONS
PRECEDENT AND SUBSEQUENT
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25
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10.
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SECURITY
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28
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11.
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COVENANTS
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28
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12.
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EVENTS
OF DEFAULT
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33
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13.
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INDEMNITIES
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37
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14.
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ASSIGNMENT
AND PARTICIPATION
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39
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15.
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CHANGE
IN CIRCUMSTANCES – INCREASED COST
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40
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16.
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WAIVER
AND REMEDIES
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42
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17.
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INVALIDITY
OF PROVISIONS
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42
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18.
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NOTICES
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42
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19.
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LAW
AND JURISDICTION
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43
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20.
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MISCELLANEOUS
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44
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Schedule
1
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46
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Schedule
2
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46
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THIS AGREEMENT is made the
24th day of August of two thousand seven (2007)
BY
AND AMONG
1. ▇▇▇▇▇▇ LANDESBANK KREDITANSTALT ▇▇▇▇▇▇▇▇▇ -
GIROZENTRALE - , a company duly incorporated and existing under the laws
of the Federal Republic of Germany, having its registered office at ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany, (hereinafter called the
“Bank”) of the one part,
and
2. NEDERLAND NAVIGATION INC., a
corporation duly incorporated and existing under the laws of the Republic of the
▇▇▇▇▇▇▇▇ Islands, having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter
called “NEDERLAND”),
and
3. LAKEVIEW NAVIGATION INC., a
corporation duly incorporated and existing under the laws of the Republic of the
▇▇▇▇▇▇▇▇ Islands, having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter
called “LAKEVIEW”),
(NEDERLAND and LAKΕVIEW hereinafter also together
called the “Borrowers”
and each one the “Borrower”), of the other
part.
IT
IS AGREED AS FOLLOWS:
1.
PURPOSE AND DEFINITIONS
1.01. This
Agreement sets out the terms and conditions upon and subject to which the Bank
agrees to make available to the Borrowers jointly and severally a loan facility
of up to United States Dollars Fifty Five Million Two
Hundred Fifty Thousand ($ 55,250,000.00) divided into two (2) tranches as
follows:
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(i)
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Tranche
A of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
($ 27,625,000.00) for the purpose of part repayment to the Bank of the
Existing Loan, and assisting NEDERLAND to part finance the acquisition
cost during construction of a Product/Chemical Tanker of approximately
37,000 dwt designated as Hull No. 2192 to be constructed by Hyundai Mipo
Dockyard Co. Ltd. according to the terms of the Vessel A Contract,
and
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(ii)
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Tranche
B of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
($ 27,625,000.00) for the purpose of part repayment to the Bank of the
Existing Loan, and assisting LAKEVIEW to part finance the acquisition cost
during construction of a Product/Chemical Tanker of approximately 37,000
dwt designated as Hull No. 2193 to be constructed by Hyundai Mipo Dockyard
Co. Ltd. according to the terms of the Vessel B
Contract.
|
1.02. Definitions. In this
Agreement, unless the context otherwise requires, the following expressions
shall have the following meanings:
“Advances” means together the
Tranche A Advance A, the Tranche A Advance B, the Tranche A Advance C, the
Tranche A Advance D, the Tranche A Advance E, the Tranche B Advance A, the
Tranche B Advance B, the Tranche B Advance C, the Tranche B Advance D, and the
Tranche B Advance E, and in the singular means any of them;
“Agreement” means this
Agreement, and the General Business Conditions, and the General Loan
Conditions of ▇▇▇▇▇▇ Landesbank Kreditanstalt ▇▇▇▇▇▇▇▇▇ - Girozentrale -
attached as Exhibits 1, and 2, which form an integral part of this
Agreement;
“Banking Day” means any day on
which banks and foreign exchange markets in Frankfurt, Federal Republic of
Germany, in New York, United States of America, and in Greece and in each
country or place in or at which an act is required to be done under this
Agreement in accordance with the usual practice of the Bank, are open for the
transaction of business of the nature contemplated in this
Agreement;
“Bank” means the Bank as
specified in the beginning of this Agreement and the successors and assigns of
the Bank;
“Borrowed Money” means
indebtedness incurred in respect of (i)money borrowed or raised, (ii)any bond,
note, loan stock, debenture or similar instrument, (iii)acceptance of
documentary credit facilities, (iv)deferred payments for assets or services
acquired, (v)rental payments under leases (whether in respect of land,
machinery, equipment or otherwise) entered into primarily as a method of raising
finance or of financing the acquisition of the asset leased, (vi)guarantees,
bonds, stand-by letters of credit or other instruments issued in connection with
the performance of contracts and (vii)guarantees or other assurances against
financial loss in respect of indebtedness of any person falling within any of
items (i) to (vi) above;
“Borrowers” means together
NEDERLAND and LAKEVIEW as specified at the beginning of this Agreement, and the
successors and permitted assigns of the Borrowers, and in the singular means
anyone of the Borrowers.
“Break Costs” means all costs,
losses, premiums or penalties incurred by the Bank as a result of the Bank
receiving any prepayment, whether voluntary or compulsory, of all or any part of
the Loan or any other payment under or in relation to the Security Documents on
a day other than the due date for payment of the sum in question, and includes
(without limitation) any losses or costs incurred in liquidating or re-employing
deposits from third parties acquired to effect or maintain the Loan and interest
on the amount of the Loan being prepaid or paid from the date of commencement of
the then current Interest Period to the last day thereof as certified by the
Bank;
“Builder” means Hyundai Mipo
Dockyard Co. Ltd., a company organized and existing under the laws of the
Republic of Korea, having its principal place of business at ▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇,
▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇, and includes the successors and assigns of the
Builder;
“Cash Liquidity” means a
minimum amount of Dollars Five Million ($5,000,000.00) held in the Cash
Liquidity Accounts;
“Cash Liquidity Accounts”
means the accounts in the name of
the Corporate Guarantor with a bank or banks, including the Bank, where the Cash
Liquidity is to remain credited in aggregate for the duration of the Security
Period;
“Commitment” means the amount
which the Bank agreed to lend to the Borrowers under Clause 2, as modified by
any relevant term of this Agreement;
“Contract” means each of
Vessel A Contract, and Vessel B Contract, and in the plural means both of
them;
2
“Contract Assignment Consent and
Acknowledgement” means the acknowledgement of notice of, and consent to,
the assignment by each Borrower in favour of the Bank in respect of the
respective Contract, to be given by the Builder;
“Corporate Guarantee” means
the corporate guarantee executed or (as the context may require) to be executed
by the Corporate Guarantor in favour of the Bank in form and substance
acceptable to the Bank;
“Corporate Guarantor” means
Omega Navigation Enterprises Inc., a company duly incorporated and existing
under the laws of ▇▇▇▇▇▇▇▇ Islands, having its registered office at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, and includes its successors in title;
“Current Account” means the
account or accounts in the name of each Borrower with the Bank, as the Bank in
its sole discretion may require, to which (inter alia) all sums payable by the
Borrowers in accordance with Clause 5.02 are to be paid;
“Default Rate” means that rate
of interest per annum which is determined in accordance with the provisions of
Clause 3.03;
“Deferred Interest” means the
interest on each Tranche accruing from the Drawdown Date of Advance A and
Advance B, up and until the Drawdown Date of Advance C of each
Tranche;
“Dollars” and “$” means the lawful currency
of the United States of America and in respect of all payments to be made under
any of the Security Documents funds which are for same day settlement in the New
York Clearing House Interbank Payments System (or such other U.S. Dollar funds
as may at the relevant time be customary for the settlement of international
banking transactions denominated in U.S. Dollars);
“Drawdown Dates” means the
dates requested by the Borrowers that each Advance be advanced to
them pursuant to Clause 2, or (as the context requires) the dates on which each
Advance is actually made, and in the singular means any of them;
“Drawdown Notice” means a
notice substantially in the form of Schedule 1, or in such other form as the
Bank approves or requires;
“Encumbrance” means any
mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, security interest, title retention, arrest, seizure, garnishee order
(whether nisi or absolute) or any other order or judgment having similar effect
or other encumbrance of any kind securing or any right conferring a priority of
payment in respect of any obligation of any person;
“Euro” and the sign “€” means (available and
transferable funds in) the single currency of member states of the European
Union introduced in accordance with the provisions of Article 109(1) of the
Treaty of Rome of 25 March 1957 as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and
the Maastricht Treaty (which was signed on 7 November 1992 and came into force
on 1st June
1993 as amended, varied or supplemented from time to time);
“Event of Default” means any
one of those events set out in Clause 12 or described as such in any other of
the Security Documents;
3
“Existing Loan Agreement” and
“Existing Loan” means
the Loan Agreement dated 4th July
2007 in respect of a loan of Dollars Nineteen Million Eight Hundred Ninety
Thousand ($ 19,890,000.00) between (i) the Borrowers together with other
borrowers, and (ii) the Bank (the “Existing Loan”), to finance in
part the first payment due to the Builder in respect of the Vessels under the
Contracts (and other vessels under other contracts).
“Expenses” means the aggregate
at any relevant time (to the extent that the same have not been received or
recovered by the Bank) of:
(a)all
losses, liabilities, costs, charges, expenses, damages and outgoings of whatever
nature (including, without limitation, taxes, repair costs, registration fees,
insurance premiums, crew wages, repatriation expenses and pension fund dues)
suffered, reasonably incurred, charged to, paid or committed to be paid by the
Bank in connection with the exercise of the powers referred to in or granted by
any of the Security Documents or otherwise payable by the Borrowers in
accordance with the terms of any of the Security Documents; and
(b)the
expenses referred to in Clause 13.02; and
(c)interest
on all such losses, liabilities, costs, charges, expenses, damages and outgoings
referred in (a) and (b) above from the date on which the same were suffered,
incurred or paid by the Bank until the date of receipt or recovery thereof
(whether before or after judgment) at a rate per annum calculated in accordance
with Clause 3.03 (as conclusively certified by the Bank);
“Fees” means the fees set out
in Clause 7;
“Indebtedness” means, in
relation to any person, any obligation (whether present or future, actual or
contingent, secured or unsecured, as principal or surety or otherwise) for the
payment or repayment of money;
“Interest Payment Date” means
in respect of the Loan or any part thereof in respect of which a separate
Interest Period is fixed, the last day of the relevant Interest Period and in
case of any Interest Period which overruns one or more Repayment Dates, each
such Repayment Date and the last day of such Interest Period;
“Interest Period” means each
period for the calculation of interest in relation to the Loan or any part
thereof, ascertained in accordance with Clause 3.02;
“Interest Rate” means in
relation to any Interest Period the rate or rates determined in accordance with
Clause 3;
“LIBOR” means, in relation to
a particular period the rate per cent per annum at which the Bank is able in
accordance with its normal practices to acquire deposits in Dollars in amounts
comparable with the amount in relation to which LIBOR is to be determined and
for a period equal to the relevant period, in the London Interbank Market at or
about 11 a.m. (London time) on the second Banking Day before the first day of
such period;
“Loan” means the aggregate
principal amount of the borrowing by the Borrowers under this Agreement or (as
the context requires) the principal amount thereof at any time being advanced
and outstanding under this Agreement;
4
“Margin” means zero point
eighty five per cent (0.85%) per annum;
“Outstanding Indebtedness”
means at any time the aggregate of the Loan and all unpaid interest accrued
thereon, the Expenses and all other sums of money whatsoever from time to time
due and owing from the Borrowers to the Bank hereunder or pursuant to the other
Security Documents and all interest accrued thereon;
“Post Delivery Facility” and
“Post Delivery
Commitment” means the facility of up to Dollars Sixty Six Million Three
Hundred Thousand ($ 66,300,000.00) agreed to be provided by the Bank
to the Borrowers jointly and severally, under the terms and conditions of a loan
agreement to be executed between the Bank and the Borrowers
“Refund Guarantee” means in
relation to each Contract, a guarantee of the obligations of the Builder to
refund to the respective Borrower which is a party to that Contract any stage
payments paid by that Borrower to the Builder pursuant to the relevant Contract,
to be in form and on terms acceptable to the Bank and to be issued by the Refund
Guarantor in favour of the relevant Borrower, and in the plural means all of
them;
“Refund Guarantee Assignment Consent
and Acknowledgement” means the acknowledgement of notice of, and consent
to, the first priority assignment by the respective Borrower in favour of the
Bank of the Refund Guarantees, to be given by the Refund Guarantor;
“Refund Guarantor” means THE
EXPORT-IMPORT BANK OF KOREA, ▇▇-▇, ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇,
▇▇▇▇▇, or any other bank acceptable to the Bank which has issued or will issue
the Refund Guarantees and includes its successors in title;
“Relevant Jurisdiction” means
any jurisdiction in which or where any Security Party is incorporated, resident,
domiciled, has permanent establishment, carries on, or has a place of business,
or is otherwise effectively connected;
“Security Assignment”
means the first priority assignments of the Contracts and of the Refund
Guarantees, executed or (as the context may require) to be executed by the
Borrowers in favour of the Bank in form acceptable to the Bank;
“Security Documents” means
this Agreement, the documents referred to in Clause 10, and any and every other
document from time to time executed to secure the obligations of the Borrowers
and/or any other Security Party to the Bank under this Agreement;
“Security Party” means each
Borrower, the Corporate Guarantor and any person (other than the Bank) which is
or will become a party to any of the Security Documents;
“Security Period” means the
period commencing on the date of this Agreement and terminating on the date upon
which all moneys payable or to become payable to the Bank at any time and from
time to time pursuant to the terms of this Agreement and any of the other
Security Documents shall have been paid and discharged in full;
“Total Loss” means with
respect to a Vessel (a) actual, constructive, compromised or arranged
total loss of
5
the
Vessel; or (b) requisition for title or other compulsory acquisition of the
Vessel; or (c) capture, seizure, detention, arrest or confiscation of the
Vessel, unless such Vessel is released within thirty (30) days
thereafter;
“Tranche” means each of
Tranche A, and Tranche B, and in the plural means all of them;
“Tranche A” means the
borrowing of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
($ 27,625,000.00) by the Borrowers for the purpose of assisting NEDERLAND to
part finance the acquisition cost during construction of Vessel A to be
constructed by the Builder;
“Tranche A Advance A” means
the borrowing of the part of Tranche A in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;
“Tranche A Advance B” means
the borrowing of the part of Tranche A in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;
“Tranche A Advance C” means
the borrowing of the part of Tranche A in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;
“Tranche A Advance D” means
the borrowing of the part of Tranche A in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;
“Tranche A Advance E” means
the borrowing of the part of Tranche A in an amount of up to Dollars Five
Million Five Hundred Twenty Five Thousand ($ 5,525,000.00) advanced or to be
advanced to the Borrowers;
“Tranche A Final Maturity
Date” means the date on which the sixth (6th)
installment of the Vessel A Contract Price becomes due and payable under the
Vessel A Contract by NEDERLAND to the Builder, or the Vessel A
Delivery Date, whichever occurs first;
“Tranche B” means the
borrowing of up to Dollars Twenty Seven Million Six Hundred Twenty Five Thousand
($ 27,625,000.00) by the Borrowers for the purpose of assisting LAKEVIEW to part
finance the acquisition cost during construction of Vessel B to be constructed
by the Builder;
“Tranche B Advance A”
means the borrowing of the part of Tranche B in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;
“Tranche B Advance B” means
the borrowing of the part of Tranche B in an amount of up to Dollars Three
Million Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) advanced or to be
advanced to the Borrowers;
“Tranche B Advance C” means
the borrowing of the part of Tranche B in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;
“Tranche B Advance D” means
the borrowing of the part of Tranche B in an amount of up to Dollars Seven
Million Seventy Two Thousand ($ 7,072,000.00) advanced or to be advanced to the
Borrowers;
6
“Tranche B Advance E” means
the borrowing of the part of Tranche B in an amount of up to Dollars Five
Million Five Hundred Twenty Five Thousand ($ 5,525,000.00) advanced or to be
advanced to the Borrowers;
“Tranche B Final Maturity
Date” means the date on which the sixth (6th)
installment of the Vessel B Contract Price becomes due and payable under the
Vessel B Contract by LAKEVIEW to the Builder, or the Vessel B Delivery Date,
whichever occurs first;
“USGAAP” means
generally accepted accounting principles as from time to time in effect in the
United States of America.
“Vessel” means each of Vessel
A, and Vessel B, and in the plural means all of them;
“Vessel A” means the
Product/Chemical Tanker of approximately 37,000 dwt currently designated as Hull
No. 2192 to be constructed by the Builder and purchased by NEDERLAND pursuant to
the Vessel A Contract;
“Vessel A Contract” means the
shipbuilding contract dated 15th June 2007 made between NEDERLAND and the
Builder, which expression shall include all Attachments, Appendixes and Exhibits
thereto as amended and supplemented from time to time with the prior written
consent of the Bank, relating to the construction and sale of Vessel A by the
Builder;
“Vessel A Contract
Installment” means each of the first (1st) second
(2nd), third
(3rd) fourth
(4th) and
fifth (5th)
installment of the Vessel A Contract Price payable by NEDERLAND to the Builder
falling due under the Vessel A Contract;
“Vessel A Contract Price”
means the price payable by NEDERLAND to the Builder for Vessel A pursuant to the
terms of the Vessel A Contract being Dollars Forty Four Million Two Hundred
Thirty Five Thousand ($ 44,235,000.00), or such other sum as is determined in
accordance with the terms and conditions of the Vessel A Contract;
“Vessel A Delivery Date” means
the date upon which Vessel A is delivered by the Builder to and accepted by
NEDERLAND pursuant to the Vessel A Contract;
“Vessel B” means the
Product/Chemical Tanker of approximately 37,000 dwt currently designated as Hull
No. 2193 to be constructed by the Builder and purchased by LAKEVIEW pursuant to
the Vessel B Contract;
“Vessel B Contract”
means the shipbuilding contract dated 15th June
2007 made between LAKEVIEW and the Builder, which expression shall include all
Attachments, Appendixes and Exhibits thereto as amended and supplemented from
time to time with the prior written consent of the Bank, relating to the
construction and sale of Vessel B by the Builder;
“Vessel B Contract
Installment” means each of the first (1st) second
(2nd), third
(3rd) fourth
(4th) and
fifth (5th)
installment of the Vessel B Contract Price payable by LAKEVIEW to the Builder
falling under the Vessel B Contract;
7
“Vessel B Contract Price”
means the price payable by LAKEVIEW to the Builder for Vessel B pursuant to the
terms of the Vessel B Contract being Dollars Forty Four Million Two Hundred
Thirty Five Thousand ($ 44,235,000.00), or such other sum as is determined in
accordance with the terms and conditions of the Vessel B Contract;
“Vessel B Delivery Date” means
the date upon which Vessel B is delivered by the Builder to and accepted by
LAKEVIEW pursuant to the Vessel B Contract;
1.03.01. each
of the terms defined in Clause 1.02 when used in plural means all of them
collectively and/or each of them and/or anyone of them (even if not expressly so
spelled out) as the context may require or permit;
1.03.02. subject
to Clause 14, references to each of the parties hereto and to the other Security
Documents shall be deemed to be references to or to include, as appropriate,
their respective successors and permitted assigns;
1.03.03. Reference
to:
“asset” includes every kind of
property, asset, interest or right, including any present, future or contingent
right to any revenues or other payment;
“bankruptcy” includes a
liquidation, receivership, administration or judicial management and any form of
suspension of payments, arrangement with creditors or reorganisation under any
corporate or insolvency law of any country;
“company” includes any
partnership, joint venture and unincorporated association;
“contingent liability” means a
liability which is not certain to arise and/or the amount of which remains
unascertained;
“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;
“liability” includes every kind
of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“month” means a period
beginning in one calendar month and ending in the next calendar month on the day
numerically corresponding to the day of the calendar month on which it started
provided that (i) if there is no such numerically corresponding day, it shall
end on the last Banking Day in such next calendar month and (ii) if such
numerically corresponding day is not a Banking Day, the period shall end on the
next following Banking Day in the same calendar month but if there is no such
Banking Day in the same calendar month, it shall end on the preceding Banking
Day and “months” and “monthly” shall be construed accordingly;
“person” shall be construed as
including reference to an individual, firm, company, corporation, unincorporated
body of persons or any State or any agency thereof;
8
“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;
“regulation” includes any
regulation, rule, official directive, request or guideline whether or not having
the force of law of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority or
organization;
“subsidiary”: company (S) is a
subsidiary of another company (P) if:
-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
-
P has direct or indirect control over a majority of the voting rights attached
to the issued shares of S; or
-
P has the direct or indirect power to appoint or remove a majority of the
directors of S; or
-
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.
“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 Security 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 reorganization of it or any other person;
“tax and taxes” includes all present
and future taxes, levies, imposts, duties, fees or charges of relevant nature
together with interest thereon and penalties in respect thereof (except taxes
concerning the Bank and imposed on the net income of the Bank) and “taxation” shall be construed
accordingly.
1.03.04. in
case of any contradiction between this Agreement and the General Loan Conditions
and/or General Terms of Business of ▇▇▇▇▇▇ Landesbank Kreditanstalt ▇▇▇▇▇▇▇▇▇
–Girozentrale - , this Agreement shall prevail;
1.03.05. The
expression “Current Account” shall include such account or any sub-accounts or
call accounts opened from time to time under the same designation and shall
include any substitute account(s) or revised designation or number
whatsoever.
1.04. Where
the context so admits, words in the singular include the plural and vice
versa.
1.05. All
documents referred to in this Agreement include the same as varied or
supplemented or amended from time to time.
1.06. Headings
are for convenience of reference only and are not to be taken into account in
construction.
1.07. References
to Clauses, Sub-Clauses and Schedules are to Clauses, Sub-Clauses and Schedules
in this Agreement.
1.08.Unless
as otherwise specifically stated in the Agreement, any determination,
requirement, consent, or permission to be made or given by the Bank or the Bank
under the terms of this Agreement, shall be made
9
or
given in the sole discretion of the Bank or the Bank, even if not so
specifically stated.
1.09.All
obligations imposed on, or assumed by the Borrowers hereunder are joint and
several even if not so expressed.
2.
THE LOAN
The
Bank relying upon each of the representations and warranties set out in Clause
8, agrees subject to the terms of this Agreement to advance by way of a loan to
the Borrowers the Commitment in the principal amount of up to Dollars Fifty Five
Million Two Hundred Fifty Thousand ($ 55,250,000.00) in aggregate, which will be
drawndown in two Tranches as follows:
2.01.01. Tranche
A which will be made available in five Advances:
|
(a)
|
Tranche
A Advance A in an amount of Dollars Three Million Nine Hundred Seventy
Eight Thousand ($ 3,978,000.00) to be applied for the repayment to the
Bank of the Existing Loan;
|
|
(b)
|
Tranche
A Advance B in an amount not exceeding the lesser of Dollars Three Million
Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) or ninety
per cent (90%) of the amount of the second Vessel A Contract Installment
under the Vessel A Contract, to be applied for the payment to the Builder
of the second Vessel A Contract Installment under the Vessel A
Contract;
|
|
(c)
|
Tranche
A Advance C in an amount not exceeding the lesser of Dollars Seven Million
Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
amount of the third Vessel A Contract Installment under the
Vessel A Contract, to be applied for the payment to the Builder of the
third Vessel A Contract Installment under the Vessel A
Contract;
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|
(d)
|
Tranche
A Advance D in an amount not exceeding the lesser of Dollars Seven Million
Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
amount of the fourth Vessel A Contract Installment under the
Vessel A Contract, to be applied for the payment to the Builder of the
fourth Vessel A Contract Installment under the Vessel A
Contract;
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|
(e)
|
Tranche
A Advance E in an amount not exceeding the lesser of Dollars Five Million
Five Hundred Twenty Five Thousand ($ 5,525,000.00) or sixty two point five
per cent (62.5%) of the amount of the fifth Vessel A Contract Installment
under the Vessel A Contract, to be applied for the payment to the Builder
of the fifth Vessel A Contract Installment under the Vessel A
Contract;
|
2.01.02.
The aggregate amount of Tranche A shall not exceed the lesser of (a)
Dollars Twenty Seven Million Six Hundred Twenty Five Thousand ($ 27,625,000.00)
or (b) seventy eight point one per cent (78.1%) of the aggregate amount of the
Vessel A Contract Installments;
2.02.01. Tranche
B which will be made available in five Advances:
|
(f)
|
Tranche
B Advance A in an amount of Dollars Three Million Nine Hundred Seventy
Eight Thousand ($ 3,978,000.00) to be applied for the repayment to the
Bank of the Existing Loan;
|
|
(g)
|
Tranche
B Advance B in an amount not exceeding the lesser of Dollars Three Million
Nine Hundred Seventy Eight Thousand ($ 3,978,000.00) or ninety
per cent (90%) of the amount of the second Vessel B Contract
Installment under the Vessel B Contract, to be applied for the
payment to the Builder of the second Vessel B Contract
Installment under the Vessel B
Contract;
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|
(h)
|
Tranche
B Advance C in an amount not exceeding the lesser of Dollars Seven Million
Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
amount of the third Vessel B Contract Installment under the
Vessel B Contract, to be applied for the payment to the Builder of the
third Vessel B Contract Installment under the Vessel B
Contract;
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10
|
(i)
|
Tranche
B Advance D in an amount not exceeding the lesser of Dollars Seven Million
Seventy Two Thousand ($ 7,072,000.00) or eighty per cent (80%) of the
amount of the fourth Vessel B Contract Installment under the Vessel B
Contract, to be applied for the payment to the Builder of the fourth
Vessel B Contract Installment under the Vessel B
Contract;
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|
(j)
|
Tranche
B Advance E in an amount not exceeding the lesser of Dollars Five Million
Five Hundred Twenty Five Thousand ($ 5,525,000.00) or sixty two point five
per cent (62.5%) of the amount of the fifth Vessel B Contract Installment
under the Vessel B Contract, to be applied for the payment to the Builder
of the fifth Vessel B Contract Installment under the Vessel B
Contract;
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2.02.02. The
aggregate amount of Tranche B shall not exceed the lesser of (a)
Dollars Twenty Seven Million Six Hundred Twenty Five Thousand ($ 27,625,000.00)
or (b) seventy eight point one per cent (78.1%) of the aggregate amount of the
Vessel B Contract Installments;
2.03. Subject
to the terms and conditions of this Agreement, each Advance shall be advanced,
as set out in Schedule 2, following receipt by the Bank from the Borrowers of a
Drawdown Notice not later than 10:00 a.m. on the third Banking Day before the
date which shall be a Banking Day, on which each Advance is intended to be
drawn. A Drawdown Notice shall be effective on actual receipt by the
Bank and once given shall, subject as provided in this Agreement, be
irrevocable;
2.04.
(Application of
proceeds) Without prejudice to the Borrowers’ obligations under Clause
11.08.01., the Bank shall have no responsibility for the application of the
proceeds of the Loan or any part thereof by the Borrowers.
2.05. (Cancellation). The Borrowers
shall be entitled to cancel the whole or any undrawn part of the Commitment
under this Agreement upon giving the Bank not less than three (3) Banking Days’
notice in writing to that effect provided that no relevant Drawdown Notice has
been given to the Bank. Any such notice of cancellation, once given, shall be
irrevocable. Any amount cancelled may not be drawn. Notwithstanding any
cancellation pursuant to this Clause 2.07 the Borrowers shall continue to be
liable for any and all amounts due to the Bank under this Agreement including
without limitation any amounts due to the Bank under Clause 13.
2.06. (Loan Account). All sums
advanced by the Bank to the Borrowers under this Agreement, and all interest
accrued thereon and all other amounts due under this Agreement from time to time
and all repayments and/or payments thereof shall be debited and credited
respectively to a separate loan account in the name of the Borrowers with the
Bank. The Bank may, however, in accordance with its usual practices or for its
accounting needs, maintain more than one account, consolidate or separate them
but all such accounts shall be considered parts of one single loan account
maintained under this Agreement.
2.07. (Evidence). It is hereby
expressly agreed and admitted by the Borrowers that abstracts or photocopies of
the books of the Bank as well as statements of accounts or certificates signed
by an officer of the Bank shall (save for manifest error) be conclusive and
binding on the Borrowers as to the existence and/or the amount at any time of
the Outstanding Indebtedness, of any amount due under this Agreement, of the
applicable Interest Rate or Default Rate or any other rate provided for or
referred to in this Agreement, the Interest Period, the payment or
non payment of any amount and the occurrence of any Event of
Default.
2.08. (Joint and Several Liability of the
Borrowers)
2.08.01. the
liability of the Borrowers hereunder shall in all cases, whether so expressed to
be or not, be
11
joint
and several and each representation and warranty and each covenant and agreement
made or given by the Borrowers is made or given by them jointly and
severally;
2.08.02. the
Bank may at its discretion accept instructions, notices or advices from any of
the Borrowers hereunder and shall ignore any subsequent conflicting
instructions, notices or advices from any other Borrower (unless they may be
deemed at the discretion of the Bank as proper revocation or amendments of
earlier instructions) and may reach any agreement in connection with this
Agreement or any of the other Security Documents with any Borrower which shall
be binding on all the Borrowers;
2.08.03. no
Borrower shall be exonerated and its liability hereunder shall not be lessened
or impaired by any time, indulgence or relief being given by the Bank to the
other Borrower or any other person by any amendment of or supplement to this
Agreement or any of the other Security Documents or any other document, by
the taking, variation, compromise, renewal or release of or refusal
or neglect to perfect or enforce any right, remedies or securities against the
other Borrower or any other person or by anything done or omitted which but for
this provision might operate to exonerate such Borrower;
2.08.04. the
obligations of a Borrower hereunder shall not be affected by any legal
limitation, disability, incapacity or other circumstances relating to the other
Borrower or any other person, whether known or not known to the Bank by any
invalidity in or irregularity or unenforceability of the obligations of the
other Borrower or any other person under this Agreement or any of the other
Security Documents or otherwise or by any change in the constitution of, or any
amalgamation or reconstruction of any other Borrower, the Bank or any other
person; and
2.08.05. each
Borrower hereby waives all rights such Borrower may have of first requiring the
Bank to proceed against or enforce any right or security, or claim payment from
the other Borrower or any other person.
2.09. (Non competition of the Borrowers
with the Bank).
2.09.01.
until all moneys, obligations and liabilities due, owing, or incurred by the
Borrowers to the Bank under this Agreement and the other Security Documents have
been paid or discharged in full, each Borrower agrees not to exercise or enforce
any claims or any rights of subrogation or indemnity or any other right which
otherwise it has against the other Borrower and agrees not to claim any set-off
or counterclaim against the other Borrower or to claim or prove in competition
with the Bank in the event of bankruptcy, insolvency or liquidation of the other
Borrower or have any benefit of or any share in any guarantee or security now or
hereafter held by the Bank;
2.09.02.
no Borrower has taken or received, and each Borrower undertakes that until all
moneys, obligations and liabilities due, owing or incurred by the Borrowers
under this Agreement and the other Security Documents have been paid in full, it
will not take or receive, any security or lien from the other Borrower in
respect of borrowing as co-borrower jointly and severally liable or for any
liability whatsoever;
2.10. (Interest to co-borrow). The
Borrowers have an interest in borrowing jointly and severally in that they
belong to the same group of companies under common ownership, and have close
financial cooperation and mutual business assistance.
12
3.
INTEREST AND INTEREST PERIODS
3.01. INTEREST
RATE FOR THE LOAN
3.01.01. (Interest Rate) interest
shall accrue on the Loan at the rate as determined by the Bank to be the
aggregate of (i) the Margin and (ii) LIBOR for the respective Interest Period
and be paid by the Borrowers on each Interest Payment Date.
3.02. INTEREST
PERIODS
3.02.01. unless
the Borrowers shall prior to the Drawdown Dates have agreed with the Bank fixed
Interest Period for the respective portion of the Loan, the Borrowers may by
notice received by the Bank not later than 10:00 a.m. (Bremen time) on the
second Banking Day before the beginning of each Interest Period specify whether
such Interest Period shall have a duration of one (1), or three (3),
or six (6) months, or twelve (12) months at Borrowers’ option (or such other
period up to five years as may be requested by the Borrower and as the Bank, in
its sole discretion may agree).
3.02.02. (Duration of Interest
Periods) every Interest Period shall, subject to market availability to
be conclusively determined by the Bank, be of the duration
specified pursuant to this Clause 3.02 but so that:
(a)
the initial Interest Periods in respect of each
Advance will commence on the Drawdown Date of such Advance and each subsequent
Interest Period in respect thereof shall commence on the last day of the
previous Interest Period, provided that in the case of an Interest Period of
more than three (3) months’ duration, such interest shall be payable quarterly,
except for the Deferred Interest;
(b)
interest shall be calculated in respect of
the Loan or part thereof from time to time outstanding as and from the
commencement date of each applicable Interest Period to the last day of each
such Interest Period and shall be paid on the last day of each such Interest
Period, except for the Deferred Interest;
(c)
for consolidation purpose, the Bank may require
that the initial Interest Period in respect of each Advance of each Tranche
after the first Advance for such Tranche shall end on the same day as the
current Interest Period of the respective Tranche;
(d)
in the event of an Interest Period being fixed for such
duration that a part of the Loan is to be repaid within such Interest Period the
Interest Rate will be fixed as provided in this Agreement for the amount of that
part of the Loan so to be repaid for the period running from the beginning of
such Interest Period to the date upon which the said repayment is to be made,
and the interest will be payable on such date and for the balance of the Loan as
part thereof as the case may be (less the amount to be repaid within such
Interest Period) the interest will be fixed as aforesaid for the agreed period;
and
(e)
if the Bank determines that the duration of an Interest Period
in accordance with Clause 3.02 is not readily available, then that Interest
Period shall have such duration as the Bank, in consultation with the Borrowers,
may determine.
(f)
in case of failure of the Borrowers to specify the duration of
an Interest Period in accordance with the provisions of Clause
3.02 3.03, such Interest Period shall have a duration of three (3)
months unless another period shall be agreed between the Bank and the Borrowers
provided always that such period (whether of
13
three
(3) months or of different duration) shall comply with this Clause
3.02;
3.02.03.
(Deferred Interest) the
accrued Deferred Interest for each Tranche will be due and payable by the
Borrowers to the Banks as follows:
|
(a)
|
the
Deferred Interest for Tranche A on the Vessel A Delivery
Date;
|
|
(b)
|
the
Deferred Interest for Tranche B on the Vessel B Delivery
Date;
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The
Deferred Interest shall constitute a loan
advanced from the Bank to the Borrowers forming part of the Loan, secured by the
Security Documents, and due and payable on the dates provided above. Such loan
shall be (a) of a principal amount equal to the amount of the Deferred Interest,
(b) treated as advanced to the Borrowers at the times of accrual thereof, and
(c) bearing interest at the Interest Rate up and until full
repayment.
3.03.
(Default Interest) in
case of failure by the Borrowers to pay any sum on its due date for payment
under this Agreement and any of the other Security Documents, the Borrowers
shall pay interest on such sum, excluding on interest, from the due date up to
the date of actual payment (both before and after judgment) at the rate
determined by the Bank pursuant to this Clause 3.03. Interest at the
Default Rate shall be compounded at such intervals as the Bank shall in its
discretion determine and shall be payable from time to time by the Borrowers to
the Bank on demand. The rate of interest applicable shall
be the rate (as determined by the Bank) of two per cent (2%) per
annum, above the rate which is the higher of (i) the Interest Rate
or (ii) the aggregate of the Margin and the cost to the Bank of
obtaining funds in the amount equal to the amount or amounts unpaid for such
period or periods as determined by the Bank in its absolute discretion and be
conclusively certified by the Bank save for manifest error. The Bank
reserves all its rights to claim damages from the Borrowers for any other amount
not paid when due.
3.04. (Notification of Interest).
The Bank shall notify the Borrowers promptly of each Interest Period and of each
Interest Rate determined by the Bank under this Clause 3.
In
case that the Bank fails to notify the Borrowers as above, such failure will not
affect the validity of the determination of the Interest Rate or of any Interest
Period. Each determination of an interest rate, or of any Interest Period made
by the Bank in accordance with Clause 3, shall be final and
conclusive.
4.
ALTERNATIVE INTEREST RATES - CURRENCY
4.01.01.
If and whenever, at any time prior to the commencement of or during any Interest
Period, the Bank shall have determined (which determination shall be conclusive)
(i) that adequate and fair means do not exist for ascertaining LIBOR during said
Interest Period or (ii) that deposits in Dollars are not available to the Bank
in the London Interbank Market in the ordinary course of business in sufficient
amounts for any Interest Period or (iii) that by reason of circumstances
affecting the London Interbank Market generally, it is impracticable for the
Bank to advance the Commitment or fund or continue to fund the Loan during any
Interest Period or (iv) that LIBOR for that Interest Period will not adequately
reflect the cost of funding of the Loan for that Interest Period, the Bank shall
forthwith give notice (a “Determination Notice”)
thereof to the Borrowers. A Determination Notice shall contain particulars of
the relevant circumstances giving rise to its issue. After the giving
of any Determination Notice any undrawn amount of the Commitment shall not be
borrowed until notice to the contrary is given to the Borrowers by the
Bank.
4.01.02. During
the period of fifteen (15) days after any Determination Notice has been given by
the
14
Bank
under Clause 4.01.01 the Bank and the Borrowers shall negotiate in good faith
(but without incurring any legal obligations) with a view to arriving at an
acceptable alternative basis (the “Substitute Basis”), for
maintaining the Loan, failing which the Borrowers shall promptly, on first
demand or within the time limit which may be determined by the
Bank, prepay the Loan together with accrued interest thereon from the
date of the Determination Notice to the date of prepayment (calculated at the
rate of (i) the Margin and (ii) the cost to the Bank of obtaining funds in the
amount equal to the Loan for the respective Interest Period) and all other sums
payable by the Borrowers under the Security Documents, and the Commitment shall
be reduced to zero. In case the Bank agrees to a Substitute Basis for
funding the Loan the Bank shall certify such Substitute Basis to the
Borrower. The Substitute Basis may (without limitation) include
alternative interest period(s), alternative currencies or alternative rates of
interest but shall always include the Margin above the cost of funds to the
Bank. Each Substitute Basis so certified shall be binding upon the
Borrowers and shall take effect in accordance with its terms from the date
specified in the Determination Notice until such time as the Bank notifies the
Borrowers that none of the circumstances specified in Clause 4.01.01. continue
to exist whereupon the normal interest rate fixing provisions of this Agreement
shall apply. The Borrowers hereby agree and undertake that upon the occurrence
of such circumstances, they will sign all necessary amendments to this Agreement
and the rest of the Security Documents as required by the Bank.
▇.▇▇.▇▇
the event that on running-out of any Interest Period, the Bank (as per the
Bank’s conclusive determination) is not able to fix a corresponding Dollar
amount on acceptable terms to the Bank for lending to the Borrowers as per
conditions of this Agreement, the Bank is entitled (i) to demand the prepayment
of the Outstanding Indebtedness and the Borrowers shall proceed with such
prepayment, or (ii) to disengage themselves from the obligation to provide
a Dollar financing by granting to the Borrowers a Euro loan as
applicable at such time or a loan in any other currency requested by the
Borrowers and agreed by the Bank at is sole discretion in an equivalent amount
calculated at the official buying rate of exchange prevailing on that
date. Alternatively, the Borrowers are entitled to effect the
prepayment of the Loan at that date. The Borrowers hereby agree and undertake
that upon the occurrence of such an event, they will sign all necessary
amendments to this Agreement and the rest of the Security Documents, or any new
documents as may be required to give effect to the change of currency of the
finance.
5.
REPAYMENT, PREPAYMENT, AND
APPLICATION OF FUNDS
5.01. REPAYMENT OF THE
LOAN.
5.01.01. the
Borrowers shall and it is expressly undertaken by the Borrowers to repay the
Loan in full to the Bank together with all interest accrued thereon and unpaid,
the Expenses, and all other moneys payable to the Bank as follows:
(a)
Tranche A on the Tranche A Final Maturity Date;
(b)
Tranche B on the Tranche B Final Maturity Date;
5.02. (Current
Accounts)
5.02.01. each
Borrower shall open and maintain with the Bank a Current Account so long as
there is any Outstanding Indebtedness;
5.02.02.
throughout the Security Period the Borrowers shall procure that by monthly
payments of 1/3 (one
15
third)
of the interest due on the next Interest Payment Date in respect of each Advance
there shall be standing to the credit of the Current Accounts aggregate funds
sufficient to meet the next interest due in respect of each
Advance;
5.02.03. all
sums from time to time standing to the credit of the Current Accounts shall be
applied by the Bank (and the Borrowers hereby irrevocably authorize the Bank so
to do) first in or towards payment to the Bank of the amount of interest due on
the next Interest Payment Date with respect to each Advance, then towards the
amount of any Expenses due and payable to the Bank;
5.02.04. the
Borrowers irrevocably authorize and instruct the Bank to apply any amount from
time to time standing to the credit of the Current Accounts in or towards
reduction of the Outstanding Indebtedness that has become due;
5.02.05. if
at any time the aggregate amounts standing to the credit of the Current Accounts
shall be insufficient to repay any part of the Outstanding Indebtedness when
due, the Borrowers’ obligation to repay the Outstanding Indebtedness under this
Agreement shall not be affected; and
5.02.06. provided
that all moneys due and payable to the Bank under this Agreement and the other
Security Documents have been paid in full, and there is no breach under the
Agreement, sums may be withdrawn by the Borrowers from the
Current Accounts, subject to Clause 5.02.02..
5.03. (Application of Funds). All
moneys received by the Bank under or pursuant to any of the Security Documents
shall be applied by the Bank in the following manner:
(a)
firstly in or towards payment to the Bank of all sums other than principal
or interest which may be due to the Bank under this Agreement and the other
Security Documents or any of them;
(b)
secondly in or towards payment to the Bank of any arrears of interest, including
default interest due in respect of the Loan or any part thereof;
(c)
thirdly in or towards payment to the Bank of interest due at the
time of such payment;
(d)
fourthly in or towards repayment to the Bank of the Loan;
(e)
fifthly in or towards payment to the Bank of any loss suffered by
reason of any such payment in respect of principal not being effected on the
last day of an Interest Period relating to the part of the Loan repaid;
and
(f)
sixthly the surplus (if any) shall be paid to the Borrowers subject to the terms
of this Agreement.
5.04.
(Set Off). The Bank
is hereby authorized by the Borrowers without prejudice to any of the Bank’
rights at law, in equity or otherwise, at any time after all or any part of the
Outstanding Indebtedness shall have become due and without notice to the
Borrowers:
(a)
to apply any credit balance standing upon any account of the
Borrowers with the Bank and in whatever currency in or towards satisfaction of
any sum due to the Bank from the Borrowers under this Agreement and/or any of
the other Security Documents;
(b) in
the name of the Borrowers and/or the Bank to do all such acts and execute all
such documents as may
16
be
necessary or expedient to effect such application; and
(c)
to combine and/or consolidate all or any accounts in the name of the
Borrowers with the Bank.
For
all or any of the above purposes the Bank is authorized to purchase with the
moneys standing to the credit of any such account or accounts such other
currencies as may be necessary to effect such application. The Bank shall not be
obliged to exercise any right given to it by this Clause.
5.05. (Voluntary Prepayment). The
Borrowers shall have the right, upon giving the Bank not less than ten (10)
Banking Days’ prior notice in writing, to prepay part or all of the Loan in each
case together with all unpaid interest accrued thereon, plus any Break Costs,
plus all other sums of money whatsoever due and owing from the Borrowers to the
Bank hereunder or pursuant to the other Security Documents and all interest
accrued thereon, provided that:
5.05.01. the
giving of such notice by the Borrowers will irrevocably commit the Borrowers to
prepay such amount as stated in such notice;
5.05.02. such
prepayment may take place only on the last day of an Interest Period, provided,
however, that if the Borrowers shall request consent to make such prepayment on
another day and the Bank shall accede to such request (it being in the sole
discretion of the Bank to decide whether or not so to do) the Borrowers will pay
in addition to the amount to be prepaid, any sum as may be payable to the Bank
pursuant to Clause 13;
5.05.03. any
partial prepayment shall be equal to Dollars Five Hundred Thousand ($
500,000.00), or in multiples thereof;
5.06. (Compulsory Prepayment in case of
Total Loss or sale of a Vessel).
On
a Vessel becoming a Total Loss or suffering damage or being involved in an
incident which in the reasonable opinion of the Bank may result in the Vessel
being subsequently determined to be a Total Loss or a Vessel being sold,
including by novation and/or assignment of the respective Contract after the
Tranche with respect to such Vessel has been drawn down (subject to the prior
consent of the Bank which is not to be unreasonably withheld provided that such
sale, or novation or assignment would result in the full prepayment of all sums
outstanding under or in connection with such Tranche), the Borrowers shall
forthwith prepay such Tranche and all sums outstanding under or in connection
with such Tranche, including without limitation, any Break Costs, in
full.
For
the purposes of this Clause 5.06:
(a)
an actual total loss of a Vessel shall be deemed to have occurred at the
actual date and time the Vessel was lost;
(b)
a constructive total loss shall be deemed to have occurred at the date and time
notice of abandonment of the Vessel is given to the insurers of the Vessel for
the time being (provided a claim for total loss is admitted by such insurers)
or, if such insurers do not admit such a claim, at the date and time at which a
total loss is subsequently adjudged by a competent court of law to have
occurred;
(c)
a compromised or arranged total loss shall be deemed to
have occurred on the date on which a binding agreement as to such compromised or
arranged total loss has been entered into by the insurers of the
Vessel;
17
(d)
requisition for title or other compulsory acquisition of the Vessel shall
be deemed to have occurred on the date upon which the relevant requisition for
title or other compulsory acquisition occurs; and
(e)
capture, seizure, detention, arrest, or confiscation of the Vessel
shall be deemed to occur upon the expiry of the period of thirty (30) days after
the date upon which the relevant capture, seizure, detention, arrest or
confiscation occurred.
6.
PAYMENTS
6.01. (Payments). All moneys to be
paid by the Borrowers to the Bank under this Agreement and the other Security
Documents shall be paid to the Bank on their due date in Dollars (and in the
case referred to in Clause 4 of this Agreement in Euro or any other applicable
currency) in immediately available funds.
The
Bank shall have the right to change the place of account for payment, upon eight
(8) Banking Days’ prior written notice to the Borrowers.
6.02. (Payments on Banking Days).
Any payment or payments due shall be made on a Banking Day. If the due date for
payment falls on a day which is not a Banking Day, the payment or payments due
shall be made on the next Banking Day. If the next Banking Day falls in the next
succeeding calendar month, then payment shall be made in the immediately
preceding Banking Day.
6.03. (No Withholdings). All
payments to be made by the Borrowers under this Agreement shall be made without
set-off or counterclaim whatsoever, and free and clear of, and without
withholding or deduction for or on account of, any present or future taxes,
charges, levies, imposts, duties or withholdings and any restrictions or
conditions resulting in any charge whatsoever imposed, either now or hereafter,
by any sovereign state or by any political sub-division or taxing authority of
any sovereign state other than taxes from time to time on the net income of the
Bank imposed in the Federal Republic of Germany.
6.04. (Gross Up). If at any time
any law, regulation, regulatory requirement or requirement of any governmental
authority, monetary agency, central bank or the like compels the Borrowers to
make payment subject to taxes, or any other deduction or withholding, the
Borrowers shall pay to the Bank such additional amounts as may be necessary to
ensure that the Bank receives a net amount equal to the full amount which would
have been received had payment not been made subject to such taxes deduction or
withholding. The Borrowers shall indemnify the Bank against any losses or costs
incurred by it by reason of any failure of the Borrowers to make any such
deduction or withholding or by reason of any increased payment not being made on
the due date for such payment. The Borrowers shall, not later than thirty (30)
days after each deduction, withholding or payment of any taxes, forward to the
Bank official receipts and any documentary receipts and any other documentary
evidence reasonably required by the Bank in respect of the payment of any taxes.
The obligations of the Borrowers under this provision shall, subject to
applicable law, remain in force notwithstanding the repayment of the Loan and
the payment of all interest due thereon pursuant to the provisions of this
Agreement.
6.05.
(Computation). All
interest and other payments payable by reference to a rate per annum under this
Agreement shall accrue from day to day and be calculated on the basis of actual
days elapsed on a 360 day year.
18
7.
FEES
7.01. For
the purposes of this Agreement:
7.01.01.
“Arrangement Fee” means
zero point twenty per cent (0.20%) of the amount of the Post Delivery
Commitment, i.e. US$ 132,600.00 less USD 39,780.00 already charged and paid
under the Existing Loan payable on the first Drawdown Date but in nay case not
later than 31st August
2007.
7.01.02.
The Borrowers shall pay the Arrangement Fee, even if the Commitment and/or
Post Delivery Commitment is cancelled or this Loan Facility is prepaid and
financed by another bank or not arranged by the Bank;
7.01.03. “Commitment Fee” means zero
point twenty per cent (0.20%) per annum on the Post Delivery Commitment
remaining undrawn, payable quarterly by the Borrowers starting on the date of
this Agreement, up and until full draw down of the Post Delivery Commitment.
Such Commitment Fee will not be calculated on amounts already drawn by Borrowers
as part of the Commitment under this Agreement.
In
case of cancellation of the Post Delivery Commitment such term (Commitment Fee)
shall mean zero point twenty per cent (0.20%) per annum on the Commitment
remaining undrawn, payable quarterly by the Borrowers starting on the date of
cancellation of the Post Delivery Commitment. Such Commitment Fee will not be
calculated on amounts already drawn under this Agreement.
8. REPRESENTATIONS
AND WARRANTIES
The
Bank enters into this Agreement in reliance upon the following representations
and warranties made by the Borrowers and it is hereby represented and warranted
by the Borrowers that the following matters are true at the date of this
Agreement, and that they shall remain true so long as there is any Outstanding
Indebtedness:
8.01. Representations Concerning the
Security Parties:
8.01.01. (Due Incorporation/Valid
Existence) each Borrower and any other corporate Security Party is
incorporated and duly organised and validly existing and in good standing under
the laws of its respective country of incorporation, with power to own its
property and assets, to carry on its business as the same is now being lawfully
conducted and to purchase, own, finance and operate vessels, or manage vessels
as the case may be, as well as to undertake the obligations which it has
undertaken pursuant to the Security Documents to which it is or is to be a
party;
8.01.02. (Due Authority) the entry
into and performance of this Agreement and all the other Security Documents to
which it is or is to be a party are within the corporate powers of each Borrower
and any other corporate Security Party and have been duly authorised
by the Board of Directors and all shareholders and any other
necessary action for the authorization has been undertaken and do not and would
not contravene or result in breach of any applicable law, regulation, rule,
judgment, decree or permit or contractual restriction which does, or may, bind
any one or more of them or their shareholders or their subsidiaries, or the
documents defining the respective constitutions of any of them and do not and
will not result in the creation or imposition of any security interest, lien,
charge, or Encumbrance on any of their assets or those of any of their
subsidiaries in favour of any party other than the Bank;
19
8.01.03. (No Default/No Litigation)
neither any Borrower nor any other Security Party is in default under any
agreement including, without limitation the respective Contract, to
which it is a party or by which it may be bound and no litigation,
arbitration, tax claim or administrative proceeding is current or pending or (to
its or its officers’ knowledge) threatened, which, if adversely determined,
would have a materially detrimental effect on the business assets or the
financial condition of any of them;
8.01.04. (Financial Information) all
information, accounts, statements of financial position, exhibits and reports
furnished by or on behalf of any Security Party to the Bank in connection with
the negotiation and preparation of this Agreement and each of the other Security
Documents are true and accurate in all material respects and are not misleading,
do not omit material facts and all reasonable enquiries have been made to verify
the facts and statements contained therein; there are no other facts the
omission of which would make any fact or statement therein misleading and
accounts and statements of financial position, have been prepared in accordance
with all applicable laws and USGAAP which have been consistently
applied;
8.01.05. (Financial Condition) the
financial condition of the Borrowers and of any other Security Party has not
suffered any material deterioration since that condition was last disclosed to
the Bank;
8.01.06. (No Immunity) neither any
Borrower nor any other Security Party nor any of their respective assets is
entitled to immunity on the grounds of sovereignty or otherwise from any legal
action or proceeding (which shall include, without limitation, suit, attachment
prior to judgment, execution or other enforcement);
8.01.07.
(Shipping
Company) the Borrowers are shipping companies involved in the owning or
managing of ships engaged in international voyages and earning profits in free
foreign currency;
8.01.08.
(Commercial benefit of the Corporate
Guarantor) the giving of the Corporate Guarantee guaranteeing the
obligations of the Borrowers under the Agreement by the Corporate Guarantor, is
to the commercial benefit of the Corporate Guarantor in that the Corporate
Guarantor holds 100% of all the issued and outstanding share capital of the
Borrowers and has close financial cooperation and mutual assistance with the
Borrowers and that by lending its support to the Borrowers through such
agreements it furthers its own business interests within the scope
of its constitutional documents.
8.02. Representations Concerning the
Security Documents:
8.02.01. (Licences/Authorization) all
licences, authorizations, consents or approvals necessary for the execution,
validity, enforceability or admissibility in evidence of the Security Documents
and all other documents executed or to be executed in connection therewith, have
been obtained and complied with by each Borrower and any other
Security Party as is or will be a party thereto;
8.02.02. (Perfected Securities) when
duly executed, the Security Documents will create a perfected security interest
in favour of the Bank, with the intended priority, over the assets and revenues
intended to be covered, valid and enforceable against each Borrowers and any
other Security Party as is or will be a party thereto in any Relevant
Jurisdiction;
8.02.03. (No
Notarization/Filing/Records) save for any registration necessary for any
Security Documents, it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement or any of the
other Security Documents that it or they or any other instrument be notarised,
filed,
20
recorded,
registered or enrolled in any court, public office or elsewhere in any Relevant
Jurisdiction or that any stamp, registration or similar tax or charge be paid on
or in relation to the Agreement or the other Security Documents;
8.02.04. (No Taxes) no taxes are
imposed by deduction, withholding or otherwise on any payment to be made by any
Security Party under this Agreement and/or any other Security Document or are
imposed on or by virtue of the execution or delivery of this Agreement and/or
any other Security Document or any document or instrument to be executed or
delivered hereunder or thereunder;
8.02.05. (Validity and Binding Effect)
the Security Documents are valid and binding and enforceable
against the Borrowers and any other Security Party, as is or will be
a party thereto, in accordance with their respective terms and conditions, and
there are no other agreements or arrangements which may adversely affect or
conflict with the Security Documents or the security they create;
8.02.06. (Direct Obligations) the
obligations imposed on the Borrowers and any other Security Party by the
Security Documents do and will constitute direct obligations on
them; and
8.02.07. (Valid Choice of Law) the
choice of law agreed to govern this Agreement and/or any other Security Document
and the submission to the non-exclusive jurisdiction of the courts agreed in
each of the Security Documents are or will be, on execution of the respective
Security Documents, valid and binding on the Borrowers and any other Security
Party which is a party thereto.
8.03.
Representations Concerning the
Vessels:
8.03.01. The
Borrowers hereby further represent and warrant to the Bank that:
a)
each Vessel is and will continue being built in full accordance with the terms
and specifications of the respective Contract and with the rules applicable to
vessels of the type and specifications of such Vessel and upon completion will
be classed to the highest standard for such vessels with a classification
society which has been approved by the Bank in writing and such classification
will be free of all requirements, conditions, recommendations or
notations;
b)
(No Encumbrances)
neither any Vessel nor any part thereof will be subject to any Encumbrances
other than those which may have been accepted in writing by the
Bank;
c)
(Contract Valid)
the copy of each Contract between the Builder and the respective Borrower
delivered to the Bank is a true and complete copy of such document constituting
valid and binding obligations of the parties thereto enforceable in accordance
with its terms and no amendments thereto or variations thereof have been (or
will, without the prior written consent of the Bank, be) agreed nor has any
action been taken by the parties thereto which would in any way render such
document inoperative or unenforceable;
d) (No Rebates) there are and
there will be no commissions, rebates, premiums or other payments by or to or on
account of any Borrower or, to the knowledge of the Borrowers, any other person
in connection with any Contract, except as may have been disclosed to and
accepted in writing by the Bank; and
8.04. (Sufficient Funds) The
Borrowers on the date hereof have secured or on the relevant dates will have
secured sufficient funds to cover their obligations under the Contracts and this
Agreement, and in particular their obligation for payment of all sums of money
payable to the Builder by the Borrowers under the Contracts and to the Bank
under this Agreement.
21
8.05. (No Money
Laundering) The transactions and other arrangements effected or
contemplated by this Agreement and the Security Documents to which a Borrower or
any other Security Party is a party, 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/ECB) of the Council of the European Communities).
8.06. Representations
Correct:
8.06.01. At
the time of entering into this Agreement all above representations and
warranties and/or any other information given by the Borrowers and/or the
Corporate Guarantor and/or any other Security Party to the Bank are true and
accurate and will remain so throughout the Security Period and there has not
occurred and/or is continuing any Event of Default or any event which would
constitute an Event of Default with the passage of time or the giving of notice
or both.
9.
CONDITIONS PRECEDENT AND SUBSEQUENT
9.01. (Conditions Concerning Corporate
Authorizations) the obligation of the Bank to make the Loan
available to the Borrowers as provided in Clause 2 shall be subject
to the condition that the Bank shall have received no later than two (2) Banking
Days before the day of this Agreement, the following documents and evidence in
form and substance satisfactory to the Bank:
(a)
a duly certified true copy of the Memorandum and Articles of Association,
or the Articles of Incorporation and By-Laws (if any) as the case may be, or of
any other constitutional documents, as the case may be, of each corporate
Security Party together, where appropriate, with certified translations of the
same into English;
(b)
a recent certificate of incumbency of each corporate Security Party issued by
the appropriate authority and/or at the discretion of the Bank signed by the
secretary or a director of each of them respectively, stating the officers
and/or the directors of each of them;
(c)
a recent certificate as to shareholding of any corporate Security Party issued
by an appropriate authority or, at the discretion of the Bank , signed by the
secretary or a director of each of them as the case may be, stating respectively
the full names and addresses of the corporate entity or entities beneficially
entitled as shareholders/stockholders of the entire issued and outstanding
shares/stock of each of them;
(d)
minutes of meetings of the directors and shareholders of any
corporate Security Party at which there was approved the entry into execution,
delivery and performance of this Agreement, the other Security Documents and any
other documents executed or to be executed pursuant hereto or thereto to which
the relevant corporate Security Party is or is to be a party;
(e)
evidence of the due authority of any person signing this Agreement, the other
Security Documents and any other documents executed or to be executed pursuant
hereto or thereto on behalf of any corporate person;
(f)
evidence that all necessary licenses, consents, permits and authorizations
(including exchange control if applicable) have been obtained by any Security
Party for execution, delivery, validity, enforceability, admissibility in
evidence and the due performance of its respective obligations under or pursuant
to this
22
Agreement
and the other Security Documents;
(g) in
case that the Bank at its sole discretion has accepted that any shares of any
Security Party may be owned by a corporate shareholder, the conditions set out
in this Clause 9.01.01 exist for such corporate shareholder in relation to its
participation in any meeting of shareholders of any of the Security Parties and
the granting of any security hereunder; and
(h)
any other documents or recent certificates or other evidence satisfactory
in the sole discretion of the Bank, which would be required by the Bank in
relation to any corporate Security Party proving that the relevant Security
Party has been properly established, continues to exist validly and to be in
good standing, listing present board of directors and shareholders, that the
execution and performance of the Security Documents have been duly authorized
and generally that the representations in Clause 8 are correct in all
respects.
9.01.02. (Conditions Concerning the Securities
and Fees) the obligation of the Bank to make available to the Borrowers
the Loan is subject to the further conditions that the Bank shall have received
in form and substance satisfactory to the Bank:
(A)
Prior to advancing any Advance under Tranche A
|
(i)
|
each
of the Agreement, the Contract Assignment Consent and Acknowledgement, and
the Refund Guarantee Consent and Acknowledgement with respect to the
Vessel A Contract, and the other Security Documents, duly
executed;
|
|
(ii)
|
evidence
that the Refund Guarantee under Vessel A Contract has been issued in form
and substance acceptable to the Bank and, if in letter form, received in
original by the Bank and no default having occurred under such Refund
Guarantee;
|
| (iii) | payment to the Bank of the fees payable pursuant to Clause 7; |
|
(iv)
|
duly
certified copy of the Vessel A Contract and no default having occurred
under the Vessel A Contract;
|
|
(v)
|
evidence
that each Current Account has been duly opened and all mandate forms,
signature cards and authorities duly
delivered;
|
|
(vi)
|
evidence
that all sums payable by NEDERLAND to the Builder under the Vessel A
Contract have been paid in full, and/or will be available with the Bank
for payment.
|
B.
Prior to advancing any Advance under Tranche B
|
(i)
|
each
of the Contract Assignment Consent and Acknowledgement, and the Refund
Guarantee Consent and Acknowledgement with respect to the Vessel B
Contract, and the other Security Documents, duly
executed;
|
|
(ii)
|
evidence
that the Refund Guarantee under Vessel B Contract has been issued in form
and substance acceptable to the Bank and, if in letter form, received in
original by the Bank and no default having occurred under such Refund
Guarantee;
|
|
(iii)
|
duly
certified copy of the Vessel B Contract and no default having occurred
under the Vessel B Contract;
|
|
(iv)
|
evidence
that all sums payable by LAKEVIEW to the Builder under the Vessel B
Contract have been paid in full, and/or will be available with the Bank
for payment.
|
|
C.
|
After
advancing the first Advance under Tranche A or under Tranche
B
|
|
|
each
of the Contract Assignment Consent and Acknowledgement, and the Refund
Guarantee Consent and Acknowledgement with respect to the Vessel A
Contract and Vessel B Contract as the case
should
|
23
|
|
be
received by the Bank not later than fourteen (14) days after
the advancing of the first Advance under the relevant
Tranche.
|
9.01.03. (No Change of Circumstances)
the obligation of the Bank to make the Loan available to the Borrowers is
subject to the further conditions that:
(a)
the representations and warranties set out in Clause 8 and in each of the
Security Documents are true and correct on and as of each such time as if each
was made with respect to the facts and circumstances existing at such
time;
(b)
no Event of Default shall have occurred and be continuing or would result
from the drawdown; and
(c)
the Bank shall be satisfied that there has been no change in the ultimate
ownership, management, operations or financial condition of any Security Party
which change might, in the reasonable opinion of the Bank, be detrimental to the
interests of the Bank.
9.01.04. (General Conditions) the
obligation of the Bank to make available the Loan to the Borrowers is subject to
the further conditions that the Bank shall have received in form and substance
satisfactory to the Bank:
(a)
opinions from legal counsel as to all the
matters referred to in this Agreement and the other Security
Documents and all such aspects of law as the Bank shall deem relevant to this
Agreement and the other Security Documents and any other documents executed
pursuant hereto or thereto and any further legal or other expert opinion as the
Bank at its sole discretion may require; and
(b)
confirmation from any agents nominated in this Agreement and elsewhere in
the other Security Documents and accepted by the Bank for the acceptance of any
notice or service of process, that they consent to such nomination.
(c)
the duly signed audited financial figures (balance sheets and profit
and loss accounts) prepared in accordance with all applicable laws and USGAAP of
the Corporate Guarantor, and evidence that the Cash Liquidity
Accounts are credited with the Cash Liquidity;
9.02.
(Further documents or
evidence). The Bank may from time to time either prior or following a
Drawdown Date request and the Borrowers shall, within the period specified by
the Bank, deliver to the Bank such further documents certificates, evidence
and/or opinions as the Bank may reasonably ask.
10.
SECURITY
As
security for the obligations of the Borrowers under the Loan and for the due and
punctual repayment of the Outstanding Indebtedness hereunder,
the Borrowers shall provide and shall ensure and procure that the Bank is
provided with the following Security Documents in form and substance
satisfactory to the Bank at the time specified herein or otherwise as
required by the Bank:
10.01.01. the
Security Assignment with respect to each Vessel to consist of a first priority
assignment in favour of the Bank of all the rights of each Borrower under the
respective Contract, together with the Contract Assignment Consent and
Acknowledgement, and a first priority assignment in favour of the Bank of all
the rights of each Borrower under the respective Refund Guarantee together with
the Refund Guarantee Assignment Consent and Acknowledgement;
24
10.01.02. the
Corporate Guarantee in favour of the Bank by the Corporate Guarantor, to secure
the obligations of the Borrowers to the Bank under this Agreement;
10.01.03.
a first priority pledge and charge in favour of the Bank executed on each
Current Account;
10.01.03. any
and all other Security Documents that the Bank may reasonably
require.
10.02. (Maintenance of Securities).
It is hereby undertaken by the Borrowers that the Security Documents shall both
at the date of execution and delivery thereof and so long as any moneys are due
under this Agreement or thereunder be valid and binding obligations of the
respective Security Parties thereto and rights of the Bank enforceable in
accordance with their respective terms and that the Borrowers will, at their own
expense, execute, sign, perfect and do any and every such further assurance,
document, act, omission or thing as in the opinion of the Bank may be necessary
or desirable for perfecting the security contemplated or constituted by the
Security Documents.
11.
COVENANTS
It
is hereby undertaken by the Borrowers that, from the date of this Agreement and
so long as any moneys are due and/or owing and/or outstanding under this
Agreement or any of the other Security Documents the Borrowers,
will:
A.
Information
Covenants
11.01.01. (Annual Financial Statements)
furnish the Bank upon request, and in any event latest 180 days after
the end of each fiscal year in form and substance satisfactory to the Bank, with
annual, audited, financial statements of each Borrower and of the
Corporate Guarantor (including balance sheets with profit and loss account)
after the end of each fiscal year commencing for the Corporate
Guarantor on the 1st January
2006 and audited by auditors acceptable to the Bank and prepared in accordance
with all applicable laws and USGAAP consistently applied;
11.01.02. (Financial Information) provide
the Bank at least annually and in any event within two (2) weeks after the
Bank’s request and in form and substance satisfactory to the Bank with
information on the financial condition, cash flow position, commitments and
operations of the corporate Security Parties, such financial details to be
certified by a Director of each Borrower and the Corporate
Guarantor or any other relevant Security Party as to their
correctness;
11.01.03. (Information on the Borrowing of the
Borrowers) promptly inform the Bank of any proposed arrangements whereby
the Borrowers will have an aggregate liability in respect of Borrowed Money
which, will be in excess of $1,000,000.00 (or the equivalent in any other
currency) together with the payment or repayment terms in respect of such
Borrowed Money;
11.01.04. (Information on Adverse Change or
Default) promptly inform the Bank in writing of any occurrence of which
any Borrower becomes aware which might adversely affect the ability of any
Security Party to perform its respective obligations under this Agreement and/or
any of the other Security Documents and of any default under any Contract or any
Refund Guarantee forthwith upon becoming aware thereof; and
25
11.01.05. (Information on Events concerning any
Vessel) notify the Bank forthwith and in any event within 48 hours after
such event becomes known to any Borrower by fax or e-mail confirmed by letter
all addressed to the Bank of:
(a)
any accident to any Vessel or any other event affecting the due and timely
construction of any Vessel;
(b)
any occurrence resulting in any Vessel becoming or being likely to become a
Total Loss;
(c)
any requirement or recommendation made by any classification society or by any
competent authority which is not complied with, within any time limit imposed by
such classification society or authority;
(d)
the exercise or purported exercise of
any lien on a Vessel and of its release; and
(e)
any petition or notice of meeting to consider any resolution to
wind-up any Borrower, or the Corporate Guarantor, or any other
corporate Security Party, or the Builder, or the Refund Guarantor.
B.
Banking
Arrangements
11.02.
(Banking Operations)
Ensure that whenever possible all banking operations in connection with any
Vessel are carried out through the Bank;
C.
Financial
Covenants
11.03.01. (No Further Indebtedness)
incur no further Indebtedness nor authorize or accept any capital commitments
nor enter into any agreement for payment on deferred terms or hire agreement
without the prior written consent of the Bank, such consent not to be
unreasonably withheld;
11.03.02. (No Loans) not make any loans
or loan advances to, or any investments in, any person, firm, corporation, joint
venture or other entity including (without limitation) any loan or advances to
any officer, director, stockholder or employee directly or through the Corporate
Guarantor;
11.03.03.
(No Dividends)
upon the happening of a Event of Default, or if an Event of Default will arise
as a result of the payment of any dividend or the making of any other form of
distribution,, not declare or pay any dividends or other distributions upon any
of the issued shares or otherwise dispose of any assets to any of the
shareholders of the Borrowers, and procure and ensure that the Corporate
Guarantor will do likewise;
11.03.04. (No Payments) except pursuant
to this Agreement and the other Security Documents (or as expressly permitted by
the same) not to pay out any funds to any company or person except in connection
with the administration of the Borrowers, or the construction of the
Vessels;
11.03.05. (No Borrowing) ensure that
the Borrowers do not enter into any arrangements in respect of Borrowed Money in
an aggregate amount in excess of $1,000,000.00 (or the equivalent in any other
currency) without the prior consent of the Bank and that the other Security
Parties inform the Bank of their such
arrangements; and
11.03.06. (No Guarantees) not issue or
agree to issue any guarantee in favour of any person or legal entity other than
any guarantee in connection with the construction of the Vessels as notified to
the Bank; and
26
11.03.07. (Cash Liquidity) ensure and
procure that the Corporate Guarantor will maintain throughout the Security
Period the Cash Liquidity in the Cash Liquidity Accounts, and provide to the
Bank account statements or any other documents that the Bank may require
evidencing compliance with this covenant; and
11.03.08. (Corporate Guarantor) ensure
and procure that throughout the Security Period the
percentage of the overall amount of debt of the Corporate Guarantor to the total
capitalization [debt plus equity] must not exceed seventy per cent (70%);
and
11.03.09. (Post Delivery Finance) enter
into a loan agreement and all other required documentation with the Bank for the
Post Delivery Finance in accordance with the terms of the Term Letter of the
Bank dated 26th June
2007 and accepted by the Corporate Guarantor on behalf of the
Borrowers.
D.
Maintenance of Corporate and Business Structure
11.04.01. (Maintain Business Structure)
not change the nature, organisation and conduct of the business
of any Borrower and any other Security Party as the case may be, or
carry on any business other than the business carried on at the date of this
Agreement;
11.04.02. (Maintain Legal Structure)
not alter in any manner any of the documents defining the constitution of any
Borrower or of any other corporate Security Party nor change any Director or
Shareholder of any Borrower or any other Corporate Security Party without the
Bank’s prior written consent;
11.04.03. (Control) ensure that no
change shall be made in the ownership, control or management of any
Borrower, or of any Vessel without the prior written consent of the
Bank which is not to be unreasonably withheld. The consent of the Bank is
required prior to any change in the ownership of the Corporate Guarantor which
affects its control;
11.04.04. (No Merger) not merge or
consolidate with any other company or person without the prior written consent
of the Bank which is not to be unreasonably withheld;
E.
No Subordination/Value of
Security
11.05.01.
(No Subordination)
ensure that the Indebtedness of the Borrowers to the Bank hereunder will not be
subordinated in priority of payment to any other present or future
Indebtedness;
F.
Maintenance of Assets
11.06.01.
(No Transfer of Assets)
not convey, assign, transfer, sell or otherwise dispose of or deal with any of
their real or personal property, assets including, without limitation, any
Vessel, or rights, whether present or future, including without limitation any
rights under any Contract or Refund Guarantee, without the
Bank’ prior written consent; and
11.06.02. (No Encumbrance of Assets) not
allow any part of their undertaking, property, assets, including, without
limitation, any Vessel, or rights, whether present or future, including without
limitation any rights under any Contract or Refund Guarantee to be mortgaged,
charged, pledged, used as a lien or otherwise encumbered without the Bank’s
prior written consent;
27
G.
Covenants Concerning the Vessels
11.07.01.
(No Change in Contracts)
ensure that each Vessel is constructed in accordance with the terms and
specifications of the respective Contract and with the highest standards and
rules of a classification society acceptable to the Bank for vessels of the type
and specifications of such Vessel, that none of the Contracts will be amended
without the Bank’s prior consent, and provide the Bank on demand with copies of
all documents and evidence in connection with the construction of each
Vessel;
11.07.02. (Inspection) ensure that the
authorised experts of the Bank is at any time allowed to inspect the
Vessels at the premises of the Builder at Borrowers’ cost;
11.07.03. (Evidence of Payment) upon
the Bank’s request, promptly provide the Bank with evidence of
payment or settlement of all amounts payable by the Borrowers to the
Builder under the Contracts;
11.07.04. promptly
pay all moneys due by each Borrower to the Builder under the Contracts, ensuring
that nothing shall be done or omitted to be done with respect to any Contract
which would cause any delay in the construction of any Vessel or any default by
any Borrower;
H.
Observance of Covenants
11.08.01. (Use of the Loan) use the
Loan exclusively for the purposes and in the manner specified in this
Agreement;
11.08.02. (Comply with Covenants) duly
and punctually perform all obligations under this Agreement and the other
Security Documents;
11.08.03. (Payment of Expenses) pay to
the Bank on demand any and all Expenses incurred by the Bank or any other amount
which is payable by the Borrowers to the Bank under this Agreement the due date
of which is not specified in any other Clause; and
11.08.04. (Proof of Compliance) upon
request from time to time by the Bank promptly provide such information and
evidence on a quarterly basis to the Bank as the Bank would reasonably require
to demonstrate compliance with the covenants and undertakings set forth in this
Agreement and any other Security Document;
I.
Validity of Securities
11.09.01. (Validity) ensure and procure
that all governmental or other consents required by law and/or any other steps
required for the validity, enforceability and legality of this Agreement and the
other Security Documents are maintained in full force and effect and/or
appropriately taken;
11.09.02. (Taxes) pay all taxes,
assessments and other governmental charges when the same fall due, except to the
extent that the same are being contested in good faith by appropriate
proceedings and adequate reserves have been set aside for their payment if such
proceedings fail; and
11.09.03. (Additional Documents) from
time to time at the request of the Bank promptly execute and deliver to the Bank
or procure the execution and delivery to the Bank of all such documents as the
Bank
28
shall
deem desirable for giving full effect to this Agreement, and for perfecting,
protecting the value of or enforcing any rights or securities granted to the
Bank under any one or more of this Agreement, the other Security Documents and
any other documents executed pursuant hereto or thereto;
J.
Covenants for the Security Parties
11.10.01. (Security Parties) ensure and
procure that each of the Security Parties will duly and punctually comply with
the covenants, conditions, undertakings, agreements or obligations on its or his
part contained in any of the Security Documents or shall not in any other way be
in breach of or do or cause to be done any act repudiating or evidencing an
intention to repudiate any of the Security Documents or that there shall not
occur any event which would or would with the passage of time render performance
of any of the Security Documents impossible or unlawful or unenforceable by the
Bank.
K.
Waiver by the Bank
11.11.01.
the covenants specified in this Clause are inserted solely for the benefit of
the Bank and may be waived in whole or in part and with or without conditions by
the Bank without prejudicing the right of the Bank to require fulfillment of
such covenants at such time and manner as specified by the Bank.
12.
EVENTS OF DEFAULT
There
shall be an Event of Default whenever an event occurs described in Clauses 12.01
to 12.08:
12.01. Default
under any Contract and any Refund Guarantee - Non Performance of
Obligations
12.01.01. failure
by the Borrowers to pay timely any sum due and payable under any
Contract to the Builder or to any other party as provided in such
Contract and in this Agreement; or
12.01.02. an
event of default or breach, or any other event occurs in respect of any Contract
and/or any Refund Guarantee which in the sole discretion of the Bank endangers
or jeopardizes or affects the due completion and delivery of a Vessel to the
respective Borrower, or the Bank’s security under the Security Assignment;
or
12.01.03. the
validity of a Refund Guarantee or any Contract or of any security provided
thereunder or under this Agreement is contested or questioned by any party or at
the sole discretion of the Bank becomes questionable or doubtful;
or
12.01.04. failure
by the Borrowers to pay any sum due from the Borrowers to the Bank under this
Agreement and/or any of the other Security Documents when due, or, in the case
of any sum payable on demand, within seven (7) days from such demand;
or
12.01.05.
any breach by the Borrowers or any other Security Party or failure of the
Borrowers or any other Security Party to observe and perform any covenant, term,
or condition or any of the obligations or undertakings expressed to
be assumed by the Borrowers under this Agreement and/or any of the other
Security Documents (other than failure to pay any sum when due) and, in respect
of any such breach or failure which in the sole opinion of the Bank is capable
of remedy, such action as the Bank may require shall not have been taken within
seven (7) days of the Bank notifying the Borrowers or any other Security Party
of such required action to remedy the breach or failure; or
29
12.01.06. sale
of a Vessel either directly or by a novation or assignment of the Contract for
such Vessel, or change of a Vessel’s present classification society attending to
construction without the prior written consent of the Bank which is not to be
unreasonably withheld and without prejudice to Clause 5.06;
or
12.01.07. failure
by the Borrowers to utilize the Loan for the purposes stated in Clause 1.01 of
this Agreement or failure to provide the Bank with evidence thereof within seven
(7) days from the Bank’s demand; or
12.01.08.
any claim is made under a Refund Guarantee irrespective of whether or not such
claim has been referred to arbitration pursuant to such Refund Guarantee and of
whether or not there is a claim made under a Contract; or
12.01.09. a
Contract is terminated or rescinded for any reason whatsoever or is frustrated
or is varied or amended in any manner not permitted by or pursuant to this
Agreement or any other Security Document; or
12.01.10. any
Refund Guarantee is repudiated, cancelled, rescinded, or otherwise terminated,
other than by return or cancellation of such Refund Guarantee following the
delivery of the respective Vessel to the respective Borrower; or
12.02. Events
affecting the Borrowers the Builder, and the Refund Guarantor
12.02.01. any
Borrower or the Builder or the Refund Guarantor is adjudicated or found bankrupt
or insolvent or any order is made by any competent court or resolution passed by
a Borrower or the Builder or the Refund Guarantor or petition presented for the
winding-up or dissolution of a Borrower or the Builder or the Refund Guarantor
or for the appointment of a liquidator, trustee, administrator or conservator of
the whole or any part of the undertakings, assets, rights or revenues of a
Borrower or the Builder or the Refund Guarantor, or a Borrower or the Builder or
the Refund Guarantor suspends or ceases or threatens to suspend or cease to
carry on its business; or
12.02.02. a
Borrower or the Builder or the Refund Guarantor becomes or is deemed to be
insolvent or suspends payment of its debts or is (or is deemed to be) unable to
or admits inability to pay its debts as they fall due or proposes or enters into
any composition or other arrangement for the benefit of its creditors generally
or proceedings are commenced in relation to a Borrower or the Builder or the
Refund Guarantor under any law, regulation or procedure relating to
reconstruction or readjustment of debts; or
12.02.03. an
encumbrancer takes possession of or a receiver or similar officer is appointed
on the whole or any part of the undertakings, assets, rights or revenues of a
Borrower or the Builder or the Refund Guarantor or a distress,
execution, sequestration or other process is levied or enforced upon or sued out
against the undertakings, assets, rights or revenues of a Borrower or
the Builder or the Refund Guarantor and is not discharged within
seven (7) days; or
12.02.04. Legal Process) any judgment or
order made against a Borrower or the Builder or the Refund Guarantor is not
stayed or complied with within seven (7) days or a creditor attaches or takes
possession of, or a distress, execution, sequestration or other process is
levied or enforced upon or sued out against, any of the undertakings, assets,
rights or revenues of a Borrower or the Builder or the Refund
Guarantor and is not discharged within seven (7) days; or
12.02.05. (Appointment of receivers and
managers) any administrative or other receiver is appointed
over
30
a
Borrower or the Builder or the Refund Guarantor or any part of its assets,
undertakings, rights or revenues or any other steps are taken to enforce any
Encumbrance over all or any part of the assets, undertakings, rights or revenues
of a Borrower or the Builder or the Refund Guarantor; or
12.02.06. all
or a material part of the undertakings, assets (including without limitation a
Vessel), rights or revenues of a Borrower or the Builder or the Refund Guarantor
is seized, nationalised, expropriated or compulsorily acquired by or under the
authority of any government; or
12.02.07. any
event occurs or proceeding is taken with respect to a Borrower or
the Builder or the Refund Guarantor in any jurisdiction to which it
is subject which has an effect equivalent or similar to any of the events
mentioned in Clauses 12.02.01 to 12.02.06; or
12.02.08. a
Borrower or the Builder or the Refund Guarantor suspends or ceases or threatens
to suspend or cease to carry on its business; or
12.02.09. there
occurs, in the reasonable opinion of the Bank, a materially adverse change in
the financial condition of a Borrower or of any other Security Party, or of the
Refund Guarantor or of the Builder; or
12.02.10. the
value of any security deteriorates, or any other event occurs or circumstances
arise which, in the opinion of the Bank is likely materially and adversely to
affect either (i) the ability of a Borrower or of the Corporate Guarantor to
perform all or any of its obligations under or otherwise to comply with the
terms of this Agreement and/or any of the other Security Documents, or (ii) the
ability of the Builder or of the Refund Guarantor to perform all or any of its
obligations under or otherwise to comply with the terms of a Contract or a
Refund Guarantee, (iii) the security created by this Agreement and/or any of the
other Security Documents; or
12.02.11. there
is any change in the beneficial ownership of the shares in a Borrower, or of the
control of the Corporate Guarantor without the prior written consent of the Bank
which is not to be unreasonably withheld; or
12.03. Representations
Incorrect
12.03.01. any
representation or warranty made or deemed to be made or repeated by or in
respect of a Borrower or of any other Security Party in or pursuant to this
Agreement or any of the other Security Documents or in any notice, certificate
or statement referred to in or delivered under this Agreement or any of the
other Security Documents is or proves to have been incorrect in any material
respect; or
12.04. Cross
- Default of a Borrower or any other Security Party
12.04.01. any
Indebtedness of a Borrower or of any other Security Party to the Bank or to any
third party is not paid when due and payable, or the Bank or any creditor of a
Borrower or any other Security Party becomes entitled to declare any such
Indebtedness due and payable prior to the date when it would otherwise have
become due, or any guarantee or indemnity given by a Borrower or any other
Security Party in respect of Indebtedness is not honored when due and called
upon; or
12.05.
Events Affecting the Security Documents
12.05.01. this
Agreement or any of the other Security Documents shall at any time and for any
reason become invalid or unenforceable or otherwise cease to remain in full
force and effect, or the priority, validity or enforceability of the Agreement
or any of the other Security Documents at any time and for any
31
reason
is contested by any party thereto (other than the Bank), or such party denies
that it has any, or any further, liability thereunder or it becomes impossible
or unlawful for a Borrower or any other Security Party to fulfill any of its
covenants and obligations contained in this Agreement or any of the other
Security Documents or for the Bank to exercise the rights or any of it vested in
it thereunder or otherwise; or
12.06. Events
Concerning the Security Parties
12.06.01. any
Security Party (other than the Borrowers) fails to pay any sum due from it under
this Agreement and/or any of the other Security Documents when due, or, in the
case of any sum payable on demand, within seven (7) Banking Days of demand;
or
12.06.02. any
Security Party (other than the Borrowers) commits any breach of or fails to
observe any of the covenants, terms, obligations, conditions or undertakings
expressed to be assumed by it under this Agreement and/or any of the other
Security Documents (other than failure to pay any sum when due) and, in respect
of any such breach or failure which in the opinion of the Bank is capable of
remedy, such action as the Bank may require shall not have been taken within
seven (7) days of the Bank notifying the relevant Security Party, of such
required action to remedy the breach or omission; or
12.06.03. any
representation or warranty made or deemed to be made or repeated by or in
respect of any Security Party (other than the Borrowers) in or pursuant to this
Agreement or any of the other Security Documents or in any notice, certificate
or statement referred to in or delivered under this Agreement or any of the
other Security Documents is or proves to have been incorrect in any material
respect; or
12.06.04. any
of the Security Parties contests or questions its obligations under any Security
Document; or
12.06.05. any
of the events referred to in Clause 12.02.01 to 12.02.06 occurs (amended as
appropriate) in relation to any Security Party (other than the Borrowers);
or
12.07. Events Concerning the
Vessels
12.07.01. in
contradiction to the rules of proper construction and maintenance the state of a
Vessel deteriorates or appurtenances are removed or construction ceases for more
than 60 days, unless such delay is within the permissible delays under the
respective Contract; or
12.07.02. alterations
in the construction specifications of a Vessel under the respective Contract are
made by the respective Borrower without the consent of the Bank and in case of
authorised alterations, if inspection by the Bank’ authorised expert is refused
or if the respective Borrower does not furnish receipts or other proof within
fourteen (14) days after demand by the Bank that the costs accrued were duly
paid; or
12.07.03. any
Vessel suffers damage of more than 40% of its estimated value, or the
security of the Loan is infringed in a material way in the reasonable opinion of
the Bank; or
12.07.04. any
Vessel is arrested, confiscated, seized, taken in execution, impounded,
forfeited, detained in exercise or purported exercise of any possessory lien or
other claim or otherwise taken from the possession of the Builder and the
Builder shall fail to procure the release of the Vessel within a period of seven
(7) days thereafter.
32
12.08. Consequences
of Default
The
Bank may without prejudice to any other rights of the Bank, at any time after
the happening of an Event of Default:
12.08.01. by
notice to the Borrowers declare that the obligation of the Bank to make
available or maintain the Loan or any part thereof shall be terminated,
whereupon the Loan or such relevant part thereof shall be reduced to
zero forthwith; and/or
12.08.02. by
notice to the Borrowers declare that the Loan and all interest and Fees accrued
and all other sums payable under this Agreement and the other Security Documents
have become due and payable, whereupon the same shall, immediately or in
accordance with the terms of such notice, become due and payable;
and/or
12.08.03. put
into force and exercise all or any of the rights, powers and remedies possessed
by the Bank under this Agreement and/or under any other Security Document or
otherwise (whether at law, by virtue of any of the Security Documents or
otherwise).
12.09. (Proof of Default). It is
agreed that (i) the non- payment of moneys on their due date will be proved
conclusively by mere passage of time and (ii) the occurrence of this and any
other Event of Default shall be proved conclusively by a mere written statement
of the Bank (save for manifest error).
13.
INDEMNITIES
13.01. The
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to) on
demand of the Bank indemnify the Bank, without prejudice to any of the Bank’
other rights under any of the Security Documents, against any loss (excluding
loss of Margin) or expense which the Bank shall certify as sustained or incurred
by it as a consequence of (i) any default in payment by any of the Security
Parties of any sum under any of the Security Documents when due, (ii) the
occurrence of any Event of Default, (iii) any prepayment of the Loan or part
thereof being made under Clauses 5.05 or 15 or any other repayment of the Loan
or part thereof being made otherwise than on the last day of an Interest Period
relating to the part of the Loan prepaid or repaid (iv) any drawdown not being
made for any reason (excluding any default by the Bank) after the relevant
Drawdown Notice has been given, including, in any such case, but not limited to,
any loss or expense sustained or incurred in maintaining or funding the Loan or
any part thereof or in liquidating or re-employing deposits from third parties
acquired to effect or maintain the Loan or any part thereof.
13.02. The
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to) pay
to the Bank on demand:
(a)
all expenses (including legal, printing and out-of- pocket expenses)
incurred by the Bank in connection with the negotiation, preparation, execution
and perfection of this Agreement and the other Security Documents and of any
amendment or extension of or the granting of any waiver or consent under this
Agreement and/or any of the other Security Documents and/or in connection with
any proposal by the Borrowers to constitute additional security, whether any
such security shall in fact be constituted or not;
(b)
all expenses (including legal and out of pocket expenses)
incurred by the Bank in contemplation of, or otherwise in connection with, the
enforcement of, or preservation of any rights under, this Agreement
and/or
33
any
of the other Security Documents, or otherwise in respect of the moneys owing
under this Agreement and/or any of the Security Documents and in general for the
protection of the Bank’ interests;
(c)
any and all other Expenses as defined in Clause 1.02;
and
(d)
interest at the rate referred to in Clause 3.03 from the date of
demand to the date of payment (as well after as before judgment).
All
expenses payable pursuant to this Clause 13.02 shall be paid together with value
added tax (if any) thereon.
13.03. The
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to) pay
any and all stamp, registration and similar taxes or charges (including those
payable by the Bank) imposed by governmental authorities in relation to this
Agreement and the other Security Documents, and shall indemnify the Bank against
any and all liabilities with respect to, or resulting from delay or omission on
the part of the Borrowers to pay such taxes or charges.
13.04.
(Environmental
Indemnity). The Borrowers shall indemnify the Bank on demand by the Bank
and hold the Bank harmless from and against all costs, expenses, payments,
charges, losses, demands, liabilities, actions, proceedings (whether civil or
criminal), penalties, fines, damages, judgments, orders, sanctions or other
outgoings of whatever nature which may be suffered, incurred or paid by, or made
or asserted against the Bank at any time, whether before or after the repayment
in full of principal and interest under this Agreement, relating to, or arising
directly or indirectly in any manner or for any cause or reason out of any
environmental claim made or asserted against the Bank.
13.05. (Currency Indemnity) If any
sum due from the Borrowers under any of the Security Documents or any order or
judgment given or made in relation hereto has to be converted from the currency
(the “first currency”) in which the same is payable under the relevant Security
Document or under such order or judgment into another currency (the “second
currency”) for the purpose of (i) making or filing a claim or proof against a
Borrower or any other Security Party, as the case may be, (ii) obtaining an
order or judgment in any court or other tribunal or (iii) enforcing any order or
judgment given or made in relation to any of the Security Documents, the
Borrowers shall (and it is hereby expressly undertaken by the Borrowers to)
indemnify and hold harmless the Bank from and against any loss suffered as a
result of any difference between (a) the rate of exchange used for such purpose
to convert the sum in question from the first currency into the second currency
and (b) the rate or rates of exchange at which the Bank may in the ordinary
course of business purchase the first currency with the second currency upon
receipt of a sum paid to it in satisfaction, in whole or in part, of any such
order, judgment, claim or proof. Any amount due from the Borrowers under this
Clause 13.05 shall be due as a separate debt and shall not be affected by
judgment being obtained for any other sums due under or in respect of any of the
Security Documents, and the term “rate of exchange” includes any premium and
costs of exchange payable in connection with the purchase of the first currency
with the second currency.
13.06. (Maintenance of the
Indemnities) The indemnities contained in this Clause 13 shall apply
irrespective of any indulgence granted to the Borrowers or any other party from
time to time and shall continue in full force and effect notwithstanding any
payment in favour of the Bank and any sum due from the Borrowers under this
Clause 13 will be due as a separate debt and shall not be affected by judgment
being obtained for any other sums due under any one or more of this Agreement,
the other Security Documents and any other documents executed pursuant hereto or
thereto.
34
13.07. (Communications Indemnity) It
is hereby agreed that:
13.07.01. the
Bank is hereby authorised by the Borrowers to accept at its sole discretion all
tested or untested communications given by facsimile, e-mail, or otherwise,
regarding any or all of the notices, requests, instructions or other
communications under this Agreement, subject to any restrictions imposed by the
Bank relating to such communications including, without limitation (if the Bank
so asks) the obligation to confirm such communications by letter;
13.07.02.
the Borrowers shall recognize any and all of the said notices, requests,
instructions or other communications to the Bank as legal, valid and binding,
when these notices, requests, instructions or communications come from the fax
number and/or e-mail address, number mentioned in Clause 18 or any
other e-mail address or fax number usually used by them or the Corporate
Guarantor;
13.07.03. the
Borrowers hereby assume full responsibility for the execution of the said
notices, requests, instructions or communications to the Bank and promise and
recognize that the Bank shall not be held responsible for any loss, liability or
expense that may result from such notices, requests, instructions or other
communications. It is hereby undertaken by the Borrowers to indemnify in full
the Bank from and against all actions, proceedings, damages, costs, claims,
demands, expenses and any and all direct and/or indirect losses which the Bank
or any third party may suffer, incur or sustain by reason of the Bank following
such notices, requests, instructions or communications;
13.07.04. the
Bank shall have the right to ask the Borrowers to furnish any information the
Bank may require to establish the authority of any person purporting to act on
behalf of the Borrowers for these notices, requests, instructions or
communications but the Bank is not obliged to do so. The Bank shall be fully
protected in, and the Bank shall incur no liability to the Borrowers for acting
upon the said notices, requests, instructions or communications which the Bank
in good faith believes to have been given by the Borrowers or by any of their
authorised representative(s);
13.07.05. it
is undertaken by the Borrowers to safeguard the function and the security of the
electronic and mechanical appliance(s) such as e-mail, fax (es)
etc., and to take adequate precautions to prevent their
use by any persons not authorized for their use. The Borrowers shall hold the
Bank harmless and indemnified from all claims, losses, damages and expenses
which the Bank may incur by reason of the failure of the Borrowers to comply
with their obligations under this Clause; and
13.07.06. the
Bank may at any time reasonably refuse to execute the requests and
communications of the Borrowers, or any part thereof given by e-mail or fax or
otherwise, prior to confirmation by letter without incurring any responsibility
for loss, liability or expense arising out of such refusal.
14.
ASSIGNMENT AND PARTICIPATION
14.01. This
Agreement shall be binding upon and inure to the benefit of the Bank and the
Borrowers and their respective successors and assigns.
14.02.
(Assignment by the
Borrower). The Borrowers and any other Security Party may not assign
and/or transfer any rights and obligations under this Agreement or any of the
other Security Documents or any documents executed pursuant to this Agreement
and/or the other Security Documents without the prior written consent of the
Bank, at its discretion.
35
14.03. (Assignment by the Bank). The
Bank may assign, transfer, or offer participation to other banks or financial
institutions, in whole or in part, or in any manner dispose of all or any of its
rights and/or obligations arising or accruing under this Agreement or any of the
other Security Documents or any documents executed pursuant to this Agreement
and/or the other Security Documents.
14.04. The
Bank may in order to implement the assignments and/or transfers and/or
participations referred to in Clause 14.03 above, at any time disclose
information with respect to the Borrowers, the other Security Parties or a
Vessel to any potential assignee, transferee or participant.
14.05. If Bank
assigns, transfers or in any other manner grants participation in respect of all
or any part of its rights or benefits or transfers all or any of its obligations
as provided in Clause 14.03 the Borrowers undertake, immediately on being
requested to do so by the Bank, to enter into and procure that each Security
Party enters into such documents as may be necessary or desirable to transfer to
the assignee, transferee, or participant all or the relevant part of such Bank’s
interest in the Security Documents and all relevant references in this Agreement
to such Bank shall thereafter be construed as a reference to the Bank and/or its
assignee, transferee or participant to the extent of their respective interests
and, in the case of a transfer or assignment of all or part of the Bank’s
obligations, the Borrowers shall thereafter look only to the assignee,
transferee or participant in respect of that proportion of the Bank’s
obligations under this Agreement assumed by such assignee, transferee or
participant.
14.06. The
Borrowers shall join in and execute such supplemental or substitute agreements
as may be necessary to enable the Bank to assign and/or transfer and/or grant
participation in respect of its rights and obligations to one or more banks or
financial institutions in a syndicate.
15.
CHANGE IN CIRCUMSTANCES –
INCREASED COST
15.01. The
Bank will not be under any obligation to make available the Loan in whole or in
part or to maintain or fund the Loan, as the case may be, if the Bank shall be
prevented from making available the Loan, in whole or in part or
maintaining or funding the Loan as the result, directly or indirectly, of any
action, inaction or purported action of any authority, government or
governmental agency or any strike, boycott or blockade or lockout, or any act of
God, civil war or other hostilities or any other event which would constitute
force majeure, and the Bank may serve written notice on the Borrowers
declaring the Bank’ obligations under this Agreement terminated, whereupon the
same shall terminate forthwith and the Borrowers will immediately repay the Loan
and accrued interest together with all other Outstanding Indebtedness to the
Bank under this Agreement.
15.02. If,
as a result of (a) the introduction of any change in any law, regulation or
official directive (whether or not having the force of law) or the
interpretation thereof by any governmental authority in any country to the laws
or regulations of which the Bank is subject or by any court of competent
jurisdiction or (b) compliance by the Bank with any request from any applicable
governmental, fiscal or monetary authority (whether or not having the force of
law) or (c) any other set of circumstances affecting the Bank including (without
limitation) those relating to taxation, capital adequacy, liquidity, reserve
assets, cash ratio deposits and special deposits or those resulting from the
implementation of any 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 Measurement and Capital Structures” or any amendatory or substitute
agreement thereof, or (d) any change in the Bank’s general financial condition
and/or rating:
36
15.02.01. the
cost to Bank of making available the Loan or any part thereof or
maintaining or funding the Loan is increased or an additional cost
on Bank is imposed; and/or
15.02.02. the
Bank is subjected to taxes or the basis of taxation (other than taxes or
taxation on the overall net income of the Bank) in respect of any payments to
the Bank under this Agreement or any of the other Security Documents is changed;
and/or
15.02.03. the
amounts payable or the effective return to the Bank under any of the Security
Documents is reduced; and/or
15.02.04. the
Bank’s rate of return on its overall capital by reason of a change in the manner
in which it is required to allocate capital resources to the Bank’s obligations
under any of the Security Documents is reduced; and/or
15.02.05. the
Bank is required to make a payment or forgo a return on or calculated by
reference to any amount received or receivable by it under any of the Security
Documents; and/or
15.02.06. the
Bank is required to incur or sustain a loss (including a loss of future
potential profits) by reason of being obliged to deduct all or part of the Loan
from its capital for regulatory purposes; and/or
15.02.07. any
reserve or liquidity requirements are imposed, modified or deemed applicable
against assets held by or commitments of deposits in or for the account of, or
loans by or commitments of, the Bank;
then
the Borrowers shall pay to the Bank, from time to time, upon demand, such
additional moneys as the Bank shall specify to be necessary to indemnify the
Bank for any increased cost, reduction in principal or interest receivable or
other foregone return whatsoever and will agree with the Bank the restructuring
of the transaction constituted by this Agreement and the other Security
Documents in a way (as determined at the discretion of the Bank) which will
satisfactorily avoid either the unlawfulness or increased cost to the Bank (as
the case may be) or any adverse effect on the rights, interests and security of
the Bank, without limitation, increase of the Margin.
15.03. The
Bank will promptly notify the Borrowers of any intention to claim
indemnification pursuant to Clause 15.02 and such notification will certify
conclusively, except for manifest error, the amount of any increased cost or
reduction and the method of calculating the same.
15.04. A
claim under Clause 15.03 may be made at any time and must be discharged by the
Borrowers within fifteen (15) days of demand.
15.05. It
shall not be a defense to a claim by the Bank under this Clause 15 that any
increased cost or reduction could have been avoided by the Bank.
15.06. Any
amount due from the Borrowers under this Clause 15 shall be due as a separate
debt secured by the Security Documents and shall not be affected by judgment
being obtained for any other sums due under or in respect of this
Agreement.
15.07. If
any additional amounts are required to be paid by the Borrowers to the Bank by
virtue of this Clause 15, the Borrowers shall be entitled, on giving the Bank
not less than fourteen (14) days’ prior notice in writing, to prepay the Loan
(as applicable) and accrued interest thereon, together with all
other
37
Outstanding
Indebtedness, on the next Interest Payment Date in accordance with
this Agreement. Any such notice, once given, shall be irrevocable.
15.08. If
any change in or in the interpretation of any applicable law or regulation, by
any government or governmental or regulatory authority or agency, makes it
unlawful for the bank to maintain or give effect to its obligations under this
Agreement, then the Bank on behalf of the Bank may serve written notice on the
Borrowers declaring the Bank’s obligations under this Agreement terminated,
whereupon the same shall terminate forthwith and the Borrowers will immediately
repay the relevant part of the Loan and accrued interest together with all other
Outstanding Indebtedness to the Bank under this Agreement.
16.
WAIVER AND REMEDIES
16.01. No
delay or omission by the Bank to exercise any right, remedy or power vested in
it under this Agreement and the other Security Documents or by law shall impair
such right or power, or be construed as a waiver of, or as an acquiescence in
any default by the Borrowers or any other Security Party nor shall any single or
partial exercise by the Bank of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or remedy. In
the event of the Bank on any occasion agreeing to waive any such right, remedy
or power, or consenting to any departure from the strict application of the
provisions of this Agreement or of any other Security Document, such waiver
shall not in any way prejudice or affect the powers conferred upon the Bank
under this Agreement and the other Security Documents or the right of the Bank
thereafter to act strictly in accordance with the terms of this Agreement and
the other Security Documents. No modification or waiver by the Bank of any
provision of this Agreement or of any of the other Security Documents nor any
consent by the Bank to any departure therefrom by any Security Party shall be
effective unless the same shall be in writing and then shall only be effective
in the specific case and for the specific purpose for which given. No notice to
or demand on any such party in any such case shall entitle such party to any
other or further notice or demand in similar or other
circumstances.
16.02. The
rights and remedies of the Bank contained in this Agreement and the other
Security Documents are cumulative and not exclusive of each other nor of any
other rights or remedies conferred by law.
17.
INVALIDITY OF PROVISIONS
In
the event of any provision contained in any one or more of this Agreement, the
other Security Documents and any other document executed pursuant hereto or
thereto being invalid, illegal or unenforceable in any respect under any
applicable law of any jurisdiction whatsoever such provision shall be
ineffective as to that jurisdiction only without affecting the remaining
provisions hereof or thereof. If, however this event becomes known to the Bank
prior to the making available of the Loan or of any part thereof, the Bank is
entitled at its sole discretion to refuse to proceed with making available the
Loan or any part thereof until this discrepancy is remedied. Where however the
provisions of any such applicable law may be waived they are hereby waived by
the parties hereto to the full extent permitted by that law to the intent that
this Agreement, the other Security Documents and any other documents executed
pursuant hereto or thereto shall be deemed to be valid binding and enforceable
in accordance with their respective terms.
18.
NOTICES
18.01. Every
notice, request, demand or other communication under this Agreement or, unless
otherwise provided therein, any of the other Security Documents
shall:
38
(a)
be in writing delivered personally or by first-class prepaid letter (airmail if
available), or subject to Clause 13.07 by e-mail, fax, or shall be served
through a process server;
(b)
be deemed to have been received, subject as otherwise provided
in this Agreement or the relevant other Security Documents, in the case of a
telex, at the time of dispatch with confirmed answerback of the addressee
appearing at the beginning and end of the communication, in the case of fax, or
e-mail at the time of dispatch as per transmission report (provided in either
that if the date of dispatch is not a Banking Day in the country of the
addressee it shall be deemed to have been received at the opening of business on
the next such Banking Day), and in the case of a letter when delivered or served
personally, or ten (10) days after it has been put into the post;
and
(c)
be sent:
(1) if
to be sent to any Security Party, in care of
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
Fax.:
(+30210) ▇▇▇▇▇▇▇
E-mail:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention:
▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
(2)
if to be sent to the Bank , to
▇▇▇▇▇▇ LANDESBANK KREDITANSTALT ▇▇▇▇▇▇▇▇▇
- GIROZENTRALE -
▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
G E R M A N
Y
Fax.:
(▇▇▇▇▇▇) ▇▇▇.▇▇▇▇
E-mail:
▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇
Attention:
▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
or
to such other person, address, e-mail address or fax number as is notified by
the relevant Security Party or the Bank (as the case may be) to the other
parties to this Agreement and, in the case of any such change of address, e-mail
address, or fax number is notified to the Bank, the same shall not become
effective until notice of such change is actually received by the Bank and a
copy of the notice of such change signed by the Bank.
19.
LAW AND JURISDICTION
19.01. This
Agreement shall be governed by and construed in accordance with German
Law.
19.02. For
the exclusive benefit of the Bank the Borrowers hereby irrevocably submits to
the jurisdiction of the First Instance Court of Bremen, Federal Republic of
Germany, provided that nothing contained in this Clause shall limit the right of
the Bank to take any suit, action or proceedings against the
Borrowers in any other court of competent jurisdiction nor shall the taking of
any suit, action or proceedings against the
39
Borrowers
in one or more jurisdictions preclude the taking of any suit, action or
proceedings in any other jurisdiction whether concurrently or not.
19.03. ▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, tel. no.:
(+30210) ▇▇▇▇▇▇▇ fax no.: (+30210) ▇▇▇▇▇▇▇ (hereinafter called “the Process
Agent”) is hereby appointed by the Borrowers as agent to accept service on their
behalf of any judicial process and any notice, request, demand or other
communication under this Agreement or any of the other Security
Documents. In the event that the Process Agent (or any substitute
process agent notified to the Bank in accordance with the foregoing) cannot be
found at the address specified above (or, as the case may be, notified to the
Bank), which will be conclusively proved by a deed of a process server that the
Process Agent was not found at such address, any process, notice, request,
demand or other communication to be sent to the Borrowers or any other Security
Party may be validly effected upon the Public Prosecutor of the First Instance
Court of Piraeus.
19.04.
The foregoing shall not limit the right of the Bank to start
proceedings in any other country or to serve process in any other manner
permitted by law. Finally, the Borrowers hereby waives any objections to the
inconvenience of Bremen, Germany, as a forum.
19.05.
If the Bank decides that any such proceedings should be commenced in any other
country, then the Borrowers hereby waive any objections as to the jurisdiction
or any claim as to the inconvenience of the forum and covenant and undertake to
instruct lawyers in that country to accept service of legal process and not to
contest the validity of such proceedings as far as the jurisdiction of the court
or courts involved is concerned.
20.
MISCELLANEOUS
20.01. (Entire Agreement). The
provisions of this Agreement and the other Security Documents and the documents
executed in connection herewith and therewith represent the entire agreement
between the parties hereto and supersede any and all prior expressions of intent
or understandings of any nature whatsoever. Any alteration or amendment to this
Agreement shall be made only in writing and such written instrument shall be the
only admissible and conclusive evidence of such amendment or
alteration.
In
the event of any inconsistency between the provisions of this Agreement and the
provisions of an other Security Document the provisions of this Agreement shall
prevail.
20.02. (Counterparts). This
Agreement may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute but one and the same
instrument.
AS WITNESS the hands of the
duly authorized representatives of the parties hereto the day and year first
before written.
40
|
SIGNED
AND DELIVERED
|
)
|
|
|
for
and on behalf of
|
)
|
|
|
▇▇▇▇▇▇
LANDESBANK KREDITANSTALT
|
)
|
|
|
▇▇▇▇▇▇▇▇▇
– GIROZENTRALE
|
)
|
|
|
by:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
|
)
|
|
|
pursuant
to a Power of Attorney
|
)
|
|
|
dated
the ___ day of August 2007
|
)
|
|
|
in
the presence of:
|
)
|
|
|
…………………………………
|
||
|
Witness:
|
||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
|
||
|
Address:
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
|
||
|
SIGNED
AND DELIVERED
|
)
|
|
|
for
and on behalf of
|
)
|
|
|
NEDERLAND
NAVIGATION INC.
|
)
|
|
|
by: ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
|
)
|
|
|
pursuant
to a Power of Attorney
|
)
|
|
|
dated
the _____ day of August 2007
|
)
|
|
|
in
the presence of:
|
||
|
…………………………………
|
||
|
Witness:
|
||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
|
||
|
Address:
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
|
||
|
SIGNED
AND DELIVERED
|
)
|
|
|
for
and on behalf of
|
)
|
|
|
LAKEVIEW
NAVIGATION INC.
|
)
|
|
|
by: ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
|
)
|
|
|
pursuant
to a Power of Attorney
|
)
|
|
|
dated
the ____ day of August 2007
|
)
|
|
|
in
the presence of:
|
)
|
|
|
…………………………………
|
||
|
Witness:
|
||
|
Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
|
||
|
Address:
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
|
41
Schedule
1
Form
of Drawdown Notice
To
: ▇▇▇▇▇▇ LANDESBANK KREDITANSTALT ▇▇▇▇▇▇▇▇▇
– GIROZENTRALE -
Loan
Agreement of up to $ ________________ dated the _______ day of
___________________ 2007 (the “Agreement”)
We
refer to the Agreement and hereby give you notice that we wish to
draw down Tranche ………. Advance ………..…in an amount of $ ……………………on .......
......... ................, provided that all conditions precedent as per Clause
9 of the Agreement have been fulfilled. The funds should be paid to
............................
We
confirm and warrant that:
(a) no
event or circumstance has occurred and is continuing which constitutes an Event
of Default;
(b) the
representations and warranties set out in Clause 8 of the Agreement
are true and correct at the date hereof as if made with respect to the facts and
circumstances existing at such date;
(c) the
borrowing to be effected by such drawing will be within our corporate powers,
has been validly authorised by appropriate corporate action and will not cause
any limit on our borrowings (whether imposed by statute, regulation, agreement
or otherwise) to be exceeded; and
(d) there
has been no material adverse change in our financial position and the financial
position of any other Security Party from that described by us to the Bank in
the negotiation of the Agreement.
Words
and expressions defined in the Agreement shall have the same meanings where used
herein.
Date:
For
and on behalf of
[each
Borrower]
By
: ________________________
Name:
Title:
42
Schedule
2
TRANCHE
A - VESSEL A
|
Advance
A
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
$
3,978,000.00
|
By
31st
August2007
|
|
|
Advance
B
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
90%
of second Vessel A Contract Installment Tranche
|
$
3,978,000.00
|
Within
6 months after signing of the Vessel A Contract
|
|
Advance
C
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
-80%
of third Vessel A Contract Installment Tranche
|
$
7,072,000.00
|
Within
5 Banking Days after the starting of the steel cutting of Vessel A
confirmed in writing by the classification society of Vessel
A
|
|
Advance
D
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
-80%
of fourth Vessel A Contract Installment Tranche
|
$
7,072,000.00
|
Within
5 Banking Days after laying of the keel of the first section of the Vessel
A confirmed in writing by the classification society of Vessel
A
|
|
Advance
E
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
-62.5%
of fifth Vessel A Contract Installment Tranche
|
5,525,000.00
|
Within
5 Banking Days after launching of Vessel A confirmed in writing by the
classification society of Vessel A
|
43
TRANCHE
B - VESSEL B
|
Advance
A
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
$
3,978,000.00
|
By 31st
August2007
|
|
|
Advance
B
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
-90%
of second Vessel B Contract Installment Tranche
|
$
3,978,000.00
|
Within
6 months after signing of the Vessel B Contract
|
|
Advance
C
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
-80%
of third Vessel B Contract Installment Tranche
|
$
7,072,000.00
|
Within
5 Banking Days after the starting of the steel cutting of Vessel B
confirmed in writing by the classification society of Vessel
B
|
|
Advance
D
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
-80%
of fourth Vessel B Contract Installment Tranche
|
$
7,072,000.00
|
Within
5 Banking Days after laying of the keel of the first section of the Vessel
B confirmed in writing by the classification society of
Vessel
|
|
Advance
E
|
Amount
up to
|
Date
or stage of construction when
payable
|
|
-62.5%
of fifth Vessel B Contract Installment Tranche
|
5,525,000.00
|
Within
5 Banking Days after launching of Vessel B confirmed in writing by the
classification society of Vessel B
|
SK
23286 0002 889269
44