Exhibit 4.4
Private & Confidential
Dated November 1, 2005
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TOP TANKERS INC. (1)
and
THE ROYAL BANK OF SCOTLAND plc (2)
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FACILITIES AGREEMENT
for a US$195,656,899.82 Term Loan
and
a US$350,000,000 Revolving Credit Facility
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▇▇▇▇▇▇ ▇▇▇▇
Contents
Clause Page
1 Purpose and definitions ................................................1
2 The Facilities ........................................................14
3 Interest and Interest Periods .........................................17
4 Repayment, prepayment and reborrowinq .................................20
5 Commitment commission, fees and expenses ..............................24
6 Payments and taxes; accounts and calculations .........................25
7 Representations and warranties ........................................26
8 Undertakings ..........................................................31
9 Conditions.............................................................43
10 Events of Default......................................................44
11 Indemnities ...........................................................48
12 Unlawfulness and increased costs ......................................49
13 Security and set-off ..................................................50
14 Accounts ..............................................................51
15 Assignment, transfer and lending office ...............................53
16 Notices and other matters .............................................54
17 Governing law and jurisdiction ........................................55
Schedule 1 Part 1 - Initial Ships ............................................56
Part 1 - Initial Ships ................................................56
Part 2 - Additional Ship Selection Criteria ...........................58
Part 3 - Maximum amount of Infra-Group Loan per Initial Ship ..........59
Part 4 - Details of Initial Owners ....................................60
Schedule 2 Form of Drawdown Notice ...........................................61
Schedule 3 Documents and evidence required as conditions
precedent to the Commitment ...........................................62
Schedule 4 Additional Cost ...................................................71
Schedule 5 Form of Compliance Certificate ....................................72
Schedule 6 Master Swap Agreement and Novation Agreement ......................73
Schedule 7 Form of Master Swap Agreement Security Deed .......................74
Schedule 8 Form of Intra-Group Loan Agreements ...............................75
Schedule 9 Form of Assignment of Intra-Group Loan Agreements .................76
Schedule 10 Form of Owner's Guarantee ........................................77
Schedule 11 Forms of Mortgages ...............................................78
Part 1 - Form of Cyprus Mortgage ......................................78
Part 2 - Form of Liberian/▇▇▇▇▇▇▇▇ Islands Mortgage ...................79
Schedule 12 Form of Deed of Covenant .........................................80
Schedule 13 Forms of General Assignments .....................................81
Part 1 - Form of Cyprus General Assignment ............................81
Part 2 - Form of Liberian/▇▇▇▇▇▇▇▇ Island General Assignment ..........82
Schedule 14 Form of Operating Accounts Charge ................................83
Schedule 15 Form of Manager's Undertakinq ....................................84
THIS AGREEMENT is dated November 1, 2005 and made BETWEEN:
(1) TOP TANKERS INC. as borrower (the "Borrower"); and
(2) THE ROYAL BANK OF SCOTLAND plc as bank (the "Bank").
IT IS AGREED as follows:
1 Purpose and definitions
1.1 Purpose
This Agreement sets out the terms and conditions upon and subject to
which the Bank agrees to make available to the Borrower (i) a term loan
facility of up to one hundred and ninety five million six hundred and
fifty six thousand eight hundred and ninety nine Dollars and eighty two
cents ($195,656,899.82) which is to be applied by the Borrower in making
available to the relevant Initial Owners intra-group loans under
Intra-Group Loan Agreements to assist in refinancing part of the
existing indebtedness on the Initial Ships and (ii) a revolving credit
facility of up to three hundred and fifty million dollars ($350,000,000)
which is to be applied by the Borrower (a) to the extent of one hundred
and forty four million Dollars ($144,000,000) in making available to the
relevant Initial Owners intra-group loans under Intra-Group Loan
Agreements to assist in refinancing part of the existing indebtedness of
the Initial Ships and (b) any balance from time to time in making
available to the Additional Owners intra-group loans under Intra-Group
Loan Agreements to allow the Additional Owners to finance part of the
purchase price of the Additional Ships and Expected Project Costs in
accordance with the Additional Ship Selection Criteria.
1.2 Definitions
In this Agreement, unless the context otherwise requires:
"Additional Cost" means in relation to any period a percentage
calculated for such period at an annual rate determined by the
application of the formula set out in Schedule 4; "Additional Cost Rate"
has the meaning given to it in Schedule 4;
"Additional Owner" means any company incorporated in a jurisdiction,
capitalised, structured and managed in a manner acceptable to the Bank
in its sole discretion which becomes the owner of an Additional Ship;
"Additional Ship Selection Criteria" means, in relation to an Additional
Ship, the selection criteria for such Additional Ship set out in Part 2
of Schedule 1 or such other criteria for an Additional Ship which are
approved by the Bank at the request of the Borrower from time to time;
"Additional Ships" means the additional ships which meet the Additional
Ship Selection Criteria purchased or (as the context may require) to be
purchased by an Additional Owner with the prior written approval of the
Bank and "Additional Ship" means any of them;
"Advance" means each borrowing or, in the case of Facility B,
re-borrowing of a proportion of the Commitment by the Borrower (whether
being an Advance constituting Facility A or forming part of Facility B)
or, as the context may require, the principal amount of such borrowing
for the time being outstanding and "Advances" means all of them;
"Approved Shipbrokers" means Braemar Seascope Ltd, Clarksons, Fearnleys
AS or any other independent firm or firms of shipbrokers appointed by
the Bank and "Approved Shipbroker" means any of them;
"Assignee" has the meaning ascribed thereto in clause 15.3;
"Assignment of Intra-Group Loan Agreements" means the assignment
executed or (as the context may require) to be executed by the Borrower
in favour of the Bank in the form set out in Schedule 9;
"Bank" means The Royal Bank of Scotland plc whose registered office is
at ▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ acting for the
purposes of this Agreement through its office at the Shipping Business
Centre, ▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ (or of such
other address as may last have been notified to the Borrower pursuant to
clause 15.6) and includes its successors in title and permitted
assignees and transferees;
"Banking Day" means a day on which dealings in deposits in Dollars are
carried on in the London Interbank Eurocurrency Market and (other than
Saturday or Sunday) on which banks are open for business in London and
New York City (or any other relevant place of payment under clause 6);
"Borrowed Money" means Indebtedness in respect of (i) money borrowed or
raised and debit balances at banks, (ii) any bond, note, loan stock,
debenture or similar debt instrument, (iii) acceptance or documentary
credit facilities, (iv) receivables sold or discounted (otherwise than
on a non-recourse basis), (v) deferred payments for assets or services
acquired, (vi) finance leases and hire purchase contracts, (vii) swaps,
forward exchange contracts, futures and other derivatives, (viii) any
other transaction (including without limitation forward sale or purchase
agreements) having the commercial effect of a borrowing or raising of
money or of any of (ii) to (vii) above and (ix) guarantees in respect of
Indebtedness of any person falling within any of (i) to (viii) above;
"Borrower" means Top Tankers Inc. a corporation incorporated in the
▇▇▇▇▇▇▇▇ Islands with its principal place of business at 109-111
Messogion Ave., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ and includes its successors in title; "Borrower's Group" means
the Borrower and its Related Companies;
"Borrower's Security Documents" means, at any relevant time, such of the
Security Documents as shall have been executed by the Borrower at such
time;
"Builder" means, in relation to an Additional Ship which is a
newbuilding, the builder of that Additional Ship and includes its
successors in title and "Builders" shall be construed accordingly;
"Classification" means:
(a) in relation to an Initial Ship, the classification set out in
Part 1 of Schedule 1; and
(b) in relation to any Additional Ship, the highest class available
to vessels of its type with the relevant Classification Society,
or, in each case, such other classification as the Bank shall, at the
request of the Borrower, have agreed in writing shall be treated as the
Classification in relation to such Ship for the purposes of the Security
Documents;
"Classification Society" means:
(a) in relation to an Initial Ship, the classification society set
out in Part 1 of Schedule 1; and
(b) in relation to any Additional Ship, a classification society
which is a member of the International Association of
Classification Societies,
or, in each case, such other classification society which the Bank
shall, at the request of the Borrower, have agreed in writing shall be
treated as the Classification Society in relation to such Ship for the
purposes of the Security Documents;
"Commercial Manager" means Top Tanker Management Inc. with its
registered address at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 or BD any other person
appointed by the Borrower, with the prior written consent of the Bank,
as the commercial manager of the Ships and includes its successors in
title and assignees;
"Committed Facility B Amount" means that part of the Total Facility B
Commitment that shall have been made available by the Bank to the
Borrower either as the Initial Revolving Amount or as an Advance to
acquire Additional Ship(s) as the same may be reduced on each Reduction
Date and as advised by the Bank to the Borrower from time to time;
"Commitment" means the aggregate of the Total Facility A Commitments and
the Total Facility B Commitments, being in total five hundred and forty
five million six hundred and fifty six thousand eight hundred and ninety
nine Dollars and eighty two cents ($545,656,899.82) at the date of this
Agreement;
"Compliance Certificate" means each certificate received by the Bank
from the Borrower pursuant to clause 8.1.6 substantially in the form set
out in Schedule 5 confirming compliance by the Borrower of the financial
covenants contained at clause 8.5 of this Agreement and duly signed by
an authorised signatory of the Borrower;
"Compulsory Acquisition" means requisition for title or other compulsory
acquisition, requisition, appropriation, expropriation, deprivation,
forfeiture or confiscation for any reason of a Ship by any Government
Entity or other competent authority, whether de jure or de facto, but
shall exclude requisition for use or hire not involving requisition of
title; "Contract" means:
(a) in relation to any second-hand Additional Ship, the memorandum
of agreement or other contract for the sale and purchase of such
Ship (to be in a form and substance satisfactory to the Bank)
made or (as the context may require) to be made, between the
Seller of such Ship and the relevant Owner as buyer of such
Ship; and
(b) in relation to any Additional Ship which is a newbuilding, a
shipbuilding contract made between the relevant Builder of such
Additional Ship and the relevant Additional Owner of that
Additional Ship and/or the relevant Seller of that Additional
Ship (to be in a form and substance satisfactory to the Bank)
and as the same may subsequently be supplemented and/or amended,
and "Contracts" means all of them;
"Contract Assignment Consent and Acknowledgements" means the
acknowledgements of notice of, and consent to, the assignment in respect
of a Contract relative to an Additional Ship which is a newbuilding to
be given by the relevant Builder, in the form scheduled to the relevant
Pre-delivery Security Assignment;
"Contract Instalment Advance" means, in relation to any Additional Ship
which is a newbuilding, an Advance of Facility B made, or to be made, to
finance the payment of an instalment of the relevant Contract Price
falling due before the Delivery Date for that Additional Ship;
"Contract Price" means in relation to any Additional Ship, the price
payable by the relevant Owner to the relevant Builder or Seller (as
appropriate) in accordance with the relevant Contract;
"Credit Support Document" has the meaning given to that expression in
Section 14 of the Master Swap Agreement and as set out in paragraph (f)
of Part 4 of the Schedule to the Master Swap Agreement;
"Credit Support Provider" means any person defined as such in the Master
Swap Agreement pursuant to Section 14 of the Master Swap Agreement;
"Dauntless" means the vessel m.t. "DAUNTLESS" owned by the Dauntless
Borrower and registered under ▇▇▇▇▇▇▇▇ Islands flag under Official
Number 2308;
"Dauntless Borrower" means Lefka Shipping Company Limited, a corporation
incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office is set out
in Part 4 of Schedule 1 and includes its successors in title;
"Deeds of Covenant" means, where appropriate, all of the deeds of
covenant collateral to the Mortgages executed or (as the context may
require) to be executed by the Owners in favour of the Bank in the form
set out in Schedule 12 and "Deed of Covenant" means any of them;
"Default" means any Event of Default or any event or circumstance which
with the giving of notice or lapse of time or the satisfaction of any
other condition (or any combination thereof) would constitute an Event
of Default;
"Delivery" means the delivery of a Ship to, and the acceptance of the
relevant Ship by the relevant Owner pursuant to the relevant Contract;
"Delivery Date" means, in relation to each Additional Ship, the date on
which such Ship is delivered to the relevant Owner in accordance with
the relevant Contract;
"Delivery Date Advance" means, in relation to an Additional Ship which
is a newbuilding, an Advance of Facility B made, or to be made, to
finance the instalment of the Contract Price falling due on the Delivery
Date for that Additional Ship;
"DOC" means a document of compliance issued to the Operator in
accordance with the ISM Code;
"Dollars" and "$" mean the lawful currency of the United States of
America and in respect of all payments to be made under any of the
Security Documents mean funds which are for same day settlement in the
New York Clearing House Interbank Payments System (or such other U.S.
dollar funds as may at the relevant time be customary for the settlement
of international banking transactions denominated in U.S. dollars);
"Doubtless" means the vessel m.t. "DOUBTLESS" owned by the Doubtless
Borrower and registered under the Liberian flag under Official Number
9363;
"Doubtless Borrower" means Falakro Shipping Company Limited, a
corporation incorporated in the Republic of Liberia whose registered
office is set out in Part 4 of Schedule 1 and includes its successors in
title;
"Drawdown Date" means any date, being a Banking Day falling during the
Drawdown Period, on which an Advance is, or is to be, made; "Drawdown
Notice" means a notice substantially in the terms of Schedule 2;
"Drawdown Period" means:
(a) in relation to Facility A, the period from and including the
date of this Agreement and ending on the Termination Date
relative to Facility A; and
(b) in relation to Facility B, the period from and including the
date of this Agreement and ending on the Termination Date
relative to Facility B,
or, in each case, the period ending on such earlier date (if any) on
which (i) the aggregate of all of the Advances is, in the case of
Facility A, equal to the Commitment or (ii) the Commitment is reduced to
zero pursuant to clauses 10.2 or 12;
"Earnings" means, in relation to each Ship, all moneys whatsoever from
time to time due or payable to the relevant Owner of such Ship during
the Security Period arising out of the use or operation of such Ship
including (but without limiting the generality of the foregoing) all
freight, hire and passage moneys, income arising out of pooling
arrangements, compensation payable to the relevant Owner in the event of
requisition of such Ship for hire, remuneration for salvage or towage
services, demurrage and detention moneys and damages for breach (or
payments for variation or termination) of any charterparty or other
contract for the employment of such Ship and any sums recoverable under
any loss of earnings insurance;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest or other encumbrance of any kind securing any obligation of any
person or any type of preferential arrangement (including without
limitation title transfer and/or retention arrangements having a similar
effect);
"Endless" means the vessel m.t. "ENDLESS" owned by the Endless Borrower
and registered under the ▇▇▇▇▇▇▇▇ Islands flag under Official Number
2040;
"Endless Borrower" means Litochoro Shipping Company Limited, a
corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office
is set out in Part 4 of Schedule 1 and includes its successors in title;
"Environmental Claim" means:
(a) any and all enforcement, clean-up, removal or other governmental
or regulatory action or order or claim instituted or made
pursuant to any Environmental Law or resulting from a Spill; or
(b) any claim made by any other person relating to a Spill;
"Environmental Incident" means any Spill:
(a) from any Fleet Vessel; or
(b) from any other vessel in circumstances where:
(i) any Fleet Vessel or its owner, operator or manager may
be liable for Environmental Claims arising from the
Spill (other than Environmental Claims arising and fully
satisfied before the date of this Agreement); and/or
(ii) any Fleet Vessel may be arrested or attached in
connection with any such Environmental Claims;
"Environmental Laws" means all laws, regulations and conventions
concerning pollution or protection of human health or the environment;
"Event of Default" means any of the events or circumstances described in
clause 10.1;
"Existing Loan Agreement" means the loan agreement dated 2 February 2005
(as supplemented and amended from time to time) made between (inter
alia) the Initial Owners and the Bank in connection with a loan of up to
four hundred and twenty four million seven hundred and ninety four
thousand Dollars ($424,794,000);
"Expected Project Costs" means:
(a) in connection with the construction of an Additional Ship, all
reasonable pre-delivery costs up to the Delivery Date of such
Additional Ship which have been approved by the Bank in its sole
discretion;
(b) in connection with the acquisition of an Additional Ship from a
Seller, the deposit payable in respect of such Additional Ship
pursuant to the relevant Contract in an amount approved by the
Bank; and
(c) all interest paid by the Borrower on the relevant Advance under
clause 3 of this Agreement up to the Delivery Date of such
Additional Ship;
"Facility" means Facility A or Facility B and "Facilities" means both of
them;
"Facility A" means the term loan facility made available under this
Agreement as described in clause 2.3 or the principal amount outstanding
for the time being under Facility A;
"Facility B" means the revolving credit facility made available under
this Agreement as described in clause 2.4 or the principal amount
outstanding for the time being under Facility B including without
limitation, any re-borrowing pursuant to clause 4.2.3;
"Facility B Repayment Amount" means an amount determined by multiplying
that part of the Loan forming Facility B by the same percentage as the
Total Facility B Commitment is being reduced on each Reduction Date:
"Fair Market Value" means, in relation to each Ship, the fair market
value of such Ship determined in accordance with clause 8.2.2;
"Faithful' means the vessel m.t. "FAITHFUL" owned by the Faithful
Borrower and registered under the ▇▇▇▇▇▇▇▇ Islands flag under Official
Number 1689;
"Faithful Borrower" means Gramos Shipping Company Inc., a corporation
incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office is set out
in Part 4 of Schedule 1 and includes its successors in title;
"Faultless" means the vessel m.t. "FAULTLESS" owned by the Faultless
Borrower and registered under Liberian flag under Official Number 12601;
"Faultless Borrower" means Parnasos Shipping Company Limited, a
corporation incorporated in the Republic of Liberia whose registered
office is set out in Part 4 of Schedule 1 and includes its successors in
title;
"Final Reduction Date" means 31 October 2015;
"Final Repayment Date" means in relation to Facility A 30 November 2012
and in relation to Facility B 31 October 2015;
"Flag State" means:
(a) in relation to an Initial Ship, the flag state set out in Part 1
of Schedule 1 or such other state or territory designated in
writing by the Bank, at the request of the Borrower or an Owner,
as being the "Flag State" of that Owner's Ship for the purposes
of the Security Documents; or
(b) in relation to an Additional Ship any of the flag states as set
out in Part 1 of Schedule 1, or such other state or territory
designated in writing by the Bank, at the request of the
Borrower or the Owner, as being the "Flag State" of that Owner's
Ship for the purposes of the Security Documents;
"Flawless" means the vessel m.t. "FLAWLESS" owned by the Flawless
Borrower and registered under the Liberian flag under Official Number
9475;
"Flawless Borrower" means Pylio Shipping Company Limited, a corporation
incorporated in the Republic of Liberia whose registered office is set
out in Part 4 of Schedule 1 and includes its successors in title;
"Fleet Vessel" means each of the Ships and any other vessel owned,
operated, managed or crewed by any member of the Borrower's Group;
"GAAP" means accounting principles, concepts, bases and policies
generally adopted and accepted in the United States of America
consistently applied;
"General Assignments" means, where appropriate, all of the general
assignments collateral to the Mortgages executed or (as the context may
require) to be executed by the Owners in favour of the Bank in the form
set out in Schedule 13 and "General Assignment" means any of them;
"Government Entity" means and includes (whether having a distinct legal
personality or not) any national or local government authority, board,
commission, department, division, organ, instrumentality, court or
agency and any association, organisation or institution of which any of
the foregoing is a member or to whose jurisdiction any of the foregoing
is subject or in whose activities any of the foregoing is a participant;
"Indebtedness" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or future,
actual or contingent;
"Initial Owners" means, in relation to each Initial Ship, the Owner of
that Initial Ship set out in Part 1 of Schedule 1 and "Initial Owner"
means any or all of them;
"Initial Revolving Amount" means the Advance forming part of Facility B
of up to one hundred and forty four million Dollars ($144,000,000);
"Initial Ships" means the initial ships whose names and particulars are
set out in Part 1 of Schedule 1 and "Initial Ship" means any of them;
"Interest Payment Date" means the last day of an Interest Period;
"Interest Period" means, in relation to any Advance, Facility A,
Facility B or the Loan as the case may be, each period for the
calculation of interest in respect of such Advance, Facility A, Facility
B or the Loan ascertained in accordance with clauses 3.2 and 3.3;
"Intra-Group Loan Agreements" means the loan agreements in a form and
substance acceptable to the Bank executed or (as the context may
require) to be executed by the Borrower and each Owner relating to the
intra-group loan to be made available by the Borrower to each Owner to
enable each such Owner to finance the acquisition and/or refinancing of
the relevant Ship in the form set out in Schedule 8 and "Intra-Group
Loan Agreement" means any of them;
"ISM Code" means the International Safety Management Code for the Safe
Operation of Ships and for Pollution Prevention constituted pursuant to
Resolution A.741(18) of the International Maritime Organisation and
incorporated into the Safety of Life at Sea Convention and includes any
amendments or extensions thereto and any regulation issued pursuant
thereto;
"ISPS Code" means the International Ship and Port Facility Security Code
constituted pursuant to Resolutions A924(22) of the International
Maritime Organisation and incorporated into the Safety of Life at Sea
Convention and includes any amendments or extensions thereto and any
regulation issued pursuant thereto;
"ISSC" means an International Ship Security Certificate issued in
respect of a Ship under the provisions of the ISPS Code;
"LIBOR" means, in relation to a particular period, the rate determined
by the Bank to be that at which deposits in Dollars and in an amount
comparable with the amount in relation to which LIBOR is to be
determined and for a period equal to the relevant period were being
offered by the Bank to prime banks in the London Interbank Market at the
time the rate is fixed in accordance with clauses 3.2 and 3.3 hereof on
the second Banking Day before the first day of such period, provided
that if the Borrower shall at any time enter into any Transaction(s)
under the Master Swap Agreement, LIBOR shall (during the period when any
such Transaction(s) are effective and for an amount equal to the
notional amount of such Transaction(s)) be the rate for deposits in
Dollars for a period equivalent to such period at or about 11 a.m. on
the second Banking Day before the first day of such period as displayed
on Telerate page 3750 (British Bankers' Association Interest Settlement
Rates) (or such other page as may replace such page 3750 on such system
or on any other system of the information vendor for the time being
designated by the British Bankers' Association to calculate the BBA
Interest Settlement Rate (as defined in the British Bankers'
Association's Recommended Terms and Conditions ("BBAIRS" terms) dated
August, 1985));
"Limitless" means the vessel m.t. "LIMITLESS" owned by the Limitless
Borrower and registered under the ▇▇▇▇▇▇▇▇ Islands flag under Official
Number 2034;
"Limitless Borrower" means Mytikas Shipping Company Limited, a
corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office
is set out in Part 4 of Schedule 1 and includes its successors in title;
"Loan" means the aggregate principal amount owing to the Bank under this
Agreement at any relevant time whether forming part of Facility A or
Facility B;
"Management Agreements" means the agreements executed or (as the context
may require) to be executed between the relevant Owner and the Manager
in a form previously approved in writing by the Bank or any other
agreement previously approved in writing by the Bank between the
relevant Owner and the Manager providing (inter alia) for the Manager to
manage the Ships and "Management Agreement" means any of them;
"Managers" means the Commercial Manager and the Technical Manager and
"Manager" means either of them;
"Manager's Undertaking" means an undertaking executed or (as the context
may require) to be executed by the Commercial Manager and/or the
Technical Manager in favour of the Bank as a condition precedent to the
approval of the appointment of the Manager as manager of a Ship, such
undertaking to be in the form set out in Schedule 15 and "Manager's
Undertakings" means all of them;
"Margin" means the margin listed in the following table which shall be
adjusted at each Margin Set Date:
--------------------------------------------------------------------------------
Facility Loan/Security Value Margin
Ratio
--------------------------------------------------------------------------------
Facility A <60% 0.875%
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Facility B <60% 0.85%
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Loan >60% 1.0%
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"Margin Set Date" means the initial Drawdown Date, 31 December 2005 and
each of the dates falling at quarterly intervals thereafter.
"Master Swap Agreement" means the agreement dated 28 October 2005 as
amended and novated and made between the Borrower and the Bank or (as
the context may require) in the form or substantially in the form set
out in Schedule 6, and any Confirmations (as defined therein)
supplemental thereto;
"Master Swap Agreement Security Deed" means the deed executed or (as the
context may require) to be executed by the Borrower in favour of the
Bank in the form set out in Error! Reference source not found;
"month" means a period beginning in one calendar month and ending in the
next calendar month on the day numerically corresponding to the day of
the calendar month on which it started, provided that (a) if the period
started on the last Banking Day in a calendar month or if there is no
such numerically corresponding day, it shall end on the last Banking Day
in such next calendar month and (b) if such numerically corresponding
day is not a Banking Day, the period shall end on the next following
Banking Day in the same calendar month but if there is no such Banking
Day it shall end on the preceding Banking Day and "months" and "monthly"
shall be construed accordingly;
"Mortgage" means, in relation to each Ship, a first priority statutory
mortgage or first preferred mortgage of such Ship executed or (as the
context may require) to be executed by the relevant Owner in favour of
the Bank in the form set out in Schedule 11 and "Mortgages" means all of
them;
"Mortgaged Ship" means, at any relevant time, any Ship which is at such
time subject to a Mortgage and the Earnings, Insurances and Requisition
Compensation (as defined in the relevant Ship Security Documents) of
which are subject to an Encumbrance pursuant to the relevant Security
Documents and a Ship shall for the purposes of this Agreement be deemed
to be a Mortgaged Ship as from the date that the Mortgage of that Ship
shall have been executed and registered in accordance with this
Agreement until whichever shall be the earlier of (i) the payment in
full of the amount required to be paid to the Bank pursuant to clause
4.5 following the sale or Total Loss of such Ship and (ii) the date on
which all moneys owing under the Security Documents have been repaid in
full;
"Noiseless" means the vessel m.t. "NOISELESS" owned by the Noiseless
Borrower and registered under ▇▇▇▇▇▇▇▇ Islands flag under Official
Number 2234;
"Noiseless Borrower" means Imitos Shipping Company Limited, a
corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office
is set out in Part 4 of Schedule 1 and includes its successors in title;
"Operating Account Charges" the charges of the Operating Accounts
executed or (as the context may require) to be executed by the Borrower
and each Owner in favour of the Bank in respect of each Operating
Account in the form set out in Schedule 14 and "Operating Account
Charge" means any of them;
"Operating Accounts" means
(a) in relation to an Initial Owner and the Borrower, the accounts
with account numbers as set out in Part 1 of Schedule 1; and
(b) in relation to any Additional Owner, accounts of the Borrower
and such Owner opened or (as the context may require) to be
opened by the Borrower and such Owner with the Bank
and includes any other account designated in writing by the Bank to be
an Operating Account for the purposes of this Agreement and "Operating
Account" means any of them;
"Operator" means any person who is at any time during the Security
Period concerned in the operation of a Ship and falls within the
definition of "Company" set out in rule 1.1.2 of the ISM Code;
"Owners" means the Initial Owners and the Additional Owners and "Owner"
means any of them;
"Owner's Guarantee" means, in relation to each Owner, a guarantee issued
or (as the context may require) to be issued by that Owner in favour of
the Bank in the form set out in Schedule 10 or in such other form as the
Bank may from time to time require as (inter alia) security for the Loan
and "Owner's Guarantees" means all of them;
"Permitted Encumbrance" means any Encumbrance in favour of the Bank
created pursuant to the Security Documents and Permitted Liens;
"Permitted Liens" means any lien on a Ship for master's, officer's or
crew's wages outstanding in the ordinary course of trading, any lien for
salvage and any ship repairer's or outfitter's possessory lien for a sum
not (except with the prior written consent of the Bank) exceeding the
Casualty Amount (as defined in the Ship Security Documents for such
Ship);
"Pollutant" means and includes oil and its products, any other
polluting, toxic or hazardous substance and any other substance whose
release into the environment is regulated or penalised by Environmental
Laws;
"Priceless" means the vessel m.t. "PRICELESS" owned by the Priceless
Borrower and registered under ▇▇▇▇▇▇▇▇ Islands flag under Official
Number 1598;
"Priceless Borrower" means Kisavos Shipping Company Limited, a
corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office
is set out in Part 4 of Schedule 1 and includes its successors in title;
"Pre-delivery Security Assignment" means, in relation to any Additional
Ship which is a newbuilding, an assignment of the relevant Contract and
the relevant Refund Guarantee with respect to that Additional Ship
executed or (as the context may require) to be executed by the relevant
Owner of that Additional Ship in favour of the Bank in a form and
substance acceptable to the Bank in its sole discretion and
"Pre-delivery Assignments" means all of them;
"Protocol of Delivery and Acceptance" means, in relation to any
Additional Ship, the protocol of delivery and acceptance to be signed by
or on behalf of the relevant Seller and the relevant Owner as buyer of
such Ship evidencing the delivery and acceptance of such Ship pursuant
to the relevant Contract, such protocol to be in a form satisfactory to
the Bank;
"Reduction Date" means in relation to Facility B 30 April 2011 and each
of the dates falling at six (6) monthly intervals thereafter up to and
including the Final Reduction Date;
"Refund Guarantee" means, in relation to any Additional Ship which is a
newbuilding, the guarantee issued or to be issued by the relevant Refund
Guarantor in respect of the relevant Builder's obligations under the
relevant Contract and any further guarantee(s) to be issued by such
Refund Guarantor in respect of such obligations, pursuant to any
agreement supplemental to the relevant Contract, and any extensions,
renewals or replacements thereto or thereof and "Refund Guarantees"
means all of them;
"Refund Guarantee Assignment Consent and Acknowledgements" means the
acknowledgements of notice, and consent to, the assignment in respect of
any Refund Guarantee to be given by the relevant Refund Guarantor in the
form scheduled to the relevant Pre-delivery Security Assignment;
"Refund Guarantor" means, in relation to any Refund Guarantee, the
refund guarantor stipulated under the relevant Contract and includes its
successors in title (which shall be acceptable to the Bank in its sole
discretion) and "Refund Guarantors" shall be construed accordingly;
"Registry" means the office of the registrar, commissioner or
representative of the relevant Flag State who is duly authorised and
empowered to register the relevant Ship, the relevant Owner's title to
such Ship and the relevant Mortgage under the laws and flag of the
relevant Flag State through the relevant Registry;
"Related Company" of a person means any Subsidiary of such person, any
company or other entity of which such person is a Subsidiary and any
Subsidiary of any such company or entity;
"Relevant Jurisdiction" means any jurisdiction in which or where any
Security Party is incorporated, resident, domiciled, has a permanent
establishment, carries on, or has a place of business or is otherwise
effectively connected;
"Repayment Dates" means (subject to clause 6.3):
(a) in relation to Facility A, 30 November 2005 and each of the
dates falling at six (6) monthly intervals thereafter up to and
including the Final Repayment Date relative to Facility A; and
(b) in relation to Facility B, 30 April 2011 and each of the dates
falling at six (6) monthly intervals thereafter up to and
including the Final Repayment Date relative to Facility B.
"Requisition Compensation" means all sums of money or other compensation
from time to time payable during the Security Period by reason of the
Compulsory Acquisition of a Ship;
"Security Documents" means this Agreement, the Master Swap Agreement,
the Assignment of the Intra-Group Loan Agreement, the Mortgages, the
Deeds of Covenant, the General Assignments, the Owner's Guarantees, the
Operating Account Charges, the Master Swap Agreement Security Deed, the
Manager's Undertakings, any Pre-Delivery Security Assignment, any
Contract Assignment Consent and Acknowledgements, any Refund Guarantee
Assignment Consents and Acknowledgements and any other documents as may
have been or shall from time to time after the date of this Agreement be
executed to guarantee and/or secure all or any part of the Loan,
interest thereon and other moneys from time to time owing by the
Borrower pursuant to this Agreement (whether or not any such document
also secures moneys from time to time owing pursuant to any other
document or agreement) as such document may be supplemented or amended
from time to time;
"Security Party" means the Borrower, any Builders, any Refund
Guarantors, the Owners, the Managers or any other person who may at any
time be a party to any of the Security Documents (other than the Bank)
or any of them;
"Security Period" means the period commencing on the date hereof and
terminating upon discharge of the security created by the Security
Documents by payment of all monies payable thereunder;
"Security Requirement" means, subject to the provisions of clause 4.5,
the amount in Dollars (as certified by the Bank whose certificate shall,
in the absence of manifest error, be conclusive and binding on the
Borrower and the Bank) which is at any relevant time one hundred and
forty per cent (140%) (or for the purposes of clause 4.5 only one
hundred and sixty seven per cent (167%)) of (a) the Loan and (b) the
notional or actual costs as certified by the Bank in its discretion at
any relevant time of cancelling, netting out, terminating, liquidating,
transferring or assigning the rights, benefits and obligations created
by any Transaction or the Master Swap Agreement;
"Security Value" means the amount in Dollars (as certified by the Bank
whose certificate shall, in the absence of manifest error, be conclusive
and binding on the Borrower and the Bank) which, at any relevant time,
is the aggregate of (a) the charter-free market value of the Mortgaged
Ships as most recently determined in accordance with clause 8.2.2 and
(b) the market value of any additional security for the time being
actually provided to the Bank pursuant to clause 8.2;
"Seller" means in relation to any Additional Ship the relevant Seller or
Builder of such Additional Ship "Sellers" means all of them;
"Shareholders" means in relation to the Borrower, Kingdom Holdings Inc.
and Sovereign Holdings Inc. each of Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, the ▇▇▇▇▇▇▇▇ Islands;
"Ship Security Documents" means in respect of each Ship the relevant
Mortgage, the relevant Deed of Covenant and/or General Assignment and
the relevant Manager's Undertakings and "Ship Security Document" means
any of them; "Ships" means the Initial Ships and the Additional Ships
and "Ship" means any of them;
"SMC" means a safety management certificate issued in respect of each
Ship in accordance with rule 13 of the ISM Code;
"Soundless" means the vessel m.t. "SOUNDLESS" owned by the Soundless
Borrower and registered under ▇▇▇▇▇▇▇▇ Islands flag under Official
Number 2309;
"Soundless Borrower" means Agrafa Shipping Company Limited, a
corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office
is set out in Part 4 of Schedule 1 and includes its successors in title;
"Spill" means any actual or threatened emission, spill, release or
discharge of a Pollutant into the environment;
"Spotless" means the vessel m.t. "SPOTLESS" owned by the Spotless
Borrower and registered under the Liberian flag under Official Number
9361;
"Spotless Borrower" means Idi Shipping Company Limited, a corporation
incorporated in the Republic of Liberia whose registered office is set
out in Schedule 1 and includes its successors in title;
"Subsidiary" of a person incorporated outside England and Wales means
any company or entity directly or indirectly controlled by such person,
and for this purpose "control" means either the ownership of more than
fifty per cent (50%) of the voting share capital (or equivalent rights
of ownership) of such company or entity or the power to direct its
policies and management, whether by contract or otherwise;
"Taintless" means the vessel m.t. "TAINTLESS" owned by the Taintless
Borrower and registered under ▇▇▇▇▇▇▇▇ Islands flag under Official
Number 2307;
"Taintless Borrower" means Giona Shipping Company Limited, a
'corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered
office is set out in Part 4 of Schedule 1 and includes its successors in
title;
"Taxes" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature together with interest thereon and
penalties in respect thereof and "Taxation" shall be construed
accordingly;
"Technical Manager" means:
(a) in relation to Dauntless, Endless, Faithful, Faultless,
Limitless, Noiseless, Priceless, Taintless and Timeless V.Ships
Management Limited of Eaglehurst, Belmont Hill, Douglas, Isle of
Man;
(b) in relation to Doubtless, Flawless, Spotless and Vanguard,
Hanseatic Shipping Co. Ltd of ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇; and
(c) in relation to Soundless and Topless, Top Tanker Management Inc.
with its registered address at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960,
or any other person appointed by the Commercial Manager, with the prior
written consent of the Bank (not to be unreasonably withheld), as the
technical manager of the Ships and includes its successors in title and
assignees and "Technical Managers" shall be construed accordingly;
"Termination Date" means:
(a) in relation to Facility A, 14 November 2005; and
(b) in relation to Facility B, the earlier of (i) the date which
falls ten (10) years after the date of this Agreement and (ii)
the Final Repayment Date;
"Timeless" means the vessel m.t. "TIMELESS" owned by the Timeless
Borrower and registered under the Liberian flag under Official Number
9480;
"Timeless Borrower" means Taygetus Shipping Company Limited, a
corporation incorporated in the Republic of Liberia whose registered
office is set out in Part 4 of Schedule 1 and includes its successors in
title;
"Topless" means the vessel m.t. "TOPLESS" owned by the Topless Borrower
and registered under ▇▇▇▇▇▇▇▇ Islands flag under Official Number 2310;
"Topless Borrower" means Agion ▇▇▇▇ Shipping Company Limited, a
corporation incorporated in the ▇▇▇▇▇▇▇▇ Islands whose registered office
is set out in Part 4 of Schedule 1 and includes its successors in title;
"Total Facility A Commitment" means the sum of one hundred and ninety
five million six hundred and fifty six thousand eight hundred and ninety
nine Dollars and eighty two cents ($195,656,899.82) at the date of this
Agreement;
"Total Facility B Commitment" means the aggregate amount of three
hundred and fifty million Dollars ($350,000,000) at the date of this
Agreement as the same may be reduced on each Reduction Date;
"Total Loss" in relation to a Ship means:
(a) actual, constructive, compromised or arranged total loss of such
Ship; or
(b) the Compulsory Acquisition of such Ship; or
(c) the hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of such Ship (other than where the
same amounts to the Compulsory Acquisition of such Ship) by any
Government Entity, or by persons acting or purporting to act on
behalf of any Government Entity, unless such Ship be released
and restored to the relevant Owner from such hijacking, theft,
condemnation, capture, seizure, arrest, detention or
confiscation within fifteen (15) days after the occurrence
thereof;
"Transactions" shall have the same meaning as ascribed thereto in the
Master Swap Agreement;
"Transferee" has the meaning ascribed thereto in clause 15.4;
"Underlying Documents" means the Contracts, the Management Agreements
and the Refund Guarantees; "United Kingdom" means Great Britain and
Northern Ireland;
"Vanguard' means the vessel m.t. "VANGUARD" owned by the Vanguard
Borrower and registered under the Cyprus flag under Official Number
709465; and
"Vanguard Borrower" means Pageon Shipping Company Limited, a company
incorporated in the Republic of Cyprus whose registered office is set
out in Part 4 of Schedule 1 and includes its successors in title.
1.3 Headings
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.4 Construction of certain terms In this Agreement, unless the context
otherwise requires:
1.4.1 references to clauses and Schedules are to be construed as references to
clauses of, and Schedules to, this Agreement and references to this
Agreement include its Schedules;
1.4.2 references to (or to any specified provision of) this Agreement or any
other document shall be construed as references to this Agreement, that
provision or that document as in force for the time being and as amended
in accordance with the terms thereof, or, as the case may be, with the
agreement of the relevant parties;
1.4.3 references to a "regulation" include any present or future regulation,
rule, directive, requirement, request or guideline (whether or not
having the force of law) of any agency, authority, central bank or
government department or any self-regulatory or other national or
supra-national authority;
1.4.4 words importing the plural shall include the singular and vice versa;
1.4.5 references to a time of day are to London time;
1.4.6 references to a person shall be construed as references to an
individual, firm, company, corporation, unincorporated body of persons
or any Government Entity;
1.4.7 references to a "guarantee" include references to an indemnity or other
assurance against financial loss including, without limitation, an
obligation to purchase assets or services as a consequence of a default
by any other person to pay any Indebtedness and "guaranteed" shall be
construed accordingly; and
1.4.8 references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended.
1.5 Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
No term of this Agreement is enforceable under the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇ by a person who is not a party to this
Agreement.
2 The Facilities
2.1 Agreement to lend
The Bank, relying upon each of the representations and warranties in
clause 7, agrees to lend to the Borrower upon and subject to the terms
of this Agreement:
(a) a Dollar term loan facility in an aggregate amount equal to the
Total Facility A Commitment; and
(b) a Dollar revolving credit and term loan facility in an aggregate
amount equal to the Total Facility B Commitment,
in the aggregate principal sum of up to five hundred and forty five
million six hundred and fifty six thousand eight hundred and ninety nine
Dollars and eighty two cents ($545,656,899.82).
2.2 Drawdown
Subject to the terms and conditions of this Agreement, each Advance
thereof shall be made to the Borrower following receipt by the Bank from
the Borrower of a Drawdown Notice not later than 10 a.m. on the second
Banking Day before the proposed Drawdown Date relative to such Advance
which shall be a Banking Day falling within the Drawdown Period on which
such Advance is intended to be made. A Drawdown Notice shall be
effective on actual receipt by the Bank and, once given, shall, subject
as provided in clause 3.6.1, be irrevocable. No Advances shall be
available after the Termination Date, and subject to the provision of
this Agreement more than one Advance may be made on the same date.
2.3 Facility A
2.3.1 Facility A shall be made in one Advance on a Banking Day falling within
the Drawdown Period.
2.3.2 Facility A shall be made available solely for the purpose set out in
1.1(i).
2.3.3 The Advance constituting Facility A shall be made in accordance with
clause 6.2 and the maximum amount of such Advance shall be
$195,656,899.82 or such other amount as may be agreed by the Bank.
2.3.4 The Advance constituting Facility A (together with the Advance
constituting the Initial Revolving Amount) shall be applied in
refinancing each Initial Ship in the amount set out alongside that
Initial Ship in Part 3 of Schedule 1.
2.4 Facility B
2.4.1 Each Advance of Facility B may only be made on Banking Days falling
during the Drawdown Period and the amount of each Advance of Facility B
shall, subject to the following provisions of this clause 2.4, be for
such amount as is specified in the Drawdown Notice of that Advance.
2.4.2 The Initial Revolving Amount of Facility B shall be made available in
one Advance solely for the purpose set out in 1.1(ii)(a) and shall be
advanced at the same time as the Advance constituting Facility A and
shall when aggregated with Facility A refinance the entire amount
outstanding under the Existing Loan Agreement.
2.4.3 Each Advance of Facility B shall be made solely for the purpose set out
in clause 1.1(ii).
2.4.4 Each Advance constituting part of Facility B shall be made in accordance
with clause 6.2 but so that:
(i) Facility B shall never exceed $350,000,000; and
(ii) the Initial Revolving Amount shall be up to $144,000,000 or such
other amount as agreed by the Bank.
2.4.5 No part of Facility B (other than the Initial Revolving Amount to be
made available with the Advance constituting Facility A) shall be made
available unless the vessel which the relevant Additional Owner intends
to acquire using the relevant intra-group loan from the Borrower has
been approved by the Bank in its sole discretion as an Additional Ship,
which approval may only be granted by the Bank if the relevant vessel
has met all the Additional Ship Selection Criteria. In relation to the
acquisition by an Additional Owner of a vessel the Borrower shall be
required to follow the procedure set out below:
(a) if the Borrower wishes to drawdown any part of Facility B the
Borrower shall first send to the Bank a request (the "Request")
which shall include the information described below and, if so
required by the Bank, a copy of the inspection report for the
relevant vessel;
(b) where the Request relates to a second-hand vessel, the Request
shall include the following information:
Name of vessel
Flag
Official Number
IMO Number
Purchase price
Year built
Type of vessel
Gross tonnage/net tonnage
Deadweight/cubic capacity/TEU of vessel
Classification Society
Class
Seller
Expected delivery date
Charter information (if any), including name and credit rating
(if any) of charterer, charter rate, % commission, period of
charter, options (if any)
Typical running costs for this type of vessel
Next drydock: expected date of drydock and estimated amount
Date of next special survey
Requested loan amount
Lightweight displacement of vessel;
(c) where the Request relates to a vessel which is a newbuilding,
the Request shall include the following information:
Builder
Hull No.
Type of vessel
Gross tonnage/net tonnage
Deadweight/cubic capacity/TEU of vessel
Date of Contract
Date keel laid
Original Contract Price
Purchase price
Payment terms under Contract
Seller
Scheduled delivery date
Date when Buyer has option to cancel the Contract for excessive
delay
Name of Refund Guarantor
Type of Refund 'Guarantee
Classification Society
Class
Flag on delivery.
2.4.6 With respect to any vessel to be financed under Facility B, the Bank
will use its best efforts to respond to any Request as soon as possible
but in any event within five (5) Banking Days of the receipt of the
Request.
2.4.7 No Advance of Facility B shall:
(a) exceed whichever shall be the lesser of (i) the Contract Price
of the Additional Ship to be financed by way of such Advance of
Facility B and (ii) the Fair Market Value of the Additional Ship
to be financed by way of such Advance of Facility B and in the
case where the Additional Ship is a newbuilding, the Expected
Project Costs approved by the Bank in its sole discretion; nor
(b) be applied in financing any Additional Ship which has not been
approved by the Bank as an Additional Ship (the "Approval") in
accordance with clauses 2.4.5 and 2.4.6
2.4.8 In relation to an Additional Ship which is a newbuilding, Contract
Instalment Advances and a Delivery Date Advance for that Additional Ship
shall be in sums of up to the amounts set out in the relevant Contract
and applied in or towards payment of the instalment of the Contract
Price for that Additional Ship and may be made on any Banking Day
falling within the Drawdown Period relative to Facility B up to and in
the case of the Delivery Date Advance upon the Delivery Date for that
Additional Ship subject to the relevant instalment of the Contract Price
for that Additional Ship having become due and payable by the relevant
Owner under such Contract.
2.4.9 Any Advance constituting a Contract Instalment Advance or a Delivery
Date Advance shall be applied in paying such relevant instalment of the
relevant Contract Price and shall be paid by the Bank to the relevant
Builder or, as the case may be, Seller and any Advance which is to be
applied in meeting Expected Project Costs approved by the Bank in its
sole discretion shall be paid by the Bank to the credit of the relevant
Operating Account as appropriate.
2.4.10 Each Advance of Facility B shall be subject to:
(a) the ratio of the Loan to the Fair Market Value of all the
Mortgaged Ships not exceeding 65% both prior to and following
the drawdown of the relevant Advance of Facility B; and
(b) the aggregate of all Advances of Facility B drawndown at any
relevant time never exceeding the Total Facility B Commitment;
and
(c) the making of such Advance of Facility B not resulting in the
Security Value being less than the Security Requirement.
provided that the provisions of sub-clause 2.4.10 shall not apply in the
case of a re-borrowing of Facility B pursuant to clause 4.2.3.
2.5 Amount of Advance
The Borrower may not deliver a Drawdown Notice if the amount of the
relevant Advance is less than $5,000,000.
2.6 Expected Project Costs
No Advance of Facility B shall constitute Expected Project Costs only.
Any Drawdown Notices for Advances constituting (in part) Expected
Project Costs shall be accompanied with invoices or pro-forma estimate
invoices itemised in a written inventory each in a form and substance
acceptable to the Bank in its sole discretion certified by an officer of
the Borrower and presented to the Bank no later than fifteen (15)
Banking Days before the relevant Drawdown Date.
2.7 Availability
Upon receipt of a Drawdown Notice complying with the terms of this
Agreement the Bank shall, subject to the provisions of clause 9, on the
Drawdown Date for the relevant Advance make such Advance available to
the Borrower in accordance with clause 6.2. The Borrower acknowledges
that payment of an Advance to a Seller or any Contract Instalment
Advance or Delivery Date Advance to a Builder in accordance with clause
6.2 shall satisfy the obligation of the Bank to lend the corresponding
portion of the Commitment to the Borrower under this Agreement.
2.8 Termination of Commitment
2.8.1 If the Commitment is not drawn down in full by the end of the Drawdown
Period, the undrawn Commitment shall thereupon be automatically
cancelled.
2.8.2 The Borrower shall upon three (3) Banking Days' notice to the Bank be
entitled to permanently reduce or terminate any undrawn portion of
Facility B (being five million Dollars ($5,000,000) or any larger sum
which is an integral multiple of five million Dollars ($5,000,000))
without premium or penalty.
2.9 Application of proceeds
Without prejudice to the Borrower's obligations under clause 8.1.3, the
Bank shall have no responsibility for the application of proceeds of the
Loan by the Borrower.
3 Interest and Interest Periods
3.1 Normal interest rate
3.1.1 Subject to paragraph (i) of Part 5 of the Schedule to the Master Swap
Agreement, the Borrower shall pay interest on Facility A, Facility B or,
as the case may be the Loan in respect of each Interest Period relating
thereto on each Interest Payment Date (or, in the case of Interest
Periods of more than three (3) months, by instalments, the first
instalment three (3) months from the commencement of the Interest Period
and the subsequent instalments at intervals of three (3) months or, if
shorter, the period from the date of the preceding instalment until the
Interest Payment Date relative to such Interest Period) at the rate per
annum determined by the Bank to be the aggregate of (a) the relevant
Margin, (b) the Additional Cost and (c) LIBOR for such Interest Period.
3.1.2 For the purposes of this clause 3, the Bank shall on each Margin Set
Date, following the Bank's determination of the Security Value, which
determination shall as between the Bank and the Borrower be conclusive,
advise the Borrower of the Margin payable in respect of Facility A,
Facility B or, as the case may be, the Loan during each quarter
commencing from the relevant Margin Set Date.
3.2 Selection of Interest Periods
Subject to (a) paragraph (i) of Part 5 of the Schedule to the Master
Swap Agreement and (b) the availability of funds to the Bank in the
normal course of dealing in the London Interbank Market for an Interest
Period of the duration requested, the Borrower may by notice received by
the Bank not later than 11 a.m. on the second Banking Day before the
beginning of each Interest Period in relation to each Advance or, as the
case may be Facility A or, as the case may be, Facility B or, as the
case may be, the Loan specify whether such Interest Period shall have a
duration of three (3) or six (6) months or such other period as the
Borrower may select and the Bank may, in its absolute discretion, agree.
Provided always that if on any date upon which an Interest Period falls
to be selected by the Borrower pursuant to this clause 3.2, a
Transaction or Transactions (which is/are effective or which shall
become effective during the relevant Interest Period) shall have been
entered into between the Bank and the Borrower pursuant to the Master
Swap Agreement LIBOR shall during the period of any such Transaction(s)
and for an amount equal to the notional amount of such Transaction(s) be
determined by reference to the rate for deposits in Dollars displayed on
Telerate page 3750 (British Bankers' Association Settlement Rates) in
accordance with the proviso to the definition of LIBOR. For the
avoidance of doubt, LIBOR for that Advance or, as the case may be
Facility A or, as the case may be, Facility B or, as the case may be
part of the Loan which exceeds the notional amount of the Transaction(s)
shall be determined by reference to the rate for deposits in Dollars
referred to in the definition of LIBOR but excluding the proviso to such
definition.
3.3 Determination of Interest Periods
Every Interest Period shall be of the duration specified by the Borrower
pursuant to clause 3.2 but so that:
3.3.1 the initial Interest Period in respect of the Advance constituting
Facility A and the Advance constituting the Initial Revolving Amount
shall commence on the date Facility A and the Advance constituting the
Initial Revolving Amount under the Loan Agreement are made and each
subsequent Interest Period of Facility A and the Advance constituting
the Initial Revolving Amount shall commence on the last day of the
previous Interest Period relating to Facility A and the Advance
constituting the Initial Revolving Amount;
3.3.2 the initial Interest Period in respect of each Advance of Facility B
(after the Advance constituting the Initial Revolving Amount) shall
commence on the date of the making of that Advance and each subsequent
Interest period of each Advance shall commence on the last day of the
previous Interest Period relating to that Advance;
3.3.3 if any Interest Period for any Advance and/or Facility A and/or Facility
B and/or the Loan would otherwise overrun a Final Repayment Date, then,
in the case of the Final Repayment Date, such Interest Period shall end
on such Repayment Date, and in the case of any other Repayment Date or
Repayment Dates (as the case may be) shall be divided into parts so that
there is one part in the amount of the repayment instalment due on each
Repayment Date falling during that Interest Period and having an
Interest Period ending on the relevant Repayment Date and another part
in the amount of the balance of the relevant Advance and/or Facility A
and/or Facility B and/or the Loan as the case may be having an Interest
Period ascertained in accordance with clause 3.2 and the other
provisions of this clause 3.3;
3.3.4 if the Borrower fails to specify the duration of an Interest Period in
accordance with the provisions of clause 3.2 and this clause 3.3 such
Interest Period shall have a duration of three (3) months or such other
period as shall comply with this clause 3.3;
3.3.5 for the avoidance of doubt, during the currency of any Transaction,
Interest Periods in respect of each Advance or, as the case may be,
Facility A or, as the case may be, Facility B or, as the case may be,
the Loan shall coincide with the payment dates set out in such
Transaction and the rate of interest shall coincide with the fixed rate
of interest determined in accordance with such Transaction; and
3.3.6 following consultation with the Borrower the Bank shall be entitled to
require that the Interest Periods relating to the Loan or any part
thereof to be consolidated.
3.4 Default interest
If the Borrower fails to pay any sum (including, without limitation, any
sum payable pursuant to this clause 3.4) on its due date for payment
under any of the Security Documents, the Borrower shall pay interest on
such sum on demand from the due date up to the date of actual payment
(as well after as before judgment) at a rate determined by the Bank
pursuant to this clause 3.4. The period beginning on such due date and
ending on such date of payment shall be divided into successive periods
of not more than three (3) months as selected by the Bank each of which
(other than the first, which shall commence on such due date) shall
commence on the last day of the preceding such period. The rate of
interest applicable to each such period shall be the aggregate (as
determined by the Bank) of (a) two per cent (2%) per annum, (b) the
relevant Margin (c) the Additional Cost and (d) LIBOR for such period.
Such interest shall be due and payable on the last day of each such
period as determined by the Bank and each such day shall, for the
purposes of this Agreement, be treated as an Interest Payment Date,
provided that if such unpaid sum is an amount of principal which become
due and payable by reason of a declaration by the Bank under clause
10.2.2 or a prepayment pursuant to clauses 4.3, 4.4, 4.5, 8.2 or 12.1,
on a date other than an Interest Payment Date relating thereto, the
first such period selected by the Bank shall be of a duration equal to
the period between the due date of such principal sum and such Interest
Payment Date and interest shall be payable on such principal sum during
such period at a rate two per cent (2%) above the rate applicable
thereto immediately before it shall have become so due and payable. If,
for the reasons specified in clause 3.6.1, the Bank is unable to
determine a rate in accordance with the foregoing provisions of this
clause 3.4, interest on any sum not paid on its due date for payment
shall be calculated at a rate determined by the Bank to be two per cent
(2%) per annum above the aggregate of the relevant Margin and the cost
of funds (including Additional Cost) to the Bank.
3.5 Notification of Interest Periods and interest rate
The Bank shall notify the Borrower promptly of the duration of each
Interest Period and of each rate of interest determined by it under this
clause 3.
3.6 Market disruption; non-availability
3.6.1 If and whenever, at any time prior to the commencement of any Interest
Period, the Bank shall have determined (which determination shall, in
the absence of manifest error, be conclusive):
(a) that adequate and fair means do not exist for ascertaining LIBOR
during such Interest Period; or
(b) that deposits in Dollars are not available to the Bank in the
London Interbank Market in the ordinary course of business in
sufficient amounts to fund the Loan for such Interest Period;
the Bank shall forthwith give notice (a "Determination Notice") thereof
to the Borrower. A Determination Notice shall contain particulars of the
relevant circumstances giving rise to its issue. After the giving of any
Determination Notice the undrawn amount of the Commitment shall not be
borrowed until notice to the contrary is given to the Borrower by the
Bank.
3.6.2 During the period of ten (10) days after any Determination Notice has
been given by the Bank under clause 3.6.1, the Bank shall certify an
alternative basis (the "Substitute Basis") for maintaining the Loan. The
Substitute Basis may (without limitation) include alternative interest
periods, alternative currencies or alternative rates of interest but
shall include a margin above the cost of funds including Additional Cost
(if any) to the Bank equivalent to the relevant Margin. Each Substitute
Basis so certified shall be binding upon the Borrower 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 Borrower
that none of the circumstances specified in clause 3.6.1 continues to
exist whereupon the normal interest rate fixing provisions of this
Agreement shall apply.
4 Repayment, prepayment and reborrowing
4.1 Repayment of Facility A
Subject always to the provisions of this clause 4.1, the Borrower shall
repay that part of the Loan forming Facility A by fifteen (15)
instalments, one such instalment to be repaid on each of the Repayment
Dates relative to Facility A. Subject to the provisions of this
Agreement, the amount of the first such instalment shall be ten million
six hundred and fifty six thousand eight hundred and ninety nine Dollars
and eighty two cents ($10,656,899.82) each of the second instalment to
the fourteenth instalment shall be ten million five hundred thousand
Dollars ($10,500,000) and the amount of the last instalment shall be
forty eight million five hundred thousand Dollars ($48,500,000)
(comprising of a repayment instalment in the amount of ten million five
hundred thousand Dollars ($10,500,000) and a balloon payment in the
amount of thirty eight million Dollars ($38,000,000)).
If Facility A is not drawn in full, the amount of each repayment
instalment relative to Facility A shall be reduced proportionately.
4.2 Repayment of Facility B
4.2.1 Subject always to the provisions of this clause 4.2 the Borrower shall
repay that part of the Loan forming Facility B (including without
limitation the Initial Revolving Amount) by ten (10) instalments, one
such instalment to be repaid on each of the Repayment Dates relative to
Facility B. Subject to the provisions of this Agreement the amount of
each such instalment shall be equal to the Facility B Repayment Amount
as determined by the Bank and notified to the Borrower.
4.2.2 The Total Facility B Commitment shall be reduced by the sum of twenty
two million seven hundred and fifty thousand Dollars ($22,750,000) on
each of the Reduction Dates and shall be reduced to zero on the Final
Reduction Date and the Committed Facility B Amount shall be reduced on
each Reduction Date by the same percentage amount as the. Total Facility
B Commitment and to zero on the Final Reduction Date and the Borrower
shall on each Repayment Date relative to Facility B repay such further
amount as shall ensure that the aggregate of all Advances of Facility B
never exceed the Total Facility B Commitment or the Committed Facility B
Amount at any relevant time.
4.2.3 The Borrower may at any time prior to the Termination Date relative to
Facility B but subject to no Default having occurred re-borrow any part
of the Committed Facility B Amount that it may have repaid and/or
prepaid other than pursuant to the provisions of clause 4.5 without
having to acquire any further Additional Ship(s) and without having to
comply with any of the provisions of clauses 2.4.3, 2.4.5, 2.4.6, 2.4.7,
2.4.8 and 2.4.9 but otherwise upon the same terms and conditions as set
out in this Agreement provided that:
(a) the amount of the Committed Facility B Amount available for
re-borrowing shall on each Reduction Date be reduced in
accordance with the provisions of clause 4.2.2 on each such
Reduction Date; and
(b) the Borrower may not re-borrow any part of the Committed
Facility B Amount following the Termination Date.
4.2.4 If an Additional Ship which is a second hand vessel is not delivered to
the relevant Additional Owner under the relevant Contract for any reason
whatsoever, then the Borrower shall repay any Advance of Facility B
constituting (in part) Expected Project Costs representing a deposit
under the relevant Contract not later than ten (10) days after the date
of expiry or termination of such Contract.
4.3 Voluntary prepayment
4.3.1 Prepayment of the Loan
The Borrower may, provided that the Bank shall have received from the
Borrower not less than fourteen (14) days notice of its intention to
make such prepayment specifying the amount to be prepaid, prepay
Facility A or Facility B in the Borrower's option Loan in whole or part
(being five hundred thousand Dollars ($500,000) or any larger sum which
is an integral multiple of five hundred thousand Dollars ($500,000)):
(a) on any Interest Payment Date relating to the part of the Loan
being prepaid together with any amounts payable under clause 11
and accrued interest and commitment commission to the date of
prepayment and any other sums then payable under this Agreement
and/or the Master Swap Agreement and/or the other Security
Documents or any of them in respect of the Loan; and
(b) at any other time upon payment to the Bank of:
(i) accrued interest to the date of prepayment; and
(ii) such additional sum as the Bank in its absolute
discretion shall determine to be the loss, cost and
expense incurred by the Bank, including in relation to
the Master Swap Agreement, as a result of the prepayment
not being made on an Interest Payment Date for any part
of the Loan being prepaid; and
(iii) any other sums then payable under this Agreement and/or
the Master Swap Agreement and/or the other Security
Documents or any of them (including loss of Margin on
the amount prepaid to the end of the then current
Interest Period). 4.4 Master Swap Agreement, Repayments
and Prepayments
4.4.1 Notwithstanding any provision of the Master Swap Agreement to the
contrary, in the case of a prepayment of all or part of the Loan
(including, without limit, upon a Total Loss in accordance with clause
4.5 and under clause 8.4) then subject to clause 4.4.2 the Bank shall be
entitled but not obliged (and, where relevant, may do without the
consent of the Borrower, where it would otherwise be required whether
under the Master Swap Agreement or otherwise) to amend, re-book,
supplement, cancel, close out, net out, terminate, liquidate, transfer
or assign all or any part of the rights, benefits and obligations
created by any Transaction and/or the Master Swap Agreement and/or to
obtain or re-establish any hedge or related trading position in any
manner and with any person the Bank in its absolute discretion may
determine and both the Bank's and the Borrower's continuing obligations
under any Transaction and/or the Master Swap Agreement shall, unless
agreed otherwise by the Bank, be calculated so far as the Bank considers
it practicable by reference to the amended repayment Schedule for the
Loan taking into account the fact that less than the full amount of the
Loan remains outstanding.
4.4.2 If following a prepayment under this Agreement and the Bank in its
absolute discretion agrees, following a written request of the Borrower,
that the Borrower may be permitted to maintain all or part of a
Transaction in an amount not wholly matched with or linked to all or
part of the Loan, the Borrower shall within ten (10) days of being
notified by the Bank of such requirement, provide the Bank with, or
procure the provision to the Bank of, such additional security as shall
in the opinion of the Bank be adequate to secure the performance of such
Transaction, which additional security shall take such form, be
constituted by such documentation and be entered into between such
parties, as the Bank in its absolute discretion may approve or require,
and each document comprising such additional security shall constitute a
Credit Support Document.
4.4.3 The Borrower shall on the first written demand of the Bank indemnify the
Bank in respect of all losses, costs and expenses (including, but not
limited to, legal costs and expenses) incurred or sustained by the Bank
as a consequence of or in relation to the effecting of any matter or
transactions referred to in this clause 4.4.
4.4.4 Notwithstanding any provision of the Master Swap Agreement to the
contrary, if for any reason a Transaction has been entered into but the
Loan is not drawn down under this Agreement then, subject to clause
4.4.5, the Bank shall be entitled but not obliged (and, where relevant,
may do so without the consent of the Borrower where it would otherwise
be required whether under the Master Swap Agreement or otherwise) to
amend, re-book, supplement, cancel, close out, net out, terminate,
liquidate, transfer or assign all or any part of the rights, benefits
and obligations created by such Transaction and/or the Master Swap
Agreement and/or to obtain or re-establish any hedge or related trading
position in any manner and with any person the Bank in its absolute
discretion may determine.
4.4.5 If a Transaction has been entered into but the Loan is not drawn down
under this Agreement and the Bank in its absolute discretion agrees,
following a written request of the Borrower, that the Borrower may be
permitted to maintain all or part of a Transaction, the Borrower shall
within ten (10) days of being notified by the Bank of such requirement,
provide the Bank with, or procure the provision to the Bank of, such
additional security as shall in the opinion of the Bank be adequate to
secure the performance of such Transaction, which additional security
shall take such form, be constituted by such documentation and be
entered into between such parties, as the Bank in its absolute
discretion may approve or require, and each document comprising such
additional security shall constitute a Credit Support Document for the
purposes of the Master Swap Agreement and/or otherwise.
Without prejudice to or limitation of the obligations of the Borrower
under clause 4.4.3, in the event that the Bank exercises any of its
rights under clauses 4.4.1, 4.4.2, 4.4.4 and 4.4.5 and such exercise
results in all or part of a Transaction being terminated such
Transaction or the part thereof terminated (which shall for the purposes
hereof be treated as a separate Transaction) in each case shall be
treated under the Master Swap Agreement in the same manner as if it were
a Terminated Transaction (as defined in Section 14 of the Master Swap
Agreement) pursuant to an Event of Default (as so defined in that
Section 14) by the Borrower and, accordingly, the Bank shall be
permitted to recover from the Borrower a payment for early termination
calculated in accordance with the provisions of Section 6(e)(i) of the
Master Swap Agreement in respect of such Transaction.
4.5 Prepayment on Total Loss and sale
On a Ship becoming a Total Loss (or suffering damage or being involved
in an incident which in the opinion of the Bank may result in such Ship
being subsequently determined to be a Total Loss) before the relevant
Advance for such Ship is drawn down, the obligation of the Bank:
(a) in the case of an Initial Ship to make available the Advance
constituting the Facility A or the Advance constituting the
Initial Revolving Amount for such Initial Ship; or
(b) in the case of an Additional Ship to make that Advance of
Facility B for such Additional Ship
shall immediately cease and in the case of an Initial Ship the Total
Facility A Commitment or at the option of the Bank, the Initial
Revolving Amount shall be reduced by the amount that would have been
applied in refinancing the Initial Ship as set out in Schedule 1, Part
3.
On the date ninety (90) days after that on which a Mortgaged Ship became
a Total Loss or immediately prior to the completion of the sale of a
Mortgaged Ship or, if earlier, on the date upon which the insurance
proceeds in respect of such Total Loss are or Requisition
Compensation (as defined in the relevant Ship Security Documents) is
received by the relevant Owner (or the Bank pursuant to the Security
Documents), the Borrower shall prepay:
(a) in the case of the Initial Ships that part of the Advance
constituting Facility A or the Initial Revolving Amount as was
applied in refinancing the relevant Initial Ship and set out in
Schedule 1, Part 3; or
(b) in the case of the Additional Ships the relevant Advance of
Facility B applied in the financing of such Additional Ship; or
(c) such greater proportion of the Loan as the Bank may in its sole
discretion determine to be prepaid but in any event such amount
as shall ensure that on the date of such prepayment the Security
Value is not less than the Security Requirement.
For the purpose of this Agreement, a Total Loss shall be deemed to have
occurred:
4.5.1 In the case of an actual total loss of a Ship on the actual date and at
the time such Ship was lost or, if such date is not known, on the date
on which such Ship was last reported;
4.5.2 in the case of a constructive total loss of a Ship, upon the date and at
the time notice of abandonment of a Ship is given to the insurers of a
Ship for the time being (provided a claim for total loss is admitted by
such insurers) or, if such insurers do not forthwith admit such a claim,
at the date and at the time at which either a total loss is subsequently
admitted by the insurers or a total loss is subsequently adjudged by a
competent court of law or arbitration tribunal to have occurred;
4.5.3 in the case of a compromised or arranged total loss, on the date upon
which a binding agreement as to such compromised or arranged total loss
has been entered into by the insurers of such Ship;
4.5.4 in the case of Compulsory Acquisition, on the date upon which the
relevant requisition of title or other compulsory acquisition occurs;
and
4.5.5 in the case of hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of a Ship (other than where the same amounts
to Compulsory Acquisition of such Ship) by any Government Entity, or by
persons purporting to act on behalf of any Government Entity, which
deprives the relevant Owner of the use of such Ship for more than thirty
(30) days, upon the expiry of the period of thirty (30) days after the
date upon which the relevant hijacking, theft, condemnation, capture,
seizure, arrest, detention or confiscation occurred.
4.6 Amounts payable on prepayment
Any prepayment of all or part of the Loan under this Agreement shall be
made together with (a) accrued interest on the amount to be prepaid to
the date of such prepayment, any additional amount payable under clause
6.6 or 12.2 and (b) all other sums payable by the Borrower to the Bank
under this Agreement, the Master Swap Agreement or any of the other
Security Documents including, without limitation, any amounts payable
under clause 11.
4.7 Notice of prepayment; reduction of repayment instalments
No prepayment may be effected under clause 4.3 unless the Borrower shall
have given the Bank at least fourteen (14) days' notice of its intention
to make such prepayment. Every notice of prepayment shall be effective
only on actual receipt by the Bank, shall be irrevocable, shall specify
(i) the amount to be prepaid, and (ii) whether the prepayment is to be
applied against Facility A and/or any Advance(s) of Facility B and shall
oblige the Borrower to make such prepayment on the date specified. No
amount prepaid may be reborrowed other than as provided in clause 4.2.3.
Any amount prepaid pursuant to:
4.7.1 clause 4.3 shall be applied first in reducing the repayment instalments
and then the balloon payment under clauses 4.1 and/or as the case may
be, 4.2.1 on a pro rata basis; and
4.7.2 clause 4.4 following the sale or Total Loss of any of the Ships shall be
applied first in reducing the repayment instalments of the Advance
pursuant to which the relevant Ship was financed or refinanced
(including for the avoidance of doubt the balloon payments) on a pro
rata basis and thereafter (and to the extent that the relevant Advance
is repaid in full) shall be applied to the extent required pursuant to
clause 4.5 as between all other Advances on a pro rata basis and in
reducing the repayment instalments of such other Advances on a pro rata
basis.
The Borrower may not prepay the Loan or any part thereof save as
expressly provided in this Agreement.
5 Commitment commission, fees and expenses
5.1 Fees
The Borrower shall pay to the Bank:
5.1.1 on the date of this Agreement an arrangement fee of one million thirty
thousand Dollars ($1,030,000);
5.1.2 quarterly in arrears and at the end of the Drawdown Period, commitment
commission computed from the date of this Agreement at the rate of zero
point three five per cent (0.35%) per annum on the daily undrawn amount
of the Loan; and
The fee referred to in clause 5.1.1 and the commitment commission
referred to in clause 5.1.2 shall be payable by the Borrower to the Bank
whether or not any part or only part of the Commitment is ever advanced.
5.2 Expenses
The Borrower shall pay to the Bank on a full indemnity basis on demand
all expenses (including legal, printing and out-of-pocket expenses)
incurred by the Bank:
5.2.1 in connection with the negotiation, preparation, execution and, where
relevant, registration of the Security Documents and of any amendment or
extension of or the granting of any waiver or consent under, any of the
Security Documents; and
5.2.2 in contemplation of, or otherwise in connection with, the enforcement
of, or preservation of any rights under, any of the Security Documents,
or otherwise in respect of the moneys owing under any of the Security
Documents together with interest at the rate referred to in clause 3.4
from the date on which such expenses were incurred to the date of
payment (as well after as before judgment).
5.3 Value added tax
All fees and expenses payable pursuant to this clause 5 shall be paid
together with value added tax or any similar tax (if any) properly
chargeable thereon. Any value added tax chargeable in respect of any
services supplied by the Bank under this Agreement shall, on delivery of
the value added tax invoice, be paid in addition to any sum agreed to be
paid hereunder.
5.4 Stamp and other duties
The Borrower shall pay all stamp, documentary, registration or other
like duties or taxes (including any duties or taxes payable by the Bank)
(if any) imposed on or in connection with any of the Underlying
Documents, the Security Documents or the Loan and shall indemnify the
Bank against any liability arising by reason of any delay or omission by
the Borrower to pay such duties or taxes.
6 Payments and taxes; accounts and calculations
6.1 No set-off or counterclaim
The Borrower acknowledges that in performing its obligations under this
Agreement, the Bank will be incurring liabilities to third parties in
relation to the funding of amounts to the Borrower, such liabilities
matching the liabilities of the Borrower to the Bank and that it is
reasonable for the Bank to be entitled to receive payments from the
Borrower gross on the due date in order that the Bank is put in a
position to perform its matching obligations to the relevant third
parties. Accordingly, subject to paragraphs (c) and (i) of Part 5 of the
Schedule to the Master Swap Agreement, all payments to be made by the
Borrower under any of the Security Documents shall be made in full,
without any set-off or counterclaim whatsoever and, subject as provided
in clause 6.6, free and clear of any deductions or withholdings, in
Dollars on the due date (for value on the day on which payment is due)
to the account of the Bank with American Express Bank Limited, 23rd
Floor, American Express Tower, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇,
▇▇▇, Account Number 000261123 SWIFT Code: ▇▇▇▇▇▇▇▇ (with a direct tested
telex advice to the Bank) or to such other account at such bank in such
place as the Bank may from time to time specify for this purpose.
6.2 Payment by the Bank
All sums to be advanced by the Bank to the Borrower under this Agreement
in respect of the Loan shall be remitted in Dollars on the relevant
Drawdown Date to the account of the Borrower or the account of the
relevant Seller specified in the relevant Drawdown Notice.
6.3 Non-Banking Days
When any payment under any of the Security Documents would otherwise be
due on a day which is not a Banking Day, the due date for payment shall
be extended to the next following Banking Day unless such Banking Day
falls in the next calendar month in which case payment shall be made on
the immediately preceding Banking Day.
6.4 Calculations
All interest and other payments of an annual nature under any of the
Security Documents shall accrue from day to day and be calculated on the
basis of actual days elapsed and a 360 day year.
6.5 Certificates conclusive
Any certificate or determination of the Bank as to any rate of interest
or any other amount pursuant to and for the purposes of any of the
Security Documents shall, in the absence of manifest error, be
conclusive and binding on the Borrower.
6.6 Grossing-up for Taxes
If at any time the Borrower is required to make any deduction or
withholding in respect of Taxes from any payment due under any of the
Security Documents, the sum due from the Borrower in respect of such
payment shall be increased to the extent necessary to ensure that, after
the making of such deduction or withholding, the Bank receives on the
due date for such payment (and retains, free from any liability in
respect of such deduction or withholding), a net sum equal to the sum
which it would have received had no such deduction or withholding been
required to be made and the Borrower shall indemnify the Bank against
any losses or costs incurred by it by reason of any failure of the
Borrower 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
Borrower shall promptly deliver to the Bank any receipts, certificates
or other proof evidencing the amounts (if any) paid or payable in
respect of any deduction or withholding as aforesaid.
6.7 Loan account
The Bank shall maintain, in accordance with its usual practice, an
account (which shall be the "account current" referred to in the
Mortgages governed by the laws of Cyprus) evidencing the amounts from
time to time lent by, owing to and paid to it under the Security
Documents. Such account shall, in the absence of manifest error, be
conclusive as to the amount from time to time owing by the Borrower
under the Security Documents.
7 Representations and warranties
7.1 Continuing representations and warranties The Borrower represents and
warrants to the Bank that:
7.1.1 Due incorporation
the Borrower and each of the other Security Parties are duly
incorporated and validly existing in good standing under the laws of
their respective countries of incorporation as limited liability
companies and, in case of the Borrower and each of those Initial Owners
incorporated in either the Republic of Liberia or the ▇▇▇▇▇▇▇▇ Islands,
incorporated in the Republic of Liberia or the ▇▇▇▇▇▇▇▇ Islands as a
corporation having limited liability, and have power to carry on their
respective businesses as they are now being conducted and to own their
respective property and other assets;
7.1.2 Corporate power
the Borrower has power to execute, deliver and perform its obligations
under the Underlying Documents and the Borrower's Security Documents to
which it is or is to be a party and to borrow the Commitment and each of
the other Security Parties has power to execute and deliver and perform
its obligations under the Security Documents and the Underlying
Documents to which it is or is to be a party; all necessary corporate,
shareholder and other action has been taken to authorise the execution,
delivery and performance of the same and no limitation on the powers of
the Borrower to borrow will be exceeded as a result of borrowing the
Loan;
7.1.3 Binding obligations
the Security Documents and the Underlying Documents constitute or will,
when executed, constitute valid and legally binding obligations of the
relevant Security Parties enforceable in accordance with their
respective terms;
7.1.4 No conflict with other obligations
the execution and delivery of, the performance of its obligations under,
and compliance with the provisions of, the relevant Underlying Documents
and the Security Documents by the relevant Security Parties will not (i)
contravene any existing applicable law, statute, rule or regulation or
any judgment, decree or permit to which the Borrower or any other
Security Party is subject, (ii) conflict with, or result in any breach
of any of the terms of, or constitute a default under, any agreement or
other instrument to which the Borrower or any other Security Party is a
party or is subject or by which it or any of its property is bound,
(iii) contravene or conflict with any provision of the memorandum and
articles of association/articles of incorporation/by-laws or other
constitutional documents of the Borrower or any other Security Party or
(iv) result in the creation or imposition of or oblige the Borrower or
any of its Related Companies or any other Security Party to create any
Encumbrance (other than a Permitted Encumbrance) on any of the
undertakings, assets, rights or revenues Borrower or its Related
Companies or any other Security Party;
7.1.5 No litigation
no litigation, arbitration or administrative proceeding is taking place,
pending or, to the knowledge of the officers of the Borrower, threatened
against the Borrower or any of its Related Companies or any other
Security Party which could have a material adverse effect on the
business, assets or financial condition of any of the Borrower or any of
its Related Companies or any other Security Party;
7.1.6 No filings required
save for the registration of the Mortgages in the relevant register
under the laws of the relevant Flag State through the relevant Registry
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of any of the Underlying Documents or any of
the Security Documents that they or any other instrument be notarised,
filed, recorded, registered or enrolled in any court, public office or
elsewhere in any Relevant Jurisdiction or that any stamp, registration
or similar tax or charge be paid in any Relevant Jurisdiction on or in
relation to the Underlying Documents, the Security Documents or any of
them and each of the Underlying Documents and Security Documents is in
proper form for its enforcement in the courts of each Relevant
Jurisdiction;
7.1.7 Choice of law
the choice of English law to govern the Underlying Documents and the
Security Documents (other than the Mortgages) and the choice of Cyprus
law to govern the Cyprus Mortgages and Deeds of Covenants, the choice of
Liberian law to govern the Liberian Mortgages and the choice of ▇▇▇▇▇▇▇▇
Islands law to govern the ▇▇▇▇▇▇▇▇ Island Mortgages and the submissions
by the Security Parties to the non-exclusive jurisdiction of the English
courts are valid and binding;
7.1.8 No immunity
neither the 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 judgement, execution or
other enforcement);
7.1.9 Financial statements correct and complete
the audited financial statements of the Borrower and the audited
consolidated financial statements of the Borrower and its Related
Companies in respect of the financial year ended on 31 December 2004 as
delivered to the Bank have been prepared in accordance with GAAP and
present fairly and accurately the financial position of the Borrower and
the consolidated financial position of the Borrower and its Related
Companies respectively as at such date and the results of the operations
of the Borrower and the consolidated results of the operations of the
Borrower and its Related Companies respectively for the financial year
ended on such date and, as at such date, neither the Borrower nor any of
its Related Companies had any significant liabilities (contingent or
otherwise) or any unrealised or anticipated losses which are not
disclosed by, or reserved against or provided for in, such financial
statements;
7.1.10 Consents obtained
every consent, authorisation, licence or approval of, or registration
with or declaration to, governmental or public bodies or authorities or
courts required by any Security Party to authorise, or required by any
Security Party in connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of the Underlying Documents
and each of
the Security Documents or the performance by each Security Party of its
obligations under the Underlying Documents and the Security Documents
has been obtained or made and is in full force and effect and there has
been no default in the observance of any of the conditions or
restrictions (if any) imposed in, or in connection with, any of the
same; and
7.1.11 No money laundering
in relation to the borrowing by the Borrower of the Loan, the
performance and discharge of its obligations and liabilities under this
Agreement and the transactions and other arrangements effected or
contemplated by this Agreement, the Borrower is acting for its own
accounts and that the foregoing will not involve or lead to
contravention of any law, official requirement or other regulatory
measure or procedure implemented to combat "money laundering" (as
defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities).
7.2 Initial representations and warranties
The Borrower further represent and warrants to the Bank that:
7.2.1 Pari passu
the obligations of the Borrower under this Agreement and the Master Swap
Agreement are direct, general and unconditional obligations of the
Borrower and rank at least pari passu with all other present and future
unsecured and unsubordinated Indebtedness with the exception of any
obligations which are mandatorily preferred by law and not by contract;
7.2.2 No default under other Indebtedness
neither the Borrower nor any of its Related Companies nor any other
Security Party is (nor would with the giving of notice or lapse of time
or the satisfaction of any other condition or combination thereof be) in
breach of or in default under the Master Swap Agreement or any agreement
relating to Indebtedness to which it is a party or by which it may be
bound;
7.2.3 Information
the information, exhibits and reports (including all financial
information relating to the Borrower and any other Security Party)
furnished by any Security Party to the Bank in connection with the
negotiation and preparation of the Security Documents are true and
accurate in all material respects and not misleading, do not omit
material facts and all reasonable enquiries have been made to verify the
facts and statements contained therein; there are no other facts the
omission of which would make any fact or statement therein misleading;
7.2.4 No withholding Taxes
no Taxes are imposed by withholding or otherwise on any payment to be
made by any Security Party under the Underlying Documents or the
Security Documents or are imposed on or by virtue of the execution or
delivery by the Security Parties of the Underlying Documents or the
Security Documents or any other document or instrument to be executed or
delivered under any of the Security Documents;
7.2.5 No Default
no Default has occurred and is continuing;
7.2.6 No Default under any Contract or any Refund Guarantee no relevant Owner
is in default of any of its obligations under any Contract or any of its
obligations upon the performance or observance of which depend the
continued liability of any Refund Guarantor in accordance with the terms
of the relevant Refund Guarantee;
7.2.7 No Encumbrance in respect of pre-delivery security
no relevant Owner has previously charged, encumbered or assigned the
benefit of any of its rights, title and interest in or to any Contract
or any Refund Guarantee and such benefit and all such rights, title and
interest are freely assignable and chargeable in the manner contemplated
by the Security Documents.
7.2.8 the Ships
each Mortgaged Ship will on the Drawdown Date of Facility A and the
Advance under the Facility B in relation to the Initial Revolving Amount
or, as the case may be, the Advance for such Ship be:
(a) in the absolute ownership of the relevant Owner who will on and
after such Drawdown Date be the sole, legal and beneficial owner
of such Ship;
(b) registered through the offices of the relevant Registry as a
ship under the laws and flag of the relevant Flag State;
(c) operationally seaworthy and in every way fit for service; and
(d) classed with the relevant Classification free of all
requirements and recommendations of the relevant Classification
Society;
7.2.9 Ships' employment
other than in respect of such charters, contracts, agreements to enter
into charters or contracts in respect of the Initial Ships details of
which have been provided to the Borrower and approved by the Bank in
writing, no Ship is nor will on or before the Drawdown Date of the
Advance constituting Facility A or, as the case may be, the Advance
constituting the Initial Revolving Amount or, as the case may be, the
relevant Advance for such Ship be subject to any charter or contract or
to any agreement to enter into any charter or contract which, if entered
into after the date of the relevant Ship's Security Documents would have
required the consent of the Bank and on or before the Drawdown Date for
the Advance constituting Facility A or, as the case may be, the Advance
constituting the Initial Revolving Amount or, as the case may be, the
Advance for such Ship, there will not be any agreement or arrangement
whereby the Earnings (as defined in the relevant Ship's Security
Documents) may be shared with any other person;
7.2.10 Freedom from Encumbrances
none of the Ships, nor their Earnings, Insurances or Requisition
Compensation (each as defined in the relevant Ship's Security Documents)
nor any of the Operating Accounts nor any of the Underlying Documents
nor any other properties or rights which are, or are to be, the subject
of any of the Security Documents nor any part thereof will be, on the
Drawdown Date for the Advance constituting Facility A or, as the case
may be, the Advance constituting the Initial Revolving Amount or, as the
case may be, the relevant Advance for such Ship, subject to any
Encumbrance; and
7.2.11 Environmental matters
to the best of the knowledge and belief of the Borrower and its
respective officers:
(a) all Environmental Laws applicable to any Fleet Vessel have been
complied with and all consents, licences and approvals required
under such Environmental Laws have been obtained and complied
with; and
(b) no Environmental Claim has been made or threatened or pending
against any member of the Borrower's Group or any Fleet Vessel
and not fully satisfied; and
(c) there has been no Environmental Incident; 7.2.12 No material
adverse change
there has been no material adverse change in the financial position of
the Borrower or the consolidated financial position of the Borrower and
its Related Companies from that set forth in the financial statements
referred to in clause 7.1.9;
7.2.13 Parent company
each of the Owners is the wholly owned subsidiary of the Borrower and
the Borrower is legally and beneficially owned as to fifteen per cent
(15%) by the Shareholders;
7.2.14 Copies true and complete
the copies of each of the Underlying Documents delivered or to be
delivered to the Bank pursuant to clause 9 are, or will when delivered
be, true and complete copies of such documents; such documents will when
delivered constitute valid and binding obligations of the parties
thereto enforceable in accordance with their respective terms and there
will have been no amendments or variations thereof or defaults
thereunder; and
7.2.15 ISM Code and ISPS Code
any Operator has obtained and maintains (a) a DOC, and will, on or prior
to the Drawdown Date, obtain an SMC for the Ships and (b) any
certification required in order for any Owner, any Operator and the
Ships to comply with the ISPS Code and each of such documents are, or
will when issued be, in full force and effect and nothing has happened
which might cause any of such documents to be withdrawn.
7.3 Repetition of representations and warranties
7.3.1 On and as of each Advance and (except in relation to the representations
and warranties in clause 7.2) on each Interest Payment Date the Borrower
shall (a) be deemed to repeat the representations and warranties in
clauses 7.1 (and so that the representation and warranty in clause 7.1.9
shall for this purpose refer to the then latest audited financial
statements delivered to the Bank under clause 8.1) and 7.2 as if made
with reference to the facts and circumstances existing on such day and
(b) be deemed to further represent and warrant to the Bank that the then
latest audited financial statements delivered to the Bank (if any) have
been prepared in accordance with GAAP which have been consistently
applied and present fairly and accurately the financial position of the
Borrower and the consolidated financial position of the Borrower and its
Related Companies as at the end of the financial period to which the
same relate and the results of the operations of the Borrower and the
consolidated results of the operations of the Borrower and its Related
Companies respectively for the financial period to which the same relate
and, as at the end of such financial period, neither the Borrower nor
any of its Related Companies had any significant liabilities (contingent
or otherwise) or any unrealised or anticipated losses which are not
disclosed by, or reserved against or provided for in, such financial
statements. 8 Undertakings
8.1 General
The Borrower undertakes with the Bank that, from the date of this
Agreement and so long as any moneys are owing under any of the Security
Documents and while all or any part of the Commitment remains
outstanding, it will:
8.1.1 Notice of Default
promptly inform the Bank of any occurrence of which it becomes aware
which might adversely affect the ability of any Security Party to
perform its obligations under any of the Security Documents or the
Underlying Documents to which it is a party and, without limiting the
generality of the foregoing, will inform the Bank of any Default
forthwith upon becoming aware thereof and will from time to time, if so
requested by the Bank, confirm to the Bank in writing that, save as
otherwise stated in such confirmation, no Default has occurred and is
continuing;
8.1.2 Consents and licences
without prejudice to clauses 7.1 and 9, obtain or cause to be obtained,
maintain in full force and effect and comply in all material respects
with the conditions and restrictions (if any) imposed in, or in
connection with, every consent, authorisation, licence or approval of
governmental or public bodies or authorities or courts and do, or cause
to be done, all other acts and things which may from time to time be
necessary or desirable under applicable law for the continued due
performance of all the obligations of the Security Parties under each of
the Security Documents and the Underlying Documents;
8.1.3 Use of proceeds
use the Loan exclusively for the purpose specified in clause 1.1;
8.1.4 Pari passu
ensure that its obligations under this Agreement and the Master Swap
Agreement shall, without prejudice to the security intended to be
created by the Security Documents at all times rank at least pari passu
with all its other present and future unsecured and unsubordinated
Indebtedness with the exception of any obligations which are mandatorily
preferred by law and not by contract;
8.1.5 Financial statements
prepare financial statements of the Borrower and consolidated financial
statements of the Borrower and its Related Companies in accordance with
GAAP and all requirements of the Securities and Exchange Commission of
the United States of America consistently applied in respect of each
financial year and cause the same to be reported on by its auditors and
prepare unaudited financial statements of the Borrower and consolidated
financial statements of the Borrower and its Related Companies in
respect of each quarter on the same basis as the annual statements and
deliver as many copies of the same as the Bank may reasonably require as
soon as practicable but not later than one hundred and twenty (120) days
(in the case of audited financial statements) or forty five (45) days
(in the case of unaudited financial statements) after the end of the
financial period to which they relate;
8.1.6 Delivery of Compliance Certificate
deliver to the Bank a Compliance Certificate for the relevant period
with each set of financial statements provided pursuant to clause 8.1.5;
8.1.7 Delivery of reports
deliver and procure that the other Security Parties deliver to the Bank
as many copies as the Bank may reasonably require at the time of issue
thereof of every report, circular, notice or like document issued by any
of the Borrower or any other Security Party to its shareholders or
creditors generally;
8.1.8 Provision of further information
provide the Bank with such financial and other management information
concerning any Borrower, its Related Companies, the other Security
Parties and their respective affairs as the Bank may from time to time
reasonably require;
8.1.9 Obligations under Security Documents
duly and punctually perform and procure that the other Security Parties
duly and punctually perform each of the obligations expressed to be
assumed by them under the Security Documents;
8.1.10 ISM Code
(a) comply with and ensure that each Ship and any Operator at all
times complies with the requirements of the ISM Code;
(b) immediately inform the Bank if there is any actual or threatened
withdrawal of an Owner's or an Operator's DOC or the SMC in
respect of any Ship; and
(c) promptly inform the Bank upon the issue to the Borrower or any
Operator of a DOC and to any Ship of an SMC or the receipt by
any of the Borrower or any Operator of notification that its
application for the same has been refused;
8.1.11 ISPS Code
(a) comply with and ensure that each Ship and any Operator at all
times complies with the requirements of the ISPS Code and with
specifications of the International Maritime Organisation, and
any other regulations, either existing or future, of the
International Maritime Authority and the European Union; and (b)
immediately inform the Bank if there is any actual or threatened
withdrawal of any certification required in order for any of
them, any Operator and/or the Ship to comply with the ISPS Code;
8.1.12 Documents and evidence
provide the Bank with such documents and evidence as the Bank shall from
time to time require, based on applicable law and regulations from time
to time and the Bank's own internal guidelines from time to time to
identify the Borrower and the other Security Parties and any other
persons involved or affected by the transaction(s) contemplated by this
Agreement;
8.1.13 Management of the Borrower
not without the Bank's written consent appoint at any time a new Chief
Executive Officer (other than ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇);
8.1.14 Owner's Guarantee procure that on or prior to the Drawdown Date of the
Advance constituting Facility A and each Advance relative to Facility B
(including without limitation the Advance constituting the Initial
Revolving Amount) the relevant Owner(s) execute(s) and deliver(s) to the
Bank an Owner's Guarantee;
8.1.15 Intra-Group Loan Agreements
procure that all interest payment dates and all repayment dates relating
to the loans to be made pursuant to the Intra-Group Loan Agreements
match those of each relevant Advance drawn down by the Borrower under
this Agreement in order to make each of the said loans available to the
Owners and shall procure and ensure that all sums paid and/or payable by
the Owners to the credit of the Operating Accounts shall be freely
available to the Bank to meet all payments of principal and interest and
all other sums payable by the Borrower to the Bank pursuant to this
Agreement and each of the other Security Documents;
8.1.16 Operating Accounts balance
(a) subject to this clause 8.1.16, on or before the Drawdown Date of
the first Advance pay to the credit of the Operating Accounts
(or other accounts charged in favour of the Bank in respect of
the Ships) an aggregate sum of not less than ten million Dollars
($10,000,000); and
(b) on and from the Drawdown Date of the first Advance and
throughout the Security Period maintain an average balance
(calculated on a monthly basis) of not less than ten million
Dollars ($10,000,000) and in any event an aggregate balance of
not less than five million Dollars ($5,000,000) standing to the
credit of the Operating Accounts (or other accounts charged in
favour of the Bank in respect of the Ships);
8.1.17 Classification
if and when so requested in writing by the Bank acting in its sole
discretion, irrevocably and unconditionally instruct and authorise the
Classification Societies (notwithstanding any previous instructions
whatsoever which the relevant Owner may have given to any Classification
Society to the contrary) as follows:
(a) to send to the Bank, following receipt of a written request from
the Bank, certified true copies of all original certificates of
class held by any Classification Society in relation to any
Ship;
(b) to allow the Bank (or its agents), at any time and from time to
time, to inspect the classification reports of any Owner for any
Ship at the offices of any Classification Society and to take
copies of them;
(c) to notify the Bank immediately in writing if any Classification
Society:
(i) receives written notification from any Owner or any
other person that the relevant Ship's Classification
Society is to be changed; or
(ii) becomes aware of any facts or matters which may result
in or have resulted in a change, suspension,
discontinuance, withdrawal or expiry of the relevant
Ship's Classification under the rules or terms and
conditions of any Owner's or the relevant Ship's
membership of the Classification Society;
(d) following receipt by any Classification Society of a written
request from the Bank:
(i) to confirm to the Bank that the relevant Owner is not in
default of any of its contractual obligations or
liabilities to the Classification Society and, without
limiting the foregoing, that it has paid in full all
fees or other charges due and payable to the
Classification Society; or
(ii) if the relevant Owner is in default of any of its
contractual obligations or liabilities to the
Classification Society, to specify to the Bank in
reasonable detail the facts and circumstances of such
default, the consequences thereof, and any remedy period
agreed or allowed by the Classification Society.
The Borrower further undertakes with the Bank that it will continue to
be responsible to the Classification Societies for the performance and
discharge of all their obligations and liabilities relating to or
arising out of or in connection with the contract it has with the
Classification Societies, and that nothing in this clause 8.1.17 should
be construed as imposing any obligation or liability on the Bank to any
Classification Society in respect thereof; and
8.2 Security value maintenance
8.2.1 Security shortfall
If at any time the Security Value shall be less than the Security
Requirement, the Bank may give notice to the Borrower requiring that
such deficiency be remedied and then the Borrower shall either:
(a) prepay within a period of thirty (30) days of the date of
receipt by the Borrower of the Bank's said notice such sum in
Dollars as will result in the Security Requirement after such
prepayment (taking into account any other repayment of the Loan
made between the date of the notice and the date of such
prepayment) being equal to the Security Value; or
(b) within thirty (30) days of the date of receipt by the Borrower
of the Bank's said notice constitute to the satisfaction of the
Bank such further security for the Loan as shall be acceptable
to the Bank having a value for security purposes (as determined
by the Bank in its absolute discretion) at the date upon which
such further security shall be constituted which, when added to
the Security Value, shall not be less than the Security
Requirement as at such date.
Clause 4.6 shall apply to prepayments under clause 8.2.1(a).
8.2.2 Valuation of Ship
Each of the Ships shall, for the purposes of this clause 8.2.2, be
valued in Dollars as and when the Bank shall require by an Approved
Shipbroker and in any event at least once a quarter immediately prior to
each Margin Set Date (such valuation to be made without, unless required
by the Bank, physical inspection and on the basis of a sale for prompt
delivery for cash at arms length on normal commercial terms as between a
willing buyer and a willing seller without taking into account the
benefit of any charterparty or other engagement concerning the relevant
Ship). Such valuations shall constitute the value of the Ships for the
purposes of this clause 8.2.2 unless the Borrower objects to any
valuation provided by an Approved Shipbroker within ten (10) days of
receipt of such valuation in which event, the value of the relevant Ship
shall be the mean of the value specified in such valuation and the value
specified in a valuation issued by another Approved Shipbrokers
appointed by the Borrower.
The value of the Ships determined in accordance with the provisions of
this clause 8.2.2 shall be binding upon the parties hereto until such
time as any further such valuations shall be obtained.
8.2.3 Information
The Borrower undertakes to the Bank to supply to the Bank and to any
Approved Shipbrokers such information concerning the Ships and their
condition as such Approved
Shipbrokers may reasonably require for the purpose of making any such
valuation of any of the Ships.
8.2.4 Costs
All costs in connection with (a) the Bank obtaining one (1) valuation of
each of the Ships referred to in clause 8.2.2 in any period of twelve
(12) months, (b) any valuation issued by another Approved Shipbrokers
appointed by the Borrower pursuant to clause 8.2.2, (c) any valuation
either of any additional security for the purposes of ascertaining the
Security Value at any time or necessitated by the Borrower electing to
constitute additional security pursuant to clause 8.2.1(b) and (d) any
valuations obtained following the occurrence of a Default, shall be
borne by the Borrower.
8.2.5 Valuation of additional security
For the purpose of this clause 8.2, the market value of any additional
security provided or to be provided to the Bank shall be determined by
the Bank in its absolute discretion without any necessity for the Bank
assigning any reason thereto.
8.2.6 Documents and evidence
In connection with any additional security provided in accordance with
this clause 8.2, the Bank shall be entitled to receive such evidence and
documents of the kind referred to in Schedule 3 as may in the Bank's
opinion be appropriate and such favourable legal opinions as the Bank
shall in its absolute discretion require.
8.3 Negative undertakings
The Borrower undertakes with the Bank that, from the date of this
Agreement and so long as any moneys are owing under the Security
Documents and while all or any part of the Commitment remains
outstanding, it will not, without the prior written consent of the Bank,
but subject to the proviso hereto:
8.3.1 Negative pledge
permit any Encumbrance (other than a Permitted Encumbrance) to subsist,
arise or be created or extended over all or any part of its present or
future undertakings, assets, rights or revenues to secure or prefer any
present or future Indebtedness or other liability or obligation of any
of the Borrower or any other person;
8.3.2 No merger merge or consolidate with any other person;
8.3.3 Disposals
sell, transfer, abandon, lend or otherwise dispose of or cease to
exercise direct control over any part (being either alone or when
aggregated with all other disposals falling to be taken into account
pursuant to this clause 8.3.3 material in the opinion of the Bank in
relation to the undertakings, assets, rights and revenues of a
Borrower's Group) of its present or future undertaking, assets, rights
or revenues (otherwise than by transfers, sales or disposals for full
consideration in the ordinary course of trading) whether by one or a
series of transactions related or not;
8.3.4 Other business
undertake any business other than the ownership and operation of the
Ships and the chartering of the Ships to third parties;
8.3.5 Acquisitions
and will procure that no other Related Company shall, acquire any
further assets (including vessels) other than the Ships and rights
arising under contracts entered into by or on behalf of the Borrower or
any Owner in the ordinary course of its businesses of owning, operating
and chartering the Ships;
8.3.6 Other obligations
incur any obligations except for obligations arising under the
Underlying Documents or the Security Documents or contracts entered into
in the ordinary course its businesses of owning, operating and
chartering the Ships; or
8.3.7 No borrowing
and will procure that no other Related Company shall, incur any Borrowed
Money except for Borrowed Money pursuant to the Security Documents (and,
in the case of any Owner, Borrowed Money pursuant to the relevant
Intra-Group Loan Agreement) or incurred in the ordinary course of its
businesses of owning, operating and chartering the Ships; or
8.3.8 Repayment of borrowings
repay the principal of, or pay interest on or any other sum in
connection with any of its Borrowed Money except for Borrowed Money
pursuant to the Security Documents; or
8.3.9 Guarantees
issue any guarantees or indemnities or otherwise become directly or
contingently liable for the obligations of any person, firm, or
corporation except pursuant to the Security Documents and except for
guarantees or indemnities from time to time required in the ordinary
course by any protection and indemnity or war risks association with
which a Ship is entered, guarantees required to procure the release of
such Ship from any arrest, detention, attachment or levy or guarantees
or undertakings required for the salvage of a Ship); or
8.3.10 Loans
make any loans (other than the Loans under the Intra-Group Loan
Agreements) grant any credit (save as envisaged in clause 8.3.7 and save
for normal trade credit in the ordinary course of business) to any
person or agree to do so and in the case of the loans to be made under
the Intra-Group Loan Agreements, the Borrower will not without the prior
written agreement of the Bank and except as envisaged in clause 14.4
accept any repayments of principal or interest or other sums due or
payable thereunder or take any action against any Owner; or
8.3.11 Sureties
permit any Indebtedness of the Borrower to any person (other than the
Bank) to be guaranteed by any person (save for guarantees or indemnities
granted by any Owner and fully subordinated in all respects to the
Bank's rights as lender under this Agreement and the other Security
Documents) or from time to time required in the ordinary course by any
protection and indemnity or war risks association with which a Ship is
entered, guarantees required to procure the release of such Ship from
any arrest, detention, attachment or levy or guarantees or undertakings
required for the salvage of a Ship); or
8.3.12 Share capital and distribution
purchase or otherwise acquire for value any shares of its capital or
stock or declare or pay any dividends or distribute any of its present
or future assets, undertakings, rights or revenues to any of its
shareholders and will procure that the Owners will not acquire for value
any shares of its capital or stock or declare or pay any dividends or
distribute any of its present or future assets, undertakings rights or
revenues to any of its shareholders following the occurrence of a
Default or if the same would result in a Default occurring; or
8.3.13 Subsidiaries and parent
cease to legally and beneficially own 100% of the issued shares in the
capital of the Owners whether directly or indirectly;
8.3.14 Change of Classification, Classification Society or Flag State
and will procure that the Owners do not change the Classification, the
Classification Society or the Flag State of any Ship;
8.3.15 Managers
change or permit any change in either of the Managers of the Ships or
amend or permit any amendment of any of the Management Agreements; and
8.3.16 Constitutional documents
agree to any change to its constitutional documents; and
8.3.17 Equity
and will procure that the Owners do not permit (a) the issue of any
convertible equity or the conversion of any existing equity and (b) any
further equity participation in the Borrower and/or the Owner unless the
same is legally and effectively subordinated to all amounts due to the
Bank under the Loan Agreement and the other Security Documents.
Provided always that subject to no Default having occurred and be
continuing or resulting from any acquisition or borrowing by a Related
Company which is not an Owner, nothing in sub-clauses 8.3.5 or 8.3.7 or
8.3.8 shall prevent the Borrower in assisting any Related Company (which
is not an Owner) to acquire, or such Related Company (which is not an
Owner) in acquiring, any further tonnage over which such Related Company
shall be entitled to grant mortgages, pledges, liens or other
encumbrances as security for its obligations. The Borrower agrees that
it shall upon the Bank's first demand in writing execute such further
documents as they may require to create specific cross-default
provisions relating to any such acquisitions or borrowing.
8.4 Permitted Ship sales
The Bank shall not unreasonably withhold its consent under any provision
of the Security Documents to the sale of a Mortgaged Ship if the Owner
delivers to the Bank evidence satisfactory to the Bank that such sale is
or will be for the full value of the Ship for payment in cash at arm's
length and upon normal commercial terms to a purchaser which is not
associated with any Owner or the Borrower provided that no Default has
occurred or will, on completion of such sale, have occurred and the Bank
is satisfied that on or immediately after the delivery of such Ship to
the relevant purchaser, the proceeds of sale of such Ship (after
deducting customary brokers' commissions and any expenses related to
such sale) will be of an amount
not less than that required by the Bank to be prepaid upon completion of
such sale pursuant to clause 4.5 together with all sums payable by the
Borrower to the Bank under clause 4.6.
8.5 Financial covenants
8.5.1 The Borrower undertakes that at all times during the Security Period the
financial condition of the Borrower, which shall be evidenced by the
Accounting Information provided to the Bank shall be such that:
(a) the Borrower's Adjusted Net Worth shall never be less than two
hundred and fifty million Dollars ($250,000,000) and will at all
times exceed thirty five per cent (35%) of Total Assets; and
(b) EBITDA of the Borrower will at all times exceed one hundred and
twenty per cent (120%) of the aggregate amount of Fixed Charges;
(c) the Liquid Funds of the Borrower shall not at any time be less
than the higher of:
(i) ten million Dollars ($10,000,000); or
(ii) five hundred thousand Dollars ($500,000) per Group
Vessel.
The Borrower further confirms and undertakes that if the terms relating
to any future Borrowed Money (whether of the Borrower or any Related
Company) including financial covenants are different to those detailed
in this clause 8.5 the Borrower shall upon the Bank's first demand in
writing execute such documents as the Bank may require to enable the
Bank to benefit from such enhanced and/or stronger financial covenants.
8.5.2 For the purposes of this Clause 8.5:
"Accounting Information" means the quarterly financial statements and/or
the annual audited financial statements to be provided by the Borrower
to the Bank in accordance with clause 8.1.5 of this Agreement;
"Accounting Period" means each consecutive period of approximately three
months falling during the Security Period (ending on the last day in
March, June, September and December of each year) for which quarterly
Accounting Information is required to be delivered pursuant to clause
8.1.5 of this Agreement;
"Adjusted Net Worth" means, in respect of an Accounting Period, the
amount of Total Assets less Consolidated Debt;
"Consolidated Debt" means, in respect of an Accounting Period, the
aggregate amount of Debt due by the members of the Group (other than any
such Debt owing by any member of the Group to another member of the
Group) as stated in the then most recent Accounting Information;
"Consolidated Financial Indebtedness" means, in respect of each
Accounting Period, the aggregate amount of Financial Indebtedness
(including current maturities) due by the members of the Group (other
than any such Financial Indebtedness owing by any member of the Group to
another member of the Group) as stated in the then most recent
Accounting Information;
"Current Assets" means, in respect of each Accounting Period, the
aggregate of the cash and marketable securities, trade and other
receivables from persons other than a member of the Group realisable
within one year, inventories and prepaid expenses which are to be
charged to income within one year less any doubtful debts and any
discounts or allowances given as stated in the then most recent
Accounting Information;
"Debt" means in relation to any member of the Group (the "debtor");
(a) Financial Indebtedness of the debtor;
(b) liability for any credit to the debtor from a supplier of goods
or services or under any instalment purchase or payment plan or
other similar arrangement;
(c) contingent liabilities of the debtor (including without
limitation any taxes or other payments under dispute) which have
been or, under GAAP, should be recorded in the notes to the
Accounting Information;
(d) deferred tax of the debtor; and
(e) liability under a guarantee, indemnity or similar obligation
entered into by the debtor in respect of a liability of another
person who is not a member of the Group which would fall within
(a) to (d) if the references to the debtor referred to the other
person;
"EBITDA" means, in respect of an Accounting Period, the aggregate amount
of consolidated pre-tax profits of the Group before extraordinary or
exceptional items, depreciation, interest, rentals under finance leases
and similar charges payable as stated in the then most recent Accounting
Information;
"Financial Indebtedness" means, in relation to any member of the Group
(the "debtor"), a liability of the debtor:
(a) for principal, interest or any other sum payable in respect of
any moneys borrowed or raised by the debtor;
(b) under any loan stock, bond, note or other security issued by the
debtor;
(c) under any acceptance credit, guarantee or letter of credit
facility made available to the debtor;
(d) under a financial lease, a deferred purchase consideration
arrangement (in each case, other than in respect of assets or
services obtained on normal commercial terms in the ordinary
course of business) or any other agreement having the commercial
effect of a borrowing or raising of money by the debtor;
(e) under any foreign exchange transaction, interest or currency
swap or any other kind of derivative transaction entered into by
the debtor or, if the agreement under which any such transaction
is entered into requires netting of mutual liabilities, the
liability of the debtor for the net amount; or
(f) under a guarantee, indemnity or similar obligation entered into
by the debtor in respect of a liability of another person which
would fall within (a) to (c) if the references to the debtor
referred to the other person;
"Fixed Charges" means, in respect of an Accounting Period, the aggregate
of Interest Expenses and the portion of Consolidated Financial
Indebtedness (other than balloon repayments) falling due during that
period, as stated in the then most recent Accounting Information;
"Group" means the Borrower and its subsidiaries (whether direct or
indirect and including, but not limited to, the Owners) from time to
time during the Security Period and "member of the Group" shall be
construed accordingly;
"Group Vessels" means any vessel (including, but not limited to, the
Ships) from time to time owned by any member of the Group (each a "Group
Vessel");
"Interest Expenses" means, in respect of an Accounting Period, the
aggregate on a consolidated basis of all interest incurred by any member
of the Group (excluding any amounts owing by one member of the Group to
another member of the Group) and any net amounts payable under interest
rate hedge agreements;
"Liquid Funds" means, in respect of an Accounting Period:
(a) cash in hand or held with banks or other financial institutions
of the Borrower and/or any other member of the Group in Dollars
or another currency freely convertible into Dollars, which is
free of any Encumbrance (other than a Permitted Encumbrance and
other than ordinary bankers' liens which have not been enforced
or become capable of being enforced);
(b) any other short-term financial investments which is free of any
Security Interest (other than a Permitted Security Interest),
as stated in the then most recent Accounting Information;
"Tangible Fixed Assets" means, in respect of an Accounting Period, the
value (less depreciation computed in accordance with GAAP) on a
consolidated basis of all tangible fixed assets of the Group as stated
in the then most recent Accounting Information; and
"Total Assets" means, in respect of an Accounting Period, the aggregate
of Current Assets and Tangible Fixed Assets.
All expressions used in the definitions of this clause 8.5 which are not
otherwise defined herein shall be construed in accordance with generally
accepted accounting principles in the United States of America.
8.6 Pre-delivery positive undertakings
In relation to each Additional Ship which is a newbuilding, the Borrower
undertakes and agrees with the Bank that it will or will procure that
the relevant Owner will:
8.6.1 Document of title to an Additional Ship
give irrevocable instructions to the relevant Builder to hold such
Additional Ship and the builder's certificate and any other document of
title to such Additional Ship to the order and at the disposal of the
Bank and ensure that the relevant Builder complies with such
instructions;
8.6.2 Performance of the Contract
duly and punctually observe and perform all the conditions and
obligations imposed on it by the relevant Contract; 8.6.3 Performance by
Builder
use its best endeavours to ensure that the Builder of such Additional
Ship observes and performs all conditions and obligations imposed on it
by the relevant Contract and take all steps within its power to ensure
that the Builder proceeds with the construction of such Additional Ship
with due diligence and despatch;
8.6.4 Progress of construction
upon the request of the Bank, advise the Bank of the progress of
construction of such Additional Ship and supply the Bank with such other
information as it may require regarding such Additional Ship, and the
materials allocated to such Additional Ship, the relevant Contract, or
otherwise relating to the construction of such Additional Ship;
8.6.5 Arbitration under the Contract
in the event that the Builder of such Additional Ship and/or the
relevant Owner resort to arbitration as provided in the relevant
Contract, immediately notify the Bank in writing that such arbitration
has been initiated, advise the Bank in writing of the identity of the
appointed arbitrators and upon termination of the arbitration notify the
Bank in writing to that effect and supply the Bank with a copy of the
arbitration award and a certified English translation thereof;
8.6.6 Conveyance on default
where such Additional Ship is (or is to be) sold in exercise of any
power contained in the relevant Pre-delivery Security Assignment or
otherwise conferred on the Bank, to execute, forthwith upon request by
the Bank, such form of conveyance of such Additional Ship as the Bank
may require;
8.6.7 Enforcement of Owner's rights
do or permit to be done each and every act or thing which the Bank may
from time to time require to be done for the purpose of enforcing the
relevant Owner's rights under or pursuant to the relevant Contract and
allow the name of the relevant Owner to be used as and when required by
the Bank for that purpose;
8.6.8 Notification of rejection of an Additional Ship
notify the Bank immediately if the relevant Builder or (with the prior
written consent of the Bank given pursuant to clause 8.5) the relevant
Owner cancels, rescinds, repudiates or otherwise terminates the relevant
Contract or purports to do so or (with the prior written consent of the
Bank given pursuant to clause 8.5) the relevant Owner rejects such
Additional Ship or purports to do so or if such Additional Ship shall
become a Total Loss or partial loss or shall be damaged;
8.6.9 Ship's name and registration
register such Additional Ship provisionally or permanently under the
laws and flag of the relevant Flag State immediately upon Delivery,
procure that (if such Additional Ship is so registered provisionally on
the Delivery Date) such Additional Ship is permanently registered under
the laws and flag of the relevant Flag State no later than one hundred
and eighty (180) days after the Delivery Date and keep such Additional
Ship registered at all times from the Delivery Date under the laws and
flag of the relevant Flag State; and
8.6.10 Mortgage
execute, and procure the registration of, the Mortgage relative to such
Additional Ship under the laws and flag of the relevant Flag State
immediately upon Delivery.
8.7 Pre-delivery negative undertakings
In relation to each Additional Ship which is a newbuilding, the Borrower
hereby further undertakes and agrees with the Bank that it will not, and
will procure that the relevant Owner will not without the prior written
consent of the Bank (and then only subject to such conditions as the
Bank may impose):
8.7.1 Sale or other disposal
sell or agree to sell, transfer, abandon or otherwise dispose of such
Additional Ship or any share or interest therein;
8.7.2 Creation of Encumbrances
create or agree to create or permit to subsist any Encumbrance over such
Additional Ship (or any share or interest therein) other than the
Encumbrances created or to be created pursuant to the Security
Documents;
8.7.3 Variation of Contract
agree to any variation of the relevant Contract or any substantial
variation of the specification of such Additional Ship (and for the
purpose of this paragraph any extras, additions or alterations which the
relevant Owner may desire to effect in the building of such Additional
Ship shall be deemed to constitute a substantial variation if the cost
thereof (which shall in every case be
agreed in writing between the relevant Owner and the relevant Builder
before the work is put in hand irrespective of whether the prior consent
thereto of the Bank be required hereunder) or if the aggregate cost of
the proposed work together with the cost of any work already ordered
will alter the fixed price of any of such Additional Ship by an amount
greater than five per cent (5%) of the said fixed price);
8.7.4 Releases and waivers of Contract
release the relevant Builder from any of its obligations under the
relevant Contract or waive any breach of the relevant Builder's
obligations thereunder or consent to any such act or omission of the
relevant Builder as would otherwise constitute such breach;
8.7.5 Delays
without prejudice to clause 8.5.3, agree to any variation of the
relevant Contract or the specification of such Additional Ship which
would delay the time for delivery of such Additional Ship;
8.7.6 Rejection and cancellation
either exercise or fail to exercise any right which the relevant Owner
may have to reject such Additional Ship or cancel or rescind or
otherwise terminate the relevant Contract provided always that any such
rejection of such Additional Ship or cancellation, rescission or other
termination of the relevant Contract by the relevant Owner after such
consent is given shall be without responsibility on the part of the Bank
who shall be under no liability whatsoever to the extent that such
rejection, rescission, cancellation or termination is thereafter
adjudged to constitute a repudiation or other breach of such Contract by
the relevant Owner;
8.7.7 Assignment of Earnings
assign or agree to assign otherwise than to the Bank the Earnings of
such Additional Ship or any part thereof;
8.7.8 Variation of a Refund Guarantee
agree to any variation of the relevant Refund Guarantee;
8.7.9 Release and waiver of the Refund Guarantee
release the relevant Refund Guarantor from any of its obligations under
the relevant Refund Guarantee or waive any breach of the relevant Refund
Guarantor's obligations thereunder or consent to any such act or
omission of such Refund Guarantor as would otherwise constitute such
breach;
8.7.10 Chartering
let or agree to let such Additional Ship:
(a) on demise charter for any period; or
(b) by any time or consecutive voyage charter for a term which
exceeds or which by virtue of any optional extensions therein
contained may exceed twelve (12) months' duration; or
(c) on terms whereby more than two months' hire (or the equivalent)
is payable in advance; or
(d) below the market rate prevailing at the time when such
Additional Ship is fixed or other than on arms length terms;
8.7.11 Manager
to appoint a manager of such Additional Ship (other than the Manager) or
to terminate or amend the terms of any Management Agreement. 9
Conditions
9.1 Commitment
The obligation of the Bank to make the Commitment available shall be
subject to the condition that the Bank, or its duly authorised
representative, shall have received the documents and evidence set out
in Part 1 of Schedule 3.
9.2 First Advance
The obligation of the Bank to make the first Advance available shall be
subject to the condition that the Bank or its duly authorised
representative shall have received not later than two (2) Banking Days
before the day on which the Drawdown Notice for the first Advance is
given, the documents and evidence specified in Part 2 of Schedule 3 in
form and substance satisfactory to the Bank.
9.3 All Advances
The obligation of the Bank to make each Advance (other than an Advance
which represents a re-borrowing of the Committed Facility B Amount in
respect of which, subject to the satisfaction of the provisions of
clause 4.2.3, no conditions precedent shall apply other than the issue
of a Drawdown Notice for the relevant amount together with evidence that
the Security Value is at least equal to the Security Requirement) shall
be subject to the further condition that the Bank, or its duly
authorised representative, shall have received on or prior to the
relevant Drawdown Date of such Advance, the documents and evidence
specified in Part 3 of Schedule 3 in form and substance satisfactory to
the Bank.
9.4 Contract Instalment Advances of Facility B
The obligation of the Bank to make any Advance which is a Contract
Instalment Advance of Facility B shall be subject to the condition that
the Bank, or its duly authorised representative, shall have received, on
or prior to the day on which that Advance is intended to be made, the
documents and evidence specified in Part 4 of Schedule 3 in form and
substance satisfactory to the Banks.
9.5 Expected Project Costs
The obligation of the Bank to make any Advance of Facility B for an
Additional Ship which is a newbuilding constituting in part Expected
Project Costs shall be subject to the further condition that the Bank,
or its duly authorised representative, shall have received invoices or
pro-forma invoices itemised in a written inventory which properly and
accurately represents the Expected Project Costs to the satisfaction of
the Bank in its reasonable discretion.
9.6 General conditions precedent
The obligation of the Bank to make any Advance thereof shall be subject
to the further conditions that, at the time of the giving of the
Drawdown Notice for such Advance thereof, and at the time of the making
of such Advance thereof:
9.6.1 the representations and warranties contained in (i) clauses 7.1 (and so
that the representation and warranty in clause 7.1.9 shall for this
purpose refer to the then latest audited financial statements delivered
to the Bank under clause 8.1.5), 7.2 and 7.3 and (ii) clauses 4.1 and
4.2 of the Owner's Guarantees (and so that the representation and
warranty in clause 4:1.6 of
Owner's Guarantees shall for this purpose refer to the then latest
audited financial statements delivered to the Bank under clause 5.1 of
the Owner's Guarantees) 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; and
9.6.2 no Default shall have occurred and be continuing or would result from
the making of the relevant Advance thereof.
9.7 Waiver of conditions precedent
The conditions specified in this clause 9 are inserted solely for the
benefit of the Bank and may be waived by the Bank in whole or in part
and with or without conditions.
9.8 Further conditions precedent
Not later than five (5) Banking Days prior to each Drawdown Date and not
later than five (5) Banking Days prior to each Interest Payment Date,
the Bank may request and the Borrower shall, not later than two (2)
Banking Days prior to such date, deliver to the Bank on such request
further favourable certificates and/or opinions as to any or all of the
matters which are the subject of clauses 7, 8, 9 and 10 of this
Agreement and clauses 4 and 5 of the each Owner's Guarantee. 10 Events
of Default
10.1 Events
There shall be an Event of Default if:
10.1.1 Non-payment: any Security Party fails to pay any sum payable by it under
any of the Security Documents or the Underlying Documents at the time,
in the currency and in the manner stipulated in the Security Documents
or the Underlying Documents (and so that, for this purpose, sums payable
on demand shall be treated as having been paid at the stipulated time if
paid within three (3) Banking Days of demand); or
10.1.2 Master Swap Agreement:
(a) an Event of Default or Potential Event of Default (in each case
as defined in the Master Swap Agreement) has occurred and is
continued under the Master Swap Agreement or
(b) an Early Termination Date (as defined in the Master Swap
Agreement) has occurred or been or become capable of being
effectively designated under the Master Swap Agreement or
(c) a person entitled to do so gives notice of an Early Termination
Date under Section 6(b)(iv) of the Master Swap Agreement or
(d) the Master Swap Agreement is terminated, cancelled, suspended,
rescinded or revoked or otherwise ceases to remain in full force
and effect for any reason; or
10.1.3 Breach of Insurance and certain other obligations: the Borrower fails to
obtain and/or maintain the Insurances (as defined in, and in accordance
with the requirements of, the Ship Security Documents) for any of the
Mortgaged Ships or if any insurer in respect of such Insurances cancels
the Insurances or disclaims liability by reason, in either case, of
misstatement in any proposal for the Insurances or for any other failure
or default on the part of the Borrower or any other person or the
Borrower or any Owner commits any breach of or omits to observe any of
the obligations or undertakings expressed to be assumed by it under
clauses 8.1 or 8.2 or 8.6 or 8.7; or
10.1.4 Breach of other obligations: any Security Party commits any breach of or
omits to observe any of its obligations or undertakings including
without limitation, any Financial Covenants expressed to be assumed by
it under any of the Underlying Documents or the Security Documents
(other than those referred to in clauses 10.1.1 and 10.1.2 above) and,
in respect of any such breach or omission which in the opinion of the
Bank is capable of remedy, such action as the Bank may require shall not
have been taken within fourteen (14) days (or any
such period as the Bank may agree in writing) of the Bank notifying the
relevant Security Party of such default and of such required action; or
10.1.5 Misrepresentation: any representation or warranty made or deemed to be
made or repeated by or in respect of any Security Party in or pursuant
to any of the Security Documents or any of the Underlying Documents or
in any notice, certificate or statement referred to in or delivered
under any of the Security Documents or any of the Underlying Documents
is or proves to have been incorrect or misleading in any material
respect; or
10.1.6 Cross-default: any Indebtedness of any Security Party is not paid when
due or any Indebtedness of any Security Party becomes (whether by
declaration or automatically in accordance with the relevant agreement
or instrument constituting the same) due and payable prior to the date
when it would otherwise have become due (unless as a result of the
exercise by the relevant Security Party of a voluntary right of
prepayment), or any creditor of any Security Party becomes entitled to
declare any such Indebtedness due and payable or any facility or
commitment available to any Security Party relating to Indebtedness is
withdrawn, suspended or cancelled by reason of any default (however
described) of the person concerned unless the relevant Security Party
shall have satisfied the Bank that such withdrawal, suspension or
cancellation will not affect or prejudice in any way the relevant
Security Party's ability to pay its debts as they fall due and fund its
commitments, or any guarantee given by any Security Party in respect of
Indebtedness is not honoured when due and called upon; or
10.1.7 Legal process: any judgment or order made against any Security Party is
not stayed or complied with within seven (7) days (or any such period as
the Bank may agree in writing) 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 any Security Party and is not discharged
within seven (7) days (or any such period as the Bank may agree in
writing); or
10.1.8 Insolvency: any Security Party is unable or admits inability to pay its
debts as they fall due; suspends making payments on any of its debts or
announces an intention to do so; or
10.1.9 Reduction or loss of capital: a meeting is convened by any Security
Party for the purpose of passing any resolution to purchase, reduce or
redeem any of its share capital or shares, as the case may be; or
10.1.10 Winding up: any corporate action, legal proceedings or other procedure
or step is taken for the purpose of winding-up any Security Party or an
order is made or resolution passed for the winding up of any Security
Party or a notice is issued convening a meeting for the purpose of
passing any such resolution; or
10.1.11 Administration: any petition is presented, notice given or other step is
taken for the purpose of the appointment of an administrator of any
Security Party or the Bank believes that any such petition or other step
is imminent or an administration order is made in relation to any
Security Party; or
10.1.12 Appointment of receivers and managers: any administrative or other
receiver is appointed of any Security Party or any part of its assets
and/or undertaking or any other steps are taken to enforce any
Encumbrance over all or any part of the assets of any Security Party; or
10.1.13 Compositions: any corporate action, legal proceedings or other
procedures or steps are taken, or negotiations commenced, by any
Security Party or by any of its creditors with a view to the general
readjustment or rescheduling of all or part of its indebtedness or to
proposing any kind of composition, compromise or arrangement involving
such company and any of its creditors; or
10.1.14 Analogous proceedings: there occurs, in relation to any Security Party,
in any country or territory in which any of them carries on business or
to the jurisdiction of whose courts any part of their assets is subject,
any event which, in the reasonable opinion of the Bank, appears in that
country or territory to correspond with, or have an effect equivalent or
similar to, any of those mentioned in clauses 10.1.7 to 10.1.13
(inclusive) or any Security Party otherwise
becomes subject, in any such country or territory, to the operation of
any law relating to insolvency, bankruptcy or liquidation; or
10.1.15 Cessation of business: any Security Party suspends or ceases or
threatens to suspend or cease to carry on its business; or
10.1.16 Seizure: all or a material part of the undertaking, assets, rights or
revenues of, or shares or other ownership interests in, any Security
Party are seized, nationalised, expropriated or compulsorily acquired by
or under the authority of any government; or
10.1.17 Invalidity: any of the Security Documents or any of the Underlying
Documents shall at any time and for any reason become invalid or
unenforceable or otherwise cease to remain in full force and effect, or
if the validity or enforceability of any of the Security Documents or
any of the Underlying Documents shall at any time and for any reason be
contested by any Security Party which is a party thereto, or if any such
Security Party shall deny that it has any, or any further, liability
thereunder; or
10.1.18 Unlawfulness: it becomes impossible or unlawful at any time for any
Security Party, to fulfil any of the covenants and obligations expressed
to be assumed by it in any of the Security Documents or any of the
Underlying Documents or for the Bank to exercise the rights or any of
them vested in it under any of the Security Documents or otherwise; or
10.1.19 Repudiation: any Security Party repudiates any of the Security Documents
or any of the Underlying Documents or does or causes or permits to be
done any act or thing evidencing an intention to repudiate any of the
Security Documents or any of the Underlying Documents; or
10.1.20 Encumbrances enforceable: any Encumbrance (other than Permitted Liens)
in respect of any of the property (or part thereof) which is the subject
of any of the Security Documents becomes enforceable; or
10.1.21 Material adverse change: there occurs, in the opinion of the Bank, a
material adverse change in the financial condition of any Security Party
by reference to the financial statements referred to in clause 7.1.9 and
clause 4.1.6 of the any Owner's Guarantee; or
10.1.22 Arrest: any Ship 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 Borrower or relevant Owner and the Borrower or relevant Owner shall
fail to procure the release of such Ship within a period of seven (7)
days (or such other period as the Bank may agree in writing) thereafter;
or
10.1.23 Registration: the registration of any Ship under the laws and flag of
the relevant Flag State is cancelled or terminated without the prior
written consent of the Bank or, if any Ship is only provisionally
registered on the Delivery Date for such Ship, such Ship is not
permanently registered under the laws and flag of the relevant Flag
State within ninety (90) days after the Drawdown Date of the Advance
constituting Facility A or, as the case may be, the Advance constituting
the Initial Revolving Amount or, as the case may be, the Advance for
such Ship or if such registration of any Ship is not renewed at least
forty five (45) days (or such other period as the Bank may agree in
writing) prior to the expiry of such registration; or
10.1.24 Unrest: the Flag State of any Ship becomes involved in hostilities or
civil war or there is a seizure of power in such Flag State by
unconstitutional means if, in any such case, such event could in the
opinion of the Bank reasonably be expected to have a material adverse
effect on the security constituted by any of the Security Documents; or
10.1.25 Environmental Incidents: there is an Environmental Incident which gives
rise, or may give rise, to Environmental Claims which could, in the
opinion of the Bank be expected to have a material adverse effect (i) on
the business, assets, operations, property or financial condition of any
Security Party or the Borrower's Group taken as a whole or (ii) on the
security constituted by any of the Security Documents or the
enforceability of that security in accordance with its terms; or
10.1.26 P&I: the Borrower or any Owner or any other person fails or omits to
comply with any requirements of the protection and indemnity association
or other insurer with which a Ship is entered for insurance or insured
against protection and indemnity risks (including oil pollution risks)
to the effect that any cover (including, without limitation, any cover
in respect of liability for Environmental Claims arising in
jurisdictions where such Ship operates or trades) is or may be liable to
cancellation, qualification or exclusion at any time; or
10.1.27 Parent company: any Owner ceases to be a wholly-owned subsidiary of the
Borrower; or
10.1.28 Breach of Contract: there is a material breach by the Borrower or any
Owner, a Seller or a Builder of any Contract or the Borrower fails to
repay any Advance of Facility B constituting (in part) Expected Project
Costs representing a 10% deposit under a Contract relating to a purchase
of an Additional Ship which is a second hand vessel within 7 days of the
date of expiry or termination of the relevant Contract; or
10.1.29 Termination or variation of a Contract: a Contract is terminated for any
reason whatsoever or a Contract is frustrated or varied in any manner
not permitted by or pursuant to the relevant Pre-delivery Security
Assignment or this Agreement; or
10.1.30 Termination of a Refund Guarantee: a Refund Guarantee is repudiated,
cancelled, rescinded or otherwise terminated; or
10.1.31 Non-Delivery of Ship: a Ship is not delivered to, and accepted by, the
Borrower or relevant Owner under a Contract on or before the Termination
Date (or such later date as the Bank in its absolute discretion, may
agree in writing); or
10.1.32 Material events: any other event occurs or circumstance arises which, in
the opinion of the Bank, is likely materially and adversely to affect
either (i) the ability of any Security Party to perform all or any of
its obligations under or otherwise to comply with the terms of any of
the Security Documents or (ii) the security created by any of the
Security Documents; or
10.1.33 ISM Code: the Borrower or any Owner or any Operator fails to comply with
the requirements of the ISM Code and/or obtain and/or maintain a DOC for
itself and an SMC in respect of each of the Ships in accordance with the
ISM Code; or
10.1.34 ISPS Code: the Borrower or any Owner or any Operator fails to comply
with the requirements of the ISPS Code and/or obtain and/or maintain the
certifications required in respect of each of the Ships in accordance
with the ISPS Code; or
10.1.35 Managers: any Manager takes any action or institutes any proceedings or
makes or asserts any claim against any Ship in exercise or purported
exercise of any claim; or
10.1.36 Management of Borrower: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ceases to be the Chief
Executive Officer of the Borrower without the Bank's prior written
consent; or
10.1.37 Failure to Drawdown Delivery Date Advance: the Borrower fails to
drawdown a Delivery Date Advance without the prior written consent of
the Bank which shall not be unreasonably withheld; or
10.1.38 Intra-Group Loans Agreements: the Borrower demands or accepts any
repayments of principal or interest or any other sum payable under the
Intra-Group Loan Agreements save as envisaged by clause 14.4 or takes
any action against any Owner without the prior written consent of the
Bank.
10.2 Acceleration
The Bank may, without prejudice to any other rights of the Bank, at any
time after the happening of an Event of Default by notice to the
Borrower declare that:
10.2.1 the obligation of the Bank to make the Commitment available shall be
terminated, whereupon the Commitment shall be reduced to zero forthwith;
and/or
10.2.2 the Loan and all interest and commitment commission accrued and all
other sums payable under the Security Documents have become due and
payable, whereupon the same shall, immediately or in accordance with the
terms of such notice, become due and payable.
10.3 Demand basis
If, pursuant to clause 10.2.2, the Bank declares the Loan to be due and
payable on demand, the Bank may by written notice to the Borrower (a)
call for repayment of the Loan on such date as may be specified
whereupon the Loan shall become due and payable on the date so specified
together with all interest and commitment commission accrued and all
other sums payable under this Agreement or (b) withdraw such declaration
with effect from the date specified in such notice.
11 Indemnities
11.1 Miscellaneous indemnities
The Borrower shall on demand indemnify the Bank, without prejudice to
any of the Bank's other rights under any of the Security Documents,
against any loss (including loss of Margin) or expense which the Bank
shall certify (which certification shall not stand in the case of
manifest error) as sustained or incurred by it as a consequence of:
11.1.1 any default in payment by the Borrower of any sum under any of the
Security Documents when due;
11.1.2 the occurrence of any other Event of Default;
11.1.3 any prepayment of the Loan or part thereof being made under clause 4.4,
4.5 or 12.1, or any other repayment of the Loan or part thereof being
made otherwise than on an Interest Payment Date relating to the part of
the Loan prepaid or repaid; or
11.1.4 any Advance not being made for any reason (excluding any default by the
Bank) after the relevant Drawdown Notice for such Advance has been
given,
including, in any such case, but not limited to, any loss or expense
sustained or incurred in maintaining or funding the Loan or any part
thereof or in liquidating or re-employing deposits from third parties
acquired to effect or maintain the Loan or any part thereof.
11.2 Currency indemnity
If any sum due from the Borrower under any of the Security Documents or
any order or judgment given or made in relation thereto has to be
converted from the currency (the "first currency") in which the same is
payable under the relevant Security Document or under such order or
judgment into another currency (the "second currency") for the purpose
of (a) making or filing a claim or proof against the Borrower, (b)
obtaining an order or judgment in any court or other tribunal or (c)
enforcing any order or judgment given or made in relation to any of the
Security Documents, the Borrower shall indemnify and hold harmless the
Bank from and against any loss suffered as a result of any difference
between (i) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and
(ii) the rate or rates of exchange at which the 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
Borrower under this clause 11.2 shall be due as a separate debt and
shall not be affected by judgment being obtained for any other sums due
under or in respect of any of the Security Documents and the term "rate
of exchange" includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency. 11.3 Environmental indemnity
The Borrower shall indemnify the Bank on demand and hold the Bank
harmless from and against all costs, claims, expenses, losses, demands,
liabilities, actions, proceedings (whether civil or criminal) penalties,
fines, damages, orders or other outgoings, of whatever nature
(including, without limitation, those arising under Environmental Laws)
which may be suffered, incurred, 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
whatsoever out of an Environmental Claim made or asserted against the
Bank which would or could not have been brought if the Bank had not
entered into any of the Security Documents and/or exercised any of its
rights, powers and discretions thereby conferred and/or performed any of
its obligations thereunder and/or been involved in any of the
transactions contemplated by the Security Documents.
12 Unlawfulness and increased costs
12.1 Unlawfulness
If it is or becomes contrary to any law or regulation for the Bank to
make any Advance or to maintain the Commitment or fund the Loan the Bank
shall promptly give notice to the Borrower whereupon (a) the Commitment
shall be reduced to zero and (b) the Borrower shall be obliged to prepay
the Loan either (i) forthwith or (ii) on a future specified date not
being earlier than the latest date permitted by the relevant law or
regulation together with interest and commitment commission accrued to
the date of prepayment and all other sums payable by the Borrower under
this Agreement and/or the Master Swap Agreement.
12.2 Increased costs
If the result of any change in, or in the interpretation or application
of, or the introduction of, any law or any regulation, request or
requirement (whether or not having the force of law, but, if not having
the force of law, with which the Bank or, as the case may be, its
holding company habitually complies), including (without limitation)
those relating to Taxation, capital adequacy, liquidity, reserve assets,
cash ratio deposits and special deposits, is to:
12.2.1 subject the Bank to Taxes or change the basis of Taxation of the Bank
with respect to any payment under any of the Security Documents (other
than Taxes or Taxation on the overall net income, profits or gains of
the Bank imposed in the jurisdiction in which its principal or lending
office under this Agreement is located); and/or
12.2.2 increase the cost to, or impose an additional cost on, the Bank or its
holding company in making or keeping the Commitment available or
maintaining or funding all or part of the Loan; and/or
12.2.3 reduce the amount payable or the effective return to the Bank under any
of the Security Documents; and/or
12.2.4 reduce the Bank's or its holding company's rate of return on its overall
capital by reason of a change in the manner in which it is required to
allocate capital resources to the Bank's obligations under any of the
Security Documents; and/or
12.2.5 require the Bank or its holding company to make a payment or forgo a
return on or calculated by reference to any amount received or
receivable by the Bank under any of the Security Documents; and/or
12.2.6 require the Bank or its holding company to incur or sustain a loss
(including a loss of future potential profits) by reason of being
obliged to deduct all or part of the Commitment or the Loan from its
capital for regulatory purposes,
then and in each such case (subject to clause 12.3):
(a) the Bank shall notify the Borrower in writing of such event
promptly upon its becoming aware of the same; and
(b) the Borrower shall on demand pay to the Bank the amount which
the Bank specifies (in a certificate setting forth the basis of
the computation of such amount but not including any matters
which the Bank or its holding company regards as confidential)
is required to compensate the Bank and/or (as the case may be)
its holding company for such liability to Taxes, cost,
reduction, payment, forgone return or loss.
For the purposes of this clause 12.2 "holding company" means the company
or entity (if any) within the consolidated supervision of which the Bank
is included.
12.3 Exception
Nothing in clause 12.2 shall entitle the Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, foregone return or loss (a) to the
extent that the same is taken into account in calculating the Additional
Cost or (b) to the extent that the same is the subject of an additional
payment under clause 6.6.
13 Security and set-off
13.1 Application of moneys
All moneys received by the Bank under or pursuant to any of the Security
Documents and expressed to be applicable in accordance with the
provisions of this clause 13.1 shall be applied by the Bank in the
following manner:
13.1.1 first in or toward payment of all unpaid fees, commissions and expenses
which may be owing to the Bank under any of the Security Documents;
13.1.2 secondly in or towards payment of any arrears of interest owing in
respect of the Loan or any part thereof;
13.1.3 thirdly in or towards repayment of the Loan (whether the same is due and
payable or not);
13.1.4 fourthly in or towards payment to the Bank for any loss suffered by
reason of any such payment in respect of principal not being effected on
an Interest Payment Date relating to the part of the Loan repaid;
13.1.5 fifthly in or towards payment to the Bank of any other sums owing to it
under any of the Security Documents; and
13.1.6 sixthly the surplus (if any) shall be paid to the Borrower or to
whomsoever else may be entitled to receive such surplus,
or in such manner as the Bank may in its reasonable discretion
determine. 13.2 Set-off
13.2.1 The Borrower authorises the Bank (without prejudice to any of the Bank's
rights at law, in equity or otherwise), at any time and without notice
to the Borrower, to apply any credit balance to which the Borrower is
then entitled standing upon any account of the Borrower with any branch
of the Bank in or towards satisfaction of any sum due and payable from
the Borrower to the Bank under any of the Security Documents. For this
purpose, the Bank is authorised to purchase with the moneys standing to
the credit of such account such other currencies as may be necessary to
effect such application. The Bank shall not be obliged to exercise any
right given to it by this clause 13.2. The Bank shall notify the
Borrower forthwith upon the exercise or purported exercise of any right
of set-off giving full details in relation thereto.
13.2.2 Without prejudice to its rights hereunder and/or under the Master Swap
Agreement, the Bank may at the same time as, or at any time after, any
Default under this Agreement or the Borrower's default under the Master
Swap Agreement, set-off any amount due now or in the future from the
Borrower to the Bank under this Agreement against any amount due from
the Bank to the Borrower under the Master Swap Agreement and apply the
first amount in discharging the second amount. The effect of any set-off
under this clause 13.2.2 shall be effective to extinguish or, as the
case may require, reduce the liabilities of the Bank under the Master
Swap Agreement.
13.3 Further assurance
The Borrower undertake that the Security Documents shall both at the
date of execution and delivery thereof and so long as any moneys are
owing under any of the Security Documents be valid and binding
obligations of the respective parties thereto and rights of the Bank
enforceable in accordance with their respective terms and that it will,
at its expense, execute, sign, perfect and do, and will procure the
execution, signing, perfecting and doing by each of the other Security
Parties of, any and every such further assurance, document, act or thing
as in the reasonable opinion of the Bank may be necessary or desirable
for perfecting the security contemplated or constituted by the Security
Documents.
13.4 Conflicts
In the event of any conflict between this Agreement and any of the other
Borrower's Security Documents, the provisions of this Agreement shall
prevail.
14 Accounts
14.1 General
14.1.1 The Borrower undertakes with the Bank that it will:
(a) on or before the Drawdown Date of the Advance constituting
Facility A or the first Advance (whichever is the earlier) open
or procure that there is opened by the relevant Initial Owner
the relevant Operating Account and prior to the drawdown of any
Advance relative to an Additional Ship open or procure that
there is opened by the Owner of the relevant Additional Ship an
Operating Account for that Additional Ship; and
(b) procure that all moneys payable to the Borrower and/or any Owner
in respect of the Earnings (as defined in the Ship Security
Documents) of the Ships shall, unless and until the Bank directs
to the contrary pursuant to proviso (a) to clause 2.1 of the
General Assignments, be paid to the relevant Operating Account
Provided however that if any of the moneys paid to the Operating
Accounts are payable in a currency other than Dollars, the Bank
shall convert such moneys into Dollars at the Bank's spot rate
of exchange at the relevant time for the purchase of Dollars
with such currency and the term "spot rate of exchange" shall
include any premium and costs of exchange payable in connection
with the purchase of Dollars with such currency; and
(c) on or before the first Drawdown Date pay or procure that there
is paid the sum of ten million Dollars ($10,000,000) by way of
working capital to the Operating Accounts and maintain such
balance in accordance with clause 8.1.16.
14.2 Account Terms
14.2.1 Amounts standing to the credit of the Operating Accounts shall, (unless
otherwise agreed between the Bank the Borrower and each of the Owners)
bear interest at the rates from time to time offered by the Bank to its
customers for Dollar deposits in comparable amounts for comparable
periods. Interest shall accrue on the Operating Accounts from day to day
and be
calculated on the basis of actual days elapsed and a 360 day year and
shall be credited as appropriate to the Operating Accounts at such times
as the Bank, the Borrower and each of the Owners shall agree.
14.2.2 The Borrower and each of the Owners shall, unless and until a Default
shall occur and the Bank shall direct to the contrary, be entitled from
time to time to require that moneys for the time being standing to the
credit of the Operating Accounts be transferred in such amounts and for
such periods as the Borrower and each of the Owners select to fixed-term
deposit accounts ("deposit accounts") opened in the name of the Borrower
and each of the Owners with the Bank. The Borrower and each of the
Owners shall not be entitled pursuant to clause 14.3 to withdraw moneys
standing to the credit of the Operating Accounts which are the subject
of a fixed term deposit until the expiry of the period of such deposit
unless the Borrower and each of the Owners shall, on withdrawing such
moneys, pay to the Bank on demand any loss or expense which the Bank
shall certify that it has sustained or incurred as a result of such
withdrawal being made prior to the expiry of the period of the relevant
deposit and the Bank shall be entitled to debit the relevant Operating
Account for the amount so certified prior to such withdrawal being made.
In the event that any moneys deposited are to be applied pursuant to
clause 14.5, the Borrower and each of the Owners shall, on such
application being made, pay to the Bank on demand any loss or expense
which the Bank shall certify that it has sustained or incurred as a
result of such application being made prior to the expiry of the period
of the relevant deposit and the Bank shall be entitled to debit the
Operating Accounts for the amount so certified prior to such application
being made. Any deposit accounts shall, for all the purposes of the
Security Documents, be deemed to be sub-accounts of the Operating
Accounts from which the moneys deposited in the deposit accounts were
transferred and all references in the Security Documents to the
Operating Account shall be deemed to include the deposit accounts deemed
as aforesaid to be sub-accounts thereof.
14.3 Operating Account: withdrawals
Unless the Bank otherwise agrees in writing, the Borrower and each of
the Owners shall not be entitled to withdraw any moneys from the
Operating Accounts at any time from the date of this Agreement and so
long as any moneys are owing under the Security Documents save that,
unless and until a Default shall occur and the Bank shall direct to the
contrary, the Borrower and each of the Owners may, subject to clause
14.2.2 withdraw moneys from the Operating Accounts, provided that the
aggregate ,amount standing to the credit of the Operating Accounts after
such withdrawal does not result in a breach of the provisions of clause
8.1.16 for the following purposes:
14.3.1 to pay any amount to the Bank in or towards payment of any instalments
of interest or principal or any other amounts then payable pursuant to
the Security Documents and to the extent that there are moneys standing
to the credit of the Operating Accounts as at any Repayment Date and
Interest Payment Date or other relevant date, the Borrower and each of
the Owners hereby irrevocably authorise the Bank to apply such moneys in
or towards payment of any instalments of interest or principal or other
amounts payable pursuant to the Security Documents provided always that
this shall be strictly without prejudice to the obligations of the
Borrower and each of the Owners to make any such payments to the extent
that the aforesaid application by the Bank is insufficient to meet the
same; and
14.3.2 to pay the proper and reasonable operating expenses (including costs of
insuring, repairing and maintaining the Ships) of the Ships and the
proper and reasonable expenses of administering the affairs of the
Borrower and each of the Owners; and
14.3.3 to pay any Manager's remuneration under any Management Agreement in the
amounts and at the times therein stated.
14.4 Repayment under the Intra-Group Loan Agreements The Borrower
acknowledges and agrees that:
14.4.1 until such time as all sums due and payable under this Agreement and
each of the other Security Documents have been satisfied in full the
obligation of each Owner to pay all sums of
principal and interest and any other sums payable under the relevant
Intra-Group Loan Agreements shall be fully satisfied by that Owner
depositing the relevant sums to the credit of its Operating Account and
the Borrower hereby irrevocably and unconditionally acknowledges that
all moneys from time to time standing to the credit of the Operating
Accounts shall be freely available to the Bank for application in or
towards payment of any instalments of principal or interest or any other
amounts then due and payable pursuant to this Agreement and any of the
other Security Documents; and
14.4.2 at any time after the occurrence of an Event of Default, the Bank may,
without notice to the Borrower or any Owner, apply all moneys then
standing to the credit of the Operating Accounts (together with interest
from time to time accruing or accrued thereon) in or towards
satisfaction of any sums due to the Bank under the Security Documents in
the manner specified in clause 13.1.
14.5 Application of accounts
At any time after the occurrence of an Event of Default, the Bank may,
without notice to the Borrower or any Owner, apply all moneys then
standing to the credit of the Operating Accounts (together with interest
from time to time accruing or accrued thereon) in payment to the Bank
and the Bank shall apply the same in or towards satisfaction of any sums
due to the Bank under the Security Documents in the manner specified in
clause 13.1.
14.6 Charging of Operating Accounts
14.6.1 The Operating Accounts and all amounts from time to time standing to the
credit thereof shall be subject to the security constituted and the
rights conferred by the Operating Account Charges.
15 Assignment, transfer and lending office
15.1 Benefit and burden
This Agreement shall be binding upon, and enure for the benefit of, the
Bank and the Borrower and their respective successors.
15.2 No assignment by Borrower
The Borrower may not assign or transfer any of its rights or obligations
under this Agreement.
15.3 Assignment by Bank
The Bank may assign all or any part of its rights under this Agreement
or under any of the other Security Documents to any other bank or
financial institution (an "Assignee") without the consent of the
Borrower.
15.4 Transfer
The Bank may transfer all or any_ part of its rights, benefits and/or
obligations under this Agreement and/or any of the other Security
Documents to any one or more banks or other financial institutions (a
"Transferee") without the consent of the Borrower.
15.5 Documenting assignments and transfers
If the Bank assigns all or any part of its rights or transfers all or
any part of its rights, benefits and/or obligations as provided in
clause 15.3 or 15.4 the Borrower undertakes, immediately on being
requested to do so by the Bank and at the cost of the Bank, to enter
into, and procure that the other Security Parties shall enter into, such
documents as may be necessary or desirable to transfer to the Assignee
or Transferee all or the relevant part of the Bank's interest in the
Security Documents and all relevant references in this Agreement to the
Bank shall thereafter be construed as a reference to the Bank and/or its
Assignee or Transferee (as the case may be) to the extent of their
respective interests.
15.6 Lending office
The Bank shall lend through its office at the address specified above or
through any other office of the Bank selected from time to time by it
through which the Bank wishes to lend for the purposes of this
Agreement. If the office through which the Bank is lending is changed
pursuant to this clause 15.6, the Bank shall notify the Borrower
promptly of such change.
15.7 Disclosure of information
The Bank may disclose to a prospective Assignee, Transferee or to any
other person who may propose entering into contractual relations with
the Bank in relation to this Agreement such information about the
Borrower as the Bank shall consider appropriate.
16 Notices and other matters
16.1 Notices
Every notice, request, demand or other communication under this
Agreement or (unless otherwise provided therein) under any of the other
Security Documents shall:
16.1.1 be in writing delivered personally or by first-class prepaid letter
(airmail if available) or facsimile transmission or other means of
telecommunication in permanent written form;
16.1.2 be deemed to have been received, subject as otherwise provided in the
relevant Security Document, in the case of a letter, when delivered
personally or three (3) days after it has been put in to the post and,
in the case of a facsimile transmission or other means of
telecommunication in permanent written form, at the time of despatch
(provided that if the date of despatch is not a business day in the
country of the addressee or if the time of despatch is after the close
of business in the country of the addressee it shall be deemed to have
been received at the opening of business on the next such business day);
and
16.1.3 be sent:
(a) to the Borrower and any Owner at:
c/o Top Tankers Inc. 109-111
Messogion Ave. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Fax no: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
(b) to the Bank at:
Shipping Business Centre ▇-▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: Ship Finance
or to such other address and/or numbers as is notified by one party to
the other party under this Agreement.
16.2 No implied waivers, remedies cumulative
No failure or delay on the part of the Bank to exercise any power, right
or remedy under any of the Security Documents shall operate as a waiver
thereof, 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. The remedies provided
in the Security Documents are cumulative and are not exclusive of any
remedies provided by law.
16.3 English language
All certificates, instruments and other documents to be delivered under
or supplied in connection with any of the Security Documents shall be in
the English language or shall be accompanied by a certified English
translation upon which the Bank shall be entitled to rely.
16.4 Counterparts
This Agreement may be entered into in any number of counterparts and by
the parties to it on separate counterparts, each of which when executed
and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument.
17 Governing law and jurisdiction
17.1 Law
This Agreement is governed by and shall be construed in accordance with
English law.
17.2 Submission to jurisdiction
The Borrower agrees, for the benefit of the Bank, that any legal action
or proceedings arising out of or in connection with this Agreement
against the Borrower or any of its assets may be brought in the English
courts. The Borrower irrevocably and unconditionally submits to the
jurisdiction of such courts and irrevocably designates, appoints and
empowers Top Tankers (U.K.) Limited at present of Att: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇ ▇▇▇, ▇▇▇▇▇▇▇ to receive for it and on its
behalf, service of process issued out of the English courts in any such
legal action or proceedings. The submission to such jurisdiction shall
not (and shall not be construed so as to) limit the right of the Bank to
take proceedings against the Borrower in the courts of any other
competent jurisdiction nor shall the taking of proceedings in any one or
more jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those
of any other State shall have jurisdiction to determine any claim which
the Borrower may have against the Bank arising out of or in connection
with this Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
[SCHEDULES AND EXHIBITS HAVE BEEN OMITTED]
The Borrower
SIGNED by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ )
for and on behalf of )
TOP TANKERS INC )
pursuant to a )
power of attorney dated 31/10/05 ) /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Attorney-in-fact
The Bank
SIGNED by ▇▇▇▇▇▇▇▇▇ Damianidou )
for and on behalf of )
THE ROYAL BANK OF SCOTLAND plc )
pursuant to a )
power of attorney dated 22/6/04 ) /s/ ▇▇▇▇▇▇▇▇▇ Damianidou
--------------------------
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▇▇ ▇▇▇▇▇ 0001 660955