LOAN AGREEMENT Dated November 14, 2006 BETWEEN
EXHIBIT
10.15
Dated November
14, ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
SHIPPING LTD
-
the
Borrower -
▇▇▇▇▇
TRADING LTD
EUROSEAS
LTD
-
the
Corporate Guarantors -
-
and
-
HSBC
BANK PLC
-
the
Bank -
Dated November
14, 2006
BETWEEN
1.
XINGANG SHIPPING LTD,
a
company incorporated under the laws of the Republic of Liberia, whose registered
office is at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "Borrower")
2.
▇▇▇▇▇ TRADING LTD
3.
EUROSEAS LTD
both
companies incorporated under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands,
whose registered offices are at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 (together called "the Corporate
Guarantors" and independently "the Corporate Guarantor")
and
HSBC
BANK PLC, a
company
incorporated under the laws of England, having its registered office at ▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, acting for the purposes of this Agreement through
its branch at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Bank").
| 1. |
PURPOSE
AND DEFINITIONS
|
1.01
This
Agreement sets out the terms and conditions upon which HSBC BANK PLC will make
available to the Borrower a loan up to U.S. Dollars twenty million (U.S. $
20.000.000) for a period of seven (7) years from the Drawdown Date of the
facility, for the purpose of financing part of the acquisition cost of the
vessel "YM XINGANG I" which flies the flag of Liberia because of her
registration in the Liberian Bareboat Registry and is also registered in the
Hamburg Registry of Ships in Germany, which upon delivery to the Borrower will
be registered in its ownership under Liberian flag in the same
name.
| 1.02 |
In
this Agreement, unless the context otherwise
requires:
|
"Accounts
Pledge(s)"
means
the declaration of pledge containing, inter alia, a charge in respect of the
Retention Account to be executed by the holder of such account in favour of
the
Bank in such form as the Bank shall require as the same may from time to time
be
supplemented and/or amended.
"Agreed
Rate" means
a
rate agreed between the Bank and the Borrower on the basis of which (instead
of
LIBOR) the interest rate is determined pursuant to Clause 3.01.
"Assignment(s)"
means
the deed(s) of assignment of Insurances, Earnings and Requisition Compensation
of the Vessels in favour of the Bank.
"Bank"
means
HSBC BANK PLC acting through its branch at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
and
includes its successors and assignees.
"Banking
Day"
means a
day on which, in each country or place in or at which any act is required to
be
done under this Agreement, banks and the relevant foreign exchange markets
are
open for the transaction of business of the nature concerned.
"Commitment"
means
the total sum of U.S. $ 20.000.000 to be made available by the Bank to the
Borrower in one advance, in accordance with Clause 2, subject to the terms
and
conditions of this Agreement.
"Corporate
Guarantee(s)" means
the
irrevocable and unconditional guarantees of the Corporate Guarantors in favour
of the Bank contained in Clause 15 hereof.
"Corporate
Obligors"
means
the Borrower and the Corporate Guarantors.
"Dollars"
and
"$"
means
the
lawful currency of the United States of America.
"Drawdown
Date"
means
the date on which the Loan is advanced to the Borrower hereunder pursuant to
Clause 2.
"Drawdown
Notice"
means a
notice substantially in the terms of Schedule 1.
"Drawdown
Period"
means
the period from the date of this Agreement and ending at 11.00 a.m. (London
time) on 15th
December
2006
or,
if earlier, (i) the date on which the Loan is advanced by the Bank to the
Borrower, or (ii) the date on which the obligation of the Bank to make the
Commitment available is terminated or ceases according to Clauses 10.02 or
12.
"Earnings"
in
relation to the Vessels, means all hires, freights, pool income and other sums
payable to or for the account of the Owner in respect of these Vessels including
(without limitation) all remuneration for salvage and towage services, demurrage
and detention moneys, contributions in general average, compensation in respect
of any requisition for hire and damages (whether awarded by any court or
arbitral tribunal or by agreement or otherwise) for breach or termination of
any
contract for the operation, employment or use of these Vessels.
"Earnings
Account" means
a
bank account to be opened with the Bank in the name of the Borrower or other
person nominated by the Borrower and designated "EARNINGS ACCOUNT" or with
such
other designation as the Bank shall approve or require, to which (inter alia)
all Earnings of the Vessels are to be paid.
"Encumbrance"
means
any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
assignment, security interest, or other encumbrance securing any obligation
of
any person.
"Environmental
Affiliate"
means an
agent, employee, independent contractor, sub-contractor or other person in
a
contractual relationship with the Corporate Obligors relating to the Vessels
or
their carriage of cargo or their operation whose acts or omissions would have
a
Material Adverse Effect.
"Environmental
Approvals"
means
any permit, licence, approval ruling, variance, exemption or other authorisation
required under applicable Environmental Laws.
"Environmental
Claim"
means
any and all enforcement, clean-up, removal or other governmental or regulatory
actions or orders instituted or completed pursuant to any Environmental Laws
or
Environmental Approval together with claims made by any third party relating
to
damage, contribution, loss or injury, resulting from any Release of Materials
of
Environmental Concern.
"Environmental
Laws"
means
all local, state, provincial, national and international laws, regulations,
treaties and conventions (including any amendments and/or protocols thereto)
for
the time being in force pertaining to the pollution or protection of human
health or the environment (including ambient air, surface water, ground water,
land surface or subsurface strata and all or any part of national and
international waters (howsoever called), including laws, regulations, treaties
and conventions (including any amendments and/or protocols thereto) for the
time
being in force relating to the Release (or threatened release) of Materials
of
Environmental Concern.
"Event
of Default" means
any
of the events or circumstances described in Clause 10.01.
"Final
Maturity Date" means
the
date falling seven (7) years after the Drawdown Date of the Loan.
"Guarantee(s)"
means
the
Corporate Guarantees incorporated in Clause 15 of this Agreement and the
Personal Guarantee and in the singular means any of them.
"Guarantor(s)"
means
any
or all of the Corporate Guarantors and the Personal Guarantor.
"Indebtedness"
means
any obligation for the payment or repayment of money, whether present or future,
actual or contingent.
"Interest
Payment Date"
means
the last day of an Interest Period and, in respect of any Interest Period of
more than three (3) months duration, the day falling at successive three (3)
monthly intervals after the commencement of such Interest Period.
"Interest
Period"
means
each period for the calculation of interest in respect of the Loan ascertained
in accordance with Clauses 3.02 and 3.03.
"Law"
means
any
law, statute, treaty, convention, regulation, instrument or other subordinate
legislation or other legislative or quasi-legislative rule or measure, including
the ISM CODE, or any order or decree of any government, judicial or public
or
other body or authority.
"LIBOR"
means,
in
relation to a particular period and a particular amount, the rate per cent
per
annum at which the Bank is able in accordance with its normal practices to
acquire dollar deposits in amounts comparable with this amount for that period
in the London Interbank Eurocurrency Market at or about 11.00 a.m. (London
time)
on the second Banking Day before the beginning of that period.
"Loan"
means
the aggregate principal amount owing to the Bank under this Agreement at any
relevant time.
"Manager"
means
the company EUROBULK LTD.
"Margin"
means
zero point nine hundred thirty five per cent (0.935%) per annum which shall
be
reduced to zero point nine per cent (0.9%) per annum if the Borrower effects
the
prepayment of U.S. $ 7.000.000 within the first year following the Drawdown
Date.
"Material
Adverse Effect"
means a
material adverse effect on the Corporate Obligors’ ability to meet their
obligations to the Bank under this Agreement and the other Security Documents.
"Material
of Environmental Concern"
means
and includes all pollutants, contaminants, toxic substances, oil and hazardous
substances as may be defined in any applicable local, state, provincial,
national and international laws, regulations, treaties and conventions
(including any amendments and/or protocols thereto) for the time being in
force.
"Month"
or
"Months"
means a
period of the required number of calendar months but ending, subject to the
exceptions below, on the day numerically corresponding to the day of the
calendar month on which it started and "monthly" shall be construed accordingly.
The exceptions are that (i) 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 the relevant calendar month, and (ii) if such
numerically corresponding day is not a Banking Day, the period shall end on
the
next Banking Day in the same calendar month but if there is no such Banking
Day
it shall end on the preceding Banking Day.
"Mortgage(s)"
means
the First Preferred Liberian Mortgage on the Vessel "YM XINGANG I" and the
Third
Preferred ▇▇▇▇▇▇▇▇ Islands’ Mortgage on the Vessel "IRINI" and in singular means
either of them.
"Obligors"
means
the Corporate Obligors and the Personal Guarantor.
"Owner(s)"
means
the owner (whether Borrower or Guarantor) of the Vessels as specified in the
definition of Vessel(s).
"Permitted
Encumbrance"
means
any encumbrance created pursuant to the Security Documents or permitted to
exist
pursuant to the terms of this Agreement or the Security Documents.
"Personal
Guarantee"
means
the irrevocable and unconditional guarantee to be executed by the Personal
Guarantor in favour of the Bank in form and substance satisfactory to the
Bank.
"Personal
Guarantor"
means
the person nominated by the Borrower and accepted by the Bank who will execute
the Personal Guarantee.
"Release"
means
an
emission, spill, release or discharge into or upon the air, surface water,
groundwater, or soils of any Material of Environmental Concern for which the
Obligors have any liability under Environmental Law, except in accordance with
a
valid Environmental Approval.
"Repayment
Dates"
means
each of the dates specified in Clause 4.01 on which the Repayment Installments
shall be payable by the Borrower to the Bank.
"Repayment
Instalment" means
each instalment of the Loan which becomes due for repayment by the Borrower
to
the Bank on a Repayment Date pursuant to Clause 4.01.
"Requisition
Compensation"
in
relation to a Vessel, means all compensation or other money which may from
time
to time be payable to the Owner as result of that Vessel being requisitioned
for
title or in any other way compulsorily acquired (other than by way of
requisition for hire).
"Retention
Account"
means a
bank account to be opened in the joint names of the Borrower and the first
Corporate Guarantor with the Bank and designated " and
others - Retention Account".
"Security
Documents"
means
this Agreement, the ISDA Master Agreement, the Guarantees, the Mortgages, the
Assignments, the Specific Assignment and any such other documents as may have
been or shall hereafter be executed to secure all, or any of the sums of money
from time to time owing (whether the same shall be due and payable or not)
by
the Borrower hereunder.
"Taxes"
means
all levies, imposts, duties, fees or charges deductions and withholdings
(including any related interest and penalties) and any restrictions or
conditions resulting in any charge, other than taxes on the overall net income
of the Bank, and "Tax"
and
"Taxation"
shall
be
interpreted accordingly.
"Total
Loss" in
relation to a Vessel means (a) an actual, constructive, arranged, agreed or
compromised total loss of that Vessel or (b) the requisition for title or
compulsory acquisition of that Vessel by or on behalf of any government or
other
authority (other than by way of requisition for hire) or (c) capture, seizure,
arrest, detention or confiscation of that Vessel by any government or by any
person acting or purporting to act on behalf of any government, unless that
Vessel is released within sixty (60) days thereafter.
"Vessel"
means
m/v "YM XINGANG I" to be owned by the Borrower and registered under Liberian
flag and m/v "IRINI" owned by the first Corporate Guarantor and "the Vessel"
means either of them.
1.03
Clause headings are inserted for convenience of reference only and shall be
ignored in the interpretation of this Agreement. In this Agreement, unless
the
context otherwise requires, references to Clauses and Schedules are to be
construed as references to clauses of, and schedules to, this Agreement;
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 amended with the agreement of the relevant parties and the
prior written consent of the Bank and in force at any relevant time; words
importing the plural shall include the singular and vice-versa and references
to
a person shall be construed as references to an individual, firm, company,
corporation, unincorporated body of persons or any state or any agency
thereof.
2. THE
LOAN
2.01
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, the
principal sum of up to U.S. $ 20.000.000.
2.02
Subject to the terms and conditions of this Agreement, the Loan shall be
advanced in full to the Borrower by the Bank upon receipt by the Bank from
the
Borrower of a Drawdown Notice not later than 12.00 noon (Greek time) on the
third Banking Day before the proposed Drawdown Date of the Loan.
2.03 (a)
The
Loan shall not be advanced on any day which is not a Banking Day or after the
end of the Drawdown Period.
(b)
A
Drawdown Notice shall be effective on actual receipt by the Bank and, once
given, shall, subject as provided in Clause 12, be irrevocable.
2.04
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 relevant date make the
amount of the Commitment available to the Borrower.
2.05
If
the Loan is not drawn down by the end of the Drawdown Period, the Commitment
shall be automatically cancelled.
3. INTEREST
AND INTEREST PERIODS
3.01
The
Borrower shall pay interest on the Loan or (as the case may be, each portion
thereof to which a different Interest Period relates) in respect of each
Interest Period (or part thereof) each Interest Payment Date. The interest
rate
for the calculation of interest shall be the rate per annum determined by the
Bank to be the aggregate of (i) the Margin and (ii) LIBOR, unless there is
an
Agreed Rate in which case the interest rate for the calculation of interest
shall be the rate per annum determined by the Bank to be the aggregate of (i)
the Margin and (ii) the Agreed Rate.
3.02
The
Borrower may by notice received by the Bank not later than 12.00 noon (Greek
time) on the second Banking Day before the beginning of each Interest Period
specify whether that Interest Period shall have a duration of 1, 2, 3, 6, 9
or
12 months or any other Period which the Bank may agree.
3.03
Every Interest Period shall be subject to market availability to be conclusively
determined by the Bank of the duration specified by the Borrower pursuant to
Clause 3.02 but so that:
(a)
the
initial Interest Period shall end on the date falling 1, 2, 3, 6, 9 or 12 (as
specified by the Borrower pursuant to Clause 3.02) months after the Drawdown
Date.
(b)
each
subsequent Interest Period in respect of the Loan will commence forthwith upon
the expiry of the previous Interest Period relative thereto.
(c)
if
any Interest Period would otherwise overrun a Repayment Date, then, in the
case
of the last Repayment Date, that Interest Period shall end on such Repayment
Date, and in the case of any other Repayment Date, the Loan shall be divided
into two parts, one in the amount of the repayment instalment falling due on
such Repayment Date and having a separate Interest Period expiring on the
relevant Repayment Date and the other in the amount of the balance of the Loan
having an Interest Period ascertained in accordance with Clause 3.02 and the
other provisions of this Clause 3.03; and
(d)
if
the Borrower fails to specify the duration of an Interest Period in accordance
with the provisions of Clause 3.02 and 3.03, that Interest Period shall have
a
duration of 3 months or other period complying with this Clause
3.03.
3.04
If
the Borrower fails to pay any sum on its due date for payment under this
Agreement, the Borrower shall pay interest on such sum on demand from that
date
up to the date of actual payment (as well after as before judgment) and
compounded at the end of each of the periods determined by the Bank under this
Clause 3.04. Such interest shall be calculated at a rate determined by the
Bank
to be two per cent (2%) per annum above the aggregate of the Margin and the
LIBOR for such period not exceeding 3 months as the Bank may determine from
time
to time in amounts comparable with the sum not paid. 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 of principal which
became due and payable 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 fell due.
If,
for
the reasons specified in Clause 12.03, the Bank is unable to determine a rate
in
accordance with the foregoing provisions of this Clause 3.04, interest shall
be
calculated at a rate determined by the Bank to be two per cent (2%) per annum
above the aggregate of the Margin and costs of funds to the Bank as conclusively
determined by the Bank, save for manifest error.
3.05
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.
3.06
All
payments of interest in respect of the Loan shall be made in U.S. Dollars.
All
interest and other payments of an annual nature under this Agreement shall
accrue from day to day and be calculated on the basis of actual days elapsed
and
a 360 day year. The certificate of the Bank as to any rate of interest or any
rate of exchange determined by it pursuant to this Agreement shall be conclusive
in the absence of manifest error.
4. REPAYMENTS
AND PREPAYMENTS
4.01
The
Borrower shall repay the Loan by twenty eight (28) consecutive, quarterly
Repayment Instalments, the first eight (8) of an amount of U.S. Dollars one
million ($ 1.000.000) each, the next four (4) of an amount of U.S. Dollars
seven
hundred fifty thousand ($ 750.000) each and the remaining sixteen (16) of an
amount of U.S. Dollars two hundred fifty thousand ($ 250.000) each, to be repaid
on each of the Repayment Dates so that the first be repaid three (3) months
after the Drawdown Date and each of the subsequent ones consecutively on each
of
the dates falling three (3) months after the immediately preceding Repayment
Date, and (ii) one (1) Balloon Instalment equal to U.S. Dollars five million
($
5.000.000) which shall be repaid together with the last Repayment Instalment,
provided that (a) if the last Repayment Instalment would otherwise fall after
the Final Maturity Date, the final Repayment Instalment shall be the Final
Maturity Date and (b) there shall be no Repayment Dates after the Final Maturity
Date. In the event that the Commitment is not drawn in full, the Loan shall
be
repaid in such proportionate lesser amounts as shall suffice to repay the Loan
over the same period.
4.02
The
Borrower shall have the right, upon giving the Bank not less than ten (10)
Banking Days' notice in writing to prepay without penalty part or all of the
Loan in each case together with all unpaid interest accrued thereon and all
other sums of money whatsoever due and owing from the Borrower to the Bank
hereunder or pursuant to the other Security Documents and all interest accrued
thereon, provided that:
(a)
The
giving of such notice by the Borrower will irrevocably commit the Borrower
to
prepay such amount as stated in such notice;
(b)
Such
prepayment may take place only on the last day of an Interest Period relating
to
the whole of the Loan provided, however, that if the Borrower shall request
consent to make such prepayment on another day and the Bank shall accede to
such
request (it being in the sole discretion of the Bank to decide whether or not
to
do so) the Borrower will pay in addition to the amount to be prepaid, any such
sum as may be payable to the Bank pursuant to Clause 11.01;
(c)
Each
partial prepayment shall be equal to U.S. Dollars two
hundred fifty thousand ($ 250.000) or
a
multiple thereof or the balance of the Loan;
(d)
Any
prepayment of less than the whole of the Loan will be applied towards Repayment
Instalments in inverse order of their due dates of payment;
(e)
Every
notice of prepayment shall be effective only on actual receipt by the Bank,
shall be irrevocable and shall oblige the Borrower to make such prepayment
on
the date specified;
(f)
No
amount prepaid may be re-borrowed; and
(g)
The
Borrower may not prepay the Loan or any part thereof save as expressly provided
in this Agreement.
The
Borrower shall have the option to effect a U.S. Dollars seven million ($
7.000.000) prepayment during the first year following the Drawdown Date. In
such
case, the remaining Repayment Instalments due in the first three (3) years
may
be reduced by a maximum of 35% each, with the balance of the prepayment amount
to be set-off against the Balloon Instalment.
4.03
Unless the Bank agrees to accept substitute security in form and substance
satisfactory to the Bank, the Borrower shall, within one hundred and twenty
(120) days of either of the Vessels becoming a Total Loss, prepay the Loan
together with accrued interest to the date of prepayment and all other sums
payable by the Borrower to the Bank pursuant to this Agreement and the other
Security Documents (and if any portion of the Commitment has not been drawn
yet,
the Commitment shall be reduced to zero), provided that:
(a)
an
actual total loss of a Vessel shall be deemed to have occurred at the actual
date and time such Vessel was lost but, in the event of the date of the loss
being unknown, then the actual total loss shall be deemed to have occurred
on
the date on which such Vessel was last reported.
(b)
a
constructive total loss shall be deemed to have occurred at the date and time
notice of abandonment of a Vessel is given to the insurers of such Vessel for
the time being. If the insurers of the Vessel will not admit the claim for
total
loss, the Borrower shall prepay the Loan within 180 days from the time of notice
of abandonment is given to the insurers.
(c)
a
compromised or arranged total loss shall be deemed to have occurred on the
date
on which a binding agreement as to such compromised or arranged total loss
has
been entered into by the insurers of a Vessel.
(d)
requisition for title or other compulsory acquisition of a Vessel shall be
deemed to have occurred on the date upon which the relevant requisition for
title or other compulsory acquisition occurs.
(e)
capture, seizure, detention, arrest or confiscation of a Vessel by any
government or by any person acting or purporting to act on behalf of any
government, which deprives the owner of the relevant vessel of the use of the
Vessel for more than ninety (90) days shall be deemed to occur upon the expiry
of the period of ninety (90) days after the date upon which the relevant
capture, seizure, detention, arrest or confiscation occurred.
4.04
If
subject to the provisions of Clause 8.02 (viii) any of the Vessels is sold,
the
Borrower shall prepay to the Bank the Loan together with the accrued
interest.
5. FEES
AND EXPENSES
The
Obligors shall pay to the Bank on demand all expenses (including legal, printing
and out-of-pocket expenses) inclusive of Value Added Tax if any, incurred by
the
Bank in connection with the negotiation, preparation and execution of this
Agreement and the Security Documents and of any amendment or extension thereof
and all reasonable expenses (including legal and out-of-pocket expenses)
inclusive of Value Added Tax if any, incurred by the Bank in contemplation
of or
otherwise in connection with the enforcement of, or preservation of any rights
under, any of this Agreement and the Security Documents, or otherwise in respect
of the monies owing under any of this Agreement and the Security
Documents.
6. PAYMENTS
AND ACCOUNTS
6.01
All
payments to be made by the Obligors under or in respect of any Security Document
shall be made in full in the currency in which the same is due, without any
set-off or counterclaim whatsoever and, subject as provided in Clause 6.03,
free
and clear of any deductions or withholdings, by not later than 10.00 a.m. (local
time in the place of payment) on the due date in immediately available funds
to
the account of the Bank at HSBC BANK U.S.A. New York (Account Number
000-04779-1) or at such other bank in such other place as the Bank may have
notified to the Borrower. All interest and any other payments hereunder of
an
annual nature shall accrue from day to day and be calculated on the basis of
360
day year.
6.02
When
any payment would otherwise be due under this Agreement 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.
6.03
If
at any time any applicable law, regulation or regulatory requirement or any
governmental authority, monetary agency or central bank requires the Obligors
to
make any deduction or withholding in respect of Taxes from any payment due
under
this Agreement, the sum due from the Obligors 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 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 Obligors shall indemnify the Bank against any losses or costs
incurred by it by reason of any failure of the Obligors to make any such
deduction or withholding. The Obligors 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.
6.04
If
it shall at any time become unlawful in any jurisdiction or impossible for
the
Obligors to make payment of any sum hereunder to the accounts referred to in
Clause 6.01 or in the currency in which such sum is due (the "Currency of
Obligation") the Obligors may agree with the Bank alternative arrangements
for
payment of such sum in the Currency of Obligation or in another freely
transferable and convertible currency. If it shall be agreed that payment may
be
made in a currency other than the Currency of Obligation such payment shall
only
satisfy the obligations of the Obligors to the Bank hereunder to the extent
of
the amount in the Currency of Obligation which can be purchased with the sum
so
paid at the spot buying rate of the Bank in the London Foreign Exchange market
for the Currency of Obligation with the currency in which payment was made,
and
the Obligors shall be liable to pay to the Bank the balance of the sum in the
Currency of Obligation which the Bank would have received if payment had been
made in accordance with the other provisions of this Agreement.
6.05
All
sums advanced by the Bank to the Borrower under this Agreement and all interest
accrued thereon and all other amounts due under this Agreement from time to
time
and all repayments and/or payments thereof shall be debited and credited
respectively to a separate loan account maintained by the Bank in the name
of
the Borrower. The Bank may, however, in accordance with its usual practices
or
for its accounting needs, maintain more than one accounts, consolidate or
separate them but all such accounts shall be considered parts of one single
loan
account maintained under this Agreement. In case that a ship mortgage in the
form of Account Current is granted as security under this Agreement, the
account(s) referred to in this Clause shall be the Account Current referred
to
in the mortgage.
7. REPRESENTATIONS
AND WARRANTIES
7.01
Each
of the Obligors hereby represents and warrants to the Bank as at the date hereof
that:
(a)
each
Corporate Obligor is duly incorporated and validly existing in good standing
under the laws of its country of incorporation as a limited liability company,
has power to carry on its business as it is now being conducted and to own
its
property and other assets;
(b)
each
Corporate Obligor has power to execute, deliver and perform its obligations
under this Agreement and the other Security Documents; 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 borrowings hereunder;
(c)
this
Agreement constitutes and the Security Documents as and when they are
respectively executed by the Obligors will constitute valid and legally binding
obligations of the Obligors;
(d)
the
execution and delivery of, the performance of their obligations under, and
compliance with the provisions of, this Agreement and the Security Documents
by
the Obligors will not (i) contravene any existing applicable law, statute,
rule
or regulation or any judgment, decree or permit to which the Obligors are
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
Obligors are parties or are subject or by which they or any of their property
is
bound except for the loans of the first Corporate Guarantor dated 16th
October
2002 and 9th
May
2005, (iii) contravene or conflict with any provision of the Corporate Obligors’
By-Laws or (iv) result in the creation or imposition of or oblige the Obligors
to create any encumbrance (other than a Permitted Encumbrance) on any of the
Obligors' assets, rights or revenues;
(e)
no
litigation, arbitration or administrative proceeding is taking place, pending
or, to the knowledge of the officers of the Corporate Obligors, threatened
against the Obligors which would have a material adverse effect on the business,
assets or financial condition of the Obligors;
(f)
the
accounts and the financial statements of the Obligors which have been delivered
to the Bank prior to the signing of this Agreement are true and accurate in
every material respect and represent fairly the financial condition of each
of
them as at the date such accounts and financial statements were prepared and
since that date there has been no material adverse change in such financial
condition, and
(g)
no
event or circumstance which constitutes or which with the giving of notice
or
lapse of time or both would constitute an Event of Default has occurred and
is
continuing.
7.02
The
Obligors further represent and warrant to the Bank that:
(a)
every
consent, authorisation, licence or approval of or registration with or
declaration to governmental or public bodies or authorities or courts required
by the Obligors to authorise, or required by the Obligors in connection with,
the execution, delivery, validity or enforceability of this Agreement and each
of the Security Documents or the performance by the Obligors of their
obligations hereunder or thereunder has been obtained or made;
(b)
the
obligations of the Obligors under this Agreement are direct, general and
unconditional obligations of the Obligors and rank at least pari passu with
all
other present and future unsecured and unsubordinated obligations (including
contingent obligations) of the Obligors (with the exemption of such obligations
as are mandatorily preferred by law and not by contract);
(c)
the
Obligors are not (nor with the giving of notice or lapse of time or both) in
breach of or in default under any agreement relating to Indebtedness to which
they are parties or by which they may be bound;
(d)
the
information, exhibits and reports furnished by the Obligors to the Bank in
connection with the negotiation and preparation of this Agreement and each
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 contained therein; there are no other facts the
omission of which would make any fact or statement therein misleading in any
material respect;
(e)
no
Taxes are imposed by withholding or otherwise on any payment to be made by
the
Obligors under this Agreement or are imposed on or by virtue of the execution
or
delivery by the Obligors of this Agreement or any document or instrument to
be
executed or delivered hereunder;
(f)
the
choice by the Obligors of English law to govern this Agreement and the
submission by the Obligors to the non-exclusive jurisdiction of the courts
of
England are valid and binding;
(g)
it is
not necessary to ensure the legality, validity, enforceability or admissibility
in evidence of this Agreement that it or any other instrument be filed,
recorded, registered or enrolled in any court, public office or elsewhere in
England or Greece. This Agreement is in proper form for its enforcement in
the
courts of England or Greece.
7.03
The
representations and warranties in Clause 7 shall be deemed to be repeated by
the
Obligors on and as of the date of the Drawdown Notice, and of each Interest
Payment Date as if made with reference to the facts and circumstances existing
at such date.
8. UNDERTAKINGS
8.01
Each
of the Obligors undertakes with the Bank that, from the date of this Agreement
and so long as any monies are owing under this Agreement, it will:
(a)
promptly inform the Bank of any occurrence of which it becomes aware which
might
materially adversely affect its ability to perform its obligations under this
Agreement and/or any of the Security Documents and, without limiting the
generality of the foregoing, will inform the Bank of any Event of Default or
any
event which with the giving of notice or lapse of time or both would constitute
an Event of Default forthwith upon becoming aware thereof;
(b)
without prejudice to Clause 7.02 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 connection with, every consent,
authorisation, licence or approval of governmental or public bodies or
authorities 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 its obligations under this Agreement and each
of the Security Documents;
(c)
use
the Loan exclusively for the purpose specified in Clause 1.01;
(d)
ensure that its obligations under this Agreement shall, subject to the operation
of Clause 8.02, at all times rank at least pari passu with all its other present
and future unsecured and unsubordinated obligations (including contingent
obligations);
(e)
cause
to be prepared in each financial year, financial statements in a form consistent
with generally accepted accounting principles and practices in Greece
consistently applied;
(f)
send
to the Bank as many copies as the Bank may reasonably require of the annual
balance sheets and income statements and every balance sheet, profit and loss
account, report, notice or like document issued by it to its shareholders within
150 days of the close of its fiscal year;
(g)
provide the Bank with such financial information concerning the Obligors and
related companies and their affairs, commitments and operations, as the Bank
may
from time to time reasonably require;
(h)
duly
and punctually perform each of its obligations under the Security
Documents.
8.02
Each
of the Obligors undertakes with the Bank that, from the date of this Agreement
and so long as any monies are owing under this Agreement, it will not, without
the prior written consent (such consent not to be unreasonably withheld) of
the
Bank permit:
(i)
any
encumbrance other than Permitted Encumbrances by the Obligors to subsist, arise
or be created or extended to secure any present or future Indebtedness of the
Obligors or any other person;
(ii)
any
Indebtedness of the Obligors to be guaranteed or otherwise assured against
financial loss by any person other than the Obligors;
(iii)
the
Indebtedness of the Obligors to be subordinated in priority of payment to any
other present or future Indebtedness of the Obligors;
(iv)
to
conduct any business or activity other than the ownership, chartering, operation
and management of vessels;
(v)
the
Obligors to declare or pay any dividend or make any other distribution of their
assets or profits to any stockholder;
(vi)
to
incur or agree to incur any Indebtedness or material liability (whether by
way
of loan, credit facilities or otherwise) nor make any commitments other than
those occurring in the ordinary course of the trading of the
Vessel;
(vii)
to
issue or agree to issue any guarantee in favour of any persons or legal entities
other than in connection with the ordinary trading and operation of the
Vessel;
(viii)
to
sell, assign, transfer or otherwise dispose of or abandon the
Vessel.
8.03
The
Obligors undertake that none of the documents defining their constitution shall
be altered in any manner whatsoever and will not change their beneficial
ownership and control from that advised to the Bank or the nature, organisation
and conduct of their business as Owners of the Vessel(s) or as manager of the
Vessels, as the case may be and will not change the Manager of the Vessels
or
substantially change the terms and conditions of the management of the Vessels
(including the management fees) without prior consultation with the Bank and
then only if such terms and conditions as the Bank shall approve in writing,
such approval not to be unreasonably withheld.
8.04
The
Obligors will not operate, or permit the operation of the Vessels in any manner
(i) which would violate the laws of the flag of the Vessels, the laws of the
owning company or the laws of the nationality of the officers and crew of the
Vessels or any other applicable jurisdiction, or (ii) which would render the
Loan or the Bank's security in the Vessels, its insurances and earnings illegal
under the laws of any applicable jurisdiction.
8.05
The
Obligors undertake that:
(i)
if at
any time the market value of the Vessels (as determined in accordance with
sub-clause (ii) below) together with the value of any additional security for
the Loan constituted pursuant to the provisions of this Clause 8.05 all as
certified by the Bank (whose certificate in that respect shall be binding upon
the Obligors) such sum as so certified by the Bank being for the purposes of
this Clause 8.05 referred to as "the Security Value" shall be less than one
hundred and twenty five per cent (125%) of the outstanding amount of the loan
(such 125% of outstanding amount of the loan being for the purposes of this
Clause 8.05 referred to as "the Specified Amount") then the Obligors shall
either:
(1)
prepay within sixty days of the date of receipt by the Borrower of the Bank's
said certificate, or on the next Interest Payment Date if the same shall occur
within such sixty day period, such sum in Dollars as is equal to the amount
by
which the Specified Amount exceeds the Security Value, and in the event that
any
such prepayment of part of the Loan shall be made otherwise than on the expiry
of an Interest Period in respect of the Loan, the Borrower shall be obliged
forthwith to pay to the Bank such amount (if any) that shall be determined
by
the Bank to be necessary to compensate the Bank for any loss (including loss
of
profits) incurred by it in liquidating or re-employing fixed deposits from
third
parties acquired to effect or maintain the Loan or any part thereof until the
expiry of the then current Interest Periods in respect of the Loan. Any
prepayment made pursuant to this Clause 8.05(i)(1) shall be applied in reducing
the remaining repayment instalments as provided in Clause 4.01;
(2)
within 21 days of the date of receipt by the Borrower of the Bank's said
certificate constitute to the satisfaction of the Bank such additional 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 additional security shall be constituted which when added to the
Security Value so certified by the Bank shall not be less than the Specified
Amount. Such additional security shall be constituted by:
(a)
Pledged cash deposits in favour of the Bank in an amount equal to such shortfall
with the Bank and in an account and manner to be determined by the Bank,
and/or
(b)
any
other security acceptable to the Bank to be provided in a manner determined
by
the Bank.
(ii)
The
said market value of the Vessels shall be determined for the purposes of
sub-clause (i) above and when the Bank shall require, by two shipbrokers
appointed by the Bank who shall value the Vessels on the basis of a sale between
a willing buyer and a willing seller free of any charter. The average of the
two
valuations of such Shipbrokers shall constitute the market value of the Vessels
for the purposes of sub-clause (i) above and shall be binding upon the parties
hereto.
(iii)
All
reasonable costs in connection with the Bank obtaining any valuation of the
Vessels referred to in sub-clause (ii) above and 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 sub-clause (i) (2) above (including without prejudice to the
generality of the foregoing costs of the shipbrokers appointed to value the
Vessels) shall be borne by the Borrower.
8.06
The
Corporate Obligors shall establish with the Bank the Earnings Account of the
Vessels. All payments related to the operation of the Vessels shall be made
through this account.
8.07
The
Obligors shall permit any surveyors or other persons appointed by the Bank
to
board the Vessels at all reasonable times for the purpose of inspecting the
condition of the Vessels or for the purpose of satisfying themselves in regard
to proposed or executed repairs recommended by the Vessels' Classification
Society and to afford all proper facilities for such inspection. The Obligors
shall pay the costs and expenses of the Bank and its surveyors for one yearly
inspection, if made.
8.08
The
Obligors undertake that, in respect of the Vessel "YM XINGANG I" from the date
of its delivery to the Borrower and in respect of the Vessel "IRINI" from the
date of this Agreement and as long as any money is due and/or outstanding under
this Agreement or any other Security Documents, the Obligors shall:
(a)
at
all times comply and be responsible for compliance by themselves and the Vessels
and the Manager, with the ISM Code;
(b)
at
all times ensure that:
(i)
the
Vessels have a valid Safety Management Certificate,
(ii)
the
Vessels are subject to a safety management system which complies with the ISM
Code; and
(iii)
the
Manager of the Vessels has a valid Document of Compliance
(c)
promptly notify the Bank of any actual or threatened withdrawal of an applicable
Safety Management Certificate or Document of Compliance;
(d)
promptly notify the Bank of the identity of the person ashore designated for
the
purpose of paragraph 4 of the ISM Code and of any change in the identity of
that
person; and
(e)
promptly upon becoming aware of the same, notify the Bank of the occurrence
of
any accident or major non-conformity requiring action under the ISM
Code.
8.09
(a)
The Obligors
undertake
that, in respect of the Vessel "YM XINGANG I" from the date of its delivery
to
the Borrower and in respect of the Vessel "IRINI" from the date of this
Agreement and as long as any money is due and/or outstanding under this
Agreement or any other Security Document:
(i)
the
Obligors
and
(to
the best of the Obligors’
knowledge) their Environmental Affiliates will comply with the provisions of
applicable Environmental Laws, except where non-compliance will not have a
Material Adverse Effect;
(ii)
the
Obligors
and
(to
the best of the Obligors’
knowledge) their Environmental Affiliates will obtain all requisite
Environmental Approvals and will comply with such Environmental Approvals,
except where the failure to obtain or comply with any such Environmental
Approvals will not have a Material Adverse
Effect;
(iii)
neither the Obligors
nor
(to
the best of the Obligors’
knowledge) any of their Environmental Affiliates will have received notice
of
any Environmental Claim which alleges that the Obligors
are
not in
compliance with applicable Environmental Laws or Environmental Approvals, where
such non-compliance will have a Material Adverse Effect;
(iv)
there will be no Environmental Claim pending or, to the best of the Obligors’
knowledge, threatened which will have a Material Adverse Effect;
and
(v)
to
the best of the Obligors’
knowledge, there will be no Release of Material of Environmental Concern except
where such event will not have a Material Adverse Effect.
(b)
The
Obligors
covenant
with the Bank that, in respect of the Vessel "YM XINGANG I" from the date of
its
delivery to the Borrower and in respect of the Vessel "IRINI" from the date
of
this Agreement and as long as any money is due and/or outstanding under this
Agreement or any other Security Document:
(i)
they
shall not trade within any area if the Obligors cannot or do not comply with
all
Environmental Laws applicable in that area, and that they shall require that
none of their Environmental Affiliates trade within any area if the
Environmental Affiliate cannot or does not comply with all Environmental Laws
applicable in that area which relate to the Vessel or its operation or its
carriage of cargo, except where such non compliance would not have a Material
Adverse Effect;
(ii)
they
shall, upon the request of the Bank, conduct and complete all reasonably
necessary investigations, studies, sampling, audits and testings required in
connection with any known (or threatened) Release of Materials of Environmental
Concern which would have a Material Adverse Effect; and
(iii)
they shall, promptly upon the occurrence of any of the following events, provide
to the Bank a certificate of an officer of the Obligors or of the Obligors’
agents specifying in detail the nature of such event and the proposed response
of the Obligors or Environmental Affiliate concerned:
(A)
the
receipt by the Obligors or any Environmental Affiliate (where the Obligors
have
knowledge of such receipt) of any Environmental Claim which would have a
Material Adverse Effect; or
(B)
any
(or any threatened) Release of Materials of Environmental Concern which would
have a Material Adverse Effect,
and
upon
the written request by the Bank, the Obligors shall submit to the Bank at
reasonable intervals a report updating the status of any occurrence of an
Environmental Claim or a Release of Materials of Environmental Concern, which
would have a Material Adverse Effect.
8.10
The
Borrower undertakes that the family of the Personal Guarantor will maintain
majority shareholding.
8.11
The
Borrower undertakes that the cross default with regard to the Borrower’s other
obligations and/or those of the Corporate Guarantors will be for over U.S.
Dollars one million ($ 1.000.000).
8.12
The
Borrower undertakes to maintain Maximum leverage (long term debt inclusive
of
Curr. Portion divided by total market adjusted assets) at 75% and minimum
“market adjusted” Net Worth of U.S. Dollars fifteen million ($
15.000.000).
9. CONDITIONS
9.01
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 before the day on which the Loan is intended to be advanced, the
documents and evidence specified in Part 1 of Schedule 2 in form and substance
satisfactory to the Bank.
9.02
The
obligation of the Bank to advance the Loan shall be subject to the condition
that the Bank, or its duly authorised representative, shall have received on
or
prior to the Drawdown Date the documents and evidence specified in Part 2 of
Schedule 2 in form and substance satisfactory to the Bank.
9.03
The
obligation of the Bank to advance the Loan is subject to the further conditions
that at the time of the giving of the Drawdown Notice for, and at the time
of
the advance of the Loan:
(a)
the
representations and warranties set out in Clause 7 are true and correct on
and
as of each such time as if each was made with respect to the facts and
circumstances existing at such time;
(b)
no
event or circumstance which constitutes or which with the giving of notice
or
lapse of time or both would constitute an Event of Default shall have occurred
and be continuing or would result from the advancing of the Loan;
and
(c)
the
Bank shall be satisfied that there is no a material adverse change in the
financial condition and operation of the Borrower and/or the Guarantors or
a
material adverse change of circumstances.
10. EVENTS
OF DEFAULT
10.01
There shall be an Event of Default if:
(a)
any
of the Obligors fails to pay any sum payable by them under this Agreement and/or
any of the Security Documents when due; or
(b)
any
of the Obligors commits any breach of or omits to observe any of its obligations
or undertakings under this Agreement and/or any of the Security Documents (other
than failure to pay any sum when due) 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 (14) days of the Bank
notifying the Obligors of such default and of such required action;
or
(c)
any
representation or warranty made or deemed to be made or repeated by or in
respect of the Obligors or any other party (other than the Bank) in or pursuant
to this Agreement and/or any of the Security Documents or in any notice,
certificate or statement referred to in or delivered under this Agreement and/or
any of the Security Documents is or proves to have been incorrect in any
material respect; or
(d)
any
Indebtedness of the Obligors is not paid when due or by reason of breach or
default under the terms of any instrument evidencing or guaranteeing the same
on
the part of the Obligors becomes due (or capable of being declared due) prior
to
the date when it would otherwise have become due or any guarantee or indemnity
given by the Obligors in respect of Indebtedness is not honoured when due and
called upon; or
(e)
any
consent, authorisation, licence or approval of or registration with or
declaration to governmental or public bodies or authorities or courts required
by the Obligors or any other party (other than the Bank) to authorise, or
required by the Obligors or any other party (other than the Bank) in connection
with the execution, delivery, validity or enforceability of this Agreement
and/or any of the Security Documents or the performance by the Obligors or
any
such party of its obligations hereunder or thereunder is modified in a manner
unacceptable to the Bank or is not granted or is revoked or terminated or
expires and is not renewed or otherwise ceases to be in full force and effect;
or
(f)
an
encumbrancer takes possession or a receiver or similar officer is appointed
of
the whole or any part of the assets, rights or revenues of any of the Obligors
or a distress, execution, sequestration or other process is levied or enforced
upon or sued out against any of the assets, rights or revenues of any of the
Obligors and is not discharged within thirty days; or
(g)
any
of the Obligors suspends payment of its debts or is unable to or admits
inability to pay its debts as they fall due or proposes or enters into any
composition or other arrangement for the benefit of its creditors generally
or
proceedings are commenced in relation to the Obligors under any law, regulation
or procedure relating to reconstruction or readjustment of debts;
or
(h)
any
of the Obligors is adjudicated or found bankrupt or insolvent or any order
is
made by any competent court or resolution passed by any Corporate Obligor for
the winding-up or dissolution of such Corporate Obligor or for the appointment
of a liquidator, trustee or conservator of the whole or any part of its assets,
rights or revenues; or
(i)
any
event occurs or proceeding is taken with respect to the Obligors in any
jurisdiction to which they are subject which has an effect equivalent or similar
to any of the events mentioned in Clause 10.01 (f), (g) or (h); or
(j)
any
of the Obligors suspends or ceases or threatens to suspend or ceases to carry
on
its business; or
(k)
all
or a material part of the assets, rights or revenues of any of the Obligors
are
seized, nationalised, expropriated or compulsorily acquired by or under the
authority of any government; or
(1)
there
shall occur, in the reasonable opinion of the Bank, a material adverse change
in
the financial condition of the Obligors by reference to the financial statements
referred to in Clause 7.01 (f); or
(m)
any
other event occurs or circumstances arise which, in the reasonable opinion
of
the Bank, is likely materially and adversely to affect the ability of the
Obligors or any other party (other than the Bank) to perform all or any of
their
obligations under or otherwise to comply with the terms of this Agreement and/or
of the Security Documents.
10.02
The
Bank may, without prejudice to any other rights of the Bank, at any time after
the happening of an Event of Default (so long as the same is continuing) by
notice to the Obligors declare that:
(a)
the
obligation of the Bank to make the Commitment or any part of the Commitment
available shall be terminated, whereupon the Commitment shall be terminated
forthwith; and/or
(b)
the
Loan and all interest and commitment commission accrued and all other sums
payable under this Agreement have become due and payable, whereupon the same
shall immediately or in accordance with such notice, become due and
payable.
11. INDEMNITIES
AND EXPENSES
11.01
The
Obligors shall indemnify the Bank, without prejudice to any of the Bank's other
rights hereunder, against any loss or expense which the Bank shall certify
as
sustained or incurred by it as a consequence of (i) any default in payment
by
the Obligors of any sum under this Agreement when due, (ii) any Event of
Default, (iii) any prepayment of the Loan or part thereof being made under
Clauses 4.02, 4.03, 12.01, 12.02 or 12.03 otherwise than on an Interest Payment
Date or (iv) the Loan not being made for any reason (including failure to
fulfill any of the conditions precedent set out in Schedule 2 but excluding
any
default by the Bank) after a Drawdown Notice has been given, including, in
any
such case, but not limited to, any loss or expenses sustained or incurred in
maintaining or funding the Commitment 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.
11.02
No
payment to the Bank under this Agreement pursuant to any judgment or order
of
any court or otherwise shall operate to discharge the obligations of the
Obligors in respect of which it was made unless and until payment in full shall
have been received in the currency in which the relevant sum is payable
hereunder ("the Relevant Currency") and to the extent that the amount of any
such payment shall on actual conversion into the Relevant Currency fall short
of
the amount of the relevant obligation expressed in the Relevant Currency the
Bank shall have a further separate cause of action against the Obligors for
the
recovery of such sum as shall after conversion into the Relevant Currency be
equal to the amount of the shortfall.
11.03
The
Obligors shall pay all stamp, documentary, registration or other like duties
(including any duties payable by the Bank) imposed on or in connection with
this
Agreement and/or any of the Security Documents or the Loan and shall indemnify
the Bank against any liability arising by reason of any delay or omission by
the
Obligors to pay such duties.
11.04
The
obligation of the Obligors to pay any amount pursuant to this Clause 11 shall
constitute a separate and independent obligation of the Obligors from their
other obligations hereunder and shall not be affected by any indulgence granted
by the Bank or by judgment being obtained for any other sums due under this
Agreement and/or any of the Security Documents, and no proof or evidence of
any
actual loss shall be required by the Obligors.
12. FORCE
MAJEURE, UNLAWFULNESS, INCREASED COSTS,
ALTERNATIVE
INTEREST RATES
12.01
The
Bank shall not be liable for any failure to perform the whole or any part of
this Agreement and/or any of the Security Documents resulting directly or
indirectly from the action or inaction of any governmental or local authority
or
any strike, lock-out, boycott or blockade effected by or upon the Bank or its
employees, or from any act of God or war, whether declared or not.
12.02
If
any law, regulation or regulatory requirement or any judgment, order or
direction of any court, tribunal or authority binding upon the Bank in the
jurisdiction in which it is formed or has its principal office or in which
any
action is required to be performed for the purposes of this Agreement, renders
it unlawful for the Bank to advance, maintain or fund the Loan, the Bank shall
promptly inform the Obligors. If it shall so be unlawful for the Bank to
maintain or fund the Loan the Bank shall give notice to the Obligors requiring
the Obligors to prepay the Loan either (i) forthwith or (ii) on a future
specified date and the Obligors will prepay the Loan in accordance with and
subject to such notice and the provisions of Clause 12.04 and 12.05. Without
prejudice to the obligation of the Obligors to make such prepayment, the
Obligors and the Bank shall negotiate for a period not exceeding 30 days with
a
view to the Bank making available its Commitment and/or maintaining the Loan
in
whole or part in a manner which is not unlawful.
12.03
If
any law, regulation or any directive, request or requirement (whether or not
having the force of law) of any central bank, government, fiscal or other
authority, or any judgment, order or direction of any court, tribunal or
authority binding upon the Bank in the jurisdiction in which it is formed or
has
its principal office or in which any action is required to be performed for
the
purposes of this Agreement taking effect after the date of this Agreement or
if
compliance by the Bank with any direction, request or requirement (whether
or
not having the force of law) of any competent governmental or other authority
shall:
(a)
subject the Bank to Taxes or change the basis of Taxation of the Bank with
respect to any payment under this Agreement (other than Taxes or Taxation on
the
overall net income of the Bank imposed in the jurisdiction in which its
principal office or lending office hereunder is located); or
(b)
impose, modify or deem applicable any reserve requirements (including any type
of liquidity, stock or capital adequacy controls or other banking or monetary
controls or requirements which affect the manner in which the Bank allocates
capital resources to its obligations hereunder) or require the making of any
special deposits against or in respect of any assets or liabilities of, deposits
with or for the account of, or loans by, the Bank; or
(c)
impose on the Bank any other condition with respect to this Agreement or its
obligations hereunder, and, as a result of any of the foregoing, the cost to
the
Bank of making or keeping the Commitment available for advance or maintaining
or
funding the Loan is increased or the amount payable or the effective return
to
the Bank under this Agreement is reduced or the Bank makes a payment or forgoes
a return on or calculated by reference to any amount payable to it under this
Agreement, then and in each such case:
(i)
on
demand, the Obligors shall pay to the Bank the amount which the Bank specifies
(in a certificate setting forth the basis of the computation of such amount,
which certificate, save for manifest error, shall be conclusive and binding
on
the Obligors) to be required to compensate the Bank for such increased cost,
reduction, payment or forgone return; and
(ii)
the
Obligors may, at any time after receipt of such demand and certificate notify
the Bank that they will prepay all (but not part only) of the Loan whereupon
the
Obligors shall prepay the Loan to the Bank in accordance with and subject to
the
provisions of Clause 12.05
Any
demand under Clause 12.03 (i) may be made at any time before or within 12 months
after the end of any Interest Period to which such demand relates whether or
not
the Loan has been repaid.
12.04
(a)
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) that:
(1)
adequate and fair means do not exist for ascertaining the rate of interest
during such Interest Period pursuant to Clause 3.01; or
(2)
deposits in Dollars are not available to the Bank in the London Interbank
Eurocurrency market in sufficient amounts in the ordinary course of business
for
such Interest Period; or
(3)
by
reason of circumstances affecting the London Interbank Eurocurrency market
generally it is impracticable for the Bank to fund or continue to fund the
Loan
during such Interest Period;
the
Bank
shall forthwith give notice of such determination to the Obligors.
(b)
During the period of 14 days after any notice has been given by the Bank under
Clause 12.04 (a), the Bank shall certify (having consulted with the Obligors)
an
alternative basis (the "Substitute Basis") for the continuance of 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 to the Bank or equivalent to the Margin. The
Substitute Basis shall be binding upon the Obligors and shall be retroactive
to
and take effect in accordance with its terms from the date specified in the
notice given by the Bank. During the period when a Substitute Basis is in force
the Obligors and the Bank shall consult not less frequently than once every
30
days with a view to reverting to the normal provisions of this Agreement as
soon
as practicable.
(c)
If
the Obligors determine within 14 days of receipt of such certificate that they
do not wish to continue to borrow the Loan they shall forthwith notify the
Bank
whereupon the Obligors shall forthwith prepay the Loan in accordance with and
subject to the provisions of Clauses 12.04 and 12.05 together with accrued
interest to the date of prepayment, calculated from the date specified in the
notice given by the Bank at a rate per annum equal to the rate certified by
the
Bank to be an interest rate equivalent to the cost to the Bank of funding the
Loan during the period commencing on the date specified in the notice given
by
the Bank and ending on the date of prepayment plus the Margin.
12.05
When the Loan is to be prepaid by the Obligors pursuant to this Clause 12,
the
Obligors shall, at the time of such prepayment, pay to the Bank accrued interest
thereon to the date of actual payment, any additional amount payable under
Clause 12.03 and all other sums payable by the Obligors to the Bank pursuant
to
this Agreement, including, without limitation, any amounts payable under Clause
11.
13. SET-OFF
SECURITY
13.01
Each Corporate Obligor shall procure that all monies payable to it in respect
of
the Earnings (as that expression is defined in the Earnings Assignment in
respect of the relevant Vessel) of its relevant Vessel shall be paid to the
Earnings Account with the Bank.
13.02 (a)
Upon
the Bank’s request and for so long as any moneys are owing under this Agreement,
the Corporate Obligors hereby jointly and severally undertake to pay to the
Bank
for credit to the Retention Account, at monthly intervals (each such day being
hereinafter called "Monthly Retention Date") such sum (each sum being
hereinafter called "Monthly Retention Amount") as shall be the aggregate
of:
i.
one
third (1/3rd) of the amount of the Repayment Instalment next falling due for
payment pursuant to Clause 4.01;
ii.
the
Applicable Fraction (as hereinafter defined) of the amount of interest falling
due for payment in respect of each part of the Loan at the end of each of the
Interest Periods current at the time of the relevant Monthly Retention Date
and,
for the purpose of this Clause, the expression "Applicable Fraction" in relation
to each Interest Period shall mean a fraction having a numerator of one and
a
denominator equal to the number of Monthly Retention Dates falling within the
relevant Interest Period.
(b)
Unless and until there shall occur an Event of Default (whereupon the provisions
of Clause 13.02(c) shall be applicable) all Monthly Retention Amounts credited
to the Retention Account together with interest from time to time accruing
or at
any time accrued thereon shall be set-off and applied by the Bank (and each
of
the Corporate Obligors hereby irrevocably authorise the Bank so to set-off
and
apply the same and release the Bank to the extent of such set-off and
application) upon each Interest Payment Date in or towards payment of the
Repayment Instalment then falling due and/or (as the case may be) the amount
of
interest then due. Each such set-off application by the Bank shall constitute
a
payment in or towards satisfaction of the Corporate Obligors' corresponding
payment obligations under this Agreement but shall be strictly without prejudice
to the obligations of the Corporate Obligors to make any such payment to the
extent that the aforesaid set-off application by the Bank is insufficient to
meet the same.
(c)
Upon
the occurrence of an Event of Default or at any time thereafter, the Bank shall
be entitled to set-off and apply all sums standing to the credit of the
Retention Account and accrued interest (if any) without notice to any of the
Corporate Obligors in the manner specified in Clause 12.03 (and each of the
Corporate Obligors hereby irrevocably authorises the Bank so to set-off and
apply the same and releases the Bank to the extent of such set-off and
application).
(d)
Any
amount for the time being standing to the credit of the Retention Account shall
bear interest (which shall be credited to the Retention Account) at the rate
normally offered by the Bank for similar accounts (unless otherwise agreed
between the Bank and the Corporate Obligors).
(e)
Each
of the Corporate Obligors hereby undertakes to pledge to the Bank the Retention
Account and agrees not to assign, transfer or suffer any Encumbrance to arise
over the whole or any part of the Retention Account.
(f)
Each
of the Corporate Obligors agrees and confirms that none of the Corporate
Obligors shall be entitled to draw from the Retention Account. (And the Bank
shall have no obligation to pay to any Corporate Obligor any sums from time
to
time standing to the credit of the Retention Account or any interest
thereon).
13.03
All
monies 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
13.01 shall be applied by the Bank in the following manner:
(a)
first
in or towards payment of all sums other than principal or interest which may
be
owing to the Bank under this Agreement and the Security Documents or any of
them.
(b)
secondly in or towards any arrears of interest owing in respect of the Loan
or
any part thereof.
(c)
thirdly in or towards repayment of the Loan.
(d)
fourthly the surplus (if any) shall be paid to the Obligors or to whomsoever
else may be entitled to receive such surplus.
13.04
The
Obligors hereby authorise the Bank without prejudice to any of the Bank's rights
at law, in equity or otherwise, at any time in the Event of Default and without
notice to the Obligors:
(a)
to
apply any credit balance standing upon any account of the Obligors with any
branch of the Bank and in whatever currency in or towards satisfaction of any
sum due to the Bank under this Agreement and/or any of the Security
Documents;
(b)
in
the name of the Obligors and/or the Bank to do all such acts and execute all
such documents as may be necessary or expedient to effect such application;
and
(c)
to
combine and/or consolidate all or any accounts in the name of the Obligors
with
the Bank.
13.05
The
Obligors hereby covenant and undertake that the Security Documents shall both
at
the date of execution and delivery thereof and so long as any monies are owing
under this Agreement or thereunder be valid and binding obligations of the
respective parties thereto and rights of the Bank enforceable in accordance
with
their respective terms and that they will, at their expense, execute, perfect
and do 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.
14. ASSIGNMENT
AND LENDING OFFICES
14.01
This Agreement shall be binding upon, and enure for the benefit of, the Bank
and
the Obligors and their respective successors.
14.02
The
Obligors may not assign or transfer any of their rights or obligations under
this Agreement.
14.03
The
Bank may assign or transfer all or any part of its rights, benefits or
obligations under this Agreement to any one or more banks or other financial
institutions (each of which is called an "Assignee" for the purposes of this
Clause 14).
Provided
that any assignment or transfer of all or part of the Bank's rights or benefits
under this Agreement shall not cause the Obligors to be required to pay any
additional amounts under the provisions of Clause 6.03 as at the date of such
assignment or transfer except where any such payment had already, or would
already have, become due to the Bank under such provisions as at such
date.
Any
assignment or transfer of all or part of the Bank's rights or benefits under
this Agreement may only be effected with the prior written consent of the
Obligors such consent not to be unreasonably withheld unless the assignee or
the
transferee shall be a subsidiary or the holding company of the Bank or a
subsidiary of such holding company in which case no such consent shall be
required but written notice of such assignment or transfer shall be given to
the
Obligors.
14.04
If
the Bank assigns or transfers its rights, benefits or obligations as provided
in
Clause 14.03 all relevant references in this Agreement to the Bank shall
thereafter be construed as a reference to the Bank and/or its assignee(s) and/or
its transferee(s)to the extent of their respective interests and, in the case
of
an assignment or transfer of all or part of the Bank's obligations, the Obligors
shall thereafter look only to the assignee or transferee in respect of that
proportion of the Bank's obligations hereunder as corresponds to the obligations
assumed by such assignee or transferee.
14.05
The
Bank shall lend initially through its office at Piraeus and subsequently 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 14.05, the Bank
shall notify the Obligors promptly of such change.
14.06
The
Bank may disclose to a potential 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 Obligors as the Bank shall consider
appropriate, such information to be treated as confidential.
15. GUARANTEE
15.
01
Guarantee
In
consideration of the Bank making or continuing the Loan to the Borrower and
for
other sufficient consideration (receipt whereof each Guarantor hereby
acknowledges), each Guarantor hereby irrevocably and
unconditionally:
(a)
guarantees to the Bank, as principal obligor and not merely as surety, and
waiving all rights and objections granted by the Law to each Guarantor, due
and
prompt performance by the Borrower of all its obligations under this Agreement
and the Security Documents and the payment of all sums payable now or in the
future to the Bank by the Borrower thereunder or in connection therewith when
and as the same shall become due, and
(b)
undertakes with the Bank that if and whenever the Borrower shall be in default
in the payment of any sum whatsoever under the Security Documents or in
connection therewith, such Guarantor will on demand pay such sum as if such
Guarantor instead of the Borrower were expressed to be the primary obligor,
together with interest thereon at the rate per annum from time to time payable
by the Borrower on such sum from the date when such sum becomes payable by
such
Guarantor hereunder until payment of such sum in full.
15.02 Continuing
guarantee
This
guarantee is a continuing guarantee and shall extend to the ultimate balance
of
all sums payable by the Borrower under the Security Documents.
15.03 Reinstatement
Where
any
discharge (whether in respect of the obligations of the Borrower or any security
therefor or otherwise) is made in whole or in part or any arrangement is made
on
the faith of any payment, security or other disposition which is avoided or
must
be repaid on bankruptcy, liquidation or otherwise without limitation, the
liability of the Guarantors under this guarantee shall continue as if there
had
been no such discharge or arrangement. The Bank shall be entitled to concede
or
compromise any claim that any such payment, security or other disposition is
liable to avoidance or repayment.
15.04 Waiver
of defences
The
obligations of each Guarantor hereunder shall not be affected by any act,
omission, matter or thing which but for this provision might operate to release
or otherwise exonerate such Guarantor from its obligations hereunder in whole
or
in part, including without limitation and whether or not known to such Guarantor
or the Bank:
(a)
any
time or waiver granted to or composition with the Borrower, another Guarantor
or
any other person.
(b)
the
taking, variation, compromise, renewal or release of or refusal or neglect
to
perfect or enforce any rights, remedies or securities against the Borrower
another Guarantor or any other person.
(c)
any
legal limitation, disability incapacity or other circumstances relating to
the
Borrower, another Guarantor or any other person.
(d)
any
variation or any Security Document or any other document or security so that
references to these conditions in this guarantee shall include each such
variation.
(e)
any
unenforceability, invalidity or frustration of any obligation of the Borrower
or
any other person under the Security Documents or any other document or security,
to the intent that the Guarantors' obligations hereunder shall remain in full
force and this guarantee be construed accordingly as if there were no such
unenforceability, invalidity or frustration.
15.05 Immediate
recourse
Each
Guarantor waives any right it may have of first requiring the Bank to proceed
against or enforce any other rights or security of or claim payment from
Borrower or any other person before claiming from a Guarantor
hereunder.
15.06 Non-competition
Until
all
amounts which may be or become payable by the Borrower under this Agreement
and
the Security Documents or in connection therewith have been irrevocably paid
in
full, the Guarantors shall not, in any event of default:
(a)
be
subrogated to any rights, security or moneys held, received or receivable by
the
Bank or be entitled to any right of contribution in respect of any payment
made
or moneys received on account of the Guarantors' liability
hereunder.
(b)
be
entitled and shall not claim to rank as creditor against the estate or in the
bankrupcy or liquidation of the Borrower in competition with the
Bank.
(c)
receive, claim or have the benefit of any payment, distribution or security
from
or on account of the Borrower or exercise any right of set-off as against the
Borrower.
The
Guarantors shall forthwith pay to the Bank an amount equal to any such set-off
in fact exercised by it and shall hold in trust for and forthwith pay or
transfer, as the case may be, to the Bank any such payment or distribution
or
benefit of security in fact received by it.
15.07 Confirmation
Each
Guarantor confirms that the giving of this guarantee by such Guarantor is to
the
commercial benefit of such Guarantor in that such Guarantor has close financial
cooperation and mutual assistance with the Borrower.
15.08
Additional
security
This
guarantee shall be in addition to and shall not in any way be prejudiced by
any
other security now or hereafter held by the Bank as security for the obligations
of the Borrower.
15.09
Certificate
A
certificate of the Bank as to any amount owing from the Borrower under the
Security Documents shall be conclusive evidence (save of manifest error) of
such
amount as against the Guarantors.
16. NOTICES
AND OTHER MATTERS
16.01
Every notice, request, demand or other communication under this Agreement shall
be in writing delivered personally or by registered letter, fax or telex
(confirmed in the case of a telex by registered letter sent within twenty four
hours of its despatch). Every notice, request, demand or communication shall,
subject as otherwise provided in this Agreement, be deemed to have been
received, in the case of a fax or telex at the time of despatch thereof
(provided that if the date of despatch is not a Business Day 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 in the case of a letter when
delivered personally or 3 days after it has been put in to the
post.
16.02
Every notice, request, demand or other communication shall be sent:
|
(1)
|
to
the Obligors at:
|
|
|
c/o
Eurobulk Ltd
|
||
|
Aethrion
▇▇▇▇▇▇
|
||
|
▇▇,
▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
|
||
|
▇▇▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
|
||
|
Fax:
(▇▇▇) ▇▇▇ ▇▇▇ ▇▇▇▇
|
||
|
Tel.:
|
||
|
(2)
|
to
the Bank at:
|
|
|
▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
|
||
|
▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
|
||
|
Attention:
the Manager
|
||
|
Telephone:
(▇▇▇) ▇▇▇ ▇▇▇▇ ▇▇▇
|
||
|
Fax:
(▇▇▇) ▇▇▇ ▇▇▇▇ ▇▇▇
|
or
such
other address or telex number as is notified by one party to the other party
hereunder.
16.03
Process Agent.
▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of Messrs. Hill ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, of 2, Defteras ▇▇▇▇▇▇▇▇▇▇,
▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, is hereby appointed by the Obligors as agent to accept
service (hereinafter "Process Agent") upon whom any judicial process may be
served and any notice, request, demand or other communication under this
Agreement or any of the Security Documents. In the event that the Process Agent
(or any substitute process agent notified to the Bank in accordance with the
foregoing) cannot be found at the address specified above (or, as the case
may
be notified to the Bank), which will be conclusively proved by a deed of a
process server to the effect that the Process Agent was not found to that
address, any process notice, request, demand or other communication to be sent
to any Security Party may be validly effected upon the District Attorney of
the
First Instance Court of Piraeus.
16.04
No
failure or delay on the part of the Bank to exercise any power, right or remedy
under this Agreement and/or 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 herein
and
in the Security Documents are cumulative and are not exclusive of any remedies
provided by law.
16.05
All
certificates, instruments and other documents to be delivered under or supplied
in connection with this Agreement shall be in the English language or shall
attach a certified English translation thereof, which translation shall be
the
governing version.
16.06
Any
provision of this Agreement prohibited by or unlawful or unenforceable under
any
applicable law actually applied by any court of competent jurisdiction shall,
to
the extent required by such law, be severed from this Agreement and rendered
ineffective so far as is possible without modifying the remaining provisions
of
this Agreement. Where however the provisions of any such applicable law may
be
waived, they are hereby waived by the parties hereto to the full extent
permitted by such law to the end that this Agreement shall be a valid and
binding agreement enforceable in accordance with its terms.
16.07
Money Laundering
Any
borrowing by the Borrower and the performance of its obligations hereunder
and
under the other Security Documents to which it is a party will be for its own
account and will not involve any breach by it of any law or regulatory measure
relating to money laundering as defined in Article 1 of the Directive
(91/308/EEC) of the Council of the European Communities or any equivalent law
or
regulatory measure in any other jurisdiction.
17. LAW
AND JURISDICTION
17.01
This Agreement shall be governed by and construed in accordance with the laws
of
England.
17.02
For
the exclusive benefit of the Bank, each of the Obligors hereby irrevocably
submits to the non-exclusive jurisdiction of the High Court of Justice in
London, England. Further, the Obligors agree that any summons, writ or other
legal process issued against them in England shall be served upon Messrs. HILL
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, currently located at ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇’▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (tel.: 0044207-2839033, fax: 0044207- ▇▇▇▇▇▇▇) or their
successors, who are hereby authorised to accept such service which shall be
deemed to be good service on the Obligors.
17.03
The
Obligors further irrevocably agree that the Courts of Piraeus, Greece, shall
have jurisdiction over any proceedings arising hereunder and each Obligor hereby
irrevocably submits to the jurisdiction of such courts for such
purpose.
17.04
Nothing herein shall limit the right of the Bank to take proceedings against
the
Obligors in any other court of competent jurisdiction, whether concurrently
or
not.
17.05
To
the extent that each Obligor or any of its property may in any jurisdiction
enjoy or be entitled to exemption or immunity from any legal process (including
without limitation any relief or execution) each Obligor hereby irrevocably
agrees not to claim or invoke and hereby irrevocably waives such exemption
or
immunity to the full extent permitted by the law of such
jurisdiction.
18. JOINT
AND SEVERAL LIABILITY
Each
of
the Obligors' obligations under this Agreement are joint and several. No
Obligors' obligations shall in any way be avoided, discharged or released or
otherwise adversely affected if for any reason whatsoever (i) any other Obligor
does not become a party to this Agreement or any Security Document or is at
any
time not effectively bound by the terms of this Agreement or any Security
Document or (ii) this Agreement or any Security Document or the liabilities
of
any other Obligor are at any time in any way or to any extent avoided
invalidated discharged released or otherwise adversely affected. For the purpose
of this Agreement and the Security Documents the Agreement by one Obligor with
the Bank to any matter or thing shall be deemed to be Agreement of all the
Obligors who shall be bound accordingly.
IN
WITNESS WHEREOF
the
parties hereto have caused this Agreement to be duly executed the day and year
first above written.
Signed
by
for
and
on behalf of
XINGANG
SHIPPING LTD
in
the
presence of:
Signed
by
for
and
on behalf of
▇▇▇▇▇
TRADING LTD
in
the
presence of:
Signed
by
for
and
on behalf of
EUROSEAS
LTD
in
the
presence of:
Signed
by
for
and
on behalf of
HSBC
BANK PLC
in
the
presence of:
SCHEDULE
1
Form
of Drawdown Notice
(referred
to in Clause 2.02)
To
HSBC
BANK PLC
U.S.
$
20.000.000 Floating Rate Loan
Loan
Agreement dated November
14, 2006
We
refer
to the above Loan Agreement and hereby:
(1)
give
you notice that we wish you to advance of U.S. $ 20.000.000 to us on
and
select a first Interest Period in respect thereof of months,
the first Interest Period to expire on .
The
above
amount to be credited to the Account:
(2)
confirm that:
(i)
no
event or circumstance has occurred and is continuing which constitutes or which
with the giving of notice or lapse of time or both would constitute an Event
of
Default under the Loan Agreement.
(ii)
the
representations and warranties contained in Clause 7 of the Loan Agreement
are
true and correct at the date hereof as if made with respect to the facts and
circumstances existing at such date.
(iii)
the
borrowing to be effected by such advance will be within our corporate powers,
has been validly authorized by appropriate corporate action and will not cause
any limit on our borrowings (whether imposed by statute, regulation, agreement
or otherwise) to be exceeded.
(iv)
there has been no material adverse change in our financial
position.
SIGNED
by
for
and
on behalf of
___________________________
XINGANG
SHIPPING LTD
SCHEDULE
2
Documents
and evidence required
as
conditions precedent
Part
1
(a)
copy
of all documents which contain or establish or relate to the constitution of
the
Corporate Obligors including transfer of shares and election of Board of
Directors.
(b)
Resolutions duly passed at meeting(s) of the Board of Directors and Shareholders
of the Corporate Obligors duly convened and held approving the Loan Agreement
and the Security Documents and authorising their signature, delivery and
performance.
(c)
an
opinion of the Law Office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ special legal advisers in
Greece to the Bank and an opinion of the Obligors' Lawyer.
(d)
there
has been no material adverse change in the financial conditions and/or
operations of the Borrower and/or the Corporate Guarantors.
Part
2
(a) evidence
that each Vessel:
(i)
is
registered in the name of the relevant Borrower or the Corporate Guarantor
free
of encumbrances other than Permitted Encumbrances
(ii)
is
classed highest with its respective Classification Society, such Classification
Society to be acceptable to the Bank
(iii)
is
insured in accordance with the provisions of the Mortgage and the Assignment
and
all requirements of the Mortgage and the Assignment in respect of such
Insurances have been complied with.
(b)
the
following security Documents duly executed:
(i)
Personal Guarantee duly executed by the Personal Guarantor
(ii)
First Preferred Liberian Mortgage on the Vessel "YM XINGANG I"
(iii)
Deed of Assignment of Insurances, Earnings and any Requisition Compensation
of
the Vessel "YM XINGANG I"
(iv)
Third Preferred ▇▇▇▇▇▇▇▇ Islands Mortgage on the Vessel "IRINI"
(v)
Deed
of Assignment of Insurances, Earnings and any Requisition Compensation of the
Vessel "IRINI"
(vi)
Specific Assignment of the Vessel’s "YM XINGANG I" time charter to "Yangming
(UK) Ltd" of London, a 100% subsidiary company of "Yangming Marine Transport
Corp., Keelung"
(c)
evidence that each Mortgage has been registered against each
Vessel.