Date 16 March 2005
MATRIX GAS TRADING LTD., GAZ DE BRAZIL INC.,
VCM TRADING LTD., GENEVE BUTANE INC., LPGONE LTD.,
SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD.,
PACIFIC GASES LTD., ARACRUZ TRADING LTD.,
INDUSTRIAL MATERIALS INC. AND STEALTHGAS INC.
as joint and several borrowers
- and -
FORTIS BANK (NEDERLAND) N.V.
as Lender
-------------------------------------------------
LOAN AGREEMENT
-------------------------------------------------
relating to a US$54,000,000 facility to part finance the
cost of the LPG carriers "GAS AMAZON", "GAS
ARCTIC", "GAS ICE" and "▇▇▇▇▇▇ ▇▇▇▇▇" and to
refinance part of the acquisition cost of the LPG carriers
"GAS EMPEROR", "GAS COURCHEVAL", "GAS
PRODIGY", "GAS SHANGHAI", "GAS PROPHET" and
"GAS TINY"
INDEX
CLAUSE PAGE
1 INTERPRETATION 3
2 FACILITY 20
3 DRAWDOWN 20
4 INTEREST 20
5 INTEREST PERIODS 22
6 DEFAULT INTEREST 22
7 REPAYMENT AND PREPAYMENT 23
8 CONDITIONS PRECEDENT 25
9 REPRESENTATIONS AND WARRANTIES 26
10 GENERAL UNDERTAKINGS 27
11 CORPORATE UNDERTAKINGS 30
12 INSURANCE 31
13 SHIP COVENANTS 35
14 SECURITY COVER 39
15 PAYMENTS AND CALCULATIONS 40
16 APPLICATION OF RECEIPTS 40
17 APPLICATION OF EARNINGS 41
18 EVENTS OF DEFAULT 43
19 FEES AND EXPENSES 46
20 INDEMNITIES 47
21 NO SET-OFF OR TAX DEDUCTION 49
22 ILLEGALITY, ETC 49
23 INCREASED COSTS 50
24 SET-OFF 51
25 TRANSFERS AND CHANGES IN LENDING OFFICE 51
2
26 VARIATIONS AND WAIVERS 52
27 NOTICES 53
28 JOINT AND SEVERAL LIABILITY 54
29 SUPPLEMENTAL 55
30 LAW AND JURISDICTION 55
SCHEDULE 1 DRAWDOWN NOTICE 57
SCHEDULE 2 DETAILS OF BORROWERS 58
SCHEDULE 3 DETAILS OF SHIPS 60
SCHEDULE 4 CONDITION PRECEDENT DOCUMENTS 61
EXECUTION PAGE 64
THIS AGREEMENT is made on 16 March 2005
BETWEEN
(1) MATRIX GAS TRADING LTD., GAZ DE BRAZIL INC., VCM TRADING LTD., GENEVE
BUTANE INC., LPGONE LTD., SEMICHLAUS EXPORTS LTD., VENTSPILS GASES
LTD., PACIFIC GASES LTD., ARACRUZ TRADING LTD., INDUSTRIAL MATERIALS
INC. and STEALTHGAS INC. as joint and several borrowers; and
(2) FORTIS BANK (NEDERLAND) N.V., acting through its office at ▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ as "LENDER".
BACKGROUND
(A) The Lender has agreed to make available to the Borrowers a facility in
up to 10 Advances of up to the lesser of (a) US$54,000,000 and (b) an
amount equal to 62 per cent. of the lesser of (i) the aggregate of the
Market Value of the Ships and (ii) the aggregate of the Purchase Price
of the Ships, for the purpose of part financing or refinancing (as the
case may be) the Purchase Price of each Ship.
(B) The Borrowers may, if they wish, from time to time hedge their exposure
under this Agreement to interest rate fluctuations by entering into
interest rate swap transactions with the Lender.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 DEFINITIONS. Subject to Clause 1.5, in this Agreement:
"ACCOUNTING INFORMATION" means the annual audited combined accounts to
be provided by the Borrowers to the Lender in accordance with Clause
10.6;
3
"ACCOUNTS SECURITY DEED" means a deed creating security in respect of
the Earnings Account and the Retention Account, to be in favour of the
Lender, in such form as the Lender may approve or require;
"ADVANCE" means the principal amount of each borrowing by the Borrowers
under this Agreement;
"APPROVED MANAGER" means, in relation to a Ship, Stealth, being the
commercial manager of the Ship and either V Ships Cyprus whose
principal office is at V. Ships House, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ A/S. whose principal office is at ▇▇▇▇▇▇▇
▇▇▇▇▇▇ House, ▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, or TESMA
Singapore Pte Ltd whose principal office is at ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇,
#▇▇-▇▇ Sembawang Kimtrans Logistics Centre, Singapore 597654,
Singapore, being the technical manager of the Ship or any other company
which the Lender may approve from time to time as the commercial and/or
technical manager of the Ship;
"ARACRUZ" means Aracruz Trading Ltd. a company incorporated and
existing under the laws of the ▇▇▇▇▇▇▇▇ Islands and having its
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, ▇▇▇▇▇▇▇▇ Islands, MH96960;
"ASSET COVER RATIO" means at any time, the ratio of:
(a) the aggregate of:
(i) the aggregate Market Values of the Ships then subject
to a Mortgage; and
(ii) the net realisable value of any additional security
previously provided under Clause 14 of this
Agreement; to
(b) the Loan;
"AVAILABILITY PERIOD" means the period commencing on the date of this
Agreement and ending on:
(a) 30 May 2005 (or such later date as the Lender may agree with
the Borrowers, such agreement not to be unreasonably withheld
by the Lender); or
(b) if earlier, the date on which the Commitment is fully
borrowed, cancelled or terminated;
"BAREBOAT CHARTER" means, each of the ▇▇▇▇▇▇ ▇▇▇▇▇ Bareboat Charter and
the GAS ICE Bareboat Charter, and in the plural means both of them;
"BAREBOAT CHARTERER" means, in the case of "▇▇▇▇▇▇ ▇▇▇▇▇", ▇▇▇▇▇ ▇▇▇▇▇
and, in the case of "GAS ICE", Finaval, and in the plural means both of
them;
"▇▇▇▇▇▇ ▇▇▇▇▇ BAREBOAT CHARTER" means the bareboat charterparty in
relation to "▇▇▇▇▇▇ ▇▇▇▇▇" dated 4 January 2005 and entered into
between Industrial as owner and ▇▇▇▇▇ ▇▇▇▇▇ as bareboat charterer;
"▇▇▇▇▇▇ ▇▇▇▇▇ BAREBOAT CHARTER PERIOD" means, the period during which
"▇▇▇▇▇▇ ▇▇▇▇▇" is operating under the ▇▇▇▇▇▇ ▇▇▇▇▇ Bareboat Charter;
4
"▇▇▇▇▇▇ ▇▇▇▇▇ MOA" means a memorandum of agreement dated 5 January 2005
and entered into between Maryse as seller and Industrial (as nominee of
Stealth) as buyer in relation to the sale and purchase of "▇▇▇▇▇▇
▇▇▇▇▇";
"▇▇▇▇▇▇ ▇▇▇▇▇ TRIPARTITE AGREEMENT" means the agreement dealing with
(inter alia) the operation of "▇▇▇▇▇▇ ▇▇▇▇▇" during the ▇▇▇▇▇▇ ▇▇▇▇▇
Bareboat Charter Period, made or to be made between (i) Industrial,
(ii) ▇▇▇▇▇ ▇▇▇▇▇ and (iii) the Lender, in such form as the Lender may
approve or require;
"BORROWERS" means, together, Matrix, Gaz, VCM, Geneve, Lpgone,
Semichalaus, Ventsplis, Pacific, Aracruz, Industrial and Stealthgas,
and in the singular means any of them; "BUSINESS DAY" means a day on
which banks are open in London, Piraeus, Rotterdam and, in respect of a
day on which a payment is required to be made under a Finance Document,
also in New York City;
"BUSINESS DAY" means a day in which banks are open in London, Piraeus,
Rotterdam and, in respect of a day on which payment is required to be
made under a Finance Document, also in New York City;
"BUYERS" means, together, Ventspils, Semichlaus, Aracruz and Industrial
in their capacity as the buyers of "GAS ARCTIC", "GAS ICE", "GAS
AMAZON" and "▇▇▇▇▇▇ ▇▇▇▇▇" respectively pursuant to the MOAs, and in
the singular means any of them;
"CHARTER" means, in relation to a Ship, any time charter or other
contract for its employment (other than the Bareboat Charter relative
to that Ship) for a term of at least 12 months, or capable of exceeding
12 months, whether or not already in existence at the date of this
Agreement, to be performed at any time during the Security Period;
"CHARTER ASSIGNMENT" means in relation to a Ship, a specific assignment
of the rights of the relevant Shipowner under any future Charter
pursuant to Clause 13.15 and any quarantee of such Charter, to be
executed by that Shipowner in favour of the Lender in such form as the
Lender may approve or require;
"COMMITMENT" means $54,000,000, as that amount may be reduced,
cancelled or terminated in accordance with this Agreement;
"CONFIRMATION" and "EARLY TERMINATION DATE", in relation to any
continuing Transaction, have the meanings given in the Master
Agreement;
"CONTRACTUAL CURRENCY" has the meaning given in Clause 20.4;
"DEBT TO VALUE RATIO" means, at any relevant time, the ratio of the
Loan to the aggregate Market Value of the Ships subject to a Mortgage
at that time;
"DEED OF COVENANT" means, in relation to each of "GAS EMPEROR", "GAS
ICE" and "GAS ARTIC", a deed of covenant collateral to the Mortgage
relating to that Ship executed or to be executed by the relevant
Shipowner in favour of the Lender in such form as the Lender may
approve or require and, in the plural, means all of them;
"DELIVERY DATE" means, in relation to a Ship, the date on which that
Ship is delivered to the relevant Buyer pursuant to the MOA relative to
that Ship;
"DOLLARS" and "$" means the lawful currency for the time being of the
United States of America;
"DRAWDOWN DATE" means, in relation to an Advance, the date requested by
the Borrowers for the Advance to be made, or (as the context requires)
the date on which the Advance is actually made;
5
"DRAWDOWN NOTICE" means a notice in the form set out in Schedule 1 (or
in any other form which the Lender approves or reasonably requires);
"EARNINGS" means, in relation to a Ship, all moneys whatsoever which
are now, or later become, payable (actually or contingently) to the
Shipowner owning the Ship and which arise out of the use or operation
of the Ship, including (but not limited to):
(a) all freight, hire and passage moneys, compensation payable to
the Shipowner owning the Ship in the event of requisition of
the Ship for hire, remuneration for salvage and towage
services, demurrage and detention moneys and damages for
breach (or payments for variation or termination) of any
charterparty or other contract for the employment of the Ship;
(b) all moneys which are at any time payable under Insurances in
respect of loss of earnings; and
(c) if and whenever the Ship is employed on terms whereby any
moneys falling within paragraphs (a) or (b) are pooled or
shared with any other person, that proportion of the net
receipts of the relevant pooling or sharing arrangement which
is attributable to the Ship;
"EARNINGS ACCOUNT" means an account in the joint names of the Borrowers
with the Lender in Rotterdam designated "Matirx Gas Trading Ltd. c.s. -
Earnings Account" and having account number ▇▇.▇▇.▇▇.▇▇▇, or any other
account (with that or another office of the Lender) which is designated
by the Lender as the Earnings Account for the purposes of this
Agreement;
"EAST GATE" means East Gate Shipping Limited, a company incorporated
and existing under the laws of Hong Kong and having its registered
office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ P.O. Box 2147, 1291 Copenhagen K,
Denmark;
"ENVIRONMENTAL CLAIM" means:
(a) any claim by any governmental, judicial or regulatory
authority which arises out of an Environmental Incident or an
alleged Environmental Incident or which relates to any
Environmental Law; or
(b) any claim by any other person which relates to an
Environmental Incident or to an alleged Environmental
Incident,
and "CLAIM" means a claim for damages, compensation, fines, penalties
or any other payment of any kind, whether or not similar to the
foregoing; an order or direction to take, or not to take, certain
action or to desist from or suspend certain action; and any form of
enforcement or regulatory action, including the arrest or attachment of
any asset;
"ENVIRONMENTAL INCIDENT" means:
(a) any release of Environmentally Sensitive Material from a Ship;
or
(b) any incident in which Environmentally Sensitive Material is
released from a vessel other than a Ship and which involves a
collision between a Ship and such other vessel or some other
incident of navigation or operation, in either case, in
connection with which a Ship is actually or potentially liable
to be arrested, attached, detained or injuncted and/or a Ship
and/or any Vessel and/or any operator or manager of the Ship
is at fault or allegedly at fault or otherwise liable to any
legal or administrative action; or
6
(c) any other incident in which Environmentally Sensitive Material
is released otherwise than from a Ship and in connection with
which a Ship is actually or potentially liable to be arrested
and/or where any Vessel and/or any operator or manager of a
Ship is at fault or allegedly at fault or otherwise liable to
any legal or administrative action;
"ENVIRONMENTAL LAW" means any law relating to pollution or protection
of the environment, to the carriage of Environmentally Sensitive
Material or to actual or threatened releases of Environmentally
Sensitive Material;
"ENVIRONMENTALLY SENSITIVE MATERIAL" means oil, oil products and any
other substance (including any chemical, gas or other hazardous or
noxious substance) which is (or is capable of being or becoming)
polluting, toxic or hazardous;
"EVENT OF DEFAULT" means any of the events or circumstances described
in Clause 18.1;
"EXCESS CASH FLOW" means, in relation to each financial year of the
Holding Company, an amount equal to the actual aggregate gross
operating revenues of all the Ships during that financial year (or
budgeted gross operating revenue in the case of the final month of that
financial year) less the aggregate of:
(a) the amount of principal and interest payable during that
financial year in accordance with the terms of this Agreement;
and
(b) actual gross operating expenses of all the Ships during that
financial year (or budgeted gross operating expenses in the
case of the final month of that financial year) including (for
the avoidance of doubt) expenditure necessarily incurred in
that financial year by the Shipowners in operating, insuring,
maintaining, repairing and generally trading the Ships (but
excluding any exceptional and extraordinary expenses);
"▇▇▇▇▇ ▇▇▇▇▇" means ▇▇▇▇▇ ▇▇▇▇▇ Ltd., a company incorporated and
existing under the laws of Hong Kong;
"FINANCE DOCUMENTS" means:
(a) this Agreement;
(b) the Master Agreement;
(c) the Mortgages;
(d) the Deeds of Covenant;
(e) the General Assignments;
(f) the Master Agreement Assignment;
(g) the Accounts Security Deed;
(h) the Tripartite Agreements;
(i) the GAS ARCTIC Charter Assignment;
(j) any Charter Assignment; and
7
(k) any other document (whether creating a Security Interest or
not) which is executed at any time by any Borrower or any
other person as security for, or to establish any form of
subordination or priorities arrangement in relation to, any
amount payable to the Lender under this Agreement or any of
the other documents referred to in this definition;
"FINANCIAL INDEBTEDNESS" means, in relation to a person (the "DEBTOR"),
a liability of the debtor:
(a) for principal, interest or any other sum payable in respect of
any moneys borrowed or raised by the debtor;
(b) under any loan stock, bond, note or other security issued by
the debtor;
(c) under any acceptance credit, guarantee or letter of credit
facility made available to the debtor;
(d) under a financial lease, a deferred purchase consideration
arrangement or any other agreement having the commercial
effect of a borrowing or raising of money by the debtor;
(e) under any foreign exchange transaction any interest or
currency swap or any other kind of derivative transaction
entered into by the debtor or, if the agreement under which
any such transaction is entered into requires netting of
mutual liabilities, the liability of the debtor for the net
amount; or
(f) under a guarantee, indemnity or similar obligation entered
into by the debtor in respect of a liability of another person
which would fall within (a) to (e) if the references to the
debtor referred to the other person;
"FINAVAL" means Finaval S.P.A., a company incorporated under the laws
of Italy and having its registered office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇;
"GAS AMAZON MOA" means a memorandum of agreement dated 13 January 2005
and entered into between East Gate as seller and Aracruz as buyer in
relation to the sale and purchase of "GAS AMAZON";
"GAS ARCTIC CHARTER ASSIGNMENT" means in relation to the GAS ARCTIC
Time Charterparty, a specific assignment of the rights of Ventspils
under the GAS ARCTIC Time Charterparty, to be executed by Ventspils in
favour of the Lender in such form as the Lender may approve or require;
"GAS ARCTIC MOA" means a memorandum of agreement dated 10 January 2005
and entered into between Transporti as seller and Ventspils as buyer in
relation to the sale and purchase of "GAS ARCTIC";
"GAS ARCTIC TIME CHARTERPARTY" means the time charterparty entered or
to be entered into between Ventspils as owner and Finaval as charterer
in relation to "GAS ARCTIC", in such form as the Lender may approve or
require;
"GAS ICE BAREBOAT CHARTER" means the bareboat charterparty in relation
to "GAS ICE" dated 23 February 2005 and entered into between Semichlaus
as owner and Finaval as bareboat charterer;
"GAS ICE BAREBOAT CHARTER PERIOD" means the period during which "GAS
ICE" is operating under the GAS ICE Bareboat Charter;
8
"GAS ICE MOA" means a memorandum of agreement dated 10 January 2005 and
entered into between Transporti as seller and Semichlaus as buyer in
relation to the sale and purchase of "GAS ICE";
"GAS ICE TRIPARTITE AGREEMENT" means an agreement dealing with (inter
alia) the operation of "GAS ICE" during the GAS ICE Bareboat Charter
Period, made or to be made between (i) Semichlaus, (ii) Finaval and
(iii) the Lender, in such form as the Lender may approve or require;
"GAZ" means Gaz de Brazil Inc., a company incorporated and existing
under the laws of the ▇▇▇▇▇▇▇▇ Islands and having its registered office
is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960;
"GENERAL ASSIGNMENT" means, in relation to each Ship, a general
assignment of the Earnings, the Insurances and any Requisition
Compensation of that Ship, in such form as the Lender may approve or
require, and in the plural means all of them;
"GENEVE" means Geneve Butane Inc., a company incorporated and existing
under the laws of the ▇▇▇▇▇▇▇▇ Islands and having its registered office
is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960;
"GROUP" means the Holding Company and its subsidiaries (whether direct
or indirect and including, but not limited to, the Borrowers) from time
to time during the Security Period and "member of the Group" shall be
construed accordingly;
"HOLDING COMPANY" means Stealthgas in its capacity as ultimate
beneficial owner of each of the other Borrowers;
"INDUSTRIAL" means Industrial Materials Inc., a company incorporated
and existing under the laws of the ▇▇▇▇▇▇▇▇ Islands and having its
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, ▇▇▇▇▇▇▇▇ Islands, MH96960;
"INSURANCES" means, in relation to a Ship:
(a) all policies and contracts of insurance, including entries of
the Ship in any protection and indemnity or war risks
association, which are effected in respect of the Ship, her
Earnings or otherwise in relation to her; and
(b) all rights and other assets relating to, or derived from, any
of the foregoing, including any rights to a return of a
premium;
"INTEREST PERIOD" means a period determined in accordance with
Clause 5;
"ISM CODE" means, in relation to its application to each Borrower, its
Ship and its operation:
(a) The International Management Code for the Safe Operation of
Ships and for Pollution Prevention', currently known or
referred to as the ISM Code', adopted by the Assembly of the
International Maritime Organisation by Resolution A.741(18) on
4 November 1993 and incorporated on 19 May 1994 into chapter
IX of the International Convention for the Safety of Life at
Sea 1974 (SOLAS 1974); and
(b) all further resolutions, circulars, codes, guidelines,
regulations and recommendations which are now or in the future
issued by or on behalf of the
9
International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including
without limitation, the 'Guidelines on implementation or
administering of the International Safety Management (ISM)
Code by Administrations' produced by the International
Maritime Organisations pursuant to Resolution A.788(19)
adopted on 25 November 1995,
as the same may be amended, supplemented or replaced from time to time;
"ISM CODE DOCUMENTATION" includes:
(a) the document of compliance (DOC) and safety management
certificate (SMC) issued pursuant to the ISM Code in relation
to each Ship within the periods specified by the ISM Code; and
(b) all other documents and data which are relevant to the ISM SMS
and its implementation and verification which the Lender may
require; and
(c) any other documents which are prepared or which are otherwise
relevant to establish and maintain a Ship's or a Shipowner's
compliance with the ISM Code which the Lender may require;
"ISM SMS" means the safety management system for each Ship which is
required to be developed, implemented and maintained under the ISM
Code;
"LENDER" means Fortis Bank (Netherland) N.V., acting through its branch
at ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (or through
another branch notified to the Borrower under Clause 25.6) or its
successor or assign;
"▇▇▇▇▇▇▇▇▇" meand ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ A/S, a company incorporated in
Denmark and having its registered office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
Box 2147, 1291 Copenhagen K, Denmark;
"LIBOR" means, for an Interest Period:
(a) the rate per annum equal to the offered quotation for deposits
in Dollars for a period equal to, or as near as possible equal
to, the relevant Interest Period which appears on Telerate
Page 3750 at or about 11.00 a.m. (London time) on the second
Business Day prior to the commencement of that Interest Period
(and, for the purposes of this Agreement, "Telerate Page 3750"
means the display designated as "Page 3750" on the Telerate
Service or such other page as may replace Page 3750 on that
service for the purpose of displaying rates comparable to that
rate) or on such other service as may be nominated by the
British Bankers' Association as the information vendor for the
purpose of displaying the British Bankers' Association
Interest Settlement Rates for Dollars; or
(b) in relation to an Interest Period of any other duration or if
no rate is quoted on Telerate Page 3750, the rate per annum
determined by the Lender to be the arithmetic mean (rounded
upwards, if necessary, to the nearest one-sixteenth of one per
cent.) of the rates per annum determined by the Lender as the
rate at which deposits in Dollars are offered to the Lender by
leading banks in the London Interbank Market at the Lender's
request at or about 11.00 a.m. (Rotterdam time) on the
Quotation Date for that Interest Period for a period equal to
that Interest Period and for delivery on the first Business
Day of it;
10
"LPGONE" means Lpgone Ltd., a company incorporated and existing under
the laws of the ▇▇▇▇▇▇▇▇ Islands and having its registered office is at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇
Islands, MH96960;
"LOAN" means the principal amount for the time being outstanding under
this Agreement;
"MAJOR CASUALTY" means, in relation to a Ship, any casualty to the Ship
in respect of which the claim or the aggregate of the claims against
all insurers, before adjustment for any relevant franchise or
deductible, exceeds $1,000,000 or the equivalent in any other currency;
"MARGIN" means, at any time when the Debt to Value Ratio is:
(a) equal to or lower than 60 per cent., 0.9 per cent. per annum;
or
(b) higher than 60 per cent. and lower or equal to 70 per cent.,
0.975 per cent. per annum; or
(b) higher than 70 per cent., 1.050 per cent per annum;
"MARKET VALUE" means the market value of a Ship at any date determined
in accordance with Clause 14.3;
"MARYSE" means Maryse Shipping Limited, a company incorporated and
existing under the laws of the Republic of Liberia and having its
registered address at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
"MASTER AGREEMENT" means the master agreement (on the 1992 ISDA
(Multicurrency - Crossborder) form) made or to be made between the
Borrowers and the Lender and includes all Transactions from time to
time entered into and Confirmations from time to time exchanged
thereunder;
"MASTER AGREEMENT ASSIGNMENT" means the assignment of the Master
Agreement in favour of the Lender executed or to be executed by the
Borrowers, in such form as the Lender may approve or require;
"MATRIX" means Matrix Gas Trading Ltd. a company incorporated and
existing under the laws of the ▇▇▇▇▇▇▇▇ Islands and having its
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, The ▇▇▇▇▇▇▇▇ Islands, MH96960;
"MOAS" means, together, the "GAS ARCTIC" MOA, the "GAS ICE" MOA, the
"GAS AMAZON" MOA and the "▇▇▇▇▇▇ ▇▇▇▇▇" MOA, and in the singular, means
any of them;
"MORTGAGE" means:
(a) in the case of "GAS EMPEROR", a first priority Cypriot
mortgage executed or to be executed by Pacific in favour of
the Lender;
(b) in the case of "GAS ICE", a first priority Maltese mortgage
executed or to be executed by Semichlaus in favour of the
Lender;
(c) in the case of "GAS ARCTIC", a first priority Maltese mortgage
executed or to be executed by Ventspils in favour of the
Lender;
11
(d) in the case of "▇▇▇▇▇▇ ▇▇▇▇▇", a first preferred Panamanian
mortgage, to be executed by Industrial in favour of the
Lender;
(e) in the case of "GAS COURCHEVAL", a first preferred ▇▇▇▇▇▇▇▇
Islands mortgage, to be executed by Geneve in favour of the
Lender;
(f) in the case of "GAS PRODIGY", a first preferred ▇▇▇▇▇▇▇▇
Islands mortgage, to be executed by ▇▇▇ in favour of the
Lender;
(g) in the case of "GAS SHANGHAI", a first preferred ▇▇▇▇▇▇▇▇
Islands mortgage, to be executed by ▇▇▇▇▇▇ in favour of the
Lender;
(h) in the case of "GAS PROPHET", a first preferred ▇▇▇▇▇▇▇▇
Islands mortgage, to be executed by VCM in favour of the
Lender;
(i) in the case of "GAS TINY", a first preferred ▇▇▇▇▇▇▇▇ Islands
mortgage, to be executed by ▇▇▇▇▇▇ in favour of the Lender;
(j) in the case of "GAS AMAZON", a first preferred ▇▇▇▇▇▇▇▇
Islands mortgage, to be executed by ▇▇▇▇▇▇▇ in favour of the
Lender,
each to be in such form as the Lender may approve or require and in the
singular means any of them;
"NEGOTIATION PERIOD" has the meaning given in Clause 4.6;
"PACIFIC" means Pacific Gases Ltd. a company incorporated and existing
under the laws of Malta and having its registered office is at ▇▇▇/▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇;
"PAYMENT CURRENCY" has the meaning given in Clause 20.4;
"PERMITTED SECURITY INTERESTS" means:
(a) Security Interests created by the Finance Documents;
(b) liens for unpaid master's and crew's wages in accordance with
usual maritime practice;
(c) liens for salvage;
(d) liens arising by operation of law for not more than 2 months'
prepaid hire under any charter in relation to a Ship not
prohibited by this Agreement;
(e) liens for master's disbursements incurred in the ordinary
course of trading and any other lien arising by operation of
law or otherwise in the ordinary course of the operation,
repair or maintenance of a Ship, provided such liens do not
secure amounts more than 30 days overdue (unless the overdue
amount is being contested by the Borrower in good faith by
appropriate steps) and subject, in the case of liens for
repair or maintenance, to Clause 13.12(g);
(f) any Security Interest created in favour of a plaintiff or
defendant in any proceedings or arbitration as security for
costs and expenses where the Borrower is actively prosecuting
or defending such proceedings or arbitration in good faith;
and
12
(g) Security Interests arising by operation of law in respect of
taxes which are not overdue for payment or in respect of taxes
being contested in good faith by appropriate steps and in
respect of which appropriate reserves have been made;
"PERTINENT DOCUMENT" means:
(a) any Finance Document;
(b) any policy or contract of insurance contemplated by or
referred to in Clause 12 or any other provision of this
Agreement or another Finance Document;
(c) any other document contemplated by or referred to in any
Finance Document; and
(d) any document which has been or is at any time sent by or to
the Lender in contemplation of or in connection with any
Finance Document or any policy, contract or document falling
within paragraphs (b) or (c);
"PERTINENT JURISDICTION", in relation to a company, means:
(a) England and Wales;
(b) the country under the laws of which the company is
incorporated or formed;
(c) a country in which the company's central management and
control is or has recently been exercised;
(d) a country in which the overall net income of the company is
subject to corporation tax, income tax or any similar tax;
(e) a country in which assets of the company (other than
securities issued by, or loans to, related companies) having a
substantial value are situated, in which the company maintains
a permanent place of business, or in which a Security Interest
created by the company must or should be registered in order
to ensure its validity or priority; and
(f) a country the courts of which have jurisdiction to make a
winding up, administration or similar order in relation to the
company or which would have such jurisdiction if their
assistance were requested by the courts of a country referred
to in paragraphs (b) or (c) above;
"PERTINENT MATTER" means:
(a) any transaction or matter contemplated by, arising out of, or
in connection with a Pertinent Document; or
(b) any statement relating to a Pertinent Document or to a
transaction or matter falling within paragraph (a),
and covers any such transaction, matter or statement, whether entered
into, arising or made at any time before the signing of this Agreement
or on or at any time after that signing;
"POTENTIAL EVENT OF DEFAULT" means an event or circumstance which, with
the giving of any notice, the lapse of time, a determination of the
Lender and/or the satisfaction of any other condition, would constitute
an Event of Default;
13
"PURCHASE PRICE" means, in relation to a Ship, the aggregate amount
paid or to be paid by the relevant Shipowner to the seller of the Ship
pursuant to the memorandum of agreement which relates to the sale and
purchase of that Ship;
"QUOTATION DATE" means, in relation to any Interest Period (or any
other period for which an interest rate is to be determined under any
provision of a Finance Document), the day on which quotations would
ordinarily be given by leading banks in the London Interbank Market for
deposits in the currency in relation to which such rate is to be
determined for delivery on the first day of that Interest Period or
other period;
"RELEVANT PERSON" has the meaning given in Clause 18.7;
"REPAYMENT DATE" means a date on which a repayment is required to be
made under Clause 7;
"REQUISITION COMPENSATION" includes all compensation or other moneys
payable by reason of any act or event such as is referred to in
paragraph (b) of the definition of "Total Loss";
"RETENTION ACCOUNT" means an account in the joint names of the
Borrowers with the Lender in Rotterdam designated "Stealthgas Inc. -
Retention Account" and having account number ▇▇.▇▇.▇▇.▇▇▇, or any other
account (with that or another office of the Lender) which is designated
by the Lender as the Retention Account for the purposes of this
Agreement;
"SEMICHLAUS" means Semichlaus Exports Ltd., a company incorporated and
existing under the laws of Malta and having its registered office is at
▇▇▇/▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇;
"SECURED LIABILITIES" means all liabilities which the Borrowers, the
Security Parties or any of them have, at the date of this Agreement or
at any later time or times, under or in connection with any Finance
Document or any judgment relating to any Finance Document; and for this
purpose, there shall be disregarded any total or partial discharge of
these liabilities, or variation of their terms, which is effected by,
or in connection with, any bankruptcy, liquidation, arrangement or
other procedure under the insolvency laws of any country;
"SECURITY INTEREST" means:
(a) a mortgage, charge (whether fixed or floating) or pledge, any
maritime or other lien or any other security interest of any
kind;
(b) the security rights of a plaintiff under an action in rem; and
(c) any arrangement entered into by a person (A) the effect of
which is to place another person (B) in a position which is
similar, in economic terms, to the position in which B would
have been had he held a security interest over an asset of A;
but this paragraph (c) does not apply to a right of set off or
combination of accounts conferred by the standard terms of
business of a bank or financial institution;
"SECURITY PARTY" means each Shareholder and any other person (except
the Lender) who, as a surety or mortgagor, as a party to any
subordination or priorities arrangement, or in any similar capacity,
executes a document falling within the last paragraph of the definition
of "Finance Documents";
"SECURITY PERIOD" means the period commencing on the date of this
Agreement and ending on the date on which the Lender notifies the
Borrowers and the Security Parties that:
14
(a) all amounts which have become due for payment by any Borrower
or any Security Party under the Finance Documents have been
paid;
(b) no amount is owing or has accrued (without yet having become
due for payment) under any Finance Document;
(c) neither any Borrower nor any Security Party has any future or
contingent liability under Clause 19, 20, or 21 or any other
provision of this Agreement or another Finance Document; and
(d) the Lender does not consider that there is a significant risk
that any payment or transaction under a Finance Document would
be set aside, or would have to be reversed or adjusted, in any
present or possible future bankruptcy of a Borrower or a
Security Party or in any present or possible future proceeding
relating to a Finance Document or any asset covered (or
previously covered) by a Security Interest created by a
Finance Document;
"SELLER" means:
(a) in the case of "GAS ICE", Transporti;
(b) in the case of "GAS ARCTIC", Transporti;
(c) in the case of "GAS AMAZON", East Gate; and
(d) in the case of "▇▇▇▇▇▇ ▇▇▇▇▇", ▇▇▇▇▇▇,
and in the plural means all of them;
"SEMICHLAUS" means Semichlaus Exports Ltd., a company incorporated and
existing under the laws of Malta having its registered office at ▇▇▇/▇
▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇, ▇▇▇▇▇;
"SHAREHOLDER" means, in relation to a Borrower, the company or
individual referred to in Schedule 2 as the holder of all, or a part of
the issued share capital of that Borrower;
"SHIPOWNERS" means, together, Matrix, Gaz, VCM, Geneve, Lpgone,
Semichlaus, Ventspils, Pacific, Aracruz and Industrial, and in the
singular means any of them;
"SHIPS" means, together:
(a) the 1995-built LPG Carrier of 5,013 cubic metres registered
under Cypriot flag in the ownership of Pacific with the name
"GAS EMPEROR" ("GAS EMPEROR");
(b) the 1991-built LPG Carrier of 3,436 cubic metres currently
registered under Italilan flag in the ownership of Transporti
with the name CAP ▇▇▇▇, to be sold to Semichlaus pursuant to
the GAS ICE MOA and registered under Maltese flag in the
ownership of Semichlaus with the name "GAS ICE" ("GAS ICE");
(c) the 1992-built LPG Carrier of 3,436 cubic metres currently
registered under Italian flag in the ownership of Trasporti
with the name "CAP ▇▇▇▇▇▇▇▇", to be sold to Ventspils pursuant
to the GAS ARCTIC MOA and registered under Panamanian flag in
the ownership of Ventspils with the name "GAS ARCTIC" ("GAS
ARCTIC");
15
(k) the 1994-built LPG Carrier of 5,012 cubic metres currently
registered under Panmanian flag in the ownership of Maryse
with the name "▇▇▇▇▇▇ ▇▇▇▇▇" , to be sold to Industrial as the
nominee of Stealth pursuant to the ▇▇▇▇▇▇ ▇▇▇▇▇ MOA and
registered under Maltese flag in the ownership of Industrial
with the name "▇▇▇▇▇▇ ▇▇▇▇▇" ("▇▇▇▇▇▇ ▇▇▇▇▇");
(l) the 1991-built LPG Carrier of 4,109 cubic metres registered
under ▇▇▇▇▇▇▇▇ Islands flag in the ownership of Geneve with
the name of "GAS COURCHEVAL" ("GAS COURCHEVAL");
(m) the 1995-built LPG Carrier of 3,000 cubic metres registered
under ▇▇▇▇▇▇▇▇ Islands flag in the ownership of Gaz with the
name "GAS PRODOGY" ("GAS PRODIGY");
(n) the 1999-built LPG Carrier of 3,526 cubic metres registered
under ▇▇▇▇▇▇▇▇ Islands flag in the ownership of Matrix with
the name "GAS SHANGHAI" ("GAS SHANGHAI");
(o) the 1996-built LPG Carrier of 3,556 cubic metres registered
under ▇▇▇▇▇▇▇▇ Islands flag in the ownership of VCM with the
name "GAS PROPHET" ("GAS PROPHET");
(p) the 1991-built LPG Carrier of 1,320 cubic metres registered
under ▇▇▇▇▇▇▇▇ Islands flag in the ownership of Lpgone with
the name "GAS TINY" ("GAS TINY");
(q) the 1992-built LPG Carrier of 6,562 cubic metres currently
registered under Hong Kong flag in the ownership of East Gate
with the name "KAISA", to be sold to Aracruz pursuant to the
GAS AMAZON MOA and registered under ▇▇▇▇▇▇▇▇ Islands flag in
the ownership of Aracruz with the name "GAS AMAZON" ("GAS
AMAZON"),
and, in the singular, means any of them;
"STEALTH" means Stealth Maritime Corporation S.A., a company
incorporated and existing under the laws of the Republic of Liberia and
having its registered office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
"STEALTHGAS" means Stealthgas Inc., a company incorporated and existing
under the laws of the ▇▇▇▇▇▇▇▇ Islands and having its registered office
at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, the
▇▇▇▇▇▇▇▇ Islands, MH96960;
"SWAP EXPOSURE" means, as at any relevant date the aggregate net amount
in Dollars which would be payable by the Borrowers to the Lender under
(and calculated in accordance with) section 6(e) (Payments on Early
Termination) of the Master Agreement if an Early Termination Date had
occurred on the relevant date in relation to all continuing
Transactions entered into between the Borrowers and the Lender;
"TOTAL ASSETS" means, at any time, the total assets as shown in the
most recent Accounting Information adjusted to reflect the market value
of all vessels owned by members of the Group, as determined by
valuations in accordance with Clause 14.4 as at any relevant date;
"TOTAL DEBT" means, at any time, Total Liabilities less Total
Shareholders' Equity;
"TOTAL LIABILITIES" and "TOTAL SHAREHOLDER'S EQUITY" means, as at any
date, the total
16
liabilities (including, for the avoidance of doubt, total shareholder's
equity) and total shareholder's equity respectively of the Group
determined in accordance and as shown in the most recent Accounting
Information;
"TOTAL LOSS" means in relation to a Ship:
(a) actual, constructive, compromised, agreed or arranged total
loss of the Ship;
(b) any expropriation, confiscation, requisition or acquisition of
the Ship, whether for full consideration, a consideration less
than its proper value, a nominal consideration or without any
consideration, which is effected by any government or official
authority or by any person or persons claiming to be or to
represent a government or official authority (excluding a
requisition for hire for a fixed period not exceeding 1 year
without any right to an extension) unless it is within 1 month
redelivered to the full control of the Shipowner owning the
Ship;
(c) any arrest, capture, seizure or detention of the Ship
(including any hijacking or theft) unless it is within 30 days
redelivered to the full control of the Shipowner owning the
Ship;
"TOTAL LOSS DATE" means in relation to a Ship:
(a) in the case of an actual loss of the Ship, the date on which
it occurred or, if that is unknown, the date when the Ship was
last heard of;
(b) in the case of a constructive, compromised, agreed or arranged
total loss of the Ship, the earliest of:
(i) the date on which a notice of abandonment is given to
the insurers; and
(ii) the date of any compromise, arrangement or agreement
made by or on behalf of the Shipowner owning the Ship
with the Ship's insurers in which the insurers agree
to treat the Ship as a total loss; and
(c) in the case of any other type of total loss, on the date (or
the most likely date) on which it appears to the Lender that
the event constituting the total loss occurred;
"TRANSPORTI" means Transporti Petrolchimici TPC S.p.A., a company
incorporated and existing under the laws of Italy and having its
registered address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇/▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇;
"TRANSACTION" has the meaning given in the Master Agreement;
"TRIPARTITE AGREEMENTS" means, together the ▇▇▇▇▇▇ ▇▇▇▇▇ Tripartite
Agreement and the GAS ICE Tripartite Agreement, and in the singular
means either of them;
"VCM" means VCM Trading Ltd., a company incorporated and existing under
the laws of the ▇▇▇▇▇▇▇▇ Islands and having its registered office is at
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇
Islands, MH96960; and
"VENTSPILS" means Ventspils Gases Ltd., a company incorporated and
existing under the laws of Malta and having its registered office is at
▇▇▇/▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
1.2 CONSTRUCTION OF CERTAIN TERMS. In this Agreement:
"APPROVED" means, for the purposes of Clause 12, approved in writing by
the Lender;
17
"ASSET" includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or
other payment;
"COMPANY" includes any partnership, joint venture and unincorporated
association;
"CONSENT" includes an authorisation, consent, approval, resolution,
licence, exemption, filing, registration, notarisation and
legalisation;
"CONTINGENT LIABILITY" means a liability which is not certain to arise
and/or the amount of which remains unascertained;
"DOCUMENT" includes a deed; also a letter or fax;
"EXCESS RISKS" means, in relation to a Ship, the proportion of claims
for general average, salvage and salvage charges not recoverable under
the hull and machinery policies in respect of the Ship in consequence
of its insured value being less than the value at which the Ship is
assessed for the purpose of such claims;
"EXPENSE" means any kind of cost, charge or expense (including all
legal costs, charges and expenses) and any applicable value added or
other tax;
"LAW" includes any order or decree, any form of delegated legislation,
any treaty or international convention and any regulation or resolution
of the Council of the European Union, the European Commission, the
United Nations or its Security Council;
"LEGAL OR ADMINISTRATIVE ACTION" means any legal proceeding or
arbitration and any administrative or regulatory action or
investigation;
"LIABILITY" includes every kind of debt or liability (present or
future, certain or contingent), whether incurred as principal or surety
or otherwise;
"MONTHS" shall be construed in accordance with Clause 1.3;
"OBLIGATORY INSURANCES" means, in relation to a Ship, all insurances
effected, or which the Borrower owning the Ship is obliged to effect,
under Clause 12 or any other provision of this Agreement or another
Finance Document;
"PARENT COMPANY" has the meaning given in Clause 1.4;
"PERSON" includes any company; any state, political sub-division of a
state and local or municipal authority; and any international
organisation;
"POLICY", in relation to any insurance, includes a slip, cover note,
certificate of entry or other document evidencing the contract of
insurance or its terms;
"PROTECTION AND INDEMNITY RISKS" means the usual risks covered by a
protection and indemnity association managed in London, including
pollution risks and the proportion (if any) of any sums payable to any
other person or persons in case of collision which are not recoverable
under the hull and machinery policies by reason of the incorporation in
them of clause 1 of the Institute Time Clauses (Hulls)(1/10/83) or
clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the
Institute Amended Running Down Clause (1/10/71) or any equivalent
provision;
"REGULATION" includes any regulation, rule, official directive, request
or guideline whether or not having the force of law of any
governmental, intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or
organisation;
18
"SUBSIDIARY" has the meaning given in Clause 1.4;
"TAX" includes any present or future tax, duty, impost, levy or charge
of any kind which is imposed by any state, any political sub-division
of a state or any local or municipal authority (including any such
imposed in connection with exchange controls), and any connected
penalty, interest or fine; and
"WAR RISKS" includes the risk of mines and all risks excluded by clause
23 of the Institute Time Clauses (Hulls)(1/10/83) or clause 24 of the
Institute Time Clauses (Hulls)(1/11/1995).
1.3 MEANING OF "MONTH". A period of one or more "MONTHS" ends on the day in
the relevant calendar month numerically corresponding to the day of the
calendar month on which the period started ("THE NUMERICALLY
CORRESPONDING DAY"), but:
(a) on the Business Day following the numerically corresponding
day if the numerically corresponding day is not a Business Day
or, if there is no later Business Day in the same calendar
month, on the Business Day preceding the numerically
corresponding day; or
(b) on the last Business Day in the relevant calendar month, if
the period started on the last Business Day in a calendar
month or if the last calendar month of the period has no
numerically corresponding days,
and "MONTH" and "MONTHLY" shall be construed accordingly.
1.4 MEANING OF "SUBSIDIARY". A company (S) is a subsidiary of another
company (P) if:
(a) a majority of the issued shares in S (or a majority of the
issued shares in S which carry unlimited rights to capital and
income distributions) are directly owned by P or are
indirectly attributable to P; or
(b) P has direct or indirect control over a majority of the voting
rights attaching to the issued shares of S; or
(c) P has the direct or indirect power to appoint or remove a
majority of the directors of S; or
(d) P otherwise has the direct or indirect power to ensure that
the affairs of S are conducted in accordance with the wishes
of P,
and any company of which S is a subsidiary is a parent company
of S.
1.5 GENERAL INTERPRETATION. In this Agreement:
(a) references in Clause 1.1 to a Finance Document or any other
document being in the form of a particular appendix include
references to that form with any modifications to that form
which the Lender approves or reasonably requires;
(b) references to, or to a provision of, a Finance Document or any
other document are references to it as amended or
supplemented, whether before the date of this Agreement or
otherwise;
(c) references to, or to a provision of, any law include any
amendment, extension, re-enactment or replacement, whether
made before the date of this Agreement or otherwise;
(d) words denoting the singular number shall include the plural
and vice versa; and
19
(e) Clauses 1.1 to 1.5 apply unless the contrary intention
appears.
1.6 HEADINGS. In interpreting a Finance Document or any provision of a
Finance Document, all clause, sub-clause and other headings in that and
any other Finance Document shall be entirely disregarded.
2 FACILITY
2.1 AMOUNT OF FACILITY. Subject to the other provisions of this Agreement,
the Lender shall make a loan facility of up to the lesser of (a)
$54,000,000 and (b) 62 per cent. of the lesser of (i) the aggregate
Market Value of the Ships and (ii) the aggregate Purchase Price of the
Ships, available to the Borrowers in up to 10 Advances.
2.2 PURPOSE OF ADVANCES. The Borrowers undertake with the Lender to use
each Advance only for the purpose stated in the preamble to this
Agreement.
3 DRAWDOWN
3.1 REQUEST FOR ADVANCE. Subject to the following conditions, the Borrowers
may request an Advance or Advances to be made by ensuring that the
Lender receives a completed Drawdown Notice not later than 11.00 a.m.
(Rotterdam time) 2 Business Days prior to the intended Drawdown Date.
3.2 AVAILABILITY. The conditions referred to in Clause 3.1 are that:
(a) a Drawdown Date has to be a Business Day during the
Availability Period;
(b) each Advance shall relate to a different Ship than any
previous Advance drawn down;
(c) no Advance shall exceed 62 per cent. of the lesser of (i) the
Market Value of the Ship to which it relates and (ii) the
Purchase Price of that Ship; and
(d) the aggregate amount of the Advances shall not exceed the
Commitment.
3.3 DRAWDOWN NOTICE IRREVOCABLE. A Drawdown Notice must be signed by a
director or other authorised person of a Borrower; and once served, a
Drawdown Notice cannot be revoked without the prior consent of the
Lender.
3.4 DISBURSEMENT OF ADVANCE. Subject to the provisions of this Agreement,
the Lender shall on each Drawdown Date make available the relevant
Advance to the Borrowers; and payment to the Borrowers shall be made to
the account which the Borrowers specify in the relevant Drawdown
Notice.
3.5 DISBURSEMENT OF ADVANCE TO THIRD PARTY. The payment of an Advance by
the Lender under Clause 3.4 shall constitute the making of the Advance
and the Borrowers shall at that time become indebted, as principal and
direct obligors, to the Lender in an amount equal to that Advance.
4 INTEREST
4.1 PAYMENT OF NORMAL INTEREST. Subject to the provisions of this
Agreement, interest on the Loan in respect of each Interest Period
shall be paid by the Borrowers on the last day of that Interest Period.
20
4.2 NORMAL RATE OF INTEREST. Subject to the provisions of this Agreement,
the rate of interest on the Loan in respect of an Interest Period shall
be the aggregate of the Margin and LIBOR for that Interest Period.
4.3 PAYMENT OF ACCRUED INTEREST. In the case of an Interest Period longer
than 3 months, accrued interest shall be paid every 3 months during
that Interest Period and on the last day of that Interest Period.
4.4 NOTIFICATION OF MARKET DISRUPTION. The Lender shall promptly notify the
Borrowers if no rate is quoted on Telerate Page 3750 or if for any
reason the Lender is unable to obtain Dollars in the London Interbank
Market in order to fund the Loan (or any part of it) during any
Interest Period, stating the circumstances which have caused such
notice to be given.
4.5 SUSPENSION OF DRAWDOWN. If the Lender's notice under Clause 4.4 is
served before an Advance is made, the Lender's obligation to make the
Advance shall be suspended while the circumstances referred to in the
Lender's notice continue.
4.6 NEGOTIATION OF ALTERNATIVE RATE OF INTEREST. If the Lender's notice
under Clause 4.4 is served after an Advance is made, the Borrowers and
the Lender shall use reasonable endeavours to agree, within the 30 days
after the date on which the Lender serves its notice under Clause 4.4
(the "NEGOTIATION PERIOD"), an alternative interest rate or (as the
case may be) an alternative basis for the Lender to fund or continue to
fund the Loan during the Interest Period concerned.
4.7 APPLICATION OF AGREED ALTERNATIVE RATE OF INTEREST. Any alternative
interest rate or an alternative basis which is agreed during the
Negotiation Period shall take effect in accordance with the terms
agreed.
4.8 ALTERNATIVE RATE OF INTEREST IN ABSENCE OF AGREEMENT. If an alternative
interest rate or alternative basis is not agreed within the Negotiation
Period, and the relevant circumstances are continuing at the end of the
Negotiation Period, then the Lender shall set an interest period and
interest rate representing the cost of funding of the Lender in Dollars
or in any available currency of the Loan plus the applicable Margin;
and the procedure provided for by this Clause 4.8 shall be repeated if
the relevant circumstances are continuing at the end of the interest
period so set by the Lender.
4.9 NOTICE OF PREPAYMENT. If the Borrowers do not agree with an interest
rate set by the Lender under Clause 4.8, the Borrowers may give the
Lender not less than 10 Business Days' notice of their intention to
prepay at the end of the interest period set by the Lender.
4.10 PREPAYMENT. A notice under Clause 4.9 shall be irrevocable; and on the
last Business Day of the interest period set by the Lender, the
Borrowers shall prepay (without premium or penalty) the Loan, together
with accrued interest thereon at the applicable rate plus the Margin.
4.11 APPLICATION OF PREPAYMENT. The provisions of Clause 7 shall apply in
relation to the prepayment.
4.12 CALCULATION OF DEBT TO VALUE RATIO. The Lender shall calculate the Debt
to Value Ratio on (a) the earlier of (i) the date falling 3 months
after the Drawdown Date for the final Advance and (ii) 30 June 2005 and
(b) every 6 months thereafter (each a "REVIEW DATE") for the purposes
of calculating the Margin and shall advise the Borrowers in writing
within 10 Business Days of each Review Date of the Margin which will
apply for the 6-month period commencing on the relevant Review Date
PROVIDED THAT in respect of each Review Date other than the first
Review Date, the Lender shall only be obliged to
21
advise the Borrowers of the Margin which will apply for the 6-month
period commencing on the relevant Review Date if that ▇▇▇▇▇▇ will be
different to the Margin which applies immediately prior to the relevant
Review Date.
5 INTEREST PERIODS
5.1 COMMENCEMENT OF INTEREST PERIODS. The first Interest Period applicable
to an Advance shall commence on the Drawdown Date relative to that
Advance and each subsequent Interest Period shall commence on the
expiry of the preceding Interest Period.
5.2 DURATION OF NORMAL INTEREST PERIODS. Subject to Clauses 5.3 and 5.4,
each Interest Period shall be:
(a) 1, 3, 6, 9 or 12 months as notified by the Borrowers to the
Lender not later than 11.00 a.m. (Rotterdam time) 2 Business
Days before the commencement of the Interest Period PROVIDED
THAT the Borrowers may not select more than three 1 month
Interest Periods in any calendar year unless otherwise agreed
by the Lender; or
(b) in the case of the first Interest Period applicable to the
second and any subsequent Advance, a period ending on the last
day of the Interest Period applicable to the Advances then
current, whereupon all Advances shall be consolidated and
treated as a single Advance; or
(c) 3 months, if the Borrowers fail to notify the Lender by the
time specified in paragraph (a); or
(d) such other period as the Lender may agree with the Borrowers.
5.3 DURATION OF INTEREST PERIODS FOR REPAYMENT INSTALMENTS. In respect of
an amount due to be repaid under Clause 7 on a particular Repayment
Date, an Interest Period shall end on that Repayment Date.
5.4 NON-AVAILABILITY OF MATCHING DEPOSITS FOR INTEREST PERIOD SELECTED. If,
after the Borrowers have selected and the Lender has agreed an Interest
Period longer than 6 months, the Lender notifies the Borrowers by 11.00
a.m. (London time) on the third Business Day before the commencement of
the Interest Period that it is not satisfied that deposits in Dollars
for a period equal to the Interest Period will be available to it in
the London Interbank Market when the Interest Period commences, the
Interest Period shall be of 6 months.
6 DEFAULT INTEREST
6.1 PAYMENT OF DEFAULT INTEREST ON OVERDUE AMOUNTS. The Borrowers shall pay
interest in accordance with the following provisions of this Clause 6
on any amount payable by the Borrowers under any Finance Document which
the Lender does not receive on or before the relevant date, that is:
(a) the date on which the Finance Documents provide that such
amount is due for payment; or
(b) if a Finance Document provides that such amount is payable on
demand, the date on which the demand is served; or
(c) if such amount has become immediately due and payable under
Clause 18.4, the date on which it became immediately due and
payable.
22
6.2 DEFAULT RATE OF INTEREST. Interest shall accrue on an overdue amount
from (and including) the relevant date until the date of actual payment
(as well after as before judgment) at the rate per annum determined by
the Lender to be 2 per cent. above:
(a) in the case of an overdue amount of principal, the higher of
the rates set out at Clauses 6.3(a) and (b); or
(b) in the case of any other overdue amount, the rate set out at
Clause 6.3(b).
6.3 CALCULATION OF DEFAULT RATE OF INTEREST. The rates referred to in
Clause 6.2 are:
(a) the rate applicable to the overdue principal amount
immediately prior to the relevant date (but only for any
unexpired part of any then current Interest Period applicable
to it);
(b) the applicable Margin plus, in respect of successive periods
of any duration (including at call) up to 3 months which the
Lender may select from time to time:
(i) LIBOR; or
(ii) if the Lender determines that Dollar deposits for any
such period are not being made available to it by
leading banks in the London Interbank Market in the
ordinary course of business, a rate from time to time
determined by the Lender by reference to the cost of
funds to it from such other sources as the Lender may
from time to time determine.
6.4 NOTIFICATION OF INTEREST PERIODS AND DEFAULT RATES. The Lender shall
promptly notify the Borrowers of each interest rate determined by it
under Clause 6.3 and of each period selected by it for the purposes of
paragraph (b) of that Clause; but this shall not be taken to imply that
the Borrowers are liable to pay such interest only with effect from the
date of the Lender's notification.
6.5 PAYMENT OF ACCRUED DEFAULT INTEREST. Subject to the other provisions of
this Agreement, any interest due under this Clause shall be paid on the
last day of the period by reference to which it was determined.
6.6 COMPOUNDING OF DEFAULT INTEREST. Any such interest which is not paid at
the end of the period by reference to which it was determined shall
thereupon be compounded.
6.7 APPLICATION TO MASTER AGREEMENT. For the avoidance of doubt this Clause
6 does not apply to any amount payable under the Master Agreement in
respect of any continuing Transaction as to which section 2(e) (Default
Interest, Other Amounts) of the Master Agreement shall apply.
7 REPAYMENT AND PREPAYMENT
7.1 AMOUNT OF REPAYMENT INSTALMENTS. The Borrowers shall repay the Loan by
32 equal consecutive three-monthly instalments of $1,453,125 each and a
balloon instalment of $7,500,000.
7.2 REPAYMENT DATES. The first instalment shall be repaid on the date
falling 3 months after the earlier of:
(a) the Delivery Date applicable to the last of the Ships to be
delivered to its Shipowner (the "FINAL DELIVERY DATE");
(b) 30 May 2005 (or such later date as the Lender may agree with
the Borrowers),
23
and the last instalment, along with the balloon instalment,
shall be repaid on the earlier of:
(c) the date falling on the eighth anniversary of the Final
Delivery Date; and
(d) 30 May 2013.
7.3 FINAL REPAYMENT DATE. On the final Repayment Date, the Borrowers shall
additionally pay to the Lender all other sums then accrued or owing
under any Finance Document.
7.4 VOLUNTARY PREPAYMENT. Subject to the following conditions, the
Borrowers may prepay the whole or any part of the Loan on the last day
of an Interest Period.
7.5 CONDITIONS FOR VOLUNTARY PREPAYMENT. The conditions referred to in
Clause 7.4 are that:
(a) a partial prepayment shall be $500,000 or a multiple of
$500,000;
(b) the Lender has received from the Borrowers at least 15 days'
prior written notice specifying the amount to be prepaid and
the date on which the prepayment is to be made; and
(c) the Borrowers have provided evidence satisfactory to the
Lender that any consent required by any Borrower or any
Security Party in connection with the prepayment has been
obtained and remains in force, and that any regulation
relevant to this Agreement which affects any Borrower or any
Security Party has been complied with.
7.6 EFFECT OF NOTICE OF PREPAYMENT. A prepayment notice may not be
withdrawn or amended without the consent of the Lender and the amount
specified in the prepayment notice shall become due and payable by the
Borrowers on the date for prepayment specified in the prepayment
notice.
7.7 MANDATORY PREPAYMENT. Without prejudice to the provisions of Clause 14,
the Borrowers shall be obliged to prepay the relevant proportion of the
Loan if a Ship is sold or becomes a Total Loss:
(a) in the case of a sale, on or before the date on which the sale
is completed by delivery of the Ship to the buyer; or
(b) in the case of a Total Loss, on the earlier of the date
falling 150 days after the Total Loss Date and the date of
receipt by the Security Trustee of the proceeds of insurance
relating to such Total Loss,
and in this Clause 7.7 "RELEVANT PROPORTION" means such amount
necessary to ensure that following the sale or Total Loss of a Ship,
the Asset Cover Ratio is equal to the Asset Cover Ratio immediately
prior to the sale or Total Loss (as the case may be) of that Ship.
7.8 AMOUNTS PAYABLE ON PREPAYMENT. A prepayment shall be made together with
accrued interest (and any other amount payable under Clause 20 or
otherwise) in respect of the amount prepaid and, if the prepayment is
not made on the last day of an Interest Period together with any sums
payable under Clause 20.1(b) but without premium or penalty.
7.9 APPLICATION OF PARTIAL PREPAYMENT. Each partial prepayment shall be
applied pro rata against the repayment instalments, including, without
limitation, the balloon instalment, specified in Clause 7.1.
24
7.10 NO REBORROWING. No amount prepaid may be reborrowed.
8 CONDITIONS PRECEDENT
8.1 DOCUMENTS, FEES AND NO DEFAULT. The Lender's obligation to make an
Advance is subject to the following conditions precedent:
(a) that, on or before the service of the first Drawdown Notice,
the Lender receives the documents described in Part A of
Schedule 4, in form and substance satisfactory to it and its
lawyers;
(b) that, on the each Drawdown Date but prior to the making of the
relevant Advance, the Lender receives the documents described
in Part B of Schedule 4 in relation to that Advance, in form
and substance satisfactory to it and its lawyers;
(c) that, on a Drawdown Date relating to an Advance which shall be
used to part-finance either "▇▇▇▇▇▇ ▇▇▇▇▇" or "GAS ICE" but
prior to the making of such Advance, the Lender receives (in
addition to those documents described in Part B of Schedule 4
and in relation to the Ship to which such Advance relates) the
documents described in Part C of Schedule 4, in form and
substance satisfactory to it and its lawyers;
(d) that, before the service of the first Drawdown Notice, the
Lender receives the arrangement fee referred to in Clause 19.1
and has received payment of the expenses referred to in Clause
19.2; and
(e) that both at the date of each Drawdown Notice and at each
Drawdown Date:
(i) no Event of Default or Potential Event of Default has
occurred and is continuing or would result from the
borrowing of the relevant Advance;
(ii) the representations and warranties in Clause 9.1 and
those of any Borrower or any Security Party which are
set out in the other Finance Documents would be true
and not misleading if repeated on each of those dates
with reference to the circumstances then existing;
and
(iii) none of the circumstances contemplated by ▇▇▇▇▇▇ 4.4
has occurred and is continuing; and
(f) that, if the ratio set out in Clause 14.1 were applied
immediately following the making of the Advance, the Borrowers
would not be obliged to provide additional security or prepay
part of the Loan under that Clause; and
(g) that the Lender has received, and found to be acceptable to
it, any further opinions, consents, agreements and documents
in connection with the Finance Documents which the Lender may
request by notice to the Borrowers prior to the relevant
Drawdown Date.
8.2 WAIVERS OF CONDITIONS PRECEDENT. If the Lender, at its discretion,
permits an Advance to be borrowed before certain of the conditions
referred to in Clause 8.1 are satisfied, the Borrowers shall ensure
that those conditions are satisfied within 5 Business Days after the
relevant Drawdown Date (or such longer period as the Lender may
specify).
25
9 REPRESENTATIONS AND WARRANTIES
9.1 GENERAL. Each Borrower represents and warrants to the Lender as
follows.
9.2 STATUS. Each Borrower is duly incorporated and validly existing and in
good standing under the laws of its place of incorporation as indicated
in Schedule 2.
9.3 SHARE CAPITAL AND OWNERSHIP. Each Borrower has an authorised and issued
share capital as set out in Schedule 2 and the legal title and
beneficial ownership of all those shares is held, free of any Security
Interest or other claim, by the relevant Shareholder or Shareholders.
9.4 CORPORATE POWER. Each Borrower, or in the case of paragraph (a), each
Buyer, has the corporate capacity, and has taken all corporate action
and obtained all consents necessary for it:
(a) to execute the MOA to which it is a party, to purchase and pay
for the relevant Ship under that MOA and to register that Ship
in its name under the relevant flag;
(b) to execute the Finance Documents to which that ▇▇▇▇▇▇▇▇ is a
party; and
(c) to borrow under this Agreement, to enter into Transactions
under the Master Agreement and to make all the payments
contemplated by, and to comply with, those Finance Documents
to which that Borrower is a party and the Master Agreement.
9.5 CONSENTS IN FORCE. All the consents referred to in Clause 9.4 remain in
force and nothing has occurred which makes any of them liable to
revocation.
9.6 LEGAL VALIDITY; EFFECTIVE SECURITY INTERESTS. The Finance Documents to
which each Borrower is a party, do now or, as the case may be, will,
upon execution and delivery (and, where applicable, registration as
provided for in the Finance Documents):
(a) constitute that Borrower's legal, valid and binding
obligations enforceable against that Borrower in accordance
with their respective terms; and
(b) create legal, valid and binding Security Interests enforceable
in accordance with their respective terms over all the assets
to which they, by their terms, relate,
subject to any relevant insolvency laws affecting creditors' rights
generally.
9.7 NO THIRD PARTY SECURITY INTERESTS. Without limiting the generality of
Clause 9.6, at the time of the execution and delivery of each Finance
Document:
(a) each Borrower which is a party to that Finance Document will
have the right to create all the Security Interests which that
Finance Document purports to create; and
(b) no third party will have any Security Interest (except for
Permitted Security Interests) or any other interest, right or
claim over, in or in relation to any asset to which any such
Security Interest, by its terms, relates.
9.8 NO CONFLICTS. The execution by each Borrower of each Finance Document
to which it is a party, and the borrowing by that Borrower of the Loan,
and its compliance with each Finance Document to which it is a party
will not involve or lead to a contravention of:
(a) any law or regulation; or
26
(b) the constitutional documents of that ▇▇▇▇▇▇▇▇; or
(c) any contractual or other obligation or restriction which is
binding on that Borrower or any of its assets.
9.9 NO WITHHOLDING TAXES. All payments which each Borrower is liable to
make under the Finance Documents to which it is a party may be made
without deduction or withholding for or on account of any tax payable
under any law of any Pertinent Jurisdiction.
9.10 NO DEFAULT. No Event of Default or Potential Event of Default has
occurred and is continuing.
9.11 INFORMATION. All information which has been provided in writing by or
on behalf of the Borrowers or any Security Party to the Lender in
connection with any Finance Document satisfied the requirements of
Clause 10.5; all audited and unaudited accounts which have been so
provided satisfied the requirements of Clause 10.7; and there has been
no material adverse change in the financial position or state of
affairs of any Borrower from that disclosed in the latest of those
accounts.
9.12 NO LITIGATION. No legal or administrative action involving any Borrower
(including, in the case of each Shipowner, action relating to any
alleged or actual breach of the ISM Code) has been commenced or taken
or, to any Borrower's knowledge, is likely to be commenced or taken.
9.13 VALIDITY AND COMPLETENESS OF MOAS. Each MOA constitutes valid, binding
and enforceable obligations of the parties thereto respectively in
accordance with their terms; and:
(a) each copy of an MOA delivered to the Lender before the date of
this Agreement is a true and complete copy of such MOA
(including, without limitation, any addenda thereto); and
(b) no amendments or additions to any MOA have been agreed nor has
any Buyer or any Seller waived any of their respective rights
under an MOA.
9.14 NO REBATES ETC. There is no agreement or understanding to allow or pay
any rebate, premium, commission, discount or other benefit or payment
(howsoever described) to any Buyer, any Seller or any third party in
connection with the purchase by a Buyer of a Ship other than as
disclosed to the Lender in writing on or prior to the date of this
Agreement.
9.15 COMPLIANCE WITH CERTAIN UNDERTAKINGS. At the date of this Agreement,
the Borrowers are in compliance with Clauses 10.2, 10.4, 10.9 and
10.13.
9.16 TAXES PAID. Each Borrower has paid all taxes applicable to, or imposed
on or in relation to that Borrower, its business and, in the case of a
Borrower which is a Shipowner, the Ship owned by it.
9.17 ISM CODE COMPLIANCE. All requirements of the ISM Code as they relate to
the Shipowners, the Approved Manager, the Bareboat Charterer and each
Ship have been complied with.
10 GENERAL UNDERTAKINGS
10.1 GENERAL. Each Borrower undertakes with the Lender to comply, or, in the
case of Clauses 10.17 and 10.18, procure the compliance by the Holding
Company, with the
27
following provisions of this Clause 10 at all times during the Security
Period, except as the Lender may otherwise permit.
10.2 TITLE; NEGATIVE PLEDGE. Each Shipowner will:
(a) hold the legal title to, and own the entire beneficial
interest in the Ship owned by it, her Insurances and Earnings,
free from all Security Interests and other interests and
rights of every kind, except for those created by the Finance
Documents and the effect of assignments contained in the
Finance Documents and except for Permitted Security Interests;
and
(b) not create or permit to arise any Security Interest (except
for Permitted Security Interests) over any other asset,
present or future including, but not limited to, the
Borrowers' rights against the Lender under the Master
Agreement or all or any part of the Borrowers' interest in any
amount payable to the Borrowers by the Lender under the Master
Agreement.
10.3 NO DISPOSAL OF ASSETS. No Borrower will transfer, lease or otherwise
dispose of:
(a) all or a substantial part of its assets, whether by one
transaction or a number of transactions, whether related or
not; or
(b) any debt payable to it or any other right (present, future or
contingent right) to receive a payment, including any right to
damages or compensation.
10.4 NO OTHER LIABILITIES OR OBLIGATIONS TO BE INCURRED. No Borrower will
incur any liability or obligation except liabilities and obligations:
(a) under the Finance Documents to which it is a party;
(b) in the case of a Buyer pursuant to the MOA to which it is a
party;
(c) in the case of each Shipowner, liabilities or obligations
reasonably incurred in the ordinary course of operating and
chartering the Ship owned by it; and
(d) in the case of the Holding Company liabilities or obligations
reasonably incurred in the ordinary course of its business.
10.5 INFORMATION PROVIDED TO BE ACCURATE. All financial and other
information which is provided in writing by or on behalf of a Borrower
under or in connection with any Finance Document will be true and not
misleading and will not omit any material fact or consideration.
10.6 PROVISION OF FINANCIAL STATEMENTS. The Borrowers will send to the
Lender:
(a) as soon as possible, but in no event later than 180 days after
the end of each financial year of the Holding Company, the
audited consolidated accounts of the Group; and
(b) as soon as possible, but in no event later than 90 days after
the end of each half year in each financial year of the
Holding Company, the unaudited management accounts of the
Group in a format approved by the Lender, which are certified
as to their correctness by the chief financial officer of the
Holding Company,
in each case together with a certificate signed by the chief financial
officer of the Holding Company confirming that the Holding Company is
as at the date of that certificate in
28
compliance with the financial covenants specified in Clauses 10.17 and
10.18 and that the Asset Cover Ratio is above 1.25:1.
10.7 FORM OF FINANCIAL STATEMENTS. All accounts (audited and unaudited)
delivered under Clause 10.6 will:
(a) be prepared in accordance with all applicable laws and
generally accepted accounting principles consistently applied;
(b) give a true and fair view of the state of affairs of the
relevant parties at the date of those accounts and of their
profit for the period to which those accounts relate; and
(c) fully disclose or provide for all significant liabilities of
the Group.
10.8 SHAREHOLDER AND CREDITOR NOTICES. Each Borrower will send to the
Lender, at the same time as they are despatched, copies of all
communications which are despatched to that Borrower's shareholders or
creditors or any class of them.
10.9 CONSENTS. Each Borrower will maintain in force and promptly obtain or
renew, and will promptly send certified copies to the Lender of, all
consents required:
(a) for that Borrower to perform its obligations under any Finance
Document and any MOA to which it is a party;
(b) for the validity or enforceability of any Finance Document to
which it is a party; and
(c) if that Borrower is a Shipowner, for that Borrower to continue
to own and operate the Ship owned by it, and
(d) if that Borrower is Industrial or Ventspils, for it to
continue to perform its obligations under the relevant
Bareboat Charter,
and that ▇▇▇▇▇▇▇▇ will comply with the terms of all such consents.
10.10 MAINTENANCE OF SECURITY INTERESTS. Each Borrower will:
(a) at its own cost, do all that it reasonably can to ensure that
any Finance Document validly creates the obligations and the
Security Interests which it purports to create; and
(b) without limiting the generality of paragraph (a), at its own
cost, promptly register, file, record or enrol any Finance
Document with any court or authority in all Pertinent
Jurisdictions, pay any stamp, registration or similar tax in
all Pertinent Jurisdictions in respect of any Finance
Document, give any notice or take any other step which may be
or has become necessary or desirable for any Finance Document
to be valid, enforceable or admissible in evidence or to
ensure or protect the priority of any Security Interest which
it creates.
10.11 NOTIFICATION OF LITIGATION. Each Borrower will provide the Lender with
details of any legal or administrative action involving that Borrower,
any Security Party, the Approved Manager or, in the case of each
Shipowner, the Ship owned by it, her Earnings or her Insurances and, in
the case of each of Industrial and Ventspils, the relevant Bareboat
Charterer, as soon as such action is instituted or it becomes apparent
to that Borrower that it is likely to be instituted, unless it is clear
that the legal or administrative action cannot be considered material
in the context of any Finance Document.
29
10.12 NO AMENDMENT TO MOA. No Buyer will agree to any amendment or supplement
to, or waive or fail to enforce, the MOA to which it is a party or any
of its provisions.
10.13 PRINCIPAL PLACE OF BUSINESS. Each Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated in Clause 27.2; and no Borrower will establish, or do anything
as a result of which it would be deemed to have, a place of business in
the United Kingdom or the United States of America.
10.14 CONFIRMATION OF NO DEFAULT. Each Borrower will, within 2 Business Days
after service by the Lender of a written request, serve on the Lender a
notice which is signed by the director of that Borrower and which:
(a) states that no Event of Default or Potential Event of Default
has occurred; or
(b) states that no Event of Default or Potential Event of Default
has occurred, except for a specified event or matter, of which
all material details are given.
10.15 NOTIFICATION OF DEFAULT. Each Borrower will notify the Lender as soon
as that ▇▇▇▇▇▇▇▇ becomes aware of:
(a) the occurrence of an Event of Default or a Potential Event of
Default; or
(b) any matter which indicates that an Event of Default or a
Potential Event of Default may have occurred,
and will keep the Lender fully up-to-date with all developments.
10.16 PROVISION OF FURTHER INFORMATION. Each Borrower will, as soon as
practicable after receiving the request, provide the Lender with any
additional financial or other information relating:
(a) any Borrower, any Ship, any Earnings, or any Insurances or
either Bareboat Charterer; or
(b) to any other matter relevant to, or to any provision of, a
Finance Document,
which may be requested by the Lender at any time.
10.17 MINIMUM CASH BALANCE. For the duration of the Security Period, the
members of the Group will maintain cash deposits with the Lender, free
of Security Interests except in favour of the Lender pursuant to this
Agreement and the other Finance Documents, in an aggregate amount of
not less than $3,000,000.
10.18 LEVERAGE OF HOLDING COMPANY. The Holding Company shall ensure that the
ratio of Total Long Term Debt to Total Assets shall not exceed 0.80:1
at any time.
11 CORPORATE UNDERTAKINGS
11.1 GENERAL. Each Borrower also undertakes with the Lender to comply with
the following provisions of this Clause 11 at all times during the
Security Period except as the Lender may otherwise permit.
11.2 MAINTENANCE OF STATUS. Each Borrower will maintain its separate
corporate existence and remain in good standing under the laws of its
place of incorporation indicated in Schedule 2.
30
11.3 NEGATIVE UNDERTAKINGS. No Borrower will:
(a) carry on any business other than, in the case of a Shipowner,
the ownership, chartering and operation of the Ship owned by
it and, in the case of the Holding Company, investing in
companies which own or are to acquire LPG carriers; or
(b) pay any dividend or make any other form of distribution or
effect any form of redemption, purchase or return of share
capital except in accordance with Clause 11.4; or
(c) provide any form of credit or financial assistance to:
(i) a person who is directly or indirectly interested in
that ▇▇▇▇▇▇▇▇'s share or loan capital; or
(ii) any company in or with which such a person is
directly or indirectly interested or connected,
or enter into any transaction with or involving such a person or
company on terms which are, in any respect, less favourable to that
Borrower than those which it could obtain in a bargain made at arms'
length;
(d) open or maintain any account with any bank or financial institution
except (i) accounts with the Lender for the purposes of the Finance
Documents if that Borrower is a Shipowner, (ii) accounts with any other
bank or financial institution notified in writing to the Lender in the
case of the Holding Company and (iii) the existing account opened by
Geneve and held in its name with Alpha Bank,
PROVIDED THAT the exemption set out in sub-paragraph (iii) of this
Clause 11.3(d) shall be without prejudice to the obligations of Geneve
under Clause 17.1;
(e) issue, allot or grant any person a right to any shares in its
capital or repurchase or reduce its issued share capital;
(f) acquire any shares or other securities other than US or UK
Treasury bills and certificates of deposit issued by major
North American or European banks, or enter into any
transaction in a derivative; or
(g) enter into any form of amalgamation, merger or de-merger or
any form of reconstruction or reorganisation.
11.4 PAYMENT OF DIVIDENDS. Subject to no Event of Default having occurred,
the Borrowers may in any financial year, declare and pay by way of
dividends an amount of up to 50 per cent. of the Excess Cash Flow of
the Group for that financial year.
12 INSURANCE
12.1 GENERAL. Each Borrower also undertakes with the Lender to comply, or as
the case may be, procure compliance, with the following provisions of
this Clause 12 at all times during the Security Period except as the
Lender may otherwise permit.
12.2 MAINTENANCE OF OBLIGATORY INSURANCES. Each Shipowner shall keep the
Ship owned by it insured at the expense of that Shipowner against:
(a) fire and usual marine risks (including hull and machinery and
excess risks);
(b) war risks;
(c) protection and indemnity risks; and
31
(d) any other risks against which the Lender considers, having
regard to practices and other circumstances prevailing at the
relevant time, it would in the opinion of the Lender be
reasonable for that Shipowner to insure and which are
specified by the Lender by notice to that Shipowner.
12.3 TERMS OF OBLIGATORY INSURANCES. Each Shipowner shall effect such
insurances:
(a) in Dollars;
(b) in the case of fire and usual marine risks and war risks, in
an amount on an agreed value basis at least the greater of (i)
such amount, which when aggregated with the amount for which
any other Ship then subject to a Mortgage is insured, is equal
to 130 per cent. of the aggregate of the Loan and the Swap
Exposure and (ii) the market value of the Ship owned by it;
and
(c) in the case of oil pollution liability risks, for an aggregate
amount equal to the highest level of cover from time to time
available under basic protection and indemnity club entry
(with the international group of protection and indemnity
clubs) and in the international marine insurance market
(currently $1,000,000,000);
(d) in relation to protection and indemnity risks in respect of
the full tonnage of the Ship owned by it;
(e) on approved terms; and
(f) through approved brokers and with approved insurance companies
and/or underwriters or, in the case of war risks and
protection and indemnity risks, in approved war risks and
protection and indemnity risks associations.
12.4 FURTHER PROTECTIONS FOR THE LENDER. In addition to the terms set out in
Clause 12.3, each Shipowner shall procure that the obligatory
insurances shall:
(a) whenever the Lender requires, name (or be amended to name) the
Lender as additional named assured for its rights and
interests, warranted no operational interest and with full
waiver of rights of subrogation against the Lender, but
without the Lender thereby being liable to pay (but having the
right to pay) premiums, calls or other assessments in respect
of such insurance;
(b) name the Lender as loss payee with such directions for payment
as the Lender may specify;
(c) provide that all payments by or on behalf of the insurers
under the obligatory insurances to the Lender shall be made
without set-off, counterclaim or deductions or condition
whatsoever;
(d) provide that such obligatory insurances shall be primary
without right of contribution from other insurances which may
be carried by the Lender;
(e) provide that the Lender may make proof of loss if any of the
Shipowners fail to do so.
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12.5 RENEWAL OF OBLIGATORY INSURANCES. Each Shipowner shall:
(a) at least 7 days before the expiry of any obligatory insurance
effected by it:
(i) notify the Lender of the brokers (or other insurers)
and any protection and indemnity or war risks
association through or with whom that ▇▇▇▇▇▇▇▇
proposes to renew that obligatory insurance and of
the proposed terms of renewal; and
(ii) obtain the Lender's approval to the matters referred
to in paragraph (i);
(b) at least 7 days before the expiry of any obligatory insurance
effected by it, renew that obligatory insurance in accordance
with the Lender's approval pursuant to paragraph (a); and
(c) procure that the approved brokers and/or the war risks and
protection and indemnity associations with which such a
renewal is effected shall promptly after the renewal notify
the Lender in writing of the terms and conditions of the
renewal.
12.6 COPIES OF POLICIES; LETTERS OF UNDERTAKING. Each Shipowner shall ensure
that all approved brokers provide the Lender with pro forma copies of
all policies relating to the obligatory insurances which they are to
effect or renew and of a letter or letters or undertaking in a form
required by the Lender and including undertakings by the approved
brokers that:
(a) they will have endorsed on each policy, immediately upon
issue, a loss payable clause and a notice of assignment
complying with the provisions of Clause 12.4;
(b) they will hold such policies, and the benefit of such
insurances, to the order of the Lender in accordance with the
said loss payable clause;
(c) they will advise the Lender immediately of any material change
to the terms of the obligatory insurances;
(d) they will notify the Lender, not less than 14 days before the
expiry of the obligatory insurances, in the event of their not
having received notice of renewal instructions from that
Shipowner or its agents and, in the event of their receiving
instructions to renew, they will promptly notify the Lender of
the terms of the instructions; and
(e) they will not set off against any sum recoverable in respect
of a claim relating to the Ship owned by that Shipowner under
such obligatory insurances any premiums or other amounts due
to them or any other person whether in respect of that Ship or
otherwise, they waive any lien on the policies, or any sums
received under them, which they might have in respect of such
premiums or other amounts, and they will not cancel such
obligatory insurances by reason of non-payment of such
premiums or other amounts, and will arrange for a separate
policy to be issued in respect of that Ship forthwith upon
being so requested by the Lender.
12.7 COPIES OF CERTIFICATES OF ENTRY. Each Shipowner shall ensure that any
protection and indemnity and/or war risks associations in which the
Ship owned by it is entered provides the Lender with:
(a) a certified copy of the certificate of entry for that Ship;
(b) a letter or letters of undertaking in such form as may be
required by the Lender; and
(c) a certified copy of each certificate of financial
responsibility for pollution by oil or other Environmentally
Sensitive Material issued by the relevant certifying authority
in relation to that Ship.
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12.8 DEPOSIT OF ORIGINAL POLICIES. Each Shipowner shall ensure that all
policies relating to obligatory insurances effected by it are deposited
with the approved brokers through which the insurances are effected or
renewed.
12.9 PAYMENT OF PREMIUMS. Each Shipowner shall punctually pay all premiums
or other sums payable in respect of the obligatory insurances effected
by it and produce all relevant receipts when so required by the Lender.
12.10 GUARANTEES. Each Shipowner shall ensure that any guarantees required by
a protection and indemnity or war risks association are promptly issued
and remain in full force and effect.
12.11 COMPLIANCE WITH TERMS OF INSURANCES. No Shipowner shall do nor omit to
do (nor permit to be done or not to be done) any act or thing which
would or might render any obligatory insurance invalid, void, voidable
or unenforceable or render any sum payable under an obligatory
insurance repayable in whole or in part; and, in particular:
(a) each Shipowner shall take all necessary action and comply with
all requirements which may from time to time be applicable to
the obligatory insurances, and (without limiting the
obligation contained in Clause 12.7(c)) ensure that the
obligatory insurances are not made subject to any exclusions
or qualifications to which the Lender has not given its prior
approval;
(b) no Shipowner shall make any changes relating to the
classification or classification society or manager or
operator of the Ship owned by it approved by the underwriters
of the obligatory insurances;
(c) each Shipowner shall make (and promptly supply copies to the
Lender of) all quarterly or other voyage declarations which
may be required by the protection and indemnity risks
association in which the Ship owned by it is entered to
maintain cover for trading to the United States of America and
Exclusive Economic Zone (as defined in the United States Oil
Pollution Act 1990 or any other applicable legislation); and
(d) no Shipowner shall employ the Ship owned by it, nor allow it
to be employed, otherwise than in conformity with the terms
and conditions of the obligatory insurances, without first
obtaining the consent of the insurers and complying with any
requirements (as to extra premium or otherwise) which the
insurers specify.
12.12 ALTERATION TO TERMS OF INSURANCES. No Shipowner shall either make or
agree to any alteration to the terms of any obligatory insurance nor
waive any right relating to any obligatory insurance.
12.13 SETTLEMENT OF CLAIMS. No Shipowner shall settle, compromise or abandon
any claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents,
evidence and information to enable the Lender to collect or recover any
moneys which at any time become payable in respect of the obligatory
insurances.
12.14 PROVISION OF COPIES OF COMMUNICATIONS. Each Shipowner shall provide the
Lender, at the time of each such communication, copies of all written
communications between that Shipowner and:
(a) the approved brokers; and
(b) the approved protection and indemnity and/or war risks
associations; and
34
(c) the approved insurance companies and/or underwriters, which
relate directly or indirectly to:
(i) that Shipowner's obligations relating to the
obligatory insurances including, without limitation,
all requisite declarations and payments of additional
premiums or calls; and
(ii) any credit arrangements made between that Shipowner
and any of the persons referred to in paragraphs (a)
or (b) relating wholly or partly to the effecting or
maintenance of the obligatory insurances.
12.15 PROVISION OF INFORMATION. In addition, each Shipowner shall promptly
provide the Lender (or any persons which it may designate) with any
information which the Lender (or any such designated person) requests
for the purpose of:
(a) obtaining or preparing any report from an independent marine
insurance broker as to the adequacy of the obligatory
insurances effected or proposed to be effected; and/or
(b) effecting, maintaining or renewing any such insurances as are
referred to in Clause 12.16 below or dealing with or
considering any matters relating to any such insurances,
and the Shipowners shall, forthwith upon demand, indemnify the Lender
in respect of all fees and other expenses incurred by or for the
account of the Lender in connection with any such report as is referred
to in paragraph (a).
12.16 MORTGAGEE'S INTEREST AND ADDITIONAL PERILS. The Lender shall be
entitled from time to time to effect, maintain and renew a mortgagee's
interest additional perils insurance in respect of any Ship, a
mortgagee's political risks insurance and a mortgagee's interest marine
insurance in such amounts, on such terms, through such insurers and
generally in such manner as the Lender may from time to time consider
appropriate and the Borrowers shall upon demand fully indemnify the
Lender in respect of all premiums and other expenses which are incurred
in connection with or with a view to effecting, maintaining or renewing
any such insurance or dealing with, or considering, any matter arising
out of any such insurance.
13 SHIP COVENANTS
13.1 GENERAL. Each Borrower also undertakes with the Lender to comply with,
or to procure compliance with (as the case may be), with the following
provisions of this Clause 13 at all times during the Security Period,
except as the Lender may otherwise permit.
13.2 SHIP'S NAME AND REGISTRATION. Each Shipowner shall keep the Ship owned
by it registered in its name at the ship registry and port indicated in
Schedule 3, shall not do or allow to be done anything as a result of
which such registration might be cancelled or imperilled; and shall not
change the name or port of registry of the Ship owned by it.
13.3 REPAIR AND CLASSIFICATION. Each Shipowner shall keep the Ship owned by
it in a good and safe condition and state of repair:
(a) consistent with first-class ship ownership and management
practice;
(b) so as to maintain that Ship's present class (namely that
indicated in Schedule 3) free of overdue recommendations and
conditions affecting the Ship's class; and
35
(c) so as to comply with all laws and regulations applicable to
vessels registered at ports in the flag state relevant to that
Ship or to vessels trading to any jurisdiction to which that
Ship may trade from time to time, including but not limited to
the ISM Code.
13.4 MODIFICATION. No Shipowner shall make or allow any modification or
repairs to, or replacement of, any Ship or equipment installed on the
Ship which would or might materially alter the structure, type or
performance characteristics of any Ship or materially reduce its value.
13.5 REMOVAL OF PARTS. No Shipowner shall remove or allow the removal of any
material part of any Ship, or any item of equipment installed on any
Ship, unless the part or item so removed is forthwith replaced by a
suitable part or item which is in the same condition as or better
condition than the part or item removed, is free from any Security
Interest or any right in favour of any person other than the Lender and
becomes on installation on the relevant Ship the property of the
relevant Shipowner and subject to the security constituted by the
relevant Mortgage PROVIDED THAT a Shipowner may install equipment owned
by a third party if the equipment can be removed without any risk of
damage to the Ship owned by it.
13.6 SURVEYS. Each Shipowner shall submit the Ship owned by it regularly to
all periodical or other surveys which may be required for
classification purposes and, if so required by the Lender provide the
Lender, with copies of all survey reports.
13.7 INSPECTION. Each Shipowner shall permit the Lender (by surveyors or
other persons appointed by it for that purpose) to board the Ship owned
by it at all reasonable times to inspect its condition or to satisfy
themselves about proposed or executed repairs and shall afford all
proper facilities for such inspections.
13.8 PREVENTION OF AND RELEASE FROM ARREST. Each Shipowner shall promptly
discharge:
(a) all liabilities which give or may give rise to maritime or
possessory liens on or claims enforceable against the Ship
owned by it, her Earnings or her Insurances;
(b) all taxes, dues and other amounts charged in respect of the
Ship owned by it, her Earnings or her Insurances; and
(c) all other outgoings whatsoever in respect of the Ship owned by
it, her Earnings or her Insurances,
and, forthwith upon receiving notice of the arrest of the Ship owned by
it, or of its detention in exercise or purported exercise of any lien
or claim, that Borrower shall procure its release by providing bail or
otherwise as the circumstances may require.
13.9 COMPLIANCE WITH LAWS ETC. Each Shipowner shall:
(a) comply, or procure compliance with the ISM Code, all
Environmental Laws and all other laws or regulations relating
to the Ship owned by it, its ownership, operation and
management or to the business of that Shipowner;
(b) not employ the Ship owned by it nor allow its employment in
any manner contrary to any law or regulation in any relevant
jurisdiction including but not limited to the ISM Code; and
(c) in the event of hostilities in any part of the world (whether
war is declared or not), not cause or permit the Ship owned by
it to enter or trade to any zone which is declared a war zone
by any government or by the Ship's war risks insurers unless
the prior written
36
consent of the Lender has been given and that Shipowner has
(at its expense) effected any special, additional or modified
insurance cover which the Lender may require.
13.10 PROVISION OF INFORMATION. Each Borrower shall promptly provide the
Lender with any information which it requests regarding:
(a) the Ship owned by it, its employment, position and
engagements;
(b) the Earnings and payments and amounts due to the master and
crew of the Ship owned by it;
(c) any expenses incurred, or likely to be incurred, in connection
with the operation, maintenance or repair of the Ship owned by
it and any payments made in respect of that Ship;
(d) any towages and salvages;
(e) its compliance, the Approved Manager's compliance the
compliance of the Ship owned by it and (in the case of each of
"▇▇▇▇▇▇ ▇▇▇▇▇" and "GAS ICE"), the relevant Bareboat
Charterer's compliance, with the ISM Code,
and, upon the Lender's request, provide copies of any current charter
relating to the Ship owned by it, of any current charter guarantee and
of the Ship's Document of Compliance.
13.11 NOTIFICATION OF CERTAIN EVENTS. Each Shipowner shall immediately notify
the Lender by fax, confirmed forthwith, by letter of:
(a) any casualty which is or is likely to be or to become a Major
Casualty;
(b) any occurrence as a result of which the Ship owned by it has
become or is, by the passing of time or otherwise, likely to
become a Total Loss;
(c) any requirement or recommendation made by any insurer or
classification society or by any competent authority which is
not immediately complied with;
(d) any arrest or detention of the Ship owned by it, any exercise
or purported exercise of any lien on that Ship or its Earnings
or any requisition of that Ship for hire;
(e) any intended dry docking of the Ship owned by it;
(f) any Environmental Claim made against that Shipowner or in
connection with the Ship owned by it, or any Environmental
Incident;
(g) any claim for breach of the ISM Code being made against that
Shipowner, the Approved Manager or a Bareboat Charterer (as
the case may be) or otherwise in connection with the Ship
owned by it; or
(h) any other matter, event or incident, actual or threatened, the
effect of which will or could lead to the ISM Code not being
complied with,
and that Shipowner shall keep the Lender advised in writing on a
regular basis and in such detail as the Lender shall require of that
Shipowner's, the Approved Manager's, a Bareboat Charterer's or any
other person's response to any of those events or matters.
37
13.12 RESTRICTIONS ON CHARTERING, APPOINTMENT OF MANAGERS ETC. No Shipowner
shall, in relation to the Ship owned by it:
(a) other than, in the case of each of "▇▇▇▇▇▇ ▇▇▇▇▇" and "GAS
ICE", pursuant to the relevant Bareboat Charter, let that Ship
on demise charter for any period;
(b) other than, in the case of "GAS ARCTIC", pursuant to the GAS
ARCTIC Time Charterparty, enter into any time or consecutive
voyage charter in respect of that Ship for a term which
exceeds, or which by virtue of any optional extensions may
exceed, 13 months;
(c) enter into any charter in relation to that Ship under which
more than 2 months' hire (or the equivalent) is payable in
advance;
(d) charter that Ship otherwise than on bona fide arm's length
terms at the time when that Ship is fixed;
(e) appoint a manager of that Ship other than the Approved Manager
or agree to any alteration to the terms of the Approved
Manager's appointment;
(f) de-activate or lay up that Ship; or
(g) put that Ship into the possession of any person for the
purpose of work being done upon her in an amount exceeding or
likely to exceed $500,000 (or the equivalent in any other
currency) unless that person has first given to the Lender and
in terms satisfactory to it a written undertaking not to
exercise any lien on that Ship or the Earnings for the cost of
such work or any other reason.
13.13 NOTICE OF MORTGAGE. Each Shipowner shall:
(a) keep the relevant Mortgage registered against the Ship owned
by it as a valid first priority or first preferred mortgage;
and
(b) carry on board that Ship a certified copy of the relevant
Mortgage and place and maintain in a conspicuous place in the
navigation room and the Master's cabin of that Ship a framed
printed notice stating that that Ship is mortgaged by that
Shipowner to the Lender.
13.14 SHARING OF EARNINGS. No Borrower shall enter into any agreement or
arrangement for the sharing of any Earnings.
13.15 TIME CHARTER ASSIGNMENT. If any Borrower enters into any Charter
(subject to obtaining the consent of the Lender in accordance with
Clause 13.13(b)), the relevant Borrower shall, at the request of the
Lender, execute in favour of the Lender a Charter Assignment in
relation to such Charter, and shall deliver to the Lender such other
documents equivalent to those referred to at paragraphs 3, 4 and 5 of
Part A of Schedule 4 hereof as the Lender may require.
13.16 COMPLIANCE WITH INSURANCE AND SHIP COVENANTS. Each of Industrial and
Ventspils shall procure the performance by ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
respectively of all the covenants and undertakings to be observed,
performed and complied with, by or on behalf of each of Industrial and
Ventspils respectively under Clause 12 (other than Clause 12.16) and
Clause 13 and, to the extent that each Bareboat Charterer duly performs
and discharges its obligations set out in this Clause 13.16 or to the
further extent that each Bareboat Charterer, by its performance of the
relevant Bareboat Charter, performs and discharges further obligations
of Industrial or Ventspils (as the case may be) contained in the
Finance Documents, then such performance and discharge shall, to that
extent, be deemed due performance and discharge of Industrial's or
Ventspil's obligations (as the case may be) under the Finance
Documents.
38
14 SECURITY COVER
14.1 MINIMUM REQUIRED SECURITY COVER. Clause 14.2 applies if the Lender
notifies the Borrowers that the Asset Cover Ratio is below 1.25 to 1.
14.2 PROVISION OF ADDITIONAL SECURITY; PREPAYMENT. If the Lender serves a
notice on the Borrowers under Clause 14.1, the Borrowers shall, within
1 month after the date on which the Lender's notice is served, either:
(a) provide, or ensure that a third party provides, additional
security which, in the reasonable opinion of the Lender, has a
net realisable value at least equal to the shortfall in the
Asset Cover Ratio and is documented in such terms as the
Lender may approve or require; or
(b) prepay such part (at least) of the Loan as will eliminate the
shortfall in the Asset Cover Ratio.
14.3 VALUATION OF SHIPS. The market value of a Ship at any date is that
shown by the arithmetic average of two valuations, each prepared:
(a) as at a date not more than 14 days previously;
(b) by an independent sale and purchase shipbroker which the
Lender has approved or appointed for the purpose;
(c) with or without physical inspection of the Ship (as the Lender
may require);
(d) on the basis of a sale for prompt delivery for cash on normal
arm's length commercial terms as between a willing seller and
a willing buyer, free of any existing charter or other
contract of employment; and
(e) after deducting the estimated amount of the usual and
reasonable expenses which would be incurred in connection with
the sale.
14.4 VALUE OF ADDITIONAL VESSEL SECURITY. The net realisable value of any
additional security which is provided under Clause 14.2 and which
consists of a Security Interest over a vessel shall be that shown by a
valuation complying with the requirements of Clause 14.3.
14.5 VALUATIONS BINDING. Any valuation under Clause 14.2, 14.3 or 14.4 shall
be binding and conclusive as regards the Borrowers, as shall be any
valuation which the Lender makes of any additional security which does
not consist of or include a Security Interest.
14.6 PROVISION OF INFORMATION. The Borrowers shall promptly provide the
Lender and any shipbroker or expert acting under Clause 14.3 or 14.4
with any information which the Lender or the shipbroker or expert may
request for the purposes of the valuation; and, if the Borrowers fail
to provide the information by the date specified in the request, the
valuation may be made on any basis and assumptions which the shipbroker
or the Lender (or the expert appointed by it) considers prudent.
14.7 PAYMENT OF VALUATION EXPENSES. Without prejudice to the generality of
the Borrowers' obligations under Clauses 19.2, 19.3 and 20.3, the
Borrowers shall, on demand, pay the Lender the amount of the fees and
expenses of any shipbroker or expert instructed by the Lender under
this Clause and all legal and other expenses incurred by the Lender in
connection with any matter arising out of this Clause.
39
14.8 APPLICATION OF PREPAYMENT. Clause 7 shall apply in relation to any
prepayment pursuant to Clause 14.2(b).
15 PAYMENTS AND CALCULATIONS
15.1 CURRENCY AND METHOD OF PAYMENTS. All payments to be made by any
Borrower to the Lender under a Finance Document shall be made to the
Lender:
(a) by not later than 11.00 a.m. (New York City time) on the due
date;
(b) in same day Dollar funds settled through the New York Clearing
House Interbank Payments System (or in such other Dollar funds
and/or settled in such other manner as the Lender shall
specify as being customary at the time for the settlement of
international transactions of the type contemplated by this
Agreement); and
(c) to the account of the Lender at ABN AMRO Bank N.V. of ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇.▇.▇. (SWIFT address:
ABNAUS33; Account No. 637070342741), or to such other account
with such other bank as the Lender may from time to time
notify to the Borrowers.
15.2 PAYMENT ON NON-BUSINESS DAY. If any payment by any Borrower under a
Finance Document would otherwise fall due on a day which is not a
Business Day:
(a) the due date shall be extended to the next succeeding Business
Day; or
(b) if the next succeeding Business Day falls in the next calendar
month, the due date shall be brought forward to the
immediately preceding Business Day,
and interest shall be payable during any extension under paragraph (a)
at the rate payable on the original due date.
15.3 BASIS FOR CALCULATION OF PERIODIC PAYMENTS. All interest and any other
payments under any Finance Document which are of an annual or periodic
nature shall accrue from day to day and shall be calculated on the
basis of the actual number of days elapsed and a 360 day year.
15.4 LENDER ACCOUNTS. The Lender shall maintain an account showing the
amounts advanced by the Lender and all other sums owing to the Lender
from the Borrowers and each Security Party under the Finance Documents
and all payments in respect of those amounts made by the Borrowers and
any Security Party.
15.5 ACCOUNTS PRIMA FACIE EVIDENCE. If the account maintained under Clauses
15.4 shows an amount to be owing by a Borrower or a Security Party to
the Lender, that account shall be prima facie evidence that that amount
is owing to the Lender.
16 APPLICATION OF RECEIPTS
16.1 NORMAL ORDER OF APPLICATION. Except as any Finance Document may
otherwise provide, any sums which are received or recovered by the
Lender under or by virtue of any Finance Document shall be applied:
(a) FIRST: in or towards satisfaction of any amounts then due and
payable under the Finance Documents (or any of them) in such
order of application and/or such proportions as the Lender may
specify by notice to the Borrowers and the Security Parties;
40
(b) SECONDLY: in retention of an amount equal to any amount not
then due and payable under any Finance Document but which the
Lender, by notice to the Borrowers and the Security Parties,
states in its opinion will or may become due and payable in
the future and, upon those amounts becoming due and payable,
in or towards satisfaction of them in accordance with the
provisions of this Clause; and
(c) THIRDLY: any surplus shall be paid to the Borrowers or to any
other person appearing to be entitled to it.
16.2 VARIATION OF ORDER OF APPLICATION. The Lender may, at its reasonable
discretion, by notice to the Borrowers and the Security Parties,
provide for a different manner of application from that set out in
Clause 16.1 either as regards a specified sum or sums or as regards
sums in a specified category or categories.
16.3 NOTICE OF VARIATION OF ORDER OF APPLICATION. The Lender may give
notices under ▇▇▇▇▇▇ 16.2 from time to time; and such a notice may be
stated to apply not only to sums which may be received or recovered in
the future, but also to any sum which has been received or recovered on
or after the third Business Day before the date on which the notice is
served.
16.4 APPROPRIATION RIGHTS OVERRIDDEN. This Clause 16 and any notice which
the Lender gives under Clause 16.2 shall override any right of
appropriation possessed, and any appropriation made, by any Borrower or
any Security Party.
17 APPLICATION OF EARNINGS
17.1 PAYMENT OF EARNINGS. Each Shipowner undertakes with the Lender to
ensure that, throughout the Security Period:
(a) (subject only to the provisions of the General Assignments to
which that Shipowner is a party), all the Earnings of the Ship
owned by it are paid to the Earnings Account; and
(b) all payments by the Lender to a Borrower under each
Transaction are paid to the Earnings Account.
17.2 APPLICATION OF EARNINGS. Each Shipowner undertakes with the Lenders
that money from time to time credited to, or for the time being
standing to the credit of, the Earnings Account shall, unless and until
an Event of Default or Potential Event of Default shall have occurred
(whereupon the provisions of Clause 16.1 shall be and become
applicable), be available for application in the following manner:
(a) in or towards meeting the costs and expenses from time to time
incurred by or on behalf of the relevant Shipowner in
connection with the operation of the Ship owned by it;
(b) in or towards making payments of all amounts due and payable
by the Borrowers under this Agreement other than the payments
of principal and interest pursuant to Clauses 7.1 and 4.1;
(c) in or towards making the transfers to the Retention Account
required pursuant to Clause 17.3; and
(d) as to any surplus from time to time arising on the Earnings
Account following application as aforesaid, to be paid to the
relevant Shipowner or to whomsoever it may direct.
17.3 MONTHLY RETENTIONS. The Borrowers undertake with the Lender to ensure
that, on the date falling one month after the date on which the final
Drawdown Notice is served and
41
on the same day in each subsequent month throughout the Security
Period, there is transferred to the Retention Account out of the
Earnings received in the Earnings Account during the preceding month:
(a) one-third of the amount of the repayment instalment falling
due under Clause 7 on the next Repayment Date; and
(b) the relevant fraction of the aggregate amount of interest on
the Loan which is payable on the next due date for payment of
interest under this Agreement.
The "RELEVANT FRACTION" is a fraction of which the numerator is 1 and
the denominator the number of months comprised in the then current
Interest Period (or, if the period is shorter, the number of months
from the later of the commencement of the current Interest Period or
the last due date for payment of interest to the next due date for
payment of interest under this Agreement).
17.4 SHORTFALL IN EARNINGS. If the aggregate Earnings received in the
Earnings Account are insufficient in any month for the required amount
to be transferred to the Retention Account under Clause 17.3, the
Borrowers shall make up the amount of the insufficiency on demand from
the Lender; but, without thereby prejudicing the Lender's right to make
such demand at any time, the Lender may permit the Borrowers to make up
all or part of the insufficiency by increasing the amount of any
transfer under Clause 17.3 from the Earnings received in the next or
subsequent months.
17.5 APPLICATION OF RETENTIONS. Until an Event of Default or a Potential
Event of Default occurs, the Lender shall on each Repayment Date and on
each due date for the payment of interest under this Agreement apply in
accordance with Clause 15.1 so much of the balance on the Retention
Account as equals:
(a) the repayment instalment due on that Repayment Date; or
(b) the amount of interest payable on that interest payment date,
in discharge of the Borrowers' liability for that repayment instalment
or that interest.
17.6 INTEREST ACCRUED ON RETENTION ACCOUNT. Any credit balance on the
Retention Account shall bear interest at the rate from time to time
offered by the Lender to its customers for Dollar deposits of similar
amounts and for periods similar to those for which such balances appear
to the Lender likely to remain on the Retention Account.
17.7 RELEASE OF ACCRUED INTEREST. Interest accruing under Clause 17.6 shall
be released to the Borrowers on each Repayment Date unless an Event of
Default or a Potential Event of Default has occurred or the then credit
balance on the Retention Account is less than what would have been the
balance had the full amount required by Clause 17.3 been transferred in
that and each previous month.
17.8 LOCATION OF ACCOUNTS. Each Borrower shall promptly:
(a) comply with any requirement of the Lender as to the location
or re-location of the Earnings Account and the Retention
Account (or any of them); and
(b) execute any documents which the Lender specifies to create or
maintain in favour of the Lender a Security Interest over
(and/or rights of set-off, consolidation or other rights in
relation to) the Earnings Account and the Retention Account.
42
17.9 DEBITS FOR EXPENSES ETC. The Lender shall be entitled (but not obliged)
from time to time to debit the Earnings Account without prior notice in
order to discharge any amount due and payable to it under Clause 19 or
20 or payment of which it has become entitled to demand under Clause 19
or 20.
17.10 BORROWERS' OBLIGATIONS UNAFFECTED. The provisions of this Clause 17 (as
distinct from a distribution effected under Clause 17.5) do not affect:
(a) the liability of the Borrowers to make payments of principal
and interest on the due dates; or
(b) any other liability or obligation of the Borrowers or any
Security Party under any Finance Document.
18 EVENTS OF DEFAULT
18.1 EVENTS OF DEFAULT. An Event of Default occurs if:
(a) any Borrower or any Security Party fails to pay when due or
(if so payable) on demand any sum payable under a Finance
Document or under any document relating to a Finance Document;
or
(b) any breach occurs of Clause 8.2, 10.2, 10.3, 10.17, 10.18,
11.2, 11.3 or 14.1; or
(c) any breach by any Borrower or any Security Party occurs of any
provision of a Finance Document (other than a breach covered
by paragraph (a) or (b)) if, in the opinion of the Lender,
such default is capable of remedy and such default continues
unremedied 10 days after written notice from the Lender
requesting action to remedy the same; or
(d) (subject to any applicable grace period specified in any
Finance Document) any breach by any of the Borrowers or any
Security Party occurs of any provision of a Finance Document
(other than a breach caused by paragraph (a), (b) or (c)); or
(e) any representation, warranty or statement made by, or by an
officer of, a Borrower or a Security Party in a Finance
Document or in the Drawdown Notice or any other notice or
document relating to a Finance Document is untrue or
misleading when it is made; or
(f) any of the following occurs in relation to any Financial
Indebtedness of a Relevant Person:
(i) any Financial Indebtedness of a Relevant Person is
not paid when due or, if so payable, on demand; or
(ii) any Financial Indebtedness of a Relevant Person
becomes due and payable or capable of being declared
due and payable prior to its stated maturity date as
a consequence of any event of default; or
(iii) a lease, hire purchase agreement or charter creating
any Financial Indebtedness of a Relevant Person is
terminated by the lessor or owner or becomes capable
of being terminated as a consequence of any
termination event; or
(iv) any overdraft, loan, note issuance, acceptance
credit, letter of credit, guarantee, foreign exchange
or other facility, or any swap or other derivative
contract or transaction, relating to any Financial
Indebtedness of a Relevant Person ceases to be
available or becomes capable of being terminated as a
result of any event of default,
43
or cash cover is required, or becomes capable of
being required, in respect of such a facility as a
result of any event of default; or
(v) any Security Interest securing any Financial
Indebtedness of a Relevant Person becomes
enforceable; or
(g) any of the following occurs in relation to a Relevant Person:
(i) a Relevant Person becomes, in the opinion of the
Lender, unable to pay its debts as they fall due; or
(ii) any assets of a Relevant Person are subject to any
form of execution, attachment, arrest, sequestration
or distress in respect of a sum of, or sums
aggregating, $500,000 or more or the equivalent in
another currency and such execution, attachment,
arrest, sequestration or distress is not withdrawn
within 7 days of its commencement; or
(iii) any administrative or other receiver is appointed
over any asset of a Relevant Person; or
(iv) a Relevant Person makes any formal declaration of
bankruptcy or any formal statement to the effect that
it is insolvent or likely to become insolvent, or a
winding up or administration order is made in
relation to a Relevant Person, or the members or
directors of a Relevant Person pass a resolution to
the effect that it should be wound up, placed in
administration or cease to carry on business, save
that this paragraph does not apply to a fully solvent
winding up of a Relevant Person other than a Borrower
which is, or is to be, effected for the purposes of
an amalgamation or reconstruction previously approved
by the Lender and effected not later than 3 months
after the commencement of the winding up; or
(v) a petition is presented in any Pertinent Jurisdiction
for the winding up or administration, or the
appointment of a provisional liquidator, of a
Relevant Person unless the petition is being
contested in good faith and on substantial grounds
and is dismissed or withdrawn within 30 days of the
presentation of the petition; or
(vi) a Relevant Person petitions a court, or presents any
proposal for, any form of judicial or non-judicial
suspension or deferral of payments, reorganisation of
its debt (or certain of its debt) or arrangement with
all or a substantial proportion (by number or value)
of its creditors or of any class of them or any such
suspension or deferral of payments, reorganisation or
arrangement is effected by court order, contract or
otherwise; or
(vii) any meeting of the members or directors of a Relevant
Person is summoned for the purpose of considering a
resolution or proposal to authorise or take any
action of a type described in paragraphs (iii), (iv),
(v) or (vi); or
(viii) in a Pertinent Jurisdiction other than England, any
event occurs or any procedure is commenced which, in
the opinion of the Lender, is similar to any of the
foregoing; or
(h) any Borrower ceases or suspends carrying on its business or a
part of its business which, in the opinion of the Lender, is
material in the context of this Agreement; or
(i) it becomes unlawful in any Pertinent Jurisdiction or
impossible:
(i) for any Borrower or any Security Party to discharge
any liability under a Finance Document or to comply
with any other obligation which the Lender considers
material under a Finance Document; or
44
(ii) for the Lender to exercise or enforce any right
under, or to enforce any Security Interest created
by, a Finance Document; or
(j) any consent necessary to enable any Shipowner or the Bareboat
Charterer to own, operate or charter the Ship owned or
chartered by it (as the case may be) or to enable any Borrower
or any Security Party to comply with any provision which the
Lender considers material of a Finance Document, an MOA or the
Bareboat Charter is not granted, expires without being
renewed, is revoked or becomes liable to revocation or any
condition of such a consent is not fulfilled; or
(k) it appears to the Lender that, without its prior consent, a
change has occurred or probably has occurred after the date of
this Agreement in the ultimate beneficial ownership of any of
the shares in any Borrower or the Shareholders or in the
ultimate control of the voting rights attaching to any of
those shares; or
(l) any provision which the Lender considers material of a Finance
Document proves to have been or becomes invalid or
unenforceable, or a Security Interest created by a Finance
Document proves to have been or becomes invalid or
unenforceable or such a Security Interest proves to have
ranked after, or loses its priority to, another Security
Interest or any other third party claim or interest; or
(m) the security constituted by a Finance Document is in any way
imperilled or in jeopardy; or
(n) an Event of Default (as defined in Section 14 of the Master
Agreement) occurs;
(o) the Master Agreement is terminated, cancelled, suspended,
rescinded or revoked or otherwise ceases to remain in full
force and effect for any reason except with the consent of the
Lender; or
(p) any other event occurs or any other circumstances arise or
develop including, without limitation:
(i) a change in the financial position, state of affairs
or prospects of any Borrower or any Shareholder; or
(ii) any accident or other event involving any Ship or
another vessel owned, chartered or operated by a
Relevant Person,
in the light of which the Lender considers that there is a significant
risk that the Borrowers are, or will later become, unable to discharge
their liabilities under the Finance Documents as they fall due.
18.2 ACTIONS FOLLOWING AN EVENT OF DEFAULT. On, or at any time after, the
occurrence of an Event of Default the Lender may:
(a) serve on the Borrowers a notice stating that all obligations
of the Lender to the Borrowers under this Agreement are
terminated; and/or
(b) serve on the Borrowers a notice stating that the Loan, all
accrued interest and all other amounts accrued or owing under
this Agreement are immediately due and payable or are due and
payable on demand; and/or
(c) take any other action which, as a result of the Event of
Default or any notice served under paragraph (a) or (b), the
Lender is entitled to take under any Finance Document or any
applicable law.
45
18.3 TERMINATION OF COMMITMENT. On the service of a notice under Clause
18.2(a) the Commitment, and all other obligations of the Lender to the
Borrowers under this Agreement, shall terminate.
18.4 ACCELERATION OF LOAN. On the service of a notice under Clause 18.2(b),
the Loan, all accrued interest and all other amounts accrued or owing
from the Borrowers or any Security Party under this Agreement and every
other Finance Document shall become immediately due and payable or, as
the case may be, payable on demand.
18.5 MULTIPLE NOTICES; ACTION WITHOUT NOTICE. The Lender may serve notices
Clauses 18.2(a) and (b) simultaneously or on different dates and it may
take any action referred to in Clause 18.2 if no such notice is served
or simultaneously with or at any time after the service of both or
either of such notices.
18.6 EXCLUSION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Neither the Lender nor any receiver or
manager appointed by the Lender, shall have any liability to a Borrower
or a Security Party:
(a) for any loss caused by an exercise of rights under, or
enforcement of a Security Interest created by, a Finance
Document or by any failure or delay to exercise such a right
or to enforce such a Security Interest; or
(b) as mortgagee in possession or otherwise, for any income or
principal amount which might have been produced by or realised
from any asset comprised in such a Security Interest or for
any reduction (however caused) in the value of such an asset,
except that this does not exempt the Lender or a receiver or manager
from liability for losses shown to have been caused directly and mainly
by the dishonesty or the wilful misconduct of the Lender's own officers
and employees or (as the case may be) such receiver's or manager's own
partners or employees.
18.7 RELEVANT PERSONS. In this Clause 18 a "RELEVANT PERSON" means a
Borrower, a Security Party, and any company which is a subsidiary of,
or which appears to the Lender to be under the ultimate control, direct
or indirect, of a Borrower.
18.8 INTERPRETATION. In Clause 18.1(f) references to an event of default or
a termination event include any event, howsoever described, which is
similar to an event of default in a facility agreement or a termination
event in a finance lease; and in Clause 18.1(g) "PETITION" includes an
application.
19 FEES AND EXPENSES
19.1 ARRANGEMENT FEE. The Borrowers shall pay to the Lender on the date of
this Agreement, a non-refundable arrangement fee of $162,000.
19.2 COSTS OF NEGOTIATION, PREPARATION ETC. The Borrowers shall pay to the
Lender on its demand the amount of all expenses incurred by the Lender
in connection with the negotiation, preparation, execution or
registration of any Finance Document or any related document or with
any transaction contemplated by a Finance Document or a related
document.
19.3 COSTS OF VARIATIONS, AMENDMENTS, ENFORCEMENT ETC. The Borrowers shall
pay to the Lender, on the Lender's demand, the amount of all expenses
incurred by the Lender in connection with:
(a) any amendment or supplement to a Finance Document, or any
proposal for such an amendment to be made;
46
(b) any consent or waiver by the Lender concerned under or in
connection with a Finance Document, or any request for such a
consent or waiver;
(c) the valuation of any security provided or offered under Clause
14 or any other matter relating to such security; or
(d) any step taken by the Lender with a view to the protection,
exercise or enforcement of any right or Security Interest
created by a Finance Document or for any similar purpose.
There shall be recoverable under paragraph (d) the full amount of all
legal expenses, whether or not such as would be allowed under rules of
court or any taxation or other procedure carried out under such rules.
19.4 DOCUMENTARY TAXES. The Borrowers shall promptly pay any tax payable on
or by reference to any Finance Document, and shall, on the Lender's
demand, fully indemnify the Lender against any claims, expenses,
liabilities and losses resulting from any failure or delay by the
Borrowers to pay such a tax.
19.5 CERTIFICATION OF AMOUNTS. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is
due to the Lender under this Clause 19 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is due.
20 INDEMNITIES
20.1 INDEMNITIES REGARDING BORROWING AND REPAYMENT OF LOAN. The Borrowers
shall fully indemnify made or brought against the Lender on its demand
in respect of all claims, expenses, liabilities and losses which are
incurred by the Lender, or which the Lender reasonably and with due
diligence estimates that it will incur, as a result of or in connection
with:
(a) an Advance not being borrowed on the date specified in the
Drawdown Notice for any reason other than a default by the
Lender;
(b) the receipt or recovery of all or any part of the Loan or an
overdue sum otherwise than on the last day of an Interest
Period or other relevant period;
(c) any failure (for whatever reason) by the Borrowers to make
payment of any amount due under a Finance Document on the due
date or, if so payable, on demand (after giving credit for any
default interest paid by the Borrowers on the amount concerned
under Clause 6);
(d) the occurrence and/or continuance of an Event of Default or a
Potential Event of Default and/or the acceleration of
repayment of the Loan under Clause 18,
and in respect of any tax (other than tax on its overall net income)
for which the Lender is liable in connection with any amount paid or
payable to the Lender (whether for its own account or otherwise) under
any Finance Document.
20.2 BREAKAGE COSTS. Without limiting its generality, Clause 20.1 covers any
claim, expense, liability or loss, including a loss of a prospective
profit, incurred by the Lender:
(a) in liquidating or employing deposits from third parties
acquired or arranged to fund or maintain all or any part of
the Loan and/or any overdue amount (or an aggregate amount
which includes the Loan or any overdue amount); and
47
(b) in terminating, or otherwise in connection with, any interest
and/or currency swap or any other transaction entered into
(whether with another legal entity or with another office or
department of the Lender) to hedge any exposure arising under
this Agreement or a number of transactions of which this
Agreement is one.
20.3 MISCELLANEOUS INDEMNITIES. The Borrowers shall fully indemnify the
Lender on its demand in respect of all claims, expenses, liabilities
and losses which may be made or brought against or incurred by the
Lender, in any country, as a result of or in connection with:
(a) any action taken, or omitted or neglected to be taken, under
or in connection with any Finance Document by the Lender or by
any receiver appointed under a Finance Document;
(b) any other Pertinent Matter,
other than claims, expenses, liabilities and losses which are shown to
have been directly and mainly caused by the dishonesty or wilful
misconduct of the officers or employees of the Lender.
Without prejudice to its generality, this Clause 20.3 covers any
claims, expenses, liabilities and losses which arise, or are asserted,
under or in connection with any law relating to safety at sea, the ISM
Code or any Environmental Law.
20.4 CURRENCY INDEMNITY. If any sum due from any Borrower or any Security
Party to the Lender under a Finance Document or under any order or
judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid
(the "CONTRACTUAL CURRENCY") into another currency (the "PAYMENT
CURRENCY") for the purpose of:
(a) making or lodging any claim or proof against any Borrower or
any Security Party, whether in its liquidation, any
arrangement involving it or otherwise; or
(b) obtaining an order or judgment from any court or other
tribunal; or
(c) enforcing any such order or judgment,
the Borrowers shall indemnify the Lender against the loss arising when
the amount of the payment actually received by the Lender is converted
at the available rate of exchange into the Contractual Currency.
In this Clause 20.4, the "AVAILABLE RATE OF EXCHANGE" means the rate at
which the Lender is able at the opening of business (London time) on
the Business Day after it receives the sum concerned to purchase the
Contractual Currency with the Payment Currency.
This Clause 20.4 creates a separate liability of the Borrowers which is
distinct from their other liabilities under the Finance Documents and
which shall not be merged in any judgment or order relating to those
other liabilities.
20.5 APPLICATION OF MASTER AGREEMENT. For the avoidance of doubt, Clause
20.4 does not apply in respect of sums due from the Borrowers to the
Lender under or in connection with the Master Agreement as to which
sums the provisions of Section 8 (Contractual Currency) of the Master
Agreement shall apply.
20.6 CERTIFICATION OF AMOUNTS. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is
due to the Lender under this
48
Clause 20 and which indicates (without necessarily specifying a
detailed breakdown) the matters in respect of which the amount, or
aggregate amount, is due shall be prima facie evidence that the amount,
or aggregate amount, is due.
21 NO SET-OFF OR TAX DEDUCTION
21.1 NO DEDUCTIONS. All amounts due from the Borrowers under a Finance
Document shall be paid:
(a) without any form of set-off, cross-claim or condition; and
(b) free and clear of any tax deduction except a tax deduction
which a Borrower is required by law to make.
21.2 GROSSING-UP FOR TAXES. If a Borrower is required by law to make a tax
deduction from any payment:
(a) that Borrower shall notify the Lender as soon as it becomes
aware of the requirement;
(b) that Borrower shall pay the tax deducted to the appropriate
taxation authority promptly, and in any event before any fine
or penalty arises; and
(c) the amount due in respect of the payment shall be increased by
the amount necessary to ensure that the Lender receives and
retains (free from any liability relating to the tax
deduction) a net amount which, after the tax deduction, is
equal to the full amount which it would otherwise have
received.
21.3 EVIDENCE OF PAYMENT OF TAXES. Within one month after making any tax
deduction, the Borrower concerned shall deliver to the Lender
documentary evidence satisfactory to the Lender that the tax had been
paid to the appropriate taxation authority.
21.4 EXCLUSION OF TAX ON OVERALL NET INCOME. In this Clause 21 "TAX
DEDUCTION" means any deduction or withholding for or on account of any
present or future tax except tax on the Lender's overall net income.
21.5 APPLICATION OF MASTER AGREEMENT. For the avoidance of doubt, ▇▇▇▇▇▇ 21
does not apply in respect of sums due from the Borrowers to the Lender
under or in connection with the Master Agreement as to which sums the
provisions of Section 2(d) (Deduction or Withholding for Tax) of the
Master Agreement shall apply.
22 ILLEGALITY, ETC
22.1 ILLEGALITY. This Clause 22 applies if the Lender notifies the Borrowers
that it has become, or will with effect from a specified date, become:
(a) unlawful or prohibited as a result of the introduction of a
new law, an amendment to an existing law or a change in the
manner in which an existing law is or will be interpreted or
applied; or
(b) contrary to, or inconsistent with, any regulation,
for the Lender to maintain or give effect to any of its obligations
under this Agreement in the manner contemplated by this Agreement.
22.2 NOTIFICATION AND EFFECT OF ILLEGALITY. On the Lender notifying the
Borrowers under Clause 22.1, the Commitment shall terminate; and
thereupon or, if later, on the date
49
specified in the Lender's notice under Clause 22.1 as the date on which
the notified event would become effective the Borrowers shall prepay
the Loan in full in accordance with Clause 7.
22.3 MITIGATION. If circumstances arise which would result in a notification
under Clause 22.1 then, without in any way limiting the rights of the
Lender under Clause 22.3, the Lender shall use reasonable endeavours to
transfer its obligations, liabilities and rights under this Agreement
and the Finance Documents to another office or financial institution
not affected by the circumstances but the Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or
might:
(a) have an adverse effect on its business, operations or
financial condition; or
(b) involve it in any activity which is unlawful or prohibited or
any activity that is contrary to, or inconsistent with, any
regulation; or
(c) involve it in any expense (unless indemnified to its
satisfaction) or tax disadvantage.
23 INCREASED COSTS
23.1 INCREASED COSTS. This Clause 23 applies if the Lender notifies the
Borrowers that it considers that as a result of:
(a) the introduction or alteration after the date of this
Agreement of a law or an alteration after the date of this
Agreement in the manner in which a law is interpreted or
applied (disregarding any effect which relates to the
application to payments under this Agreement of a tax on the
Lender's overall net income); or
(b) complying with any regulation (including any which relates to
capital adequacy or liquidity controls or which affects the
manner in which the Lender allocates capital resources to its
obligations under this Agreement) which is introduced, or
altered, or the interpretation or application of which is
altered, after the date of this Agreement,
the Lender (or a parent company of it) has incurred or will incur an
"INCREASED COST".
23.2 MEANING OF "INCREASED COST". In this Clause 23, "INCREASED COST" means:
(a) an additional or increased cost incurred as a result of, or in
connection with, the Lender having entered into, or being a
party to, this Agreement or having taken an assignment of
rights under this Agreement, of funding or maintaining the
Commitment or performing its obligations under this Agreement,
or of having outstanding all or any part of the Loan or other
unpaid sums; or
(b) a reduction in the amount of any payment to the Lender under
this Agreement or in the effective return which such a payment
represents to the Lender or on its capital;
(c) an additional or increased cost of funding all or maintaining
all or any of the advances comprised in a class of advances
formed by or including the Loan or (as the case may require)
the proportion of that cost attributable to the Loan; or
(d) a liability to make a payment, or a return foregone, which is
calculated by reference to any amounts received or receivable
by the Lender under this Agreement,
but not an item attributable to a change in the rate of tax on the
overall net income of the Lender (or a parent company of it) or an item
covered by the indemnity for tax in Clause 20.1 or by Clause 21.
50
For the purposes of this Clause 23.2 the Lender may in good faith
allocate or spread costs and/or losses among its assets and liabilities
(or any class of its assets and liabilities) on such basis as it
considers appropriate.
23.3 PAYMENT OF INCREASED COSTS. The Borrowers shall pay to the Lender, on
its demand, the amounts which the Lender from time to time notifies the
Borrowers that it has specified to be necessary to compensate it for
the increased cost.
23.4 NOTICE OF PREPAYMENT. If the Borrowers are not willing to continue to
compensate the Lender for the increased cost under Clause 23.3, the
Borrowers may give the Lender not less than 14 days' notice of their
intention to prepay the Loan at the end of an Interest Period.
23.5 PREPAYMENT. A notice under Clause 23.4 shall be irrevocable; and on the
date specified in the Borrowers' notice of intended prepayment, the
Commitment shall terminate and the Borrowers shall prepay (without
premium or penalty) the Loan, together with accrued interest thereon at
the applicable rate plus the Margin.
23.6 APPLICATION OF PREPAYMENT. Clause 7 shall apply in relation to the
prepayment.
24 SET-OFF
24.1 APPLICATION OF CREDIT BALANCES. The Lender may without prior notice:
(a) apply any balance (whether or not then due) which at any time
stands to the credit of any account in the name of a Borrower
at any office in any country of the Lender in or towards
satisfaction of any sum then due from that Borrower to the
Lender under any of the Finance Documents; and
(b) for that purpose:
(i) break, or alter the maturity of, all or any part of a
deposit of that Borrower;
(ii) convert or translate all or any part of a deposit or
other credit balance into Dollars; and
(iii) enter into any other transaction or make any entry
with regard to the credit balance which the Lender
considers appropriate.
24.2 EXISTING RIGHTS UNAFFECTED. The Lender shall not be obliged to exercise
any of its rights under Clause 24.1; and those rights shall be without
prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which the Lender is
entitled (whether under the general law or any document).
24.3 NO SECURITY INTEREST. This Clause 24 gives the Lender a contractual
right of set-off only, and does not create any equitable charge or
other Security Interest over any credit balance of the Borrower.
25 TRANSFERS AND CHANGES IN LENDING OFFICE
25.1 TRANSFER BY BORROWERS. No Borrower may, without the consent of the
Lender transfer any of its rights or obligations under any Finance
Document.
25.2 ASSIGNMENT BY ▇▇▇▇▇▇. The Lender may assign all or any of the rights
and interests which it has under or by virtue of the Finance Documents
without the consent of any Borrower.
51
25.3 RIGHTS OF ASSIGNEE. In respect of any breach of a warranty,
undertaking, condition or other provision of a Finance Document, or any
misrepresentation made in or in connection with a Finance Document, a
direct or indirect assignee of any of the Lender's rights or interests
under or by virtue of the Finance Documents shall be entitled to
recover damages by reference to the loss incurred by that assignee as a
result of the breach or misrepresentation irrespective of whether the
Lender would have incurred a loss of that kind or amount.
25.4 SUB-PARTICIPATION; SUBROGATION ASSIGNMENT. The Lender may
sub-participate all or any part of its rights and/or obligations under
or in connection with the Finance Documents without the consent of, or
any notice to, any Borrower; and the Lender may assign, in any manner
and terms agreed by it, all or any part of those rights to an insurer
or surety who has become subrogated to them.
25.5 DISCLOSURE OF INFORMATION. The Lender may disclose to a potential
assignee or sub-participant any information which the Lender has
received in relation to any Borrower, any Security Party or their
affairs under or in connection with any Finance Document, unless the
information is clearly of a confidential nature.
25.6 CHANGE OF LENDING OFFICE. The Lender may change its lending office by
giving notice to the Borrowers and the change shall become effective on
the later of:
(a) the date on which the Borrowers receive the notice; and
(b) the date, if any, specified in the notice as the date on which
the change will come into effect.
26 VARIATIONS AND WAIVERS
26.1 VARIATIONS, WAIVERS ETC. BY ▇▇▇▇▇▇. A document shall be effective to
vary, waive, suspend or limit any provision of a Finance Document, or
the Lender's rights or remedies under such a provision or the general
law, only if the document is signed, or specifically agreed to by fax
or telex, by the Borrowers and the Lender and, if the document relates
to a Finance Document to which a Security Party is party, by that
Security Party.
26.2 EXCLUSION OF OTHER OR IMPLIED VARIATIONS. Except for a document which
satisfies the requirements of Clause 26.1, no document, and no act,
course of conduct, failure or neglect to act, delay or acquiescence on
the part of the Lender (or any person acting on its behalf) shall
result in the Lender (or any person acting on its behalf) being taken
to have varied, waived, suspended or limited, or being precluded
(permanently or temporarily) from enforcing, relying on or exercising:
(a) a provision of this Agreement or another Finance Document; or
(b) an Event of Default; or
(c) a breach by a Borrower or a Security Party of an obligation
under a Finance Document or the general law; or
(d) any right or remedy conferred by any Finance Document or by
the general law;
and there shall not be implied into any Finance Document any term or
condition requiring any such provision to be enforced, or such right or
remedy to be exercised, within a certain or reasonable time.
52
27 NOTICES
27.1 GENERAL. Unless otherwise specifically provided, any notice under or in
connection with any Finance Document shall be given by letter or fax;
and references in the Finance Documents to written notices, notices in
writing and notices signed by particular persons shall be construed
accordingly.
27.2 ADDRESSES FOR COMMUNICATIONS. A notice shall be sent:
(a) to a Borrower: c/o Stealthgas Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇
Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
(b) to the Lender: Fortis Bank (Nederland) N.V.
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Fax No: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
and in the event that a
notice concerns the Master
Agreement, with a copy to:
Fortis Bank Oslo
Haakon VII ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
Fax No.: + ▇▇ ▇▇▇▇ ▇▇▇▇
or to such other address as the relevant party may notify the other.
27.3 EFFECTIVE DATE OF NOTICES. Subject to Clauses 27.4 and 27.5:
(a) a notice which is delivered personally or posted shall be
deemed to be served, and shall take effect, at the time when
it is delivered; and
(b) a notice which is sent by telex or fax shall be deemed to be
served, and shall take effect, 2 hours after its transmission
is completed.
27.4 SERVICE OUTSIDE BUSINESS HOURS. However, if under Clause 27.3 a notice
would be deemed to be served:
(a) on a day which is not a business day in the place of receipt;
or
(b) on such a business day, but after 5 p.m. local time,
the notice shall (subject to Clause 27.5) be deemed to be served, and
shall take effect, at 9 a.m. on the next day which is such a business
day.
27.5 ILLEGIBLE NOTICES. Clauses 27.3 and 27.4 do not apply if the recipient
of a notice notifies the sender within 1 hour after the time at which
the notice would otherwise be deemed to be served that the notice has
been received in a form which is illegible in a material respect.
53
27.6 ENGLISH LANGUAGE. Any notice under or in connection with a Finance
Document shall be in English.
27.7 VALID NOTICES. A notice under or in connection with a Finance Document
shall not be invalid by reason that its contents or the manner of
serving it do not comply with the requirements of this Agreement or,
where appropriate, any other Finance Document under which it is served
if:
(a) the failure to serve it in accordance with the requirements of
this Agreement or other Finance Document, as the case may be,
has not caused any party to suffer any significant loss or
prejudice; or
(b) in the case of incorrect and/or incomplete contents, it should
have been reasonably clear to the party on which the notice
was served what the correct or missing particulars should have
been.
27.8 MEANING OF "NOTICE". In this Clause 28 "NOTICE" includes any demand,
consent, authorisation, approval, instruction, waiver or other
communication.
28 JOINT AND SEVERAL LIABILITY
28.1 GENERAL. All liabilities and obligations of the Borrowers under this
Agreement shall, whether expressed to be so or not, be several and, if
and to the extent consistent with Clause 28.2, joint.
28.2 NO IMPAIRMENT OF ▇▇▇▇▇▇▇▇'S OBLIGATIONS. The liabilities and
obligations of a Borrower shall not be impaired by:
(a) this Agreement being or later becoming void, unenforceable or
illegal as regards any other Borrower;
(b) the Lender entering into any rescheduling, refinancing or
other arrangement of any kind with any other Borrower;
(c) the Lender releasing any other Borrower or any Security
Interest created by a Finance Document; or
(d) any combination of the foregoing.
28.3 PRINCIPAL DEBTORS. Each Borrower declares that it is and will,
throughout the Security Period, remain a principal debtor for all
amounts owing under this Agreement and the Finance Documents and no
Borrower shall in any circumstances be construed to be a surety for the
obligations of any other Borrower under this Agreement.
28.4 SUBORDINATION. Subject to Clause 28.5, during the Security Period, no
Borrower shall:
(a) claim any amount which may be due to it from any other
Borrower whether in respect of a payment made, or matter
arising out of, this Agreement or any Finance Document, or any
matter unconnected with this Agreement or any Finance
Document; or
(b) take or enforce any form of security from any other Borrower
for such an amount, or in any other way seek to have recourse
in respect of such an amount against any asset of any other
Borrower; or
(c) set off such an amount against any sum due from it to any
other Borrower; or
54
(d) prove or claim for such an amount in any liquidation,
administration, arrangement or similar procedure involving any
other Borrower or other Security Party; or
(e) exercise or assert any combination of the foregoing.
28.5 BORROWER'S REQUIRED ACTION. If during the Security Period, the Lender,
by notice to a Borrower, requires it to take any action referred to in
paragraphs (a) to (d) of Clause 28.4, in relation to any other
Borrower, that Borrower shall take that action as soon as practicable
after receiving the Lender's notice.
29 SUPPLEMENTAL
29.1 RIGHTS CUMULATIVE, NON-EXCLUSIVE. The rights and remedies which the
Finance Documents give to the Lender are:
(a) cumulative;
(b) may be exercised as often as appears expedient; and
(c) shall not, unless a Finance Document explicitly and
specifically states so, be taken to exclude or limit any right
or remedy conferred by any law.
29.2 SEVERABILITY OF PROVISIONS. If any provision of a Finance Document is
or subsequently becomes void, unenforceable or illegal, that shall not
affect the validity, enforceability or legality of the other provisions
of that Finance Document or of the provisions of any other Finance
Document.
29.3 COUNTERPARTS. A Finance Document may be executed in any number of
counterparts.
29.4 THIRD PARTY RIGHTS. A person who is not a party to this Agreement has
no right under the Contracts (Rights of Third Parties) Act 1999 to
enforce or to enjoy the benefit of any term of this Agreement.
30 LAW AND JURISDICTION
30.1 ENGLISH LAW. This Agreement shall be governed by, and construed in
accordance with, English law.
30.2 EXCLUSIVE ENGLISH JURISDICTION. Subject to Clause 30.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which
may arise out of or in connection with this Agreement.
30.3 CHOICE OF FORUM FOR THE EXCLUSIVE BENEFIT OF THE LENDER. Clause 30.2 is
for the exclusive benefit of the Lender, which reserves the rights:
(a) to commence proceedings in relation to any matter which arises
out of or in connection with this Agreement in the courts of
any country other than England and which have or claim
jurisdiction to that matter; and
(b) to commence such proceedings in the courts of any such country
or countries concurrently with or in addition to proceedings
in England or without commencing proceedings in England.
Neither Borrower shall commence any proceedings in any country
other than England in relation to a matter which arises out of
or in connection with this Agreement.
55
30.4 PROCESS AGENT. Each Borrower irrevocably appoints ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ at
its registered office for the time being, presently at Beaufort House,
▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, to act as its agent to
receive and accept on its behalf any process or other document relating
to any proceedings in the English courts which are connected with this
Agreement.
30.5 ▇▇▇▇▇▇'S RIGHTS UNAFFECTED. Nothing in this Clause 30 shall exclude or
limit any right which the Lender may have (whether under the law of any
country, an international convention or otherwise) with regard to the
bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
30.6 MEANING OF "PROCEEDINGS". In this Clause 30, "PROCEEDINGS" means
proceedings of any kind, including an application for a provisional or
protective measure.
THIS AGREEMENT has been entered into on the date stated at the beginning of this
Agreement.
56
SCHEDULE 1
DRAWDOWN NOTICE
To: Fortis Bank (Nederland) N.V.
Coolsingel 93, 3012 AE
Rotterdam
The Netherlands
Attention: ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
2005
DRAWDOWN NOTICE
1 We refer to the loan agreement (the "LOAN AGREEMENT") dated [o]
February 2005 and made between us, as Borrowers, and you, as Lender, in
connection with a facility of up to US$54,000,000. Terms defined in the
Loan Agreement have their defined meanings when used in this Drawdown
Notice.
2 We request to borrow an Advance in relation to "[o]" as follows:
(a) Amount: US$[o];
(b) Drawdown Date: [o];
(c) Duration of the first Interest Period shall be [o] months;
(d) Payment instructions : account in our name and numbered [o]
with [o] of [o].
3 We represent and warrant that:
(e) the representations and warranties in Clause 9 of the Loan
Agreement would remain true and not misleading if repeated on
the date of this notice with reference to the circumstances
now existing;
(f) no Event of Default or Potential Event of Default has occurred
or will result from the borrowing of the Loan.
4 This notice cannot be revoked without the prior consent of the Lender.
[Name of Signatory]
.....................................
Director
for and on behalf of
[o]
57
SCHEDULE 2
DETAILS OF BORROWERS
<TABLE>
--------------------------------------------------------------------------------
BORROWER REGISTERED ADDRESS COUNTRY OF
INCORPORATION
--------------------------------------------------------------------------------
Aracruz Trading Ltd. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
Gaz de Brazil Inc. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
Geneve Butane Inc. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
Industrial Materials Inc. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
Lpgone Ltd. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
BORROWER AUTHORISED SHARE ISSUED SHARE SHAREHOLDER(S), EACH
CAPITAL CAPITAL INCORPORATED IN THE ▇▇▇▇▇▇▇▇
ISLANDS
--------------------------------------------------------------------------------------------------
Aracruz Trading Ltd. 100 registered 100 bearer shares ▇▇▇▇▇▇▇ Enterprises S.A.
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
Gaz de Brazil Inc. 100 registered 100 bearer shares Fairdeal Enterprises Corp.
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
Geneve Butane Inc. 100 registered 100 bearer shares Access Consultants Co.
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
Industrial Materials Inc. 100 registered 100 bearer shares Lyonet Holdings Corp.
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
Lpgone Ltd. 100 registered 100 bearer shares Atlas Investments S.A.
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
</TABLE>
58
<TABLE>
--------------------------------------------------------------------------------
BORROWER REGISTERED ADDRESS COUNTRY OF
INCORPORATION
--------------------------------------------------------------------------------
Matrix Gas Trading Ltd. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
Pacific Gases Ltd. ▇▇▇/▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
--------------------------------------------------------------------------------
Semichlaus Exports Ltd. ▇▇▇/▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
--------------------------------------------------------------------------------
VCM Trading Ltd. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
Ventspils Gases Ltd. ▇▇▇/▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
--------------------------------------------------------------------------------
Stealthgas Inc. Trust Company Complex, Ajeltake ▇▇▇▇▇▇▇▇ Islands
Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands, MH96960
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
BORROWER AUTHORISED SHARE ISSUED SHARE SHAREHOLDER(S), EACH
CAPITAL CAPITAL INCORPORATED IN THE ▇▇▇▇▇▇▇▇
ISLANDS
--------------------------------------------------------------------------------------------------
Matrix Gas Trading Ltd. 100 registered 100 bearer shares ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ S.A.
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
Pacific Gases Ltd. 2000 shares of 500 shares of LM1 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ S.A. (325
LM1 each each, each shares) and Grazia Maritime
20% paid up Ltd. (175 shares)
--------------------------------------------------------------------------------------------------
Semichlaus Exports Ltd. 2000 shares of 500 shares of LM1 ▇▇▇▇▇ Properties Co.(325
LM1 each each, each shares) and Aubine Services
20% paid up Ltd. (175 shares)
--------------------------------------------------------------------------------------------------
VCM Trading Ltd. 100 registered 100 bearer shares Leader Investments Inc.
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
Ventspils Gases Ltd. 2000 shares of 500 shares of LM1 ▇▇▇▇▇▇ Trading Limited (325
LM1 each each, each shares0 and
20% paid up Celidon Investments Inc. (175
shares)
--------------------------------------------------------------------------------------------------
Stealthgas Inc. 100 registered 100 bearer shares ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and/or bearer by way of bearer
shares of no par stock certificates
value. nos. 1 and 2
--------------------------------------------------------------------------------------------------
</TABLE>
59
SCHEDULE 3
DETAILS OF SHIPS
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
SHIP FLAG OWNER CLASS NOTATION CLASSIFICATION SOCIETY
------------------------------------------------------------------------------------------------------------------------------------
"▇▇▇▇▇▇ ▇▇▇▇▇ Panama Industrial Nippon Kaiji Kyokai
------------------------------------------------------------------------------------------------------------------------------------
"GAS AMAZON" ▇▇▇▇▇▇▇▇ Islands Aracruz Bureau Veritas
------------------------------------------------------------------------------------------------------------------------------------
"GAS ARCTIC" Malta Ventspils RINA
------------------------------------------------------------------------------------------------------------------------------------
"GAS COURCHEVAL" ▇▇▇▇▇▇▇▇ Islands Geneve 1*HULL *MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation ICE CLASS 1C oAUT
UMS
------------------------------------------------------------------------------------------------------------------------------------
"GAS EMPEROR" Cyprus Pacific 1 *HULL *MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation
------------------------------------------------------------------------------------------------------------------------------------
"GAS ICE" Malta Semichlaus RINA
------------------------------------------------------------------------------------------------------------------------------------
"GAS PRODIGY" ▇▇▇▇▇▇▇▇ Islands Gaz 1*HULL *MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation
------------------------------------------------------------------------------------------------------------------------------------
"GAS PROPHET" ▇▇▇▇▇▇▇▇ Islands VCM NS* MNS* Nippon Kaiji Kyokai
------------------------------------------------------------------------------------------------------------------------------------
"GAS TINY" ▇▇▇▇▇▇▇▇ Islands Lpgone 1*HULL *MACH Liquefied gas carrier Bureau Veritas
Unrestricted navigation
------------------------------------------------------------------------------------------------------------------------------------
"GAS SHANGHAI" ▇▇▇▇▇▇▇▇ Islands Matrix *A1, Liquefied gas carrier, (E), *AMS American Bureau of Shipping
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
60
SCHEDULE 4
CONDITION PRECEDENT DOCUMENTS
PART A
The following are the documents referred to in Clause 8.1(a).
1 A duly executed original of each Finance Document (and of each document
required to be delivered by each Finance Document) other than those
referred to in Part B or Part C.
2 Copies of the constitutional documents of each Borrower and each
Security Party.
3 Copies of resolutions of the shareholders and directors of each
Borrower and each Security Party authorising the execution of each of
the Finance Documents to which that Borrower or that Security Party is
a party and, in the case of a Borrower, authorising named officers to
give the Drawdown Notices and other notices under this Agreement, and
in the case of each Buyer ratifying the execution of the relevant MOA.
4 The original of any power of attorney under which any Finance Document
is executed on behalf of the Borrower or a Security Party.
5 Copies of all consents which any Borrower or any Security Party
requires to enter into, or make any payment under, any Finance Document
or an MOA.
6 The originals of any mandates or other documents required in connection
with the opening or operation of the Earnings Account and the Retention
Account and all other information required by the Lender in relation to
its "know your customer" regulations (whether in connection with the
opening of the Earnings Account, the Retention Account or otherwise).
7 Copies of the MOAs and all addenda thereto and of all documents signed
or issued by the Buyers or the Sellers under or in connection with any
of them.
8 Such documentary evidence as the Lender and its legal advisers may
require in relation to the due authorisation and execution by each
Seller of the MOA to which it is a party and of all documents to be
executed by each Seller under the MOA to which it is a party.
9 Such evidence satisfactory to the Lender of the Purchase Price of each
Ship which is already in the ownership of a Shipowner at the date on
which the first Drawdown Notice is served.
10 Documentary evidence that the agent for service of process named in
Clause 30 has accepted its appointment.
11 If the Lender so requires, in respect of any of the documents referred
to above, a certified English translation prepared by a translator
approved by the Lender.
61
PART B
In this Part B of Schedule 4, "RELEVANT SHIP" means the Ship whose acquisition
is to be part-financed or part refinanced (as the case may be) by the Advance
being drawn down on the relevant Drawdown Date.
The following are the documents referred to in Clause 8.1(b).
65
1 A duly executed original of the Mortgage, the General Assignment and,
if applicable, the Deed of Covenant (and of each document to be
delivered by each of them) relating to the Relevant Ship.
2 Documentary evidence that:
(a) in accordance with the information contained in Schedule 3,
the Relevant Ship is definitively and permanently registered
in the name of the relevant Shipowner under the flag and at
the port specified in Schedule 3;
(b) the Relevant Ship is in the absolute and unencumbered
ownership of the relevant Shipowner save as contemplated by
the Finance Documents;
(c) the Relevant Ship maintains the class as set out in Schedule 3
with the relevant Classification Society free of all overdue
recommendations and conditions of such Classification Society;
(d) the Mortgage relating to the Relevant Ship has been duly
registered against that Ship as a valid first preferred or
priority (as the case may be) ship mortgage in accordance with
the laws of the relevant flag state; and
(e) the Relevant Ship is insured in accordance with the provisions
of this Agreement and all requirements therein in respect of
insurances have been complied with.
3 Documents establishing that the Relevant Ship will, as from the first
Drawdown Date, be managed by the applicable Approved Manager on terms
acceptable to the Lender, together with:
(a) a letter of undertaking executed by the Approved Manager in
favour of the Lender in the terms required by the Lender
agreeing certain matters in relation to the management of the
Relevant Ship and subordinating the rights of the Approved
Manager against the relevant Shipowner to the rights of the
Lender under the Finance Documents; and
(b) copies of the Approved Manager's Document of Compliance and of
the Relevant Ship's Safety Management Certificate (together
with any other details of the applicable safety management
system which the Lender requires).
4 Satisfactory valuations of the Relevant Ship addressed to the Lender,
stated to be for the purposes of this Agreement and dated not earlier
than 30 days before the Drawdown Date for the Advance relevant to that
Ship, from 2 independent London sale and purchase shipbroker selected
by the Lender.
5 A satisfactory survey report addressed to the Lender, stated to be for
the purposes of this Agreement and dated not earlier than 30 days
before the relevant Drawdown Date from the technical manager of the
relevant Ship in respect of the physical condition of that Ship
PROVIDED THAT when 4 such reports have been provided in relation to 4
different Ships, this condition precedent shall no longer apply.
62
6 Favourable legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of Cyprus, Malta, Panama, the ▇▇▇▇▇▇▇▇
Islands and such other relevant jurisdiction as the Lender may require.
PART C
The following are the documents referred to in Clause 8.1(c).
1 A duly executed original of the relevant Tripartite Deed (and of each
document to be delivered pursuant thereto).
2 Documentary evidence that the relevant Ship has been unconditionally
delivered by the relevant Shipowner to, and accepted by, the relevant
Bareboat Charterer for operation under the relevant Bareboat Charter;
3 Copies of the constitutional documents of the relevant Bareboat
Charterer;
4 Copies of resolutions of the shareholders and directors of the relevant
Bareboat Charterer authorising the execution of the relevant Tripartite
Agreement and ratifying its entry into the relevant Bareboat Charter.
5 The original power of attorney under which any Finance Document is
executed on behalf of the relevant Bareboat Charterer.
6 A copy of the relevant Bareboat Charter and any addenda thereto.
7 Favourable legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of the ▇▇▇▇▇▇▇▇ Islands, Malta, Panama,
Cyprus, The Netherlands and such other relevant jurisdiction as the
Lender may require.
Each copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of a
Borrower.
63
EXECUTION PAGE
BORROWERS
SIGNED by ) /s/ illegible
for and on behalf of )
MATRIX GAS TRADING LTD. )
SIGNED by ) /s/ illegible
for and on behalf of )
GAZ DE BRAZIL INC. )
SIGNED by ) /s/ illegible
for and on behalf of )
VCM TRADING LTD. )
SIGNED by ) /s/ illegible
for and on behalf of )
GENEVE BUTANE INC. )
SIGNED by ) /s/ illegible
for and on behalf of )
LPGONE LTD. )
SIGNED by ) /s/ illegible
for and on behalf of )
SEMICHLAUS EXPORTS LTD. )
SIGNED by ) /s/ illegible
for and on behalf of )
VENTSPILS GASES LTD. )
SIGNED by ) /s/ illegible
for and on behalf of )
PACIFIC GASES LTD. )
64
SIGNED by ) /s/ illegible
for and on behalf of )
ARACRUZ TRADING LTD. )
SIGNED by ) /s/ illegible
for and on behalf of )
INDUSTRIAL MATERIALS INC. )
SIGNED by ) /s/ illegible
for and on behalf of )
STEALTHGAS INC. )
LENDER
SIGNED by ) /s/ illegible
for and on behalf of )
FORTIS BANK (NEDERLAND) N.V. )
Witness to all ) /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
the above signatures: )
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Solicitor
Address: ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
2 Defteras Merarchias
Piraeus, 185 36 Greece
65
Date 10 June 2005
FORTIS BANK (NEDERLAND) N.V.
as Lender
-and-
MATRIX GAS TRADING LTD., GAZ DE BRAZIL INC.,
VCM TRADING LTD., GENEVE BUTANE INC., LPGONE LTD.,
SEMICHLAUS EXPORTS LTD., VENTSPILS GASES LTD.,
PACIFIC GASES LTD., ARACRUZ TRADING LTD.,
INDUSTRIAL MATERIALS INC. AND STEALTHGAS INC.
as joint and several Borrowers
----------------------------------------------------------
DEED OF RELEASE OF SECURITY AND OBLIGATIONS
------------------------------------------------------------
relating to security granted by Gaz de Brazil Inc. in relation
to the LPG carrier "GAS PRODIGY"
to secure a facility of (originally) US$54,000,000
with US$54,000,000 outstanding
for the financing of the LPG carriers "GAS AMAZON",
"GAS ARCTIC", "GAS ICE" and "▇▇▇▇▇▇ ▇▇▇▇▇"
and the refinancing of the LPG carriers "GAS EMPEROR",
"GAS COURCHEVAL", "GAS PRODIGY", "GAS SHANGHAI",
"GAS PROPHET" and "GAS TINY"
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Piraeus
INDEX
CLAUSE PAGE
1 INTERPRETATION 1
2 RELEASE OF SECURITY INTERESTS 2
3 REASSIGNMENT OF ASSIGNED PROPERTY 2
4 FURTHER DOCUMENTS 2
5 EFFECTIVE DATE 2
6 EXPENSES 2
7 COUNTERPARTS 2
8 LAW AND JURISDICTION 3
SCHEDULE FORM OF NOTICE OF REASSIGNMENT 4
EXECUTION PAGES 5
THIS DEED is made on June 2005
BETWEEN
(1) FORTIS BANK (NEDERLAND) N.V. acting through its office at ▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the "LENDER"); and
(2) MATRIX GAS TRADING LTD., GAZ DE BRAZIL INC., VCM TRADING LTD., GENEVE
BUTANE INC., LPGONE LTD., SEMICHLAUS EXPORTS LTD., VENTSPILS GASES
LTD., PACIFIC GASES LTD., ARACRUZ TRADING LTD., INDUSTRIAL MATERIALS
INC. and STEALTHGAS INC. as joint and several borrowers (the
"BORROWERS").
BACKGROUND
(A) By a loan agreement dated 16 March 2005 and made between (i) the
Borrowers and (ii) the Lender, the Lender has made available to the
Borrowers a facility of (originally) US$54,000,000, of which
US$54,000,000 is outstanding on the date of this Deed (prior to taking
into account the prepayment of the Loan referred to in Recital (B)).
(B) In respect of the Released Ship, the Borrowers have, on the date of
this Deed, prepaid the relevant proportion of Loan, being US$3,580,500,
to the Lender.
(C) This Deed sets out the terms and conditions on which the Lender agrees,
at the request of the Borrowers, to the release of the Security
Interests created by the Released Finance Documents and to the release
of the Released Borrower from its obligations under the Continuing
Finance Documents.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 DEFINED EXPRESSIONS. Words and expressions defined in the Loan
Agreement shall have the same meanings when used in this Deed unless
the context otherwise requires.
1.2 DEFINITIONS. In this Deed, unless the contrary intention appears:
"CONTINUING BORROWERS" means all the Borrowers other than the Released
Borrower;
"CONTINUING FINANCE DOCUMENTS" means all the Finance Documents other
than the Released Finance Documents;
"EFFECTIVE DATE" means 30 March 2005;
"LOAN AGREEMENT" means the Loan Agreement dated 16 March 2005 referred
to in Recital (A);
"RELEASED BORROWER" means Gaz de Brazil Inc., a company incorporated
and existing under the laws of the ▇▇▇▇▇▇▇▇ Islands and having its
registered office at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, The ▇▇▇▇▇▇▇▇ Islands;
"RELEASED FINANCE DOCUMENTS" means each of the Mortgage and the General
Assignment in respect of the Released Ship;
"RELEASED SHIP" means the 1995-built LPG Carrier of 3,000 cubic metres
registered under ▇▇▇▇▇▇▇▇ Islands flag in the ownership of the Relevant
Borrower with the name "GAS PRODIGY".
1.3 APPLICATION OF CONSTRUCTION AND INTERPRETATION PROVISIONS OF LOAN
AGREEMENT. Clauses 1.2 and 1.5 of the Loan Agreement apply, with any
necessary modifications, to this Deed.
2 RELEASE OF SECURITY INTERESTS AND OBLIGATIONS
2.1 RELEASE OF SECURITY INTERESTS. In consideration of the prepayment of
the Loan referred to in Recital (B), the Lender releases:
(a) all Security Interests created in its favour by the Released Borrower
under the Released Finance Documents; and
(b) the Released Borrower from its obligations under the Loan Agreement and
the other Finance Documents.
2.2 OBLIGATIONS OF CONTINUING BORROWERS. The Continuing Borrowers, by
executing this Deed, confirm and agree that other than those Security
Interests and obligations released pursuant to Clause 2.1, the terms
and conditions of, and all of their obligations under, the Continuing
Finance Documents shall remain in full force and effect.
3 REASSIGNMENT OF ASSIGNED PROPERTY
3.1 REASSIGNMENT. The Lender, without any warranty, representation,
covenant or other recourse, reassigns to the Released Borrower, all
rights and interests of every kind which the Lender now has to, in or
in connection with the Assigned Property (as defined in the General
Assignment relating to the Released Ship.
4 FURTHER DOCUMENTS
4.1 DELIVERY OF FURTHER DOCUMENTS. The Lender shall promptly after
execution and delivery of this Deed deliver to the Released Borrower:
(a) evidence that the Mortgage relating to the Released Ship has been
discharged; and
(b) an executed notice of reassignment of Insurances relating to the
Released Ship in the form set out in the Schedule.
5 EFFECTIVE DATE
5.1 EFFECTIVE DATE. The Borrowers and the Lender agree that the provisions
of this Deed shall be deemed to have taken effect as of the Effective
Date.
6 EXPENSES
6.1 EXPENSES. The provisions of clause 19 (fees and expenses) of the Loan
Agreement shall apply to this Deed as if they were expressly
incorporated in this Deed with any appropriate modifications.
7 SUPPLEMENTAL
7.1 COUNTERPARTS. This Deed may be executed in any number of counterparts.
7.2 THIRD PARTY RIGHTS. A person who is not a party to this Deed has no
right under the Contracts (Rights of Third Parties) Act 1999 to enforce
or to enjoy the benefit of any term of this Deed.
2
8 LAW AND JURISDICTION
8.1 GOVERNING LAW. This Deed shall be governed by and construed in
accordance with English law.
8.2 INCORPORATION OF LOAN AGREEMENT PROVISIONS. The provisions of clause 30
(law and jurisdiction) of the Loan Agreement shall apply to this Deed
as if they were expressly incorporated in this Agreement with any
necessary modifications.
THIS DEED has been duly executed as a Deed on the date stated at the beginning
of this Deed
3
SCHEDULE
FORM OF NOTICE OF REASSIGNMENT OF INSURANCES
M. V. "GAS PRODIGY" (THE "SHIP")
We, FORTIS BANK (NEDERLAND) N.V., being the assignee of all rights and interest
of every kind of GAZ DE BRAZIL INC. (the "ASSIGNOR") to, in or in connection
with all policies and contracts of insurance, including entries of the Ship in
any protection and indemnity or war risks association (the "INSURANCES") in
respect of the Ship pursuant to a first priority assignment dated 21 March 2005
(the "ASSIGNMENT") GIVE NOTICE that we have reassigned to the Assignor all of
our rights and interest of every kind to, in or in connection with the
Insurances under the Assignment and, with effect from 30 March 2005, we have no
further interest in or claim over the Insurances.
-----------------------------------
for and on behalf of
FORTIS BANK (NEDERLAND) N.V.
Date: June 2005
4
EXECUTION PAGES
LENDER
EXECUTED as a DEED ) /s/ Illegible
by )
for and on behalf of )
FORTIS BANK )
(NEDERLAND) N.V. )
BORROWERS
SIGNED by ) /s/ Illegible
for and on behalf of )
MATRIX GAS TRADING LTD. )
SIGNED by ) /s/ Illegible
for and on behalf of )
GAZ DE BRAZIL INC. )
SIGNED by ) /s/ Illegible
for and on behalf of )
VCM TRADING LTD. )
SIGNED by ) /s/ Illegible
for and on behalf of )
GENEVE BUTANE INC. )
SIGNED by ) /s/ Illegible
for and on behalf of )
LPGONE LTD. )
SIGNED by ) /s/ Illegible
for and on behalf of )
SEMICHLAUS EXPORTS LTD. )
SIGNED by ) /s/ Illegible
for and on behalf of )
VENTSPILS GASES LTD. )
5
SIGNED by ) /s/ Illegible
for and on behalf of )
PACIFIC GASES LTD. )
SIGNED by ) /s/ Illegible
for and on behalf of )
ARACRUZ TRADING LTD. )
SIGNED by ) /s/ Illegible
for and on behalf of )
INDUSTRIAL MATERIALS INC. )
SIGNED by ) /s/ Illegible
for and on behalf of )
STEALTHGAS INC. )
Witness to all of the above signatures:
6