LOAN AGREEMENT PROVIDING FOR A SENIOR SECURED TERM LOAN OF UP TO US$12,000,000 TO BE MADE AVAILABLE TO SACHEM SHIPPING LTD., as Borrower, BY DVB BANK AMERICA NV, as Administrative Agent and Security Agent, and the Banks and Financial Institutions...
LOAN
AGREEMENT PROVIDING FOR A
SENIOR
SECURED TERM LOAN
OF
UP
TO
US$12,000,000
TO
BE
MADE AVAILABLE TO
SACHEM
SHIPPING LTD.,
as
Borrower,
BY
DVB
BANK
AMERICA NV,
as
Administrative Agent and Security Agent,
and
the
Banks and Financial Institutions
identified
on Schedule 1, as Lenders
October
12, 2006
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1.1.Specific
Definitions1
1.2.Computation
of Time Periods; Other Definitional Provisions12
1.3.Accounting
Terms13
1.4.Certain
Matters Regarding Materiality13
1.5.Forms
of
Documents13
2.REPRESENTATIONS
AND WARRANTIES13
2.1.Representations
and Warranties13
(a)Due
Organization and Power13
(b)Authorization
and Consents13
(c)Binding
Obligations13
(d)No
Violation14
(e)Filings;
Stamp Taxes14
(f)Litigation14
(g)No
Default14
(h)Vessel14
(i)Insurance15
(j)Financial
Information15
(k)Tax
Returns15
(l)Chief
Executive Office15
(m)Foreign
Trade Control Regulations15
(n)Equity
Ownership15
(o)Environmental
Matters and Claims15
(p)Compliance
with ISM Code, the ISPS Code and the MTSA16
(q)No
Threatened Withdrawal of DOC, ISSC or SMC16
(r)Liens16
(s)Debt16
(t)No
Proceedings to Dissolve17
(u)Solvency17
(v)Compliance
with Laws17
(w)Survival17
3.THE
LOAN17
3.1.Purpose/Making
of the Loan17
(a)Purpose17
(b)Making
of
the Loan.17
3.2.Drawdown
Notice18
3.3.Effect
of
Drawdown Notice18
4.CONDITIONS19
4.1.Conditions
Precedent to the Effectiveness of this Loan Agreement19
(a)Corporate
Authority19
(b)The
Loan
Agreement20
(c)The
Note20
(d)The
Guarantor20
(e)The
Vessel20
(f)Vessel
Documents20
(g)Vessel
Liens21
(h)ISM
DOC21
(i)Environmental
Claims21
(j)Fees21
(k)Accounts21
(l)Compliance
Certificate21
(m)Vessel
Appraisal21
(n)Charter
Agreement21
(o)Money
Laundering Due Diligence21
(p)Legal
Opinions21
4.2.Further
Conditions Precedent22
(a)Drawdown
Notice22
(b)Representations
and Warranties22
(c)No
Event
of Default22
(d)No
Change
in Laws22
(e)No
Material Adverse Effect22
4.3.Breakfunding
Costs22
4.4.Satisfaction
after Drawdown22
5.REPAYMENT
AND PREPAYMENT22
5.1.Repayment22
5.2.Voluntary
Prepayment; No Re-Borrowing23
5.3.Mandatory
Prepayment Sale or Loss of Vessel23
5.4.Interest
and Costs with Prepayments/Application of Prepayments23
6.INTEREST
AND RATE23
6.1.Applicable
Rate23
6.2.Default
Rate23
6.3.Interest
Periods23
6.4.Interest
Payments24
7.PAYMENTS24
▇.▇.▇▇▇▇▇
of
Payments, No Set Off24
▇.▇.▇▇▇
Credits24
7.3.Sharing
of Setoffs24
7.4.Computations;
Banking Days25
▇.▇▇▇▇▇▇
OF
DEFAULT25
▇.▇.▇▇▇▇▇▇
of
Default25
(a)Non-Payment
of Principal25
(b)Non-Payment
of Interest or Other Amounts25
(c)Representations25
(d)Impossibility;
Illegality25
(e)Mortgage26
(f)Covenants26
(g)Debt26
(h)Ownership
of Borrower26
(i)Bankruptcy26
(j)Termination
of Operations; Sale of Assets26
(k)Judgments26
(l)Inability
to Pay Debts27
(m)Change
in
Financial Position27
(n)Change
in
Control27
(o)Cross-Default27
8.2.Indemnification27
8.3.Application
of Moneys28
9.COVENANTS28
9.1.Affirmative
Covenants28
(a)Performance
of Agreements28
(b)Notice
of
Default, etc28
(c)Obtain
Consents28
(d)Financial
Information29
(e)Vessel
Valuations30
(f)Corporate
Existence30
(g)Books
and
Records30
(h)Taxes
and
Assessments30
(i)Inspection30
(j)Inspection
and Survey Reports30
(k)Compliance
with Statutes, Agreements, etc30
(l)Environmental
Matters30
(m)Vessel
Management31
(n)Vessel
Employment31
(o)Assignment
of Charter31
(p)ISM
Code,
ISPS Code and MTSA Matters31
(q)Brokerage
Commissions, etc31
(r)Operating
Account; Assignment31
(s)Insurance32
9.2.Negative
▇▇▇▇▇▇▇▇▇▇▇
(▇)▇▇▇▇▇▇▇
(▇)▇▇▇▇▇▇
(c)Change
of
Flag, Class, Management or Ownership32
(d)Chartering32
(e)Change
in
Business33
(f)Sale
or
Pledge of Shares33
(g)Sale
of
Assets33
(h)Changes
in Offices33
(i)Consolidation
and Merger33
(j)Change
Fiscal Year33
(k)Use
of
Corporate Funds33
(l)Issuance
of Shares33
(m)No
Money
Laundering34
(n)Use
of
Proceeds34
9.3.Asset
Maintenance34
10.ASSIGNMENT34
11.ILLEGALITY,
INCREASED COST, NON-AVAILABILITY, ETC34
11.1.Illegality35
11.2.Increased
Costs35
11.3.Nonavailability
of Funds36
11.4.Lender's
Certificate Conclusive36
11.5.Compensation
for Losses36
12.CURRENCY
INDEMNITY36
12.1.Currency
Conversion36
12.2.Change
in
Exchange Rate36
12.3.Additional
Debt Due37
12.4.Rate
of
Exchange37
13.FEES
AND
EXPENSES37
13.1.Fees37
13.2.Expenses37
14.APPLICABLE
LAW, JURISDICTION AND WAIVER37
14.1.Applicable
Law37
14.2.Jurisdiction38
14.3.WAIVER
OF
JURY TRIAL38
15.THE
AGENTS38
15.1.Appointment
of Agents38
▇▇.▇.▇▇▇▇▇▇▇▇
Agent as Trustee38
15.3.Distribution
of Payments39
15.4.Holder
of
Interest in Note39
▇▇.▇.▇▇
Duty
to Examine, Etc39
15.6.Agents
as
Lenders39
15.7.Acts
of
the Agents39
(a)Obligations
of the Agents39
(b)No
Duty
to Investigate39
(c)Discretion
of the Agents39
(d)Instructions
of Majority Lenders39
15.8.Certain
Amendments40
15.9.Assumption
re Event of Default40
15.10.Limitations
of Liability40
15.11.Indemnification
of the Agents41
15.12.Consultation
with Counsel41
15.13.Resignation41
15.14.Representations
of Lenders41
15.15.Notification
of Event of Default42
▇▇.▇▇.▇▇
Agency
or Trusteeship if not Syndicated42
16.NOTICES
AND DEMANDS42
16.1.Notices42
17.MISCELLANEOUS42
17.1.Time
of
Essence42
17.2.Unenforceable,
etc., Provisions-Effect42
17.3.References43
17.4.Further
Assurances43
17.5.Prior
Agreements, Merger43
17.6.Entire
Agreement; Amendments43
17.7.Indemnification43
17.8.Headings44
17.9.Waiver
of
Immunity44
17.10.USA
Patriot Act Notice; OFAC and Bank Secrecy Act44
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SCHEDULE
1 The
Lenders and the Commitments
EXHIBITS
A Form
of
Note
B Form
of
Guaranty
C Form
of
Accounts Pledge
D Form
of
Statutory Mortgage and Deed of Covenants
E Form
of
Earnings Assignment
F Form
of
Insurances Assignment
G Form
of
Charter Assignment
H Form
of
Compliance Certificate
I Form
of
Drawdown Notice
J Form
of
Assignment and Assumption Agreement
K Form
of
Interest Notice
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SENIOR
SECURED TERM LOAN AGREEMENT
THIS
SENIOR SECURED TERM LOAN AGREEMENT (this "Loan Agreement") is made as of the
12th
day of
October, 2006, by and among (1) SACHEM SHIPPING LTD., a corporation
organized and existing under the laws of the Republic of the ▇▇▇▇▇▇▇▇ Islands
(the “Borrower”), (2) the banks and financial institutions listed on
Schedule 1, as lenders (together with any bank or financial institution which
becomes a Lender pursuant to Section 10, the “Lenders”) and (3) DVB BANK
AMERICA NV (“DVB”), as administrative agent for the Lenders (in such capacity,
the “Administrative Agent”) and as Security Agent for the Lenders (in such
capacity, the “Security Agent”), and is consented to and agreed to by B+H OCEAN
CARRIERS LTD., a corporation organized and existing under the laws of the
Republic of Liberia, as guarantor (the “Guarantor”).
WITNESSETH
THAT:
WHEREAS,
at the request of the Borrower, the Administrative Agent and Security Agent
have
agreed to serve in such capacities under the terms of this Loan Agreement and
the Lenders have agreed to provide to the Borrower a senior secured a term
loan
to be made available in an amount equal to US$12,000,000;
NOW,
THEREFORE, in consideration of the premises set forth above, the covenants
and
agreements hereinafter set forth, and other good and valuable consideration,
the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as set forth below:
1. DEFINITIONS
1.1. Specific
Definitions.
In this
Loan Agreement, including in the preamble and recitals hereof, the words and
expressions specified below shall, except where the context otherwise requires,
have the meanings attributed to them below:
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“Acceptable
Accounting Firm”
|
means
Ernst & Young, or such other recognized international accounting firm
as shall be approved by the Administrative Agent, such approval not
to be
unreasonably withheld;
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|
“Acceptable
Charterer”
|
means
a company having a rating of at least A- from S&P or a rating of at
least A3 from ▇▇▇▇▇’▇, or such other charterer acceptable to the Lenders
in their sole discretion;
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“Account
Pledge”
|
means
the pledge agreement to be executed by the Borrower in favor of the
Security Agent in respect of the Operating Account and all other
accounts
held by the Borrower pursuant to Section 4.1(j), substantially in the
form set out in Exhibit B;
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“Accounting
Period”
|
means
each consecutive period of three months falling during the period
(ending
on the last day in March, June, September and December of each year)
for
which quarterly accounting information is required to be provided
to the
Administrative Agent hereunder;
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|
“Administrative
Agent”
|
shall
have the meaning ascribed thereto in the preamble;
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||
|
“Affiliate”
|
means
with respect to any Person, any other Person directly or indirectly
controlled by or under common control with such Person. For the purposes
of this definition, “control” (including, with correlative meanings, the
terms “controlled by” and “under common control with”) as applied to any
Person means the possession directly or indirectly of the power to
direct
or cause the direction of the management and policies of that Person
whether through ownership of voting securities or by contract or
otherwise;
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|
"Agents"
|
means
each of the Administrative Agent and the Security Agent;
|
||
|
“Applicable
Margin”
|
means
(a) other than as described in (b) below, at all times during the
term of
this Loan one
and twenty five one-hundredths of one percent (1.25%) per annum or,
(b)
upon fixing of employment of the Vessel with an Acceptable Charterer
for a
minimum of two years at charter rates sufficient, in the sole
determination of the Administrative Agent, to cover estimated operating
expenses of the Vessel and debt service (principal plus interest)
of this
Loan, one percent (1.0%) per annum for the term of such
employment;
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||
|
“Applicable
Rate”
|
means
any rate of interest applicable to the Loan from time to time pursuant
to
Section 6.1;
|
||
|
“Assigned
Moneys”
|
means
sums assigned to or received by the Agents pursuant to any Security
Document;
|
||
|
“Assignment
and Assumption Agreement(s)”
|
means
the Assignment and Assumption Agreement(s) executed pursuant to
Section 10 substantially in the form set out in
Exhibit J;
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|
“Assignment
Notices”
|
means:
(i) notices
with respect to the Earnings Assignment substantially in the form
set out
in Exhibit 1 thereto;
(ii) notices
with respect to any Charter Assignment substantially in the form
set out
in Exhibit 1 thereto; and
(ii) notices
with respect to the Insurances Assignments substantially in the form
set
out in Exhibit 3 thereto;
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||
|
“Assignments”
|
means
the Earnings Assignment, the Charter Assignment and the Insurances
Assignment;
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|
“Banking
Day(s)”
|
means
day(s) on which banks are open for the transaction of business in
London,
England, New York, New York, Amsterdam, The Netherlands, and Curacao,
Netherlands
Antilles;
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|
“▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇”
|
means
that certain 1993 built, 83,155 dwt, ore/bulk/oil carrier registered
under
Bahamas flag and bearing IMO No.9050084;
|
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|
“Borrower”
|
shall
have the meaning ascribed thereto in the preamble;
|
||
|
"Cash
and Cash Equivalents"
|
means,
in respect of the Guarantor Group, and at any time, (i) cash in hand
or on
deposit with any bank acceptable to the Administrative Agent available
for
cash management purposes, (ii) investment grade certificates of deposit
or
investment grade marketable debt securities, maturing within one
(1) year
after the relevant date of calculation, or (iii) any other instrument,
security or investment approved by the Majority Lenders; in each
case, to
which any member of the Guarantor Group is beneficially entitled
at that
time and which is capable of being applied against the Total
Debt;
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|
“Change
of Control”
|
means
(a) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3
and
13d-5 under the Exchange Act), directly or indirectly, of more than
35% of
the total voting power or ownership interest of the Borrower or (b)
the Board of Directors of the Borrower ceases to consist of a majority
of
the directors existing on the date hereof or directors nominated
by at
least two-thirds (2/3) of the then existing directors;
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|
“Charter”
|
means
that certain time charter by and between Redina Maritime Ltd. and
Stena
Bulk AB dated as of October 11, 2004 and novated by Redina Maritime
Ltd. pursuant to a novation agreement dated June 23, 2006 in favor
of the
Borrower relating to the Vessel at a rate of $18,400 per day;
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|
"Charter
Assignment"
|
means
the assignment in respect of any charter of the Vessel, for a period
of
twelve months or longer, to be executed by the Borrower in favor
of the
Security Agent pursuant to Section 9.1(o) substantially in the form
set
out in Exhibit F;
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||
|
“Classification
Society”
|
means
a member of the International Association of Classification Societies
with
whom the Vessel is entered and who conducts periodic physical surveys
and/or inspections of the Vessel;
|
||
|
“CLO"
|
shall
have the meaning ascribed thereto in Section 10;
|
||
|
“Collateral”
|
means
all property or other assets, real or personal, tangible or intangible,
whether now owned or hereafter acquired in which any Agent or any
Lender
has been granted a security interest pursuant to a Security
Document;
|
||
|
“Commitment(s)”
|
means
in relation to a Lender, the portion of the Loan set out opposite
its name
in Schedule 1 or, as the case may be, as reduced by or set out in any
relevant Assignment and Assumption Agreement, as such amount shall
be
reduced from time to time pursuant to Section 5;
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||
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“Compliance
Certificate”
|
means
a certificate certifying the compliance by the Borrower and/or the
Guarantor, as the case may be, with all of its respective covenants
contained herein and showing the calculations thereof in reasonable
detail, executed and delivered by the chief financial officer of
such
party to the Administrative Agent from time to time pursuant to
Section 9.1(d) in the form set out in Exhibit H, or in such
other form as the Administrative Agent may agree;
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||
|
"Creditors"
|
means,
collectively, the Lenders and the Agents;
|
||
|
“Current
Assets”
|
means,
measured at the end of each Accounting Period, the aggregate of the
cash
and marketable securities, trade and other receivables of the Guarantor
Group on a consolidated basis from persons (other than a member of
the
Guarantor Group) which can be realized within one year, inventories
and
prepaid expenses which are to be charged to income within one year
less
any doubtful debts and any discounts or allowances given as stated
in the
then most recent accounting information delivered to the Administrative
Agent hereunder;
|
||
|
“Debt”
|
means,
in relation to any of the members of the Guarantor Group (the “debtor”):
(a) Financial Indebtedness of the debtor; (b) liability for any credit
to
the debtor from a supplier of goods or services or under any installment
purchase or payment plan or similar arrangement; (c) contingent
liabilities of the debtor (including without limitation any taxes
or other
payments under dispute) which have been or, under GAAP, should be
recorded
in the notes to the accounting information; (d) deferred tax of the
debtor; and (e) liability under a guaranty, indemnity or similar
obligation entered into by the debtor in respect of a liability of
another
person who is not a Security Party which would fall within (a) to
(d) if
the references to the debtor referred to the other Person;
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||
|
“Default
Rate”
|
shall
have the meaning ascribed thereto in Section 6.2;
|
||
|
“Depositary”
|
means
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
|
||
|
“DOC”
|
means
a document of compliance issued to an Operator in accordance with
rule 13
of the ISM Code;
|
||
|
“Dollars”
and the sign “$”
|
means
the legal currency, at any relevant time hereunder, of the United
States
of America and, in relation to all payments hereunder, in same day
funds
settled through the New York Clearing House Interbank Payments System
(or
such other Dollar funds as may be determined by the Administrative
Agent
to be customary for the settlement in New York City of banking
transactions of the type herein involved);
|
||
|
“Drawdown
Date”
|
means
the date, being a Banking Day, upon which the Borrower has requested
that
the Loan be made available to the Borrower, as provided in Section
3;
provided,
however,
that the Drawdown Date shall not fall later than October 31,
2006;
|
||
|
“Drawdown
Notice”
|
shall
have the meaning ascribed thereto in Section 3.2;
|
||
|
“DVB”
|
shall
have the meaning ascribed thereto in the preamble;
|
||
|
“EBITDA”
|
means,
always in accordance with GAAP, the aggregate of operating profits
of the
Guarantor Group (on a consolidated basis) for a Measurement Period
before
Taxes, financial items, depreciations and amortizations, excluding
(i) the
profit or loss attributable to any extraordinary or exceptional items
or
any write-offs on investments during such Measurement Period and
(ii) the
profit and loss arising on any disposal of fixed assets during such
Measurement Period save for any disposals made in the ordinary course
of
business;
|
||
|
“Earnings
Assignment”
|
means
the assignment in respect of the earnings of the Vessel from any
and all
sources, to be executed by the Borrower in favor of the Security
Agent
pursuant to Section 4.2(b), substantially in the form set out in
Exhibit D;
|
||
|
“Environmental
Affiliate(s)”
|
means
any person or entity, the liability of which for Environmental Claims
any
Security Party or Subsidiary of any Security Party may have assumed
by
contract or operation of law;
|
||
|
“Environmental
Approval(s)”
|
shall
have the meaning ascribed thereto in Section 2.1(o);
|
||
|
“Environmental
Claim(s)”
|
shall
have the meaning ascribed thereto in Section 2.1(o);
|
||
|
“Environmental
Law(s)”
|
shall
have the meaning ascribed thereto in Section 2.1(o);
|
||
|
“Event(s)
of Default”
|
means
any of the events set out in Section 8.1;
|
||
|
“Exchange
Act”
|
shall
mean the Securities and Exchange Act of 1934, as amended;
|
||
|
“Fair
Market Value”
|
means
the value of the Vessel as determined by the average of two charter-free
valuations from two independent shipbrokers appointed by the
Administrative Agent;
|
||
|
“Final
Payment Date”
|
means
that date which is four years after the Drawdown Date; provided,
however,
that the Final Payment Date shall not fall later than October 31,
2010;
|
||
|
“Financial
Covenants Commencement Date”
|
means
the date on which the Administrative Agent ceases to be a “Lender” under
that certain Credit Facility Agreement dated as of August 29, 2006
by and
among the Guarantor, OBO
Holdings Ltd., BHOBO One Ltd., BHOBO Two Ltd., BHOBO Three Ltd.,
RMJ OBO
Shipping Ltd. and Sagamore Shipping Ltd.,
as borrowers and Nordea Bank Finland plc, as swap bank, Nordea Bank
Norge
ASA, as agent, and Nordea Bank Norge ASA, as mandated lead
arranger;
|
||
|
“Financial
Indebtedness”
|
means,
in relation to any member of the Guarantor Group (the “debtor”), a
liability of the debtor: (a) for principal, interest or any other
sum
payable in respect of any moneys borrowed or raised by the debtor;
(b)
under any loan stock, bond, note or other security issued by the
debtor;
(c) under any acceptance credit, Guaranty or letter of credit facility
made available to the debtor; (d) under a financial lease, a deferred
purchase consideration arrangement (in each case, other than in respect
of
assets or services obtained on normal commercial terms in the ordinary
course of business) or any other agreement having the commercial
effect of
a borrowing or raising of money by the debtor; (e) under any foreign
exchange transaction, interest or currency swap or any other kind
of
derivative transaction entered into by the debtor or, if the agreement
under which any such transaction is entered into requires netting
of
mutual liabilities, the liability of the debtor for the net amount;
or (f)
under a guaranty, 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;
|
||
|
“Fixed
Charges”
|
means
(i) Net Interest for any Measurement Period, plus (ii) the amount
of
scheduled repayments of the Loan and/or any other credit facilities
and
the interest and repayment element under capitalized charterparties
in
accordance with GAAP which fall due for repayment or payment during
the
Measurement Period, other than any amount prepaid under this Loan
Agreement, minus (iii) free and available cash (at the relevant Quarter
Date) and marketable securities (acceptable to the Administrative
Agent
(on behalf of the Lenders)) in excess of the minimum requirement
plus any
dividends paid in such Measurement Period;
|
||
|
“GAAP”
|
shall
have the meaning ascribed thereto in Section 1.3;
|
||
|
“Guarantor”
|
shall
have the meaning ascribed thereto in the preamble;
|
||
|
“Guarantor
Group”
|
means
the Guarantor and each of its Subsidiaries;
|
||
|
“Indemnitee”
|
shall
have the meaning ascribed thereto in Section 17.7;
|
||
|
“Initial
Payment Date”
|
means
the date which is three (3) months after the Drawdown Date;
|
||
|
“Insurances
Assignment”
|
means
the assignment in respect of the insurances over the Vessel to be
executed
by the Borrower in favor of the Security Agent pursuant to Section
4.2(b),
substantially in the form set out in Exhibit E;
|
||
|
“Interest
Notice”
|
means
a notice from the Borrower to the Administrative Agent specifying
the
duration of any relevant Interest Period, each substantially in the
form
set out in Exhibit K;
|
||
|
“Interest
Period(s)”
|
means
period(s) of one (1), three (3) or six (6) months as selected by
the
Borrower, or as otherwise agreed by the Administrative Agent and
the
Borrower;
|
||
|
“ISM
Code”
|
means
the International Safety Management Code for the Safe Operating of
Ships
and for Pollution Prevention constituted pursuant to Resolution A.741(18)
of the International Maritime Organization and incorporated into
the
Safety of Life at Sea Convention and includes any amendments or extensions
thereto and any regulation issued pursuant thereto;
|
||
|
“ISPS
Code”
|
means
the International Ship and Port Loan Security Code adopted by the
International Maritime Organization (as the same may be amended from
time
to time);
|
||
|
“ISSC”
|
means
a valid and current International Ship Security Certificate issued
under
the ISPS Code;
|
||
|
“Lender(s)”
|
shall
have the meaning ascribed thereto in the preamble;
|
||
|
“LIBOR”
|
means
the rate (rounded upward to the nearest 1/16th
of
one percent) for deposits of Dollars for a period equivalent to the
relevant Interest Period at or about 11:00 a.m. (London time) on the
second London Banking Day before the first day of such period as
displayed
on Telerate page 3750 (British Bankers’ Association Interest
Settlement Rates) (or such other page as may replace such page 3750
on
such system or on any other system of the information vendor for
the time
being designated by the British Bankers’ Association to calculate the BBA
Interest Settlement Rate (as defined in the British Bankers’ Association’s
Recommended Terms and Conditions (“BBAIRS” terms) dated August 1985)),
provided that if on such date no such rate is so displayed for the
relevant Interest Period, LIBOR for such period shall be the rate
quoted
to the Administrative Agent by the Reference Bank at the request
of the
Administrative Agent as the offered rate for deposits of Dollars
in an
amount approximately equal to the amount in relation to which LIBOR
is to
be determined for a period equivalent to the relevant Interest Period
to
prime banks in the London Interbank Market at or about 11:00 a.m.
(London time) on the second Banking Day before the first day of such
period;
|
||
|
“Loan”
|
means
the loan facility to be made available by the Lenders to the Borrower
in a
single advance pursuant to Section 3 in an
amount equal to Twelve Million Dollars ($12,000,000);
|
||
|
|
means
this agreement, as the same shall be amended, modified or supplemented
from time to time;
|
||
|
“Majority
Lenders”
|
means,
at any time, Lenders holding an aggregate of more than 66.66% of
the Loan
then outstanding;
|
||
|
“Material
Adverse Effect”
|
shall
mean a material adverse effect on (i) the ability of the Borrower to
repay the Loan or perform any of its obligations hereunder or under
the
Note, (ii) the ability of any Security Party to perform its
obligations under any Security Documents or (iii) the business,
property, assets, liabilities, operations, condition (financial or
otherwise) or prospects of the Security Parties taken as a
whole;
|
||
|
"Measurement
Period"
|
means
a rolling period of twelve (12) calendar months ending on a Quarter
Date;
|
||
|
“Mortgage”
|
means
the Bahamas statutory ship mortgage on the Vessel and the deed of
covenants appurtenant thereto, to be executed by the Borrower in
favor of
the Security Agent (as trustee for the Lenders) pursuant to
Section 4.3(b), substantially in the form set out in Exhibit
C;
|
||
|
“MTSA”
|
means
the Maritime and Transportation Security Act, 2002, as amended,
inter alia,
by Public Law 107-295;
|
||
|
"Net
Interest"
|
means
all interest, arrangement fees and capitalized commissions and periodic
fees (whether, in each case, paid or payable) as reported in accordance
with GAAP being incurred (after having deducted any interest, arrangement
fee and capitalized income earned) by the Guarantor Group (on a
consolidated basis) during a Measurement Period;
|
||
|
“Note”
|
means
the promissory note to be executed by the Borrower to the order of
the
Administrative Agent pursuant to Section 4.1(b), to evidence the
Loan, substantially in the form set out in Exhibit A;
|
||
|
“Operating
Account”
|
shall
have the meaning ascribed thereto in Section 4.1(j);
|
||
|
“Operator”
|
means
the Person who is concerned with the operation of the Vessel and
falls
within the definition of “Company” set out in rule 1.1.2 of the ISM
Code;
|
||
|
“Payment
Dates”
|
means
the Initial Payment Date and the dates falling at three month intervals
thereafter, the last of which is the Final Payment Date;
|
||
|
“Permitted
Percentage”
|
means
(i) for the period beginning on the Drawdown Date and ending on the
second
anniversary thereof, eighty percent (80%); and (ii) at all times
thereafter, seventy-five percent (75%);
|
||
|
“Person”
|
means
any individual, sole proprietorship, corporation, partnership (general
or
limited), limited liability company, business trust, bank, trust
company,
joint venture, association, joint stock company, trust or other
unincorporated organization, whether or not a legal entity, or any
government or agency or political subdivision thereof;
|
||
|
“Proceeding”
|
shall
have the meaning ascribed thereto in Section 8.1(i);
|
||
|
"Quarter
Date"
|
means
each March 31, June 30, September 30 and December 31;
|
||
|
“Reference
Bank”
|
means
DVB;
|
||
|
“Regulation
T”
|
means
Regulation T of the Board of Governors of the Federal Reserve System,
as
in effect from time to time;
|
||
|
“Regulation
U”
|
means
Regulation U of the Board of Governors of the Federal Reserve System,
as
in effect from time to time;
|
||
|
“Regulation
X”
|
means
Regulation X of the Board of Governors of the Federal Reserve System,
as
in effect from time to time;
|
||
|
“RIP
HUDNER”
|
means
that certain 1994 built, 83,155 dwt, ore/bulk/oil carrier registered
under
Bahamas flag and bearing IMO No. 9077111;
|
||
|
“SEAROSE
G”
|
means
that certain 1994 built, 83,155 dwt, ore/bulk/oil carrier registered
under
Bahamas flag and bearing IMO No. 9050096;
|
||
|
“Security
Agent”
|
shall
have the meaning ascribed thereto in the preamble;
|
||
|
“Security
Document(s)”
|
means
the Account Pledge, the Mortgage, the Guaranty, the Assignments and
any
other documents that may be executed as security for the Loan and
the
Borrower’s obligations in connection therewith;
|
||
|
“Security
Party(ies)”
|
means
the Borrower and the Guarantor;
|
||
|
“SMC”
|
means
the safety management certificate issued in respect of the Vessel
in
accordance with rule 13 of the ISM code;
|
||
|
“Subsidiary(ies)”
|
means,
with respect to any Person, any business entity of which more than
50% of
the outstanding voting stock or other equity interest is owned directly
or
indirectly by such Person and/or one or more other Subsidiaries of
such
Person;
|
||
|
“Taxes”
|
means
any present or future income or other taxes, levies, duties, charges,
fees, deductions or withholdings of any nature now or hereafter imposed,
levied, collected, withheld or assessed by any taxing authority
whatsoever, except for taxes on or measured by the overall net income
of
each Lender imposed by its jurisdiction of incorporation or applicable
lending office, the United States of America, the State or City of
New
York or any governmental subdivision or taxing authority of any thereof
or
by any other taxing authority having jurisdiction over such Lender
(unless
such jurisdiction is asserted by reason of the activities of any
of the
Security Parties or any other member of the Guarantor Group);
|
||
|
"Total
Debt"
|
means,
on a consolidated basis, the aggregate book value of all provisions,
other
long term liabilities and current liabilities of the Guarantor Group
(on a
consolidated basis);
|
||
|
“Total
Loss”
|
shall
have the meaning ascribed thereto in the Mortgage;
|
||
|
"Value
Adjusted Equity"
|
means
Value Adjusted Total Assets less Total Debt;
|
||
|
"Value
Adjusted Equity Ratio"
|
means
Value Adjusted Equity divided by Value Adjusted Total Assets;
|
||
|
"Value
Adjusted Total Assets"
|
means,
on a consolidated basis, the total market value of all of the assets
of
the Guarantor; and
|
||
|
“Vessel”
|
means
that certain 1988 built, 61,000 dwt, double sided Panamax tanker
named
REDINA (tbr SACHEM) and registered under Bahamas flag and bearing
Official
No. 8000303.
|
||
1.2. Computation
of Time Periods; Other Definitional Provisions.
In this
Loan Agreement, the Note and the Security Documents, in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding”; words importing either gender include the other gender; references
to “writing” include printing, typing, lithography and other means of
reproducing words in a tangible visible form; the words “including,” “includes”
and “include” shall be deemed to be followed by the words “without limitation”;
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Loan Agreement, the Note or such Security
Document, as applicable; references to agreements and other contractual
instruments (including this Loan Agreement, the Note and the Security Documents)
shall be deemed to include all subsequent amendments, amendments and
restatements, supplements, extensions, replacements and other modifications
to
such instruments (without, however, limiting any prohibition on any such
amendments, extensions and other modifications by the terms of this Loan
Agreement, the Note or any Security Document); references to any matter that
is
“approved” or requires “approval” of a party shall mean approval given in the
sole and absolute discretion of such party unless otherwise
specified.
1.3. Accounting
Terms.
Unless
otherwise specified herein, all accounting terms used in this Loan Agreement,
the Note and in the Security Documents shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to
be
delivered to the Administrative Agent or to the Lenders under this Loan
Agreement shall be prepared, in accordance with generally accepted accounting
principles for the United States (“GAAP”) as from time to time in
effect.
1.4. Certain
Matters Regarding Materiality.
To the
extent that any representation, warranty, covenant or other undertaking of
the
Borrower or the Guarantor in this Loan Agreement is qualified by reference
to
those which are not reasonably expected to result in a “Material Adverse Effect”
or language of similar import, no inference shall be drawn therefrom that any
Agent or Lender has knowledge or approves of any noncompliance by the Borrower
or the Guarantor with any governmental rule.
1.5. Forms
of Documents.
Except
as otherwise expressly provided in this Loan Agreement, references to documents
or certificates “substantially in the form” of Exhibits to another document
shall mean that such documents or certificates are duly completed in the form
of
the related Exhibits with substantive changes subject to the provisions of
Section 17.6 of this Loan Agreement, as the case may be, or the correlative
provisions of the Security Documents.
2. REPRESENTATIONS
AND WARRANTIES
2.1. Representations
and Warranties.
In
order to induce the Agents and the Lenders to enter into this Loan Agreement
and
to induce the Lenders to make the Loan available, the Borrower hereby represents
and warrants to the Agents and the Lenders (which representations and warranties
shall survive the execution and delivery of this Loan Agreement and the Note
and
the drawdown hereunder) that:
(a) Due
Organization and Power.
each
Security Party is duly formed and is validly existing in good standing under
the
laws of its jurisdiction of incorporation, has full power to carry on its
business as now being conducted and to enter into and perform its obligations
under this Loan Agreement, the Note and the Security Documents to which it
is a
party, and has complied with all statutory, regulatory and other requirements
relative to such business and such agreements;
(b) Authorization
and Consents.
all
necessary corporate action has been taken to authorize, and all necessary
consents and authorities have been obtained and remain in full force and effect
to permit, each Security Party to enter into and perform its obligations under
this Loan Agreement, the Note and the Security Documents, to which it is a
party, and, in the case of the Borrower, to borrow, service and repay the Loan
and, as of the date of this Loan Agreement, no further consents or authorities
are necessary for the service and repayment of the Loan or any part
thereof;
(c) Binding
Obligations.
this
Loan Agreement, the Note and the Security Documents constitute or will, when
executed and delivered, constitute the legal, valid and binding obligations
of
each Security Party as is a party thereto enforceable against such Security
Party in accordance with their respective terms, except to the extent that
such
enforcement may be limited by equitable principles, principles of public policy
or applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting generally the enforcement of creditors' rights;
(d) No
Violation.
the
execution and delivery of, and the performance of the provisions of, this Loan
Agreement, the Note and those of the Security Documents to which it is to be
a
party by each Security Party do not contravene any applicable law or regulation
existing at the date hereof or any contractual restriction binding on such
Security Party or the certificate of incorporation or by-laws (or equivalent
instruments) thereof and that the proceeds of the Loan shall be used by the
Borrower exclusively for its own account or for the account of a Subsidiary
or
Affiliate of the Borrower;
(e) Filings;
Stamp Taxes.
other
than the recording of the Mortgage with the appropriate authorities for the
Commonwealth of the Bahamas, and the filing of UCC Financing Statements in
the
District of Columbia in respect of the Assignments, and the payment and filing
or recording fees consequent thereto, it is not necessary for the legality,
validity, enforceability or admissibility into evidence of this Loan Agreement,
the Note or the Security Documents that any of them or any document relating
thereto be registered, filed, recorded or enrolled with any court or authority
in any relevant jurisdiction or that any stamp, registration or similar Taxes
be
paid on or in relation to this Agreement, the Note or any of the Security
Documents;
(f) Litigation.
except
as has been disclosed in writing by the Security Parties to the Administrative
Agent, no action, suit or proceeding is pending or threatened against any
Security Party or any Subsidiary thereof before any court, board of arbitration
or administrative agency which is reasonably likely to result in a Material
Adverse Effect;
(g) No
Default.
neither
the Borrower, the Guarantor nor any of their Subsidiaries is in default under
any material agreement by which it is bound, or is in default in respect of
any
financial commitment or obligation;
(h) Vessel.
upon
the date of the making of the Loan, the Vessel:
| (i) |
will
be in the sole and absolute ownership of the Borrower and duly registered
in the Borrower's name under Bahamian flag, unencumbered, save and
except
for the Mortgage recorded against it and as permitted
thereby;
|
| (ii) |
will
be classed in the highest classification and rating for vessels of
the
same age and type with its Classification Society without any material
outstanding recommendations;
|
| (iii) |
will
be operationally seaworthy and in every way fit for its intended
service;
and
|
| (iv) |
will
be insured in accordance with the provisions of the Mortgage recorded
against it and the requirements thereof in respect of such insurances
will
have been complied with;
|
(i) Insurance.
each of
the Security Parties has insured its properties and assets against such risks
and in such amounts as are customary for companies engaged in similar
businesses;
(j) Financial
Information.
on or
prior to the date hereof, all financial statements, information and other data
furnished by the Security Parties to the Administrative Agent are complete
and
correct, such financial statements have been prepared in accordance with GAAP
and accurately and fairly present the financial condition of the parties covered
thereby as of the respective dates thereof and the results of the operations
thereof for the period or respective periods covered by such financial
statements, and, since the date of each Security Party's financial statements
most recently delivered to the Administrative Agent, there has been no Material
Adverse Effect as to any of such parties and none thereof has any contingent
obligations, liabilities for taxes or other outstanding financial obligations,
except as disclosed in such statements, information and data;
(k) Tax
Returns.
the
Security Parties and each of their respective Subsidiaries have filed all tax
returns required to be filed by them and have paid all taxes payable by them
which have become due, other than those not yet delinquent and except for those
taxes being contested in good faith and by appropriate proceedings or other
acts
and for which adequate reserves shall have been set aside on its books;
(l) Chief
Executive Office.
the
Security Parties' chief executive office and chief place of business and the
office in which the records relating to the earnings and other receivables
of
each Subsidiary are kept is located at ▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇▇▇;
(▇) Foreign
Trade Control Regulations.
none of
the transactions contemplated herein will violate the provisions of any statute
or regulation enacted to prohibit or limit economic transactions with foreign
Persons including, without limitation, the Foreign Assets Control Regulations
of
the United States of America (Title 31, Code of Federal Regulations,
Chapter V, Part 500, as amended), any of the provisions of the Cuban
Assets Control Regulations of the United States of America (Title 31, Code
of Federal Regulations, Chapter V, Part 515, as amended), any of the
provisions of the Iranian Transaction Regulations of the United States of
America (Title 31, Code of Federal Regulations, Chapter V, Part 560, as
amended), any of the provisions of the Iraqi Sanctions Regulations
(Title 31, Code of Federal Regulations, Chapter V, Part 575, as
amended) or any of the provisions of the Regulations of the United States of
America Governing Transactions in Foreign Shipping of Merchandise
(Title 31, Code of Federal Regulations, Chapter V, Part 505, as
amended);
(n) Equity
Ownership.
the
Borrower is a wholly-owned subsidiary of Seasak OBO Holdings Ltd., which is
a
wholly-owned subsidiary of the Guarantor;
(o) Environmental
Matters and Claims.
(a) except as heretofore disclosed in writing to the Administrative Agent
and the Lenders (i) the Borrower and its Affiliates will, when required to
operate their business as then being conducted, be in compliance with all
applicable United States federal and state, local, foreign and international
laws, regulations, conventions and agreements relating to pollution prevention
or protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, navigable waters, waters of the
contiguous zone, ocean waters and international waters), including, without
limitation, laws, regulations, conventions and agreements relating to
(1) emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous materials, oil,
hazardous substances, petroleum and petroleum products and by-products
(“Materials of Environmental Concern”), or (2) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern (“Environmental Laws”); (ii) the
Borrower and its Affiliates will, when required, have all permits, licenses,
approvals, rulings, variances, exemptions, clearances, consents or other
authorizations required under applicable Environmental Laws (“Environmental
Approvals”) and will, when required, be in compliance with all Environmental
Approvals required to operate their business as then being conducted;
(iii) neither the Borrower nor its Affiliates has received any notice of
any claim, action, cause of action, investigation or demand by any person,
entity, enterprise or government, or any political subdivision,
intergovernmental body or agency, department or instrumentality thereof,
alleging potential liability for, or a requirement to incur, material
investigator costs, cleanup costs, response and/or remedial costs (whether
incurred by a governmental entity or otherwise), natural resources damages,
property damages, personal injuries, attorneys' fees and expenses, or fines
or
penalties, in each case arising out of, based on or resulting from (1) the
presence, or release or threat of release into the environment, of any Materials
of Environmental Concern at any location, whether or not owned by such person,
or (2) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law or Environmental Approval (“Environmental
Claim”) (other than Environmental Claims that have been fully and finally
adjudicated or otherwise determined and all fines, penalties and other costs,
if
any, payable by the Borrower in respect thereof have been paid in full or which
are fully covered by insurance (including permitted deductibles)); and
(iv) there are no circumstances that may prevent or interfere with such
full compliance in the future; and (b) except as heretofore disclosed in
writing to the Administrative Agent there is no Environmental Claim pending
or
threatened against the Borrower or any Affiliate thereof and there are no past
or present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge or disposal
of
any Materials of Environmental Concern, that could form the basis of any
Environmental Claim against such persons the adverse disposition of which may
result in a Material Adverse Effect;
(p) Compliance
with ISM Code, the ISPS Code and the MTSA.
the
Vessel complies and the Operator complies with the requirements of the ISM
Code,
the ISPS Code and the MTSA including (but not limited to) the maintenance and
renewal of valid certificates pursuant thereto;
(q) No
Threatened Withdrawal of DOC, ISSC or SMC.
there
is no actual or, to the best of the Borrower’s knowledge, threatened withdrawal
of the Operator’s DOC or the Vessel’s ISSC or SMC or other certification or
documentation related to the ISM Code or otherwise required for the operation
of
the Vessel;
(r) Liens.
other
than as permitted hereby, there are no liens of any kind on any property owned
by the Borrower or any Subsidiary of the Borrower;
(s) Debt.
other
than as permitted hereby, the Borrower has no Debt;
(t) No
Proceedings to Dissolve.
there
are no proceedings or actions pending or contemplated by any Security Party,
or,
contemplated by any third party, to dissolve or terminate any Security
Party;
(u) Solvency.
in the
case of each of the Security Parties, (a) the sum of its assets, at a fair
valuation, does and will exceed its liabilities, including, to the extent they
are reportable as such in accordance with GAAP, contingent liabilities, (b)
the
present fair market salable value of its assets is not and shall not be less
than the amount that will be required to pay its probable liability on its
then
existing debts, including, to the extent they are reportable as such in
accordance with GAAP, contingent liabilities, as they mature, (c) it does not
and will not have unreasonably small working capital with which to continue
its
business and (d) it has not incurred, does not intend to incur and does not
believe it will incur, debts beyond its ability to pay such debts as they
mature;
(v) Compliance
with Laws.
each of
the Security Parties is in compliance with all applicable laws except where
the
failure to comply would not alone or in the aggregate result in a Material
Adverse Effect; and
(w) Survival.
all
representations, covenants and warranties made herein and in any certificate
or
other document delivered pursuant hereto or in connection herewith shall survive
the making of the Loan and the issuance of the Note.
3. THE
LOAN
3.1. Purpose/Making
of the Loan.
(a) Purpose.
The
Lenders shall make the Loan available to the Borrower for the purpose of
financing a portion of the acquisition price to be paid for the
Vessel.
(b) Making
of the Loan.
| (i) |
Each
of the Lenders, relying upon each of the representations and warranties
set out in Section 2, hereby severally and not jointly agrees with
the Borrower that, subject to and upon the terms of this Loan Agreement,
it will, not later than 11:00 A.M. (New York time) on the Drawdown
Date
(except as provided in subsection (ii) of this Section), make its
portion
of the Loan, in Federal or other funds immediately available in New
York
City, to the Administrative Agent at its address and to such account
as
set forth on Schedule 1 or to such account of the Administrative
Agent
most recently designated by it for such purpose by notice to the
Lenders.
Unless the Administrative Agent determines that any applicable condition
specified in Section 4.1 or 4.2 has not been satisfied, the Administrative
Agent will make the funds so received from the Lenders available
to the
Borrower at the aforesaid address, subject to the receipt of the
funds by
the Administrative Agent as provided in the immediately preceding
sentence, not later than 10:00 A.M. (New York City time) on the Drawdown
Date, and in any event as soon as practicable after receipt. The
Loan
shall be repayable as provided in Section
5.
|
| (ii) |
Unless
the Administrative Agent shall have received notice from a Lender
prior to
the Drawdown Date that such Lender will not make available to the
Administrative Agent such Lender’s share of the Loan, the Administrative
Agent may assume that such Lender has made such share available to
the
Administrative Agent on the Drawdown Date in accordance with this
Section 3.1 and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made
such
share available to the Administrative Agent, such Lender and the
Borrower
(but without duplication and not if such Lender is an affiliate of
the
Administrative Agent) severally agree to repay to the Administrative
Agent
forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available
to the
Borrower until the date such amount is repaid to the Administrative
Agent,
at (i) in the case of the Borrower, a rate per annum equal to the
higher of (y) the LIBOR rate for overnight or weekend deposits plus
the
Applicable Margin and (z) the interest rate applicable thereto pursuant
to
Section 6.1 and (ii) in the case of such Lender, the LIBOR rate
for overnight or weekend deposits. If such Lender shall repay to
the
Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender’s share of the Loan included in such amount
for purposes of this Loan Agreement as of the date such amount was
repaid.
Nothing in this subsection (b)(ii) shall be deemed to relieve any
Lender of its obligation to make its share of the Loan to the extent
provided in this Loan Agreement. In the event that the Borrower is
required to repay the Loan to the Administrative Agent pursuant to
this
Section 3.1(b)(ii), as between the Borrower and the defaulting Lender,
the
liability for any breakfunding costs as described in Section 4.3
shall be
borne by the defaulting Lender. If the defaulting Lender has not
paid any
such breakage costs upon demand by the Administrative Agent therefor,
the
Borrower shall pay such breakage costs upon demand by the Administrative
Agent and the Borrower shall be entitled to recover any such payment
for
breakfunding costs made by the Borrower from the defaulting
Lender.
|
3.2. Drawdown
Notice.
The
Borrower shall, by 11:00 a.m. New York time, at least three (3) Banking
Days before the Drawdown Date, serve a notice (a “Drawdown Notice”),
substantially in the form of Exhibit I, on the Administrative Agent, which
notice shall (a) be in writing addressed to the Administrative Agent,
(b) be effective on receipt by the Administrative Agent, (c) specify
the amount of the Loan to be drawn, (d) specify the Banking Day on which
the Loan is to be drawn and, subject to the terms of Section 6.3 hereof, the
Interest Period, (e) specify the disbursement instructions and (f) be
irrevocable. The Administrative Agent shall deliver the Drawdown Notice to
Lenders as soon as practicable after its receipt thereof.
3.3. Effect
of Drawdown Notice.
The
Drawdown Notice shall be deemed to constitute a warranty by the Borrower
(a) that the representations and warranties stated in Section 2
(updated mutatis mutandis) are true and correct on and as of the date of the
Drawdown Notice and will be true and correct on and as of the Drawdown Date
as
if made on such date, and (b) that no Event of Default nor any event which
with the giving of notice or passage or both would constitute an Event of
Default has occurred and is continuing.
4. CONDITIONS
4.1. Conditions
Precedent to the Effectiveness of this Loan Agreement.
The
effectiveness of this Loan Agreement and the obligation of the Lenders to make
the Loan available to the Borrower under this Loan Agreement shall be expressly
subject to the following conditions precedent:
(a) Corporate
Authority.
the
Administrative Agent shall have received the following documents in form and
substance satisfactory to the Administrative Agent:
| (i) |
copies,
certified as true and complete by an officer of the Borrower, of
the
resolutions of the board of directors of the Borrower evidencing
approval
of this Loan Agreement and the Note and authorizing an appropriate
officer
or officers or attorney-in-fact or attorneys-in-fact to execute the
same
on its behalf, or other evidence of such approvals and
authorizations;
|
| (ii) |
copies,
certified as true and complete by an officer of the Guarantor, of
the
resolutions of the board of directors evidencing approval of this
Loan
Agreement, and those Security Documents to which it is to be a party
and
authorizing an appropriate officer or officers or attorney-in-fact
or
attorneys-in-fact to execute the same on its behalf, or other evidence
of
such approvals and authorizations;
|
| (iii) |
copies,
certified as true and complete by an officer of each Security Party,
of
all documents evidencing any other necessary action (including actions
by
such parties thereto other than such Security Party as may be required
by
the Administrative Agent), approvals or consents with respect to
this Loan
Agreement, the Note and the Security
Documents;
|
| (iv) |
copies,
certified as true and complete by an officer of the respective Security
Party, of the certificate of incorporation and by-laws, certificate
of
formation and operating agreement, or equivalent instruments
thereof;
|
| (v) |
certificate
of an authorized officer of the Guarantor certifying that it legally
and
beneficially directly owns, all of the issued and outstanding capital
stock, of Seasak OBO Holdings Ltd., and that Seasak OBO Holdings
Ltd.
legally and beneficially owns all of the issued and outstanding capital
stock of the Borrower, and all such capital stock is free and clear
of any
liens, claims, pledges or other encumbrances
whatsoever;
|
| (vi) |
certificate
of an officer of the Guarantor confirming the solvency of the
Guarantor;
|
| (vii) |
certificate
of an authorized officer of the Guarantor (other than the Borrower)
certifying as to the record ownership of all of its issued and outstanding
capital stock; and
|
| (viii) |
certificates
of the jurisdiction of incorporation or formation, as the case may
be, of
each Security Party as to the good standing
thereof;
|
(b) The
Loan Agreement.
the
Borrower shall have duly executed and delivered this Loan Agreement to the
Administrative Agent;
(c) The
Note.
the
Borrower shall have duly executed and delivered the Note to the Administrative
Agent;
(d) The
Guarantor.
the
Guarantor shall have duly executed and delivered the Consent and Agreement
and
the Guaranty to the Administrative Agent;
(e) The
Vessel.
the
Administrative Agent shall have received evidence satisfactory to it that the
Vessel:
| (i) |
has
been delivered to the Borrower;
|
| (ii) |
is
in the sole and absolute ownership of the Borrower and duly registered
in
the Borrower’s name under Bahamian flag, unencumbered, save and except for
the Mortgage, recorded against it and as otherwise permitted
thereby;
|
| (iii) |
is
classed in the highest classification and rating for vessels of the
same
age and type with its Classification Society without any material
outstanding recommendations;
|
| (iv) |
is
operationally seaworthy and in every way fit for its intended service;
|
| (v) |
is
insured in accordance with the provisions of the Mortgage recorded
against
it and the requirements thereof in respect of such insurance have
been
complied with;
|
(f) Vessel
Documents.
Upon
the delivery of the Vessel, the Borrower shall have duly executed and delivered
to the Administrative Agent:
| (i) |
the
Mortgage over the Vessel;
|
| (ii) |
an
Insurances Assignment with respect to the
Vessel;
|
| (iii) |
an
Earnings Assignment with respect to the
Vessel;
|
| (iv) |
the
Assignment Notices with respect to the Insurances Assignment and
Earnings
Assignment;
|
| (v) |
Uniform
Commercial Code Financing Statements for filing with the District
of
Columbia and in such other jurisdictions as the Administrative Agent
may
reasonably require;
|
(g) Vessel
Liens.
the
Administrative Agent shall have received evidence satisfactory to it and to
its
legal advisor that, save for the liens created by the Mortgage and the
Assignments relating to the Vessel, there are no liens, charges or encumbrances
of any kind whatsoever on the Vessel or on its earnings except as permitted
hereby or by any of the Security Documents;
(h) ISM
DOC.
the
Administrative Agent shall have received a copy of the DOC for the
Vessel;
(i) Environmental
Claims.
the
Administrative Agent shall be satisfied that neither the Borrower nor any of
its
Affiliates is subject to any Environmental Claim;
(j) Fees.
the
Administrative Agent shall have received payment in full of all fees and
expenses then due to the Agents and/or the Lenders under
Section 13;
(k) Accounts.
the
Borrower shall have established a master operating account into which Assigned
Moneys are to be paid (the “Operating Account”) with the Depositary and shall
have pledged its interest in the Operating Account and all other accounts in
the
Borrower’s name to the Security Agent pursuant to an Account
Pledge;
(l) Compliance
Certificate.
the
Administrative Agent having received a Compliance Certificate from each Security
Party with respect to the most recently ended fiscal quarter;
(m) Vessel
Appraisal.
the
Administrative Agent having received an appraisal with respect to the Fair
Market Value on or about thirty (30) days prior to the date hereof;
(n) Charter
Agreement.
the
Administrative Agent having received a copy of the Charter
Agreement;
(o) Money
Laundering Due Diligence.
the
Administrative Agent having received such documentation and other evidence
as is
reasonably requested by the Administrative Agent in order for each of the
Lenders to carry out and be satisfied with the results of all necessary “know
your client” or other checks which is required to carry out in relation to the
transactions contemplated by this Loan Agreement, the Note and the Security
Documents;
(p) Legal
Opinions.
the
Administrative Agent, on behalf of the Agents and the Lenders, shall have
received legal opinions addressed to the Administrative Agent from
(i) ▇▇▇▇▇▇ ▇▇▇▇, Esq., counsel for the Security Parties, (ii) ▇▇▇▇▇ &
▇▇▇▇▇▇▇, special Bahamian counsel to the Agents and the Lenders, and
(iii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the Agents and
Lenders, in each case in such form as the Administrative Agent may require,
as
well as such other legal opinions as the Administrative Agent shall have
required as to all or any matters under the laws of the United States of
America, the State of New York, the Republic of the ▇▇▇▇▇▇▇▇ Islands, the
Republic of Liberia and the Commonwealth of the Bahamas covering the
representations and conditions which are the subjects of Section 2 and this
Section 4.1.
4.2. Further
Conditions Precedent.
The
obligation of the Lenders to make the Loan available to the Borrower under
this
Loan Agreement shall be expressly and separately subject to the following
further conditions precedent on the Drawdown Date:
(a) Drawdown
Notice.
the
Administrative Agent having received a Drawdown Notice in accordance with the
terms of Section 3.2;
(b) Representations
and Warranties.
the
representations stated in Section 2 (updated mutatis mutandis to such date)
being true and correct as if made on and as of that date;
(c) No
Event of Default.
no
Event of Default having occurred and being continuing and no event having
occurred and being continuing which, with the giving of notice or passage,
or
both, would constitute an Event of Default;
(d) No
Change in Laws.
the
Administrative Agent being satisfied that no change in any applicable laws,
regulations, rules or in the interpretation thereof shall have occurred which
make it unlawful for any Security Party to make any payment as required under
the terms of this Loan Agreement, the Note, the Security Documents or any of
them; and
(e) No
Material Adverse Effect.
there
having been no Material Adverse Effect since the date hereof.
4.3. Breakfunding
Costs.
In the
event that, on the date specified for the making of the Loan in the Drawdown
Notice, the Lenders shall not be obliged under this Loan Agreement to make
the
Loan available, the Borrower shall indemnify and hold the Lenders fully harmless
against any losses which the Lenders (or any thereof) may sustain as a result
of
borrowing or agreeing to borrow funds to meet the drawdown requirement of the
Drawdown Notice and the certificate of the relevant Lender or Lenders shall,
absent manifest error, be conclusive and binding on the Borrower as to the
extent of any such losses.
4.4. Satisfaction
after Drawdown.
Without
prejudice to any of the other terms and conditions of this Loan Agreement,
in
the event the Lenders, in their sole discretion, make the Loan available prior
to the satisfaction of all or any of the conditions referred to in
Sections 4.1 or 4.2, the Borrower hereby covenants and undertakes to
satisfy or procure the satisfaction of such condition or conditions within
fourteen (14) days after the Drawdown Date (or such longer period as the
Lenders, in their sole discretion, may agree).
5. REPAYMENT
AND PREPAYMENT
5.1. Repayment.
Subject
to the provisions of this Section 5 regarding prepayments and the
application thereof, the Borrower shall repay the principal amount of the Loan
on each of the Payment Dates in sixteen (16) consecutive installments payable
quarterly in arrears commencing on the date occurring three (3) months after
the
Drawdown Date, each installment being in the amount of Five Hundred Fifty
Thousand Dollars ($550,000), the final such installment to be paid together
with
a balloon payment in the amount of Three Million Two Hundred Thousand Dollars
($3,200,000).
5.2. Voluntary
Prepayment; No Re-Borrowing.
The
Borrower may prepay, upon five (5) Banking Days written notice, the outstanding
amount of the Loan or any portion thereof, without penalty, provided that if
such prepayment is made on a day other than the last day of the Interest Period
such prepayment shall be made together with the costs and expenses provided
for
in Section 5.4. Each prepayment shall be in a minimum amount of One Million
Dollars ($1,000,000) plus any Five Hundred Thousand Dollar ($500,000) multiple
thereof or the full amount of the Loan then outstanding. Prepayments shall
be
applied to the remaining installments in the inverse order of their due date
for
payment and will not be available for re-borrowing.
5.3. Mandatory
Prepayment Sale or Loss of Vessel.
On (i)
any sale of the Vessel or (ii) the earlier of (x) ninety (90) days after the
Total Loss of the Vessel or (y) the date on which the insurance proceeds in
respect of such loss are received by the Borrower or the Security Agent as
assignee thereof, the Borrower shall repay the Loan in full and all other
amounts owed under the Loan or otherwise in connection with the Loan.
5.4. Interest
and Costs with Prepayments/Application of Prepayments.
Any
prepayment of the Loan made hereunder (including, without limitation, those
made
pursuant to Sections 5 and 10.4) shall be subject to the condition that on
the
date of prepayment all accrued interest to the date of such prepayment shall
be
paid in full, together with any and all costs or expenses incurred by any Lender
in connection with any breaking of funding (as certified by such Lender, which
certification shall, absent any manifest error, be conclusive and binding on
the
Borrower).
6. INTEREST
AND RATE
6.1. Applicable
Rate.
The
Loan shall bear interest at the Applicable Rate, which shall be the rate per
annum which is equal to the aggregate of (a) LIBOR for the relevant
Interest Period, plus (b) the Applicable Margin. The Applicable Rate shall
be determined by the Administrative Agent two (2) Banking Days prior to the
first (1st)
day of
the relevant Interest Period and the Administrative Agent shall promptly notify
the Borrower in writing of the Applicable Rate as and when determined. Each
such
determination, absent manifest error, shall be conclusive and binding upon
the
Borrower.
6.2. Default
Rate.
Any
amounts due under this Loan Agreement, not paid when due, whether by
acceleration or otherwise, shall bear interest thereafter from the due date
thereof until the date of payment at a rate per annum equal to the sum of
(i) the Applicable Rate, plus (ii) two percent (2%) per annum (the “Default
Rate”). In addition, following the occurrence of any Event of Default and until
such Event of Default is cured to the satisfaction of the Majority Lenders,
the
Loan shall bear interest at the Default Rate.
6.3. Interest
Periods.
The
Borrower shall give the Administrative Agent an Interest Notice specifying
the
Interest Period selected for the next subsequent Interest Period by 11:00 a.m.
New York time at least three (3) Banking Days prior to the end of any then
existing Interest Period, which notice the Administrative Agent agrees to
forward on to all Lenders on a same day basis or as soon as practicable. If
at
the end of any then existing Interest Period the Borrower fail to give an
Interest Notice, the relevant Interest Period shall be three (3) months.
The Borrower’s right to select an Interest Period shall be subject to the
restriction that no selection of an Interest Period shall be effective unless
each Lender is satisfied that the necessary funds will be available to such
Lender for such period and that no Event of Default or event which, with the
giving of notice or passage of time, or both, would constitute an Event of
Default shall have occurred and be continuing. The
Borrower shall reimburse the Lenders for any and all costs or expenses incurred
by the Lenders in connection with any breaking of funding (as certified by
each
Lender, which certification, absent manifest error, shall be conclusive and
binding in the Borrower) as a consequence of such consolidation.
6.4. Interest
Payments.
Accrued
interest on the Loan shall be payable in arrears on the last day of each
Interest Period, except that if the Borrower shall select an Interest Period
in
excess of three (3) months, accrued interest shall be payable during such
Interest Period on each three (3) month anniversary of the commencement of
such
Interest Period and upon the end of such Interest Period.
7. PAYMENTS
7.1. Place
of Payments, No Set Off.
All
payments to be made hereunder by the Borrower shall be made to the
Administrative Agent, not later than 10 a.m. New York time (any payment received
after 10 a.m. New York time shall be deemed to have been paid on the next
Banking Day) on the due date of such payment, at its office located at ▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or to such other office
of
the Administrative Agent as the Administrative Agent may direct, without set-off
or counterclaim and free from, clear of, and without deduction or withholding
for, any Taxes, provided, however, that if the Borrower shall at any time be
compelled by law to withhold or deduct any Taxes from any amounts payable to
the
Lenders hereunder, then the Borrower shall pay such additional amounts in
Dollars as may be necessary in order that the net amounts received after
withholding or deduction shall equal the amounts which would have been received
if such withholding or deduction were not required and, in the event any
withholding or deduction is made, whether for Taxes or otherwise, the Borrower
shall promptly send to the Administrative Agent such documentary evidence with
respect to such withholding or deduction as may be required from time to time
by
the Lenders.
7.2. Tax
Credits.
If any
Lender obtains the benefit of a credit against the liability thereof for federal
income taxes imposed by any taxing authority for all or part of the Taxes as
to
which the Borrower has paid additional amounts as aforesaid in Section 7.1,
then such Lender shall pay an amount to the Borrower which that Lender
determines will leave it (after such payment) in the same position as it would
have been had the Tax payment not been made by the Borrower. Each Lender agrees
that in the event that Taxes are imposed on account of the situs of its loans
hereunder, such Lender, upon acquiring knowledge of such event, shall, if
commercially reasonable and if, in the opinion of that Lender, is not
prejudicial to it, shift such loans on its books to another office of such
Lender so as to avoid the imposition of such Taxes. Nothing contained in this
clause shall in any way prejudice the right of the Lenders to arrange their
tax
affairs in such way as they, in their sole discretion, deem appropriate. In
particular, no Lender shall be required to obtain such tax credit, if this
interferes with the way such Lender normally deals with its tax
affairs.
7.3. Sharing
of Setoffs.
Each
Lender agrees that if it shall, through the exercise of a right of banker's
lien, setoff or counterclaim or pursuant to a secured claim under Section 506
of
the Federal Bankruptcy Code or other security or interest arising from, or
in
lieu of, such secured claim, exercised or received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by
any
other means, obtain payment (voluntary or involuntary) as a result of which
its
funded Commitment shall be proportionately less than the funded Commitment
of
any other Lender, it shall be deemed simultaneously to have purchased from
such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the funded Commitment of such other
Lender so that the aggregate funded Commitment of each Lender shall be in the
same proportion to the aggregate funded Commitments then outstanding as its
funded Commitment prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all funded
Commitments outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that, if any such purchase
or
purchases or adjustments shall be made pursuant to this Section 7.3 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery
and
the purchase price or prices or adjustment restored without interest. Any Lender
holding a participation in a funded Commitment deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing to such Lender by reason thereof as fully
as
if such Lender had made available its share of the Loan. The Borrower expressly
consents to the foregoing arrangement.
7.4. Computations;
Banking Days.
(a)
All
computations of interest and fees shall be made by the Administrative Agent
or
the Lenders, as the case may be, on the basis of a 360-day year, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which interest or fees are payable. Each
determination by the Administrative Agent or the Lenders of an interest rate
or
fee hereunder shall be conclusive and binding for all purposes, absent manifest
error;
(b) Whenever
any payment hereunder or under the Note shall be stated to be due on a day
other
than a Banking Day, such payment shall be due and payable on the next succeeding
Banking day unless the next succeeding Banking Day falls in the following
calendar month, in which case it shall be payable on the immediately preceding
Banking Day.
8. EVENTS
OF DEFAULT
8.1. Events
of Default.
The
occurrence of any of the following events shall be an Event of
Default:
(a) Non-Payment
of Principal.
any
payment of principal is not paid when due; or
(b) Non-Payment
of Interest or Other Amounts.
any
interest or any other amount becoming payable to any Creditor under this Loan
Agreement, under the Note or under any of the Security Documents is not paid
within three (3) Banking Days of the due date or date of demand (as the case
may
be); or
(c) Representations.
any
representation, warranty or other statement made by any Security Party in this
Loan Agreement or any of the Security Documents or in any other instrument,
document or other agreement delivered in connection herewith or therewith proves
to have been untrue or misleading in any material respect as at the date as
of
which made or confirmed; or
(d) Impossibility;
Illegality.
it
becomes impossible or unlawful for the Borrower or the Guarantor to fulfill
any
of its covenants or obligations hereunder, under the Note or under any of the
Security Documents or for any of the Lenders to exercise any of the rights
vested in any of them hereunder, under the Note or under any of the Security
Documents; or
(e) Mortgage.
there
is an event of default under the Mortgage; or
(f) Covenants.
any
Security Party (i) defaults in the due and punctual observance or performance
of
Sections 9.1(a), 9.1(c), 9.1(d), 9.1(h), 9.1(j), 9.1(k), 9.1(p), 9.2(i) or
9.2(l) and such default continued unremedied for a period of sixty (60) days
or
(ii) defaults under any other term, covenant or agreement contained in this
Loan
Agreement, in the Note, in any of the Security Documents or in any other
instrument, document or other agreement delivered in connection herewith or
therewith, or there occurs any other event which constitutes a default under
this Loan Agreement, under the Note or under any of the Security Documents,
in
each case other than an Event of Default referred to elsewhere in this
Section 8.1; or
(g) Debt.
(i) any
Security Party shall default in the payment when due of (x) any Financial
Indebtedness, or (y) any Debt other than Financial Indebtedness or any other
debt, in either case, in the outstanding principal amount equal to or exceeding
Five Hundred Thousand Dollars ($500,000); or (ii) such Debt or debt is, or
by
reason of such default is subject to being, accelerated or any party becomes
entitled to enforce the security for any such Debt or debt and such party shall
take steps to enforce the same, unless such default or enforcement is being
contested in good faith and by appropriate proceedings or other acts and the
Security Party, Subsidiary or Affiliate of the Guarantor, as the case may be,
shall set aside on its books adequate reserves with respect thereto;
or
(h) Ownership
of Borrower.
the
Guarantor shall cease to own directly or indirectly, one hundred percent (100%)
of the Borrower; or
(i) Bankruptcy.
any
Security Party, any Subsidiary or any Affiliate of the Guarantor commences
any
proceeding under any reorganization, arrangement or readjustment of debt,
dissolution, winding up, adjustment, composition, bankruptcy or liquidation
law
or statute of any jurisdiction, whether now or hereafter in effect (a
“Proceeding”), or there is commenced against any thereof any Proceeding and such
Proceeding remains undismissed or unstayed for a period of thirty (30) days
or
any receiver, trustee, liquidator or sequestrator of, or for, any thereof or
any
substantial portion of the property of any thereof is appointed and is not
discharged within a period of thirty (30) days or any thereof by any act
indicates consent to or approval of or acquiescence in any Proceeding or the
appointment of any receiver, trustee, liquidator or sequestrator of, or for,
itself or of, or for, any substantial portion of its property; or
(j) Termination
of Operations; Sale of Assets.
except
as expressly permitted under this Loan Agreement, any Security Party ceases
its
operations or sells or otherwise disposes of all or substantially all of its
assets or all or substantially all of the assets of any Security Party are
seized or otherwise appropriated; or
(k) Judgments.
any
judgment or order is made, the effect whereof would be to render ineffective
or
invalid this Loan Agreement, the Note or any of the Security Documents or any
material provision thereof, or the Borrower or any Security Party asserts that
any such agreement or provision thereof is invalid; or
(l) Inability
to Pay Debts.
any
Security Party, any Subsidiary or any Affiliate of the Guarantor is unable
to
pay or admits its inability to pay its debts as they fall due or a moratorium
shall be declared in respect of any material indebtedness of the Borrower or
any
Affiliate of the Borrower; or
(m) Change
in Financial Position.
any
change in the financial position of the any Security Party or any Affiliate
thereof which, in the opinion of the Majority Lenders, shall have a Material
Adverse Effect; or
(n) Change
in Control.
a
Change of Control shall occur with respect to any Security Party; or
(o) Cross-Default.
any
Security Party, any Subsidiary or any Affiliate thereof defaults under any
material contract or material agreement to which it is a party or by which
it is
bound; or
Upon
and
during the continuance of any Event of Default, the Lenders' obligation to
make
its share of the Loan available shall cease and the Administrative Agent may,
and on the instructions of the Majority Lenders shall, by notice to the
Borrower, declare the entire unpaid balance of the then outstanding Loan,
accrued interest and any other sums payable by the Borrower hereunder or under
the Note due and payable, whereupon the same shall forthwith be due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived; provided that upon the happening of an event specified
in subsections (i) or (l) of this Section 8.1 with respect to any
Security Party, the Note shall be immediately due and payable without
declaration or other notice to such Security Party. In such event, the Lenders
may proceed to protect and enforce their rights by action at law, suit in equity
or in admiralty or other appropriate proceeding, whether for specific
performance of any covenant contained in this Loan Agreement, in the Note or
in
any Security Document, or in aid of the exercise of any power granted herein
or
therein, or the Lenders may proceed to enforce the payment of the Note or to
enforce any other legal or equitable right of the Lenders, or proceed to take
any action authorized or permitted under the terms of any Security Document
or
by applicable law for the collection of all sums due, or so declared due, on
the
Note. Without limiting the foregoing, the Security Parties agree that during
the
continuance of any Event of Default each of the Lenders shall have the right
to
appropriate and hold or apply (directly, by way of set-off or otherwise) to
the
payment of the obligations of such Security Party to the Lenders hereunder
and/or under the Note (whether or not then due) all moneys and other amounts
of
such Security Party then or thereafter in possession of any Lender, the balance
of any deposit account (demand or time, mature or unmatured) of such Security
Party then or thereafter with any Lender and every other claim of such Security
Party then or thereafter against any of the Lenders.
8.2. Indemnification.
The
Borrower agrees to, and shall, indemnify and hold the Agents and the Lenders
harmless against any loss, as well as against any costs or expenses (including
legal fees and expenses), which any of the Agents or the Lenders sustains or
incurs as a consequence of any default in payment of the principal amount of
the
Loan, interest accrued thereon or any other amount payable hereunder, under
the
Note or under any Security Documents, including, but not limited to, all actual
losses incurred in liquidating or re-employing fixed deposits made by third
parties or funds acquired to effect or maintain the Loan or any portion thereof.
Any Lenders' certification of such costs and expenses shall, absent any manifest
error, be conclusive and binding on the Borrower.
8.3. Application
of Moneys.
Except
as otherwise provided in any Security Document, all moneys received by the
Creditors under or pursuant to this Loan Agreement, the Note or any of the
Security Documents after the happening of any Event of Default (unless cured
to
the satisfaction of the Majority Lenders) shall be applied by the Administrative
Agent in the following manner:
(a) first,
in
or
towards the payment or reimburse-ment of any expenses, including breakfunding
costs, or liabilities incurred by the Agents, or the Lenders in connection
with
the ascertainment, protection or enforcement of their rights and remedies
hereunder, under the Note and under any of the Security Documents;
(b) secondly,
in
or
towards payment of any interest owing in respect of the Loan;
(c) thirdly,
in or towards repayment of principal of the Loan;
(d) fourthly,
in or towards payment of all other sums which may be owing to the Agents, or
any
of them, or the Lenders under this Loan Agreement, under the Note or under
any
of the Security Documents; and
(e) fifthly,
the surplus (if any) shall be paid to the Borrower or to whosoever else may
be
entitled thereto.
9. COVENANTS
9.1. Affirmative
Covenants.
The
Borrower hereby covenants and undertakes with the Lenders that, from the date
hereof and so long as any principal, interest or other moneys are owing in
respect of this Loan Agreement, under the Note or under any of the Security
Documents, the Borrower will:
(a) Performance
of Agreements.
duly
perform and observe, and procure the observance and performance by all other
parties thereto (other than the Agents and the Lenders) of, the terms of this
Loan Agreement, the Note and the Security Documents;
(b) Notice
of Default, etc.
promptly
upon, and in any event no later than five (5) Banking Days after, obtaining
knowledge thereof, inform the Administrative Agent of the occurrence of
(a) any Event of Default or of any event which, with the giving of notice
or passage of time, or both, would constitute an Event of Default, (b) any
litigation or governmental proceeding pending or threatened against it or
against any of its Subsidiaries which could reasonably be expected to have
a
Material Adverse Effect, including but not limited to, in respect of any
Environmental Claim, (c) the withdrawal of the Vessel's rating by its
Classification Society or the issuance by the Classification Society of any
material recommendation or notation affecting class and (d) any other event
or condition which is reasonably likely to have a Material Adverse
Effect;
(c) Obtain
Consents.
without
prejudice to Section 2.1 and this Section 9.1, obtain every consent
and do all other acts and things which may from time to time be necessary or
advisable for the continued due performance of all its and the other Security
Parties’ respective obligations under this Loan Agreement, under the Note and
under the Security Documents;
(d) Financial
Information.
deliver
to each Lender:
| (i) |
as
soon as available but not later than one hundred fifty (150) days
after
the end of each fiscal year of the Borrower, complete copies of the
financial reports of the Borrower (and after the Financial Covenants
Commencement Date, together with a Compliance Certificate), all in
reasonable detail, which shall include at least the balance sheet
of the
Borrower as of the end of such year and the related statements of
income
and sources and uses of funds for such year, and such reports may
be
unaudited, but shall be certified to be true and complete by the
chief
financial officer of the Borrower;
|
| (ii) |
as
soon as available but not later than seventy-five (75) days after the
end of each of the first three quarters of each fiscal year of the
Borrower, a quarterly interim balance sheet of the Borrower and
the related profit and loss statements and sources and uses of funds
(and
after the Financial Covenants Commencement Date, together with a
Compliance Certificate), all in reasonable detail, unaudited, but
certified to be true and complete by the chief financial officer
of the
Borrower;
|
| (iii) |
as
soon as available but not later than one hundred fifty (150) days
after
the end of each fiscal year of the Guarantor, complete copies of
the
consolidated financial reports of the Guarantor and its Subsidiaries
(and
after the Financial Covenants Commencement Date, together with a
Compliance Certificate), all in reasonable detail, which shall include
at
least the consolidated balance sheet of the Guarantor and its Subsidiaries
as of the end of such year and the related consolidated statements
of
income and sources and uses of funds for such year, which shall be
audited
reports prepared by an Acceptable Accounting
Firm;
|
| (iv) |
as
soon as available but not later than seventy-five (75) days after
the end
of the first three quarters of each fiscal year of the Guarantor,
a
quarterly interim consolidated balance sheet of the Guarantor and
the
related consolidated profit and loss statements and sources and uses
of
funds (and after the Financial Covenants Commencement Date, together
with
a Compliance Certificate), all in reasonable detail, which shall
be
audited reports prepared by an Acceptable Accounting
Firm;
|
| (v) |
within
ten (10) days of a Security Party’s receipt thereof, copies of all audit
letters or other correspondence from any external auditors including
material financial information in respect of such Security
Party;
|
| (vi) |
such
other statements (including, without limitation, monthly consolidated
statements of operating revenues and expenses), lists of assets and
accounts, budgets, forecasts, reports and other financial information
with
respect to its business as the Administrative Agent may from time
to time
request, certified to be true and complete by the chief financial
officer
of the respect Security Party;
|
(e) Vessel
Valuations.
reimburse the Administrative Agent for the cost of appraisals of the Fair Market
Value. The Administrative Agent shall be entitled to obtain such valuations
from
two ship brokers approved by the Lenders two times in each calendar year and
upon the occurrence of an Event of Default;
(f) Corporate
Existence.
do or
cause to be done, and procure that the Guarantor shall do or cause to be done,
all things necessary to preserve and keep in full force and effect its corporate
existence, and all licenses, franchises, permits and assets necessary to the
conduct of its business;
(g) Books
and Records.
at all
times keep proper books of record and account into which full and correct
entries shall be made in accordance with GAAP;
(h) Taxes
and Assessments.
pay and
discharge, and cause each Subsidiary to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or property prior to the date upon which penalties attach thereto;
provided, however, that it shall not be required to pay and discharge, or cause
to be paid and discharged, any such tax, assessment, charge or levy so long
as
the legality thereof shall be contested in good faith and by appropriate
proceedings or other acts and it shall set aside on its books adequate reserves
with respect thereto;
(i) Inspection.
allow,
upon ten (10) Banking Days notice from the Administrative Agent, any
representative or representatives designated by the Administrative Agent,
subject to applicable laws and regulations, to visit and inspect any of its
properties, and, on request, to examine its books of account, records, reports,
agreements and other papers and to discuss its affairs, finances and accounts
with its officers, all at such times and as often as the Administrative Agent
requests;
(j) Inspection
and Survey Reports.
if the
Administrative Agent shall so request and upon reasonable notice, the Borrower
shall permit the Administrative Agent to inspect the Vessel and shall provide
the Administrative Agent with copies of all internally generated inspection
or
survey reports on the Vessel and, once in any twelve month period, the
Administrative Agent may require a review of class records and an inspection
report prepared by a surveyor appointed by the Administrative Agent, the results
of such class record review and inspection report to be satisfactory to the
Administrative Agent;
(k) Compliance
with Statutes, Agreements, etc.
do or
cause to be done all things necessary to comply with all contracts or agreements
to which it, or any Subsidiary is a party, and all laws, and the rules and
regulations thereunder, applicable to the Borrower, including, without
limitation, those laws, rules and regulations relating to employee benefit
plans
and environmental matters;
(l) Environmental
Matters.
promptly upon the occurrence of any of the following conditions, provide to
the
Administrative Agent a certificate of an executive officer thereof, specifying
in detail the nature of such condition and its proposed response or the response
of its Environmental Affiliates: (a) its receipt or the receipt by any
other Security Party or any Environmental Affiliates of the Borrower or any
other Security Party of any written communication whatsoever that alleges that
such person is not in compliance with any applicable Environmental Law or
Environmental Approval, if such noncompliance could reasonably be expected
to
have a Material Adverse Effect, (b) knowledge by it, or by any other
Security Party or any Environmental Affiliates of the Borrower or any other
Security Party that there exists any Environmental Claim pending or threatened
against any such person, which could reasonably be expected to have a Material
Adverse Effect, or (c) any release, emission, discharge or disposal of any
material that could form the basis of any Environmental Claim against it, any
other Security Party or against any Environmental Affiliates of the Borrower
or
any other Security Party, if such Environmental Claim could reasonably be
expected to have a Material Adverse Effect. Upon the written request by the
Administrative Agent, it will submit to the Administrative Agent at reasonable
intervals, a report providing an update of the status of any issue or claim
identified in any notice or certificate required pursuant to this subsection;
(m) Vessel
Management.
cause
the Vessel to be managed technically by B+H Management Ltd., a Bermuda
Corporation, or an affiliate of the Guarantor or a company selected by the
Borrower and approved by the Lenders; provided, however, that the Vessel may
be
technically managed by Paradise Navigation S.A. until March 31, 2007, and the
Borrower will procure that the Guarantor shall supervise the special survey
of
the Vessel scheduled to be conducted in December 2006, which is to be undertaken
by Paradise Navigation S.A.;
(n) Vessel
Employment.
cause
the Vessel to be employed under the Charter through and including March 11,
2007, and thereafter to trade from time to time on spot or time charter or
under
a contract of affreightment with an Acceptable Charterer;
(o) Assignment
of Charter.
upon
the entry by the Borrower into any charter in respect of the Vessel with a
duration of twelve (12) months or more, execute a Charter Assignment in respect
of such charter;
(p) ISM
Code, ISPS Code and MTSA Matters.
(i)
procure that the Operator will comply with and ensure the Vessel will comply
with the requirements of the ISM Code, ISPS Code and MTSA in accordance with
the
implementation schedule thereof, including (but not limited to) the maintenance
and renewal of valid certificates and when required, security plans, pursuant
thereto; and (ii) will procure that the Operator will immediately inform the
Administrative Agent if there is any threatened or actual withdrawal of its
DOC,
SMC or the ISSC in respect of the Vessel; and (iii) will procure that the
Operator will promptly inform the Administrative Agent upon the issuance to
the
Borrower or Operator of a DOC and the issuance to the Vessel of an SMC or
ISSC;
(q) Brokerage
Commissions, etc.
indemnify and hold each of the Creditors and the Lenders harmless from any
claim
for any brokerage commission, fee, or compensation from any broker or third
party resulting from the transactions contemplated hereby;
(r) Operating
Account; Assignment.
maintain an Operating Account with the Depositary and, upon the request of
the
Administrative Agent, shall procure that all earnings of the Vessel shall be
paid into the Operating Account and, hereby pledges, assigns and grants to
the
Security Agent, for the benefit of the Lenders, a security interest in all
funds
from time to time in the Operating Account; and
(s) Insurance.
maintain, and cause each other Security Party to maintain, with financially
sound and reputable insurance companies, insurance on all their respective
properties and against all such risks and in at least such amounts as are
usually insured against by companies of established reputation engaged in the
same or similar business from time to time.
9.2. Negative
Covenants.
The
Borrower covenants and undertakes with the Lenders that, from the date hereof
and so long as any principal, interest or other moneys are owing in respect
of
this Loan Agreement, under the Note or under any of the Security Documents,
the
Borrower will not, and will procure that the Guarantor will not, to the extent
of Sections 9.2(e), (g), (h), (i), or (j), without the prior written consent
of
the Majority Lenders (or all of the Lenders if required by Section 15.8):
(a) Liens.
create,
assume or permit to exist, any mortgage, pledge, lien, charge, encumbrance
or
any security interest whatsoever upon any Collateral except:
| (i) |
liens
for taxes not yet payable for which adequate reserves have been
maintained;
|
| (ii) |
the
Mortgage, the Assignments and other liens in favor of the Security
Agent;
|
| (iii) |
liens,
charges and encumbrances against the Vessel permitted to exist under
the
terms of the Mortgage; and
|
| (iv) |
pledges
of certificates of deposit or other cash collateral securing any
Security
Party's reimbursement obligations in connection with letters of credit
now
or hereafter issued for the account of such Security Party in connection
with the establishment of the financial responsibility of the Security
Parties under 33 C.F.R. Part 130 or 46 C.F.R.
Part 540, as the case may be, as the same may be amended or
replaced;
|
(b) Debt.
with
respect to the Borrower (i) incur any Debt, excluding Debt to the Agents or
any
of the Lenders hereunder, other than in the ordinary course of business, (ii)
incur any Debt that would cause the Borrower to be in default under any
provision of Section 8.3 or (iii) make advances or extend credit to, or become
obligated, contingently or otherwise, in respect of any Debt of, a third
party;
(c) Change
of Flag, Class, Management or Ownership.
change
the flag of the Vessel other than to a jurisdiction acceptable to the Majority
Lenders, their Classification Society other than to another member of the
International Association of Classification Societies, the technical management
of the Vessel other than to one or more technical management companies
acceptable to the Majority Lenders or the immediate or ultimate ownership of
the
Vessel;
(d) Chartering.
enter
into any charter with respect to the Vessel with any party other than the
Guarantor or a Subsidiary or an Affiliate thereof, having a duration, including
any options to extend such charter, of more than twelve (12) months without
the
prior consent of the Majority Lenders;
(e) Change
in Business.
materially change the nature of its business or commence any business materially
different from its current business;
(f) Sale
or Pledge of Shares.
sell,
assign, transfer, pledge or otherwise convey or dispose of any of the shares
(including by way of spin-off, installment sale or otherwise) of the capital
stock of the Borrower;
(g) Sale
of Assets.
sell,
or otherwise dispose of, the Vessel (unless otherwise in accordance with this
Loan Agreement) or, with respect to the Guarantor, any other asset (including
by
way of spin-off, installment sale or otherwise) which is substantial in relation
to its assets taken as a whole; unless immediately before and after giving
effect to such sale or disposition, no Event of Default shall have occurred
and
be continuing, and the acquirer in such sale or disposition shall have assumed
all liabilities and obligations of the Borrower shall have provided not less
than ten (10) Banking Days in advance, a certificate declaring that no Event
of
Default exists or would result from such sale or disposition and demonstrating
compliance on a pro-forma basis with all covenants contained in this Loan
Agreement. Such acquirer shall be required to make the same representations
and
warranties made by the Borrower and the Guarantor herein;
(h) Changes
in Offices.
change
the location of the chief executive office of any Security Party, the office
of
the chief place of business of any such parties or the office of the Security
Parties in which the records relating to the earnings or insurances of the
Vessel are kept unless the Lenders shall have received thirty (30) days prior
written notice of such change;
(i) Consolidation
and Merger.
consolidate with, or merge into, any corporation or other entity, or merge
any
corporation or other entity into it; unless immediately before and after giving
effect to such consolidation or merger, no Event of Default shall have occurred
and be continuing, and the survivor in such consolidation or merger shall have
assumed all liabilities and obligations of the parties thereto and the Borrower
shall have provided not less than ten (10) Banking Days in advance, a
certificate declaring that no Event of Default exists or would result from
such
consolidation or merger and demonstrating compliance on a pro-forma basis with
all covenants contained in this Loan Agreement. Such surviving entity shall
be
required to make the same representations and warranties made by the Borrower
and the Guarantor herein;
(j) Change
Fiscal Year.
change
its fiscal year;
(k) Use
of
Corporate Funds.
the
Borrower will not pay out any funds to any company or person except (i) in
the ordinary course of business in connection with the management of the
business of the Borrower and its Subsidiaries, including the operation and/or
repair of the Vessel and other vessels owned or operated by such parties and
(ii) the servicing of the Debt permitted hereunder if immediately before
and after the making of such payment, an Event of Default shall have occurred
or
be continuing;
(l) Issuance
of Shares.
permit
the Borrower to issue or dispose of any shares of its own capital stock to
any
person other than the Guarantor;
(m) No
Money Laundering.
in
connection with this Loan Agreement or any of the Security Documents, contravene
or permit any Subsidiary to contravene, any law, official requirement or other
regulatory measure or procedure implemented to combat “money laundering” (as
defined in Article 1 of the Directive (91/308/EEC) of the Council of the
European Communities) and comparable United States Federal and state laws.
In
addition, the Borrower confirms that it is the beneficiary (within the meaning
of Section 8 of the German Money Laundering Act (Geldw’schegesetz)) for the Loan
made available to it. The Borrower will promptly inform the Lenders (by written
notice to the Agent) if the Borrower is not or ceases to be the beneficiary
and
will provide in writing the name and address of the beneficiary;
(n) Use
of
Proceeds.
will
not use the proceeds of the Loan in violation of Regulation T, U or X;
and
9.3. Asset
Maintenance.
If at
any time during the term of the Loan Agreement, the outstanding amount of the
Loan is greater than the Permitted Percentage of the Fair Market Value, the
Borrower shall, within a period of thirty (30) days following receipt by
the Borrower of written notice from the Administrative Agent notifying the
Borrower of such excess and specifying the amount thereof (which amount shall,
in the absence of manifest error, be deemed to be conclusive and binding on
the
Borrower), either (i) deliver to the Security Agent such additional
collateral as may be satisfactory to the Lenders in their sole discretion of
sufficient value to make the aggregate of Fair Market Value plus the additional
collateral, equal to the Required Percentage of the outstanding amount of the
Loan or (ii) the Borrower shall prepay such amount of the Loan (together
with interest thereon and any other monies payable in respect of such prepayment
pursuant to Section 5.4) as shall result in the Fair Market Value being not
less
than the Required Percentage
10. ASSIGNMENT
This
Loan
Agreement shall be binding upon, and inure to the benefit of, the Borrower
and
the Lenders, the Agents and their respective successors and assigns, except
that
the Borrower may not assign any of its rights or obligations hereunder. Each
Lender shall be entitled to assign their respective rights and obligations
under
this Loan Agreement or grant participation(s) in the Loan to any subsidiary,
holding company or other affiliate of such Lender, to any subsidiary or other
affiliate company of any thereof or to any other bank or financial institution
or collateralized loan obligation trust or fund (a “CLO”) without the consent of
the Borrower. Except for the Agent, which shall retain an interest in this
Loan
in an amount equal to at least 25% thereof, each Lender may transfer all or
any
part of its rights, benefits and its obligations under this Loan Agreement
and
any of the other Security Documents to any subsidiary or other affiliate company
of any thereof or to any other bank or financial institution or CLO (the
“Transferee”) if the Transferee, by delivery of such undertaking, becomes bound
by the terms of this Loan Agreement and agrees to perform all or, as the case
may be, part of such Lender’s obligations under this Loan Agreement. Each Lender
may disclose to a prospective assignee, transferee or to any other person who
may propose entering into contractual relations with such Lender in relation
to
the Loan Agreement and such information about the Borrower as such Lender shall
consider appropriate. The Borrower will take all actions requested by the Agents
or any Lender to effect such assignment, including, without limitation, the
execution of a written consent to any Assignment and Assumption
Agreement.
11. ILLEGALITY,
INCREASED COST, NON-AVAILABILITY, ETC.
11.1. Illegality.
In the
event that by reason of any change in any applicable law, regulation or
regulatory requirement or in the interpretation thereof, a Lender has a basis
to
conclude that it has become unlawful for any Lender to maintain or give effect
to its obligations as contemplated by this Loan Agreement, such Lender shall
inform the Administrative Agent and the Borrower to that effect, whereafter
the
liability of such Lender to make its Commitment available shall forthwith cease
and the Borrower shall be required either to repay to such Lender that portion
of the Loan advanced by such Lender immediately or, if such Lender so agrees,
to
repay such portion of the Loan to such Lender on the last day of any then
current Interest Period in accordance with and subject to the provisions of
Section 11.5. In any such event, but without prejudice to the aforesaid
obligations of the Borrower to repay such portion of the Loan, the Borrower
and
the relevant Lender shall negotiate in good faith with a view to agreeing on
terms for making such portion of the Loan available from another jurisdiction
or
otherwise restructuring such portion of the Loan on a basis which is not
unlawful.
11.2. Increased
Costs.
If any
change in applicable law, regulation or regulatory requirement (including any
applicable law, regulation or regulatory requirement which relates to capital
adequacy or liquidity controls or which affects the manner in which any Lender
allocates capital resources under this Loan Agreement), or in the interpretation
or application thereof by any governmental or other authority,
shall:
| (i) |
subject
any Lender to any Taxes with respect to its income from the Loan,
or any
part thereof; or
|
| (ii) |
change
the basis of taxation to any Lender of payments of principal or interest
or any other payment due or to become due pursuant to this Loan Agreement
(other than a change in the basis effected by the jurisdiction of
organization of such Lender, the jurisdiction of the principal place
of
business of such Lender, the United States of America, the State
or City
of New York or any governmental subdivision or other taxing authority
having jurisdiction over such Lender (unless such jurisdiction is
asserted
by reason of the activities of the Borrower or any of the other Security
Parties) or such other jurisdiction where the Loan may be payable);
or
|
| (iii) |
impose,
modify or deem applicable any reserve requirements or require the
making
of any special deposits against or in respect of any assets or liabilities
of, deposits with or for the account of, or loans by, a Lender;
or
|
| (iv) |
impose
on any Lender any other condition affecting the Loan or any part
thereof;
|
and
the
result of the foregoing is either to increase the cost to such Lender of making
available or maintaining its Commitment or any part thereof or to reduce the
amount of any payment received by such Lender, then and, in any such case,
if
such increase or reduction, in the opinion of such Lender, materially affects
the interests of such Lender under or in connection with this Loan
Agreement:
| (i) |
the
Lender shall notify the Administrative Agent and the Borrower of
the
happening of such event, and
|
| (ii) |
the
Borrower agrees forthwith upon demand to pay to such Lender such
amount as
such Lender certifies to be necessary to compensate such Lender for
such
additional cost or such reduction.
|
11.3. Nonavailability
of Funds.
If the
Administrative Agent shall determine that, by reason of circumstances affecting
the London Interbank Market generally, adequate and reasonable means do not
or
will not exist for ascertaining the Applicable Rate for the Loan for any
Interest Period, the Administrative Agent shall give notice of such
determination to the Borrower. The Majority Lenders shall then determine the
interest rate and/or Interest Period to be substituted for those which would
otherwise have applied under this Loan Agreement. If the Majority Lenders are
unable to agree upon such a substituted interest rate and/or Interest Period
within thirty (30) days of the giving of such determination notice, the
Administrative Agent shall set an interest rate and Interest Period to take
effect from the expiration of the Interest Period in effect at the date of
determination, which rate shall be equal to the Margin plus the cost to the
Lenders (as certified by each Lender) of funding the Loan. In the event the
state of affairs referred to in this Section 11.3 shall extend beyond the
end of the Interest Period, the foregoing procedure shall continue to apply
until circumstances are such that the Applicable Rate may be determined pursuant
to Section 6.
11.4. Lender's
Certificate Conclusive.
A
certificate or determination notice of any Lender as to any of the matters
referred to in this Section 11 shall, absent manifest error, be conclusive
and binding on the Borrower.
11.5. Compensation
for Losses.
Where
the Loan or any portion thereof is to be repaid by the Borrower pursuant to
this
Section 11, the Borrower agrees simultaneously with such repayment to pay
to the relevant Lender all accrued interest to the date of actual payment on
the
amount repaid and all other sums then payable by the Borrower to the relevant
Lender pursuant to this Loan Agreement, together with such amounts as may be
certified by the relevant Lender to be necessary to compensate such Lender
for
any actual loss, premium or penalties incurred or to be incurred thereby on
account of funds borrowed to make, fund or maintain its Commitment or such
portion thereof for the remainder (if any) of the then current Interest Period
or Interest Periods, if any, but otherwise without penalty or
premium.
12. CURRENCY
INDEMNITY
12.1. Currency
Conversion.
If, for
the purpose of obtaining or enforcing a judgment in any court in any country,
it
becomes necessary to convert into any other currency (the “judgment currency”)
an amount due in Dollars under this Loan Agreement, the Note or any of the
Security Documents, then the conversion shall be made, in the discretion of
the
Administrative Agent, at the rate of exchange prevailing either on the date
of
default or on the day before the day on which the judgment is given or the
order
for enforcement is made, as the case may be (the “conversion date”), provided
that the Administrative Agent shall not be entitled to recover under this
section any amount in the judgment currency which exceeds at the conversion
date
the amount in Dollars due under this Loan Agreement, the Note, the Guaranty
and/or any of the Security Documents.
12.2. Change
in Exchange Rate.
If
there is a change in the rate of exchange prevailing between the conversion
date
and the date of actual payment of the amount due, the Borrower shall pay such
additional amounts (if any, but, in any event, not a lesser amount) as may
be
necessary to ensure that the amount paid in the judgment currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount then due under this Loan Agreement, the Note and/or any
of
the Security Documents in Dollars; any excess over the amount due received
or
collected by the Lenders shall be remitted to the Borrower.
12.3. Additional
Debt Due.
Any
amount due from the Borrower under this Section 12 shall be due as a
separate debt and shall not be affected by judgment being obtained for any
other
sums due under or in respect of this Loan Agreement, the Note and/or any of
the
Security Documents.
12.4. Rate
of Exchange.
The
term “rate of exchange” in this Section 12 means the rate at which the
Administrative Agent in accordance with its normal practices is able on the
relevant date to purchase Dollars with the judgment currency and includes any
premium and costs of exchange payable in connection with such
purchase.
13. FEES
AND EXPENSES
13.1. Fees.
The
Borrower shall pay to the Administrative Agent an arrangement fee of One Hundred
Thousand Dollars ($100,000) payable upon the execution of this Agreement.
13.2. Expenses.
The
Borrower agrees, whether or not the transactions hereby contemplated are
consummated, on demand to pay, or reimburse the Agents for their payment of,
the
expenses of the Agents and (after the occurrence and during the continuance
of
an Event of Default) the Lenders incident to said transactions (and in
connection with any supplements, amendments, waivers or consents relating
thereto or incurred in connection with the enforcement or defense of any of
the
Agents' and the Lenders' rights or remedies with respect thereto or in the
preservation of the Agent's and the Lenders' priorities under the documentation
executed and delivered in connection therewith), including, without limitation,
all costs and expenses of preparation, negotiation, execution and administration
of this Loan Agreement and the documents referred to herein (including, but
not
limited to, value added tax imposed on any Lender related to those expenses),
the fees and disbursements of the Agents' and Lenders' counsel in connection
therewith, as well as the fees and expenses of any independent appraisers,
surveyors, engineers, inspectors and other consultants retained by the Agents
in
connection with this Agreement and the transactions contemplated hereby and
under the Security Documents, all costs and expenses, if any, in connection
with
the enforcement of this Loan Agreement, the Note and the Security Documents
and
stamp and other similar taxes, if any, incident to the execution and delivery
of
the documents (including, without limitation, the Note) herein contemplated
and
to hold the Agents and the Lenders free and harmless in connection with any
liability arising from the nonpayment of any such stamp or other similar taxes.
Such taxes and, if any, interest and penalties related thereto as may become
payable after the date hereof shall be paid immediately by the Borrower to
the
Agents or the Lenders, as the case may be, when liability therefor is no longer
contested by such party or parties or reimbursed immediately by the Borrower
to
such party or parties after payment thereof (if the Agents or the Lenders,
at
their sole discretion, chooses to make such payment).
14. APPLICABLE
LAW, JURISDICTION AND WAIVER
14.1. Applicable
Law.
This
Loan Agreement shall be governed by, and construed in accordance with, the
laws
of the State of New York.
14.2. Jurisdiction.
The
Borrower hereby irrevocably submits to the jurisdiction of the courts of the
State of New York and of the United States District Court for the Southern
District of New York in any action or proceeding brought against it by any
of
the Lenders or the Agents under this Loan Agreement or under any document
delivered hereunder and hereby irrevocably agrees that valid service of summons
or other legal process on it may be effected by serving a copy of the summons
and other legal process in any such action or proceeding on the Borrower by
mailing or delivering the same by hand to the Borrower at the address indicated
for notices in Section 16.1. The service, as herein provided, of such
summons or other legal process in any such action or proceeding shall be deemed
personal service and accepted by the Borrower as such, and shall be legal and
binding upon such Security Party for all the purposes of any such action or
proceeding. Final judgment (a certified or exemplified copy of which shall
be
conclusive evidence of the fact and of the amount of any indebtedness of the
Borrower to the Lenders or the Agent) against the Borrower in any such legal
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment. Each Security Party will advise the
Administrative Agent promptly of any change of address for the purpose of
service of process. Notwithstanding anything herein to the contrary, the Lenders
may bring any legal action or proceeding in any other appropriate
jurisdiction.
14.3. WAIVER
OF JURY TRIAL.
IT IS MUTUALLY AGREED BY AND AMONG THE BORROWER, THE AGENT AND THE LENDERS
THAT
EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON
ANY
MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT,
THE NOTE OR THE SECURITY DOCUMENTS.
15. THE
AGENTS
15.1. Appointment
of Agents.
Each of
the Lenders irrevocably appoints and authorizes the Agents severally each to
take such action as agent on its behalf and to exercise such powers under this
Loan Agreement, the Note and the Security Documents as are delegated to such
Agent by the terms hereof and thereof. No Agent nor any of their respective
directors, officers, employees or agents shall be liable for any action taken
or
omitted to be taken by it or them under this Loan Agreement, the Note or the
Security Documents or in connection therewith, except for its or their own
gross
negligence or willful misconduct.
15.2. Security
Agent as Trustee.
Each of
the Lenders irrevocably appoints the Security Agent as trustee on its behalf
with regard to (i) the security, powers, rights, titles, benefits and
interests (both present and future) constituted by and conferred on the Lenders
or any of them or for the benefit thereof under or pursuant to this Loan
Agreement, the Note or any of the Security Documents (including, without
limitation, the benefit of all covenants, undertakings, representations,
warranties and obligations given, made or undertaken to any Lender in the
Agreement, the Note or any Security Document), (ii) all moneys, property and
other assets paid or transferred to or vested in any Lender or any agent of
any
Lender or received or recovered by any Lender or any agent of any Lender
pursuant to, or in connection with, this Loan Agreement, the Note or the
Security Documents whether from any Security Party or any other person and
(iii)
all money, investments, property and other assets at any time representing
or
deriving from any of the foregoing, including all interest, income and other
sums at any time received or receivable by any Lender or any agent of any Lender
in respect of the same (or any part thereof). The Security Agent hereby accepts
such appointment.
15.3. Distribution
of Payments.
Whenever any payment is received by the Administrative Agent from the Borrower
or any other Security Party for the account of the Lenders, or any of them,
whether of principal or interest on the Note, commissions, fees under
Section 13 or otherwise, it will thereafter cause to be distributed on the
same day if received before 3 p.m. New York time, or on the next day if
received thereafter, like funds relating to such payment ratably to the Lenders
according to their respective Commitments, in each case to be applied according
to the terms of this Loan Agreement.
15.4. Holder
of Interest in Note.
The
Agents may treat each Lender as the holder of all of the interest of such Lender
in the Note.
15.5. No
Duty to Examine, Etc.
The
Agents shall not be under a duty to examine or pass upon the validity,
effectiveness or genuineness of any of this Loan Agreement, the Note, the
Security Documents or any instrument, document or communication furnished
pursuant to this Loan Agreement or in connection therewith or in connection
with
the Note or any Security Document, and the Agents shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by
the
proper parties and are what they purport to be.
15.6. Agents
as Lenders.
With
respect to that portion of the Loan made available by it, each Agent shall
have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not an Agent, and the term “Lender” or “Lenders” shall
include each Agent in its capacity as a Lender. Each Agent and its affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with, the Borrower and the other Security Parties, as if it were not
an
Agent.
15.7. Acts
of the Agents.
Each
Agent shall have duties and reasonable discretion, and shall act as
follows:
(a) Obligations
of the Agents.
The
obligations of each Agent under this Loan Agreement, under the Note and under
the Security Documents are only those expressly set forth herein and
therein.
(b) No
Duty to Investigate.
No
Agent shall at any time be under any duty to investigate whether an Event of
Default, or an event which, with the giving of notice or passage of time, or
both, would constitute an Event of Default, has occurred or to investigate
the
performance of this Loan Agreement, the Note or any Security Document by any
Security Party.
(c) Discretion
of the Agents.
Each
Agent shall be entitled to use its discretion with respect to exercising or
refraining from exercising any rights which may be vested in it by, and with
respect to taking or refraining from taking any action or actions which it
may
be able to take under or in respect of, this Loan Agreement, the Note and the
Security Documents, unless the Administrative Agent shall have been instructed
by the Majority Lenders to exercise such rights or to take or refrain from
taking such action; provided,
however,
that no
Agent shall be required to take any action which exposes such Agent to personal
liability or which is contrary to this Loan Agreement or applicable
law.
(d) Instructions
of Majority Lenders.
Each
Agent shall in all cases be fully protected in acting or refraining from acting
under this Loan Agreement, under the Note, or under any Security Document in
accordance with the instructions of the Majority Lenders, and any action taken,
or failure to act pursuant to such instructions, shall be binding on all of
the
Lenders.
15.8. Certain
Amendments.
Neither
this Loan Agreement, the Note nor any of the Security Documents nor any terms
hereof or thereof may be amended unless such amendment is approved by the
Borrower and the Majority Lenders, provided that no such amendment shall,
without the written consent of each Lender affected thereby, (i) reduce
the interest rate or extend the time of a scheduled payment of principal or
interest or fees on the Loan, or reduce the principal amount of the Loan or
any
fees hereunder, (ii) increase or decrease the Commitment of any Lender or
subject any Lender to any additional obligation (it being understood that a
waiver of any Event of Default, other than a payment default, or any mandatory
repayment of Loan shall not constitute a change in the terms of any Commitment
of any Lender), (iii) amend, modify or waive any provision of this Section
15.8, (iv) amend the definition of Majority Lenders or any other definition
referred to in this Section 15.8, (v) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Loan Agreement,
(vi) release any Security Party from any of its obligations under any
Security Document except as expressly provided herein or in such Security
Document or (vii) amend any provision relating to the maintenance of
collateral under Section 9.4; provided, further, that approval by all
Lenders shall be required for any amendment or waivers with respect to Section
5.3 of this Loan Agreement. All amendments approved by the Majority Lenders
under this Section 15.8 must be in writing and signed by the Borrower and
consented to and acknowledged by the Guarantor, each of the Lenders comprising
the Majority Lenders and, if applicable, each Lender affected thereby and any
such amendment shall be binding on all the Lenders; provided, however, that
any
amendments or waivers with respect to Section 5.3 of this Loan Agreement must
be
in writing and signed by the Security Parties and all of the
Lenders.
15.9. Assumption
re Event of Default.
Except
as otherwise provided in Section 15.15, the Administrative Agent shall be
entitled to assume that no Event of Default, or event which with the giving
of
notice or passage of time, or both, would constitute an Event of Default, has
occurred and is continuing, unless the Administrative Agent has been notified
by
any Security Party of such fact, or has been notified by a Lender that such
Lender considers that an Event of Default or such an event (specifying in detail
the nature thereof) has occurred and is continuing. In the event that the
Administrative Agent shall have been notified, in the manner set forth in the
preceding sentence, by any Security Party or any Lender of any Event of Default
or of an event which with the giving of notice or passage, or both, would
constitute an Event of Default, the Administrative Agent shall notify the
Lenders and shall take action and assert such rights under this Loan Agreement,
under the Note and under Security Documents as the Majority Lenders shall
request in writing.
15.10. Limitations
of Liability.
Neither
any Agent nor any of the Lenders shall be under any liability or responsibility
whatsoever:
(a) to
any
Security Party or any other person or entity as a consequence of any failure
or
delay in performance by, or any breach by, any other Lenders or any other person
of any of its or their obligations under this Loan Agreement or under any
Security Document;
(b) to
any
Lender or Lenders as a consequence of any failure or delay in performance by,
or
any breach by, any Security Party of any of its respective obligations under
this Loan Agreement, under the Note or under the Security Documents;
or
(c) to
any
Lender or Lenders for any statements, representations or warranties contained
in
this Loan Agreement, in any Security Document or in any document or instrument
delivered in connection with the transaction hereby contemplated; or for the
validity, effectiveness, enforceability or sufficiency of this Loan Agreement,
the Note, any Security Document or any document or instrument delivered in
connection with the transactions hereby contemplated.
15.11. Indemnification
of the Agents.
The
Lenders agree to indemnify each Agent (to the extent not reimbursed by the
Security Parties or any thereof), pro rata according to the respective amounts
of their Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including legal fees and
expenses incurred in investigating claims and defending itself against such
liabilities) which may be imposed on, incurred by or asserted against, such
Agent in any way relating to or arising out of this Loan Agreement, the Note
or
any Security Document, any action taken or omitted by such Agent thereunder
or
the preparation, administration, amendment or enforcement of, or waiver of
any
provision of, this Loan Agreement, the Note or any Security Document, except
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or willful
misconduct.
15.12. Consultation
with Counsel.
Each of
the Agents may consult with legal counsel reasonably selected by such Agent
and
shall not be liable for any action taken, permitted or omitted by it in good
faith in accordance with the advice or opinion of such counsel.
15.13. Resignation.
Any
Agent may resign at any time by giving thirty (30) days' written notice thereof
to the other Agents, the Lenders and the Borrower. Upon any such resignation,
the Lenders shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving notice
of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint
a
successor Agent which shall be a bank or trust company of recognized standing.
Any resignation by an Agent pursuant to this Section 15.13 shall be effective
only upon the appointment of a successor Agent. The appointment of any successor
Agent shall be subject to the prior written consent of the Borrower, such
consent not to be unreasonably withheld. After any retiring Agent's resignation
as Agent hereunder, the provisions of this Section 15 shall continue in
effect for its benefit with respect to any actions taken or omitted by it while
acting as Agent.
15.14. Representations
of Lenders.
Each
Lender represents and warrants to each other Lender and each Agent
that:
(a) in
making
its decision to enter into this Loan Agreement and to make its Commitment
available hereunder, it has independently taken whatever steps it considers
necessary to evaluate the financial condition and affairs of the Security
Parties, that it has made an independent credit judgment and that it has not
relied upon any statement, representation or warranty by any other Lender or
any
Agent; and
(b) so
long
as any portion of its Commitment remains outstanding, it will continue to make
its own independent evaluation of the financial condition and affairs of the
Security Parties.
15.15. Notification
of Event of Default.
The
Administrative Agent hereby undertakes to promptly notify the Lenders, and
the
Lenders hereby promptly undertake to notify the Administrative Agent and the
other Lenders, of the existence of any Event of Default, which shall have
occurred and be continuing, of which the Administrative Agent or Lender has
actual knowledge.
15.16. No
Agency or Trusteeship if not Syndicated.
Unless
and until the Loan is syndicated or at any other time DVB is the only Lender,
all references to the terms “Agent” and “Security Agent” shall be deemed to be
references to DVB as Lender and not as agent or Security Agent.
16. NOTICES
AND DEMANDS
16.1. Notices.
All
notices, requests, demands and other communications to any party hereunder
shall
be in writing (including prepaid overnight courier, facsimile transmission
or
similar writing) and shall be given to the Security Parties at the address
or
facsimile number set forth below and to the Lenders and the Agents at their
address and facsimile numbers set forth in Schedule 1 or at such other
address or facsimile numbers as such party may hereafter specify for the purpose
by notice to each other party hereto. Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Section
16.1
and telephonic confirmation of receipt thereof is obtained or (ii) if given
by mail, prepaid overnight courier or any other means, when received at the
address specified in this Section or when delivery at such address is
refused.
If
to the
Security Parties:
c/o
B+H
Shipping Group
▇▇▇
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▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇
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▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇
▇▇, ▇▇
▇▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
17. MISCELLANEOUS
17.1. Time
of Essence.
Time is
of the essence with respect to this Loan Agreement but no failure or delay
on
the part of any Lender or any Agent to exercise any power or right under this
Loan Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by any Lender or any Agent of any power or right hereunder
preclude any other or further exercise thereof or the exercise of any other
power or right. The remedies provided herein are cumulative and are not
exclusive of any remedies provided by law.
17.2. Unenforceable,
etc., Provisions-Effect.
In case
any one or more of the provisions contained in this Loan Agreement, the Note
or
in any Security Document would, if given effect, be invalid, illegal or
unenforceable in any respect under any law applicable in any relevant
jurisdiction, said provision shall not be enforceable against the relevant
Security Party, but the validity, legality and enforceability of the remaining
provisions herein or therein contained shall not in any way be affected or
impaired thereby.
17.3. References.
References herein to Sections, Exhibits and Schedules are to be construed as
references to sections of, exhibits to, and schedules to, this Loan Agreement,
unless the context otherwise requires.
17.4. Further
Assurances.
Each
Security Party agrees that if this Loan Agreement or any Security Document
shall, in the reasonable opinion of the Lenders, at any time be deemed by the
Lenders for any reason insufficient in whole or in part to carry out the true
intent and spirit hereof or thereof, it will execute or cause to be executed
such other and further assurances and documents as in the opinion of the Lenders
may be required in order to more effectively accomplish the purposes of this
Loan Agreement, the Note or any Security Document.
17.5. Prior
Agreements, Merger.
Any and
all prior understandings and agreements heretofore entered into between the
Security Parties on the one part, and the Agents or the Lenders, on the other
part, whether written or oral are superseded by and merged into this Loan
Agreement and the other agreements (the forms of which are exhibited hereto)
to
be executed and delivered in connection herewith to which the Security Parties,
the Agents and/or the Lenders are parties, which alone fully and completely
express the agreements between the Security Parties, the Agents and the Lenders.
17.6. Entire
Agreement; Amendments.
This
Loan Agreement constitutes the entire agreement of the parties hereto, including
all parties added hereto pursuant to an Assignment and Assumption Agreement.
Subject to Section 15, any provision of this Loan Agreement, the Note or any
Security Document may be amended or waived if, but only if, such amendment
or
waiver is in writing and is signed by the Borrower, the Agents and the Majority
Lenders. This Loan Agreement may be executed in any number of counterparts,
each
of which shall be deemed an original, but all such counterparts together shall
constitute one and the same instrument.
17.7. Indemnification.
The
Borrower and, by its execution and delivery of the Consent and Agreement set
forth below, the Guarantor, both jointly and severally agree to indemnify each
Lender and each Agent, their respective successors and assigns, and their
respective officers, directors, employees, representatives and agents (each
an
“Indemnitee”) from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of counsel for such
Indemnitee in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be
designated a party thereto) that may at any time (including, without limitation,
at any time following the payment of the obligations of the Borrower hereunder)
be imposed on, asserted against or incurred by, any Indemnitee as a result
of,
or arising out of or in any way related to or by reason of, (a) any
violation by any Security Party (or any charterer or other operator of the
Vessel) of any applicable Environmental Law, (b) any Environmental Claim
arising out of the management, use, control, ownership or operation of property
or assets by any Security Party (or, after foreclosure, by any Lender or any
Agent or any of their respective successors or assigns), (c) the breach of
any representation, warranty or covenant set forth in Sections 2.1 (o) or
9.1(l), (d) the Loan (including the use of the proceeds of the Loan and any
claim made for any brokerage commission, fee or compensation from any Person),
or (e) the execution, delivery, performance or non-performance of this Loan
Agreement, the Note, any Security Document, or any of the documents referred
to
herein or contemplated hereby (whether or not the Indemnitee is a party
thereto). If and to the extent that the obligations of the Borrower and, by
its
execution of the Consent and Agreement set forth below, under this Section
are
unenforceable for any reason, the Security Parties jointly and severally agree
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The obligations of the
Security Parties under this Section 17.7 shall survive the termination of
this Loan Agreement and the repayment to the Lenders of all amounts owing
thereto under or in connection herewith.
17.8. Headings.
In this
Loan Agreement, section headings are inserted for convenience of reference
only
and shall not be taken into account in the interpretation of this Loan
Agreement.
17.9. Waiver
of Immunity.
TO THE
EXTENT THAT ANY SECURITY PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS (WHETHER THROUGH ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT,
OR
FROM ANY OTHER LEGAL PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY,
SUCH SECURITY PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS LOAN AGREEMENT AND THE OTHER SECURITY
DOCUMENTS.
17.10. USA
Patriot Act Notice; OFAC and Bank Secrecy Act.
The
Agent hereby notifies each Security Party that pursuant to the requirements
of
the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26,
2001) (the “Act”), and the Agent’s policies and practices, the Agent and each of
the Lenders is required to obtain, verify and record certain information and
documentation that identifies each Security Party, which information includes
the name and address of each Security Party and such other information that
will
allow the Agent and the Lenders to identify each Security Party in accordance
with the Act. In addition, each Security Party shall (a) ensure that no Person
who owns a controlling interest in or otherwise controls any Security Party
or
any subsidiary of any thereof is or shall be listed on the Specially Designated
Nationals and Blocked Person List or other similar lists maintained by the
Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or
included in any Executive Orders, (b) not use or permit the use of the proceeds
of the Loan to violate any of the foreign asset control regulations of OFAC
or
any enabling statute or Executive Order relating thereto, and (c) comply, and
cause any of its subsidiaries to comply, with all applicable Bank Secrecy Act
laws and regulations, as amended.
IN
WITNESS whereof, the parties hereto have caused this Loan Agreement to be duly
executed by their duly authorized representatives as of the day and year first
above written.
SACHEM
SHIPPING LTD.
By:__/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:
Attorney-in-Fact
DVB
BANK
AMERICA NV,
as
Administrative Agent and Security Agent
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
The
Lenders:
DVB
BANK
AMERICA NV,
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
CONSENT
AND AGREEMENT
The
undersigned, referred to in the foregoing Loan Agreement as the “Guarantor”,
hereby consents and agrees to said Loan Agreement and to the documents
contemplated thereby and to the provisions contained therein relating to
conditions to be fulfilled and obligations to be performed by the undersigned
pursuant to or in connection with said Loan Agreement and agrees particularly
to
be bound by the representations, warranties and covenants relating to the
undersigned contained in Sections 2 and 9 of said Loan Agreement to the same
extent as if the undersigned were a party to said Loan Agreement, and expressly
agrees to the grant of a security interest in favor of the Security Agent
pursuant to Section 9.1(q) of said Loan Agreement.
B+H
OCEAN
CARRIERS LTD.,
as
Guarantor
By:__/s/
▇▇▇▇▇▇ S. Wise_
Name:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:
Attorney-in-fact
Schedule
1
Lenders Commitment
|
DVB
Bank America NV
Zeelandia
Office Park
Kaya
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▇▇▇▇▇▇▇▇▇▇▇ Antilles
Attention:
▇▇▇▇▇▇▇ Van Heel & ▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇▇-▇-▇▇▇-▇▇▇▇
|
$12,000,000
|
|
|
Agents
DVB
Bank America NV
Zeelandia
Office Park
Kaya
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▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ Antilles
Attention:
▇▇▇▇▇▇▇ Van Heel & ▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇▇-▇-▇▇▇-▇▇▇▇
|
SK
01029
0031 707841 v6